Born Poor, Drop Out and Got Rich – The Billionaires Story, Part 2
Following a great success in my first article of The Billionaire Story, I feel motivated in writing a sequel. In this part two series of the billionaire story, I would like to share with you three most outstanding people that have shaped the business world.
The Apple Story
Steven Paul (Steve) Jobs was responsible for building Apple Computer twice, as well as for rescuing Pixar Animation Studios and turning it into one of the world’s most successful motion picture studios. He was a hands-on manager, who studied even the minutest details of his products, with the heart and eye of an artist. His insistence on high-quality, good-looking products struck a chord with many people who appreciated the beauty of Apple products, resulting in such fabulous successes as the Macintosh computer and the iPod portable music system. These successes often reshaped how consumers viewed technology and also reshaped the technology itself.
Jobs was adopted in February 1955 by Paul and Clara Jobs, who were indulgent parents. They were so focused on their son’s needs that they even moved from Mountain View, California, to Los Altos, California, in 1968, to put Jobs in a new school because he said that he could not get along with the children in his old school. He was an odd student, out of step with both classmates and teachers, with a mind that looked at science from unusual angles. He preferred to spend his time with older students rather than ones his own age, including Stephen Wozniak, an electronics genius four years older than Jobs.
In 1972 Jobs attended Reed College, in Portland, Oregon, dropping out after one semester. He hung around the school for about a year longer, before submitting a résumé that greatly inflated his electronics experience to Atari, a pioneer in video gaming. After saving up enough money to pay his way, he left Atari and journeyed with friends to India to search for enlightenment. He shaved his head and walked through what he saw to be appalling poverty. He soon left India believing that Thomas Edison had done more for the betterment of humanity than all the gurus in the world. In 1975 he joined the Homebrew computer club, which included Wozniak among its members. Wozniak had discovered that a toy in Cap’n Crunch cereal boxes made the same tones that telephone companies used for long-distance switching. Soon, with Jobs’s help, he was making small blue boxes that could be used with telephones to circumvent the safeguards of telephone companies and make free long-distance calls. It was Jobs who turned this into a business venture by selling the boxes to college students.
Wozniak was an electronics enthusiast. He enjoyed making gadgets and then sharing his inventions with anyone who was interested, without concern for patents or profit. It was Jobs who soon saw the potential marketability of Wozniak’s circuit board combined with the microprocessor chips. In 1975 he and Wozniak became partners, and Jobs gave their enterprise the name “Apple.” They designed their simple computer in Jobs’s bedroom. When more space was needed, Jobs’s father cleared out his home’s garage, where Jobs and Wozniak cobbled together their combination of a circuit board, a microprocessor, a video screen, and Jobs’s most important contribution, a typewriter-style keyboard. The inventors called it the Apple I.
Jobs had already discovered a local electronics storeowner who wanted 50 personal computers to sell to college students, who were the bulk of electronics enthusiasts. Jobs and Wozniak gave the Apple I the whimsical price of $666.66 and ended up selling more than 600 of them, making $774,000. The Apple I was a hobbyist’s machine, a clumsy-looking beast of wires and boards that invited tinkering. The partners wanted to build something more sophisticated and easier to use-making technology easier to use would become essential to Jobs’s views for building his companies. In 1977 the former Intel executive Mike Markkula, a venture capitalist, invested in Apple, becoming its chairman of the board and bringing in outsiders to help govern the company. Jobs persuaded a successful publicist, Regis McKenna, to join Apple. That year the Apple II was introduced. It took only about four hours for a purchaser to set it up and have it running, and it could run some business programs, reducing to minutes from hours certain accounting tasks. With a canny sales campaign created by McKenna, and Jobs’s own magnetic personality helping persuade corporate buyers, the Apple II became the first successful mass-market personal computer.
Jobs had to have been a concern for McKenna: Jobs had long hair and a scruffy beard, and he usually wore jeans when meeting the conservatively dressed businessmen who had the power to order dozens of Apple IIs at a time. But Jobs was charismatic. When he spoke of what his machines could do and of the future the machines would shape, he created what came to be known as his “reality distortion field.” His power to persuade was remarkable, and he often had potential customers vying for his attention. He was soon perceived to be a visionary genius that foresaw how to marry high-technology electronics and everyday business.
According to Forbes magazine, Steve jobs estimated net worth is at US $4 billion in 2007.
The Hutchinson Whampoa Story
The wealthiest man in Asia, Li Ka-shing was nicknamed “Superman” in Hong Kong, where his global empire was based. His political and financial influence, as derived from his diverse holdings, which included real estate, ports, telecommunications, finance, infrastructure, and biotechnology, led AsiaWeek to call him “the most powerful man in Asia” in 2000. Born in mainland China, Li came to Hong Kong as a poor immigrant in 1940 and launched his career making and exporting plastic flowers.
Although his father was the head of a primary school in Guangdong province, Li had little opportunity for formal education. He was 12 years old in 1940 when his family fled the Japanese invasion of China. Within three years of their arrival in Hong Kong, his father had died, and the teenage Li was helping to support the family by selling plastic watchbands and belts.
