When you read about modern businesses, it’s easy to forget that ‘business’, as a concept, is a made-up thing: a human game with some set of rules shaped by some set of economic realities intersecting with a certain social and technical environment.
I posted this in another thread but it seems immediately applicable.
It seems absurd to equate Zemurray with Musk but it seems like they share exactly the principles:
Taking huge risks starts to make sense under this framework because in both cases it seems like the players want the future they have in mind more than anything else or they enjoy playing the game more than anything else. Taking on huge amounts of debt is only a risk if you value other things in your life over playing the game.
I wish we had cases of people like this that ultimately ended up failing. Understanding the failure conditions of this kind of approach seems way more valuable than positive cases.
Aye, absolutely, I’m not condoning the extreme risk here. I do intend to do more cases of folks who bet too much and then lost it all, but for what it’s worth — Jesse Livermore, whose case we published last week … ultimately killed himself. His was not a life worth emulating.
I should also add that Zemurray’s story is amazing to me (and the book, The Fish That Ate The Whale is one of my favourite business books) because of an incident that occurs not too long after the events of this case: Zemurray is doing well, he gets lots of concessions from the Honduran government thanks to bribes and special deals. Then the Honduran government attempts to reschedule their sovereign debt to the UK, and the US Secretary of State stations JP Morgan bank agents in the custom offices to enforce a new tax. This tax would ruin Zemurray. He’s still heavily in debt. He has a young wife, a young daughter, and a son on the way. He appeals to the US government; Secretary of State Philander Knox ignores him. He attempts to pay for lobbyists. Knox gets annoyed and calls Zemurray to his office, tells him off, yells at him to mind his own business.
So Zemurray leaves Washington, returns to New Orleans, raises an army, and then overthrows the Honduran government.
THAT is the level of risk he was playing at. All for the banana trade.
You got me, now I have to read the book.
I am both bewildered and in awe of people.who have this sort of vision where they are just determined to make it come into existence. I’ve realized one of my weaknesses is that when I see an incompatibility between me and my environment, I just adapt to the environment or the people around me. It’s easy for me to change, so that’s what I do.
Founders and entrepreneurs see such an incompatibility and decide the world has to change to fit their vision. And most of them fail. But the ones who are determined and capable and resourceful keep going, learn from their mistakes and find a way to bring their vision into reality. To echo a Cedric LinkedIn post, their will is indomitable, which means they figure out and learn the skills they need.
RE: uneasiness about corruption
Netscape introduced support for cookies 30 years ago this month; third party cookies appeared shortly thereafter
Human friendly cookie transparency wasn’t widespread until GDPR enforcement showed up recently
The internet first unicorns of today were built in the meantime
Might what we think of as normal data collection practices be considered corruption in 50 years, or 20?
Could be
Could be our grandchildren will think of us as corrupt if we manage to get rich as operators by the time they’re adults
So there are many scenarios where I’m inclined to give operators some grace in exchange for understanding, even though I might be disgusted by particular actions
Damn, that’s sobering. I didn’t think of cookie / privacy disasters when prepping for this series, but I think what you say (on future generations judging the early internet tycoons harshly on this topic) may well come true.
Another one is the environmental exploitation that most companies today get away with. If our current environmental crisis gets to civilisation-threatening levels, we will likely receive the same sort of judgment from future generations.
I should probably follow up this series with a series on alternative business structures, ones that have been proven to do good in addition to doing well.