Tuesday, June 29, 2010

What I Learned From A Chinese Billionaire

It's not that I have gotten lazy, though I've been rather distracted from blogging by work and the World Cup (of course).

But, I do have to reproduce this piece from Forbes by Shaun Rein because he tells an interesting story about the important values that nurture entrepreneurial success. In this case, the story involves a Chinese billionaire. But, it could be anyone, anywhere. This is a good tale about the importance of having ethics and values in business. Here's the piece:

He taught me the basic principles he relied on to go from grinding poverty to enormous wealth.

In the last decade more new billionaires emerged in China than anywhere else in the world. There are now at least 79 there. China's rich are fueling the country's 15% annual growth in luxury sales, which have reached $9 billion a year, making the country the world's second largest market for top-end products. You can wait a year for a new Ferrari there. Porsche launched its Panamera sedan there before it did so in the U.S. Long lines often stretch outside Louis Vuitton and Hermès stores.

Who are the superrich Chinese? What are they like? How did they get so wealthy?

To find answers to those questions I've talked to a half dozen Chinese billionaires. Some of them made their money by taking Internet companies public in the U.S., others by investing in real estate or beverages. Unlike many of today's American billionaires, such as Rockefellers or the Waltons of Wal-Mart, China's are almost all self-made. Half of the world's 14 self-made billionaire women are Chinese. They all overcame hardship and failure, and they all are highly optimistic about China's future.

One Chinese billionaire, a real estate mogul, met with me more than a dozen times over five years to share his lessons for succeeding in business. Sometimes we met at his palatial home in Beijing, sometimes at my much smaller one in Shanghai. We ate clams the size of footballs on a beach in Australia, and one time we went to McDonald's for french fries. I liked spending time with him not only because I could briefly live the life of a billionaire but also because it became obvious why he was so successful. He actually embodied the lessons he taught me. He didn't just preach them.

There was one condition to our talks and my writing about him, though. He insisted on remaining anonymous. Therefore I will call him Mr. Chen. Like many wealthy Chinese, Mr. Chen prefers to fly under the radar, because he doesn't want to accidentally get on anyone's wrong side. Lest you think his fears are exaggerated, realize that 70 of the people who have appeared on the Forbes China Rich List in the last decade have publicly gotten into trouble. China's affluent now sometimes half-jokingly call the ranking the Death List.

Lesson No.1

Mr. Chen's first lesson is to believe that anything is possible and the only thing that can stop you is yourself. He never ceased to believe that he would make something of himself. As a poor peasant child with no high government connections, he had the odds stacked again him. He had to drop out of school in his teens because his family had no money.

Yet he believed in himself and refused to give up. With no powerful family behind him, he had to take out loans at five times the normal rates of his well-connected competitors. He had to do smaller projects that no one else wanted and endure derision and slights from others. Slowly, over time, he developed a reputation for doing what he said he would, and his projects got bigger and bigger.

Now he pays for the food, medical costs and living expenses of more than 80 members of his extended family. He donates millions a year to set up schools in rural areas, and he often walks the halls of hospitals with his offspring and pays for the medical costs of uninsured patients. But before he could do any of that he spent decades in sheer perseverance, ignoring all the better-educated, wealthier people who disdained him.

Lesson No.2

The second lesson Mr. Chen taught me is that to get what you want you have to respect everyone and sometimes eat humble pie. A decade ago, when nearly everyone in China was poor, it took less than $10 million to make the China rich list. Last year you needed $120 million. The creation of wealth has been staggeringly quick. As Mr. Chen says, you could be a waiter today and the head of a food and beverage conglomerate tomorrow--so you'd better respect everyone, or your attitude may come back to haunt you. Practically everyone in China knows someone who a decade ago raised pigs and today drives a Mercedes and buys Tiffany jewelry.

Lesson No.3 (Very Important)

Finally, Mr. Chen believes in sharing wealth. He lets business partners make more than he does, so that the next time they secure a good deal they'll think of working with him first. He sees no point in ever trying to shortchange business partners.

He is right. I have been in meetings with him with different partners with projects all over the country. I asked several of them why they worked with him rather than anyone else, and every one of them said it was because they knew he'd take a smaller piece of the total pie. But so many small pieces add up to a whole lot of pie.

Mr. Chen believes in sharing wealth also in the sense of ensuring good working conditions for rank-and-file employees and letting the most productive ones get rich. He does not believe in letting lieutenants scrape by while a CEO is paid absurd sums. And he believes that companies like Apple and Dell need to improve the conditions at the factories where they source their products.

Mr. Chen built a fortune out of dogged determination and a reputation for being assiduously honest, fair and respectful. He sees no reason why the same shouldn't work for anyone else. As he told me once, "If I can do it with as little as I had growing up, anyone can do it."


donplaypuks® said...


Sorry to digress.

I think as many as possible should act to stop a miscarriage of justice from taking place in the MACC vs lawyer Rosli Dahlan case as reported by Din Merican here.

It appears some one has manipulated a change of judge in the midst of a trial going badly for the MACC, with ominous implications now for Rosli.

How can this happen? Why was the presiding judge hastily transfererd to Melaka and a new one appointed when the trial had already reached an advanced stage? What was the urgency of the transfer of a hIgh Court judge?

How can we expect the new judge to understand the testimony or demeanour of MACC witnesses who had testified earlier and really, taken to the cleaners by Rosli Dahlan lawyres for being evasive, obstructive, misleading and plain "terminological inexactitudeness" ?

What’s happening in our courts right in front of our eyes is unbelievable!! Trust you'll blog about it.

Thank you.

we are all of 1 race, the Human Race

Raison D'etre said...

Hi DM,
Great post. Very illuminating.

flyer168 said...

Hi Deminimis,

That is a great post & so very true indeed...

I hope it has influenced you to be what you are & where you are today...

Btw donplaypuks, looking at the holistic picture...

Mama's boy Jibby needs Musang to be close at hand to "Sustain" his "Usurped Position" at all cost...

Both have each other by the "Orbs/Juglars"...

Dato' Ramli being the better & more qualified person than Musang would definitely be the better choice for the IGP position...

Which would have far reaching ramifications on the Sodomee 1 "Ploy" with the Tivoli Villa mattress hero...the Pak Lah family Saga, the Jibby skeletons, etc.

So seeing there is no case on Dato' Ramli, the Personal Vendetta has to fall on his magnificient lawyer instead...as the fall guy.

Same with DSAI, RPK, Bala, etc...
to Destroy them at all costs, by hook or by crook...Melayu hasrat Denki, as they say...

Objective...Jibby needs Musang to be "Still Relevant" & close at hand to "Sustain" his "Usurped Position" at all cost...