Li proved to be a capable salesman and started his own plastics factory in Hong Kong in 1950. By 1958 he had a flourishing business manufacturing plastic flowers and was ready to expand. He named the firm Cheung Kong Industries, after the Cheung Kong River-also known as the Yangtze-the longest river in China. The name was reportedly an allusion to both the river’s many tributaries and the need for business alliances.
By 1958, when his landlord raised its rent, Li had enough cash to purchase his factory. This would be the first of many investments in real estate; by the 1960s Cheung Kong had transformed into a property development and management company. Li’s strategy was to avoid debt by raising capital before building, both through the formation of joint ventures with landowners and by pre-selling apartments to friends and colleagues. As such Cheung Kong could incur fewer risks while still earning profits for both Li and his co-investors, fueling rapid growth. The company, renamed Cheung Kong Holdings in 1971, had its initial public offering in 1972. By 1979 Li was Hong Kong’s largest private landlord.
Once again success led Li to expand his corporate efforts in a new direction, this time through the acquisition of one of the oldest British “hongs,” or trading companies. Hutchison Whampoa had been created in 1977 by a merger between the financially troubled Hutchison International, founded in 1880, and Hongkong and Whampoa Dock, which had been the first registered company in Hong Kong when it was founded in 1861. In 1979 Li bought 23 percent of Hutchison Whampoa from Hongkong & Shanghai Bank, becoming the first Chinese to control one of the old British companies that had long dominated Hong Kong’s economy.
Forbes magazine estimated his fortune at US$23 billion, making him the 9th richest man in the world.
The Dell Story
Michael Dell defied conventional wisdom-that consumers would not purchase computer equipment over the telephone-and built a billion-dollar company doing just that. Through his direct method of offering low-cost, custom-configured personal computers direct to customers, Dell changed the competitive dynamic of the computer industry. Notable for a natural business talent coupled with a willingness to share power, Dell carried the company through rapid growth and economic difficulties. He innovated operating processes, took risks, learned through his mistakes, and built Dell Inc. from a college dormitory operation to a global corporation. Along the way Dell became one of the wealthiest Americans and the youngest CEO of a company on the Fortune 500 list of largest American companies.
Dell understood the meaning of “business opportunity” early in life, as his mother’s profession, stockbroker, frequently raised discussions of business and economic affairs at the family dinner table. So when he began to collect stamps at age 12 and noticed prices rising, Dell recognized a business opportunity. He determined the most profitable way to sell stamps would be to bypass the auctioneer and sell direct to collectors. He compiled a 12-page catalog of his and his friends’ stamps and advertised in a stamp collectors’ magazine. In this first business venture Dell earned $2000.
Dell further developed his business acumen at the age of 16, when he sold newspaper subscriptions for the Houston Post. The inefficiency of cold-calling prompted Dell to find better marketing methods. He determined that the people most likely to subscribe were newly married couples and people who had moved. He obtained lists of marriage license applicants and mortgage applicants then used his Apple II computer to address sales letters to people on these lists. The approach succeeded so well that Dell earned $18,000 the first year and had bought a BMW automobile by the time he went to college. In the back seat of that BMW, Dell carried three personal computers, the seeds of PC’s Limited and Dell Computer Corporation.
Dell’s fascination with computers began with exposure to a data processor in junior high school then to computers at the local Radio Shack store. After much persuasion, Dell’s parents allowed him to use savings to buy an Apple II computer at the age of 15. To the fury of his parents, upon arriving home Dell dismantled the computer to see how it operated. The following year, in 1981, Dell bought an IBM desktop computer and learned how to upgrade and add new components. With insight that IBM-compatible computers would become the choice of business, Dell began to buy, upgrade, and resell personal computers for friends and acquaintances, eventually purchasing components at wholesale rates from distributors. Exposure to the computer industry fostered Dell’s desire to start a computer business. In June 1982 he skipped classes for most of a week to attend the National Computer Conference. After saving money to buy a hard disk drive (not standard equipment at the time), Dell communicated with other computer enthusiasts on a bulletin board system and learned how the industry operated. He found dealers sold computers for $3,000 and made $1,000 gross profit, yet he could purchase components for less than $700.
Dell determined that he could compete with retail computer dealers by selling direct to consumers at a lower price and offering better technical service, but his parents had another idea-that Dell should become a physician. Dell went to the University of Texas at Austin in fall 1983. While he attended to premed studies, Dell continued to upgrade and resell computers, finding customers among students and local business-people through word-of-mouth. By the time his parents made a surprise visit in November to address poor class attendance, Dell knew he wanted to compete with IBM. An attempt to be the good son and study premed lasted approximately three weeks, then Dell returned to upgrading computers. In early 1984 Dell registered PC’s Limited with the state of Texas and moved to a two-bedroom condominium. Between word-of-mouth referrals and a small advertisement in the local newspaper, PC’s Limited sold between $50,000 and $80,000 per month in computers, add-on components, and upgrade kits. The week before final examinations in May 1983 Dell incorporated the company as Dell Computer Corporation with the state-required minimum of $1,000 capital. He never returned to college.
Today, Forbes estimated Michael Dell at US$15 billion dollars, remarkable achievement for a dropout.
I believe everyone has a chance for success, whether you are high school dropout or a PHD graduate, you can chose what kind of life you want to lead, you can chose who you want to become.
