I’ve failed over and over and over again in my life. That’s why I succeed.
—Michael Jordan
If you are going through hell, keep going.
—Winston Churchill
If you are afraid to fail, stop here. Don’t waste your time reading the rest of this book. Please give this book to a more ambitious friend of yours. My conversations with dozens of RMITs suggest strongly that the only way to succeed is to have the courage to fail, and fail publicly. Perhaps the greatest commonality among RMITs—other than their ambition addiction—is the willingness to face failure and the resilience to pick themselves up and make the next step toward a better outcome.
Jim Oelschlager of Akron, who made his fortune through Oak Associates, a leading money management firm, says, “Don’t be afraid of failure. Failure is a part of life. Absolutely every successful individual has had several failures. You learn a lot from your failed experiences, and you will find that generally people are very forgiving of your failures. Perhaps one of the saddest things to see is a person who approaches retirement age and regrets not having taken chances when presented with opportunities because they were afraid to fail.” Failure is not fatal, and RMITs simply are not afraid of it.
David Rubenstein, who founded and runs the Carlyle Group, says, “Hope that you fail and hope that you fail early.” This seems easy for him to say as he sits atop a multibillion-dollar fortune. Yet he believes it with every ounce of his being. Rubenstein strongly asserts, “Nobody has uninterrupted success. Everybody has failures, and those who have too charmed a life early in the first third of their life more likely than not will not be stars in the next third of their life, or certainly the final third of life. The folks who end up being on the Forbes 400 list or winning Nobel Prizes are people who did not have all the awards and all the success in the early part of their lives.”
In other words, if at first you don’t succeed, join the not-so-exclusive club alongside such members as Michael Jordan, one of the richest athletes in sports history; J. K. Rowling, one of the richest authors in history; Steve Jobs, one of the richest men Silicon Valley has ever produced; and members emeritus, including Thomas Edison and Abraham Lincoln. It’s a very powerful and prestigious club. Michael Jordan was cut from his high school basketball team as a sophomore. J. K. Rowling was famously rejected by more than a dozen publishers before her first Harry Potter chronicle was finally published. Steve Jobs initially couldn’t get anyone interested in his first Apple computer; he sure didn’t have that problem with his iPod. It took Thomas Edison more than a thousand tries to create his first working lightbulb. Michael Jordan’s boss at Nike—Oregon’s richest man, Phil Knight—famously said, “The trouble with America isn’t that we’re making too many mistakes—it’s that we’re making too few.” David Rubenstein, the good political science major he was, agrees. “Just look at some of the recent presidents of the United States. Franklin Roosevelt ran for vice president in 1920 and was defeated. [He] subsequently came down with polio but went on to become president in 1933 and serve three terms—more than any other president in history. Harry Truman had a haberdashery that went bankrupt. Most folks thought Dwight Eisenhower’s military career was over after World War II. He was simply an executive assistant or gofer to Douglas MacArthur. John Kennedy literally had last rites given to him three times, but he overcame his physical ailments and became the youngest president in history. The same is true with virtually every successful business leader I have ever met.” All of the members of this failures’ club ultimately achieved monumental success. Success and great wealth creation demand that you refuse to be afraid of failure or what your friends and family and neighbors might think.
Fear of failure is the single greatest impediment to reaching your personal American Dream. David Jones, the founder of Humana and Louisville, Kentucky’s RMIT, says that the best advice he has given all five of his children is, “If you go to the plate and strike out ten times, you are no worse off than a coward who never went to the plate at all. In fact, you’re way better off, because you tried.” Anchorage, Alaska’s Bob Gillam says, “Success is not so much about winning as it is repairing damage when you lose.” Like David Rubenstein, he believes that “there is one great certainty in life—you will lose at some point.” It makes great sense, then, to not only learn from your own mistakes and failures but also to learn from the mistakes of others. No one lives long enough to make them all themselves.
Your success is measured by how you handle that failure and how resilient you are. Resilience is the character trait that I most admire in Carrollton, Georgia’s RMIT, Bob Stone. He has reinvented his computer processing company, SMI, almost as many times as Madonna has reinvented her look. “We have essentially gone bankrupt three times, though no one knew it,” he says. The first time he reinvented his company was to change from a service bureau that created payroll processing and accounting services for local businesses into a government outsourcing business that processed and distributed food stamps. This repositioning reaped millions in profits, until the government suddenly decided that only banks could distribute food stamp benefits via debit cards. Stone’s company was not a bank, so suddenly the very foundation of his business was crumbling. Thanks to his son Joe’s insight, at about the same time the food stamp business was looking bleak, SMI was morphed into a provider of systems and tracking for the government branch that distributes child welfare benefits to custodial parents. Today this business yields $40 million a year. Stone’s failures were not fatal; on the contrary, they became opportunities for Stone to reinvent his company and revitalize his fortunes. He has proven that whatever forces of change come his way, he can adapt and find success. Stone proves that your success is often determined by the velocity of your resilience. Failure really is your friend.
“Since childhood, most of us have been brainwashed with the maxim, If at first you don’t succeed try, try again—well, it’s true,” says Ron Rice, the founder of Hawaiian Tropic and the richest man in Daytona Beach, Florida. It took Rice six tries to get it right. He started out his career as a teacher and a coach, and though he loved both teaching and coaching, Rice laughs about it now: “I taught for eight years at seven schools and was fired six times.” Clearly, he needed to work for himself, to be his own boss. No one can doubt his persistence and certainly not his resilience, but it took him eight years and six failures to realize fully what he was destined to do, what he could be most passionate about, what his perfect pitch was. In Rice’s case, that passion was for pitching suntan lotions to beautiful women. He says, “My failures taught me my greatest lessons—the most important thing I learned in life was that when I fell down, I could get back up.”
The Chinese use the same word for both “opportunity” and “crisis”—out of failure often comes our most stunning successes. Roxanne Quimby points out that one of her heroes, Abraham Lincoln, arguably one of the most effective presidents in the history of the United States, had a veritable laundry list of failures: “He had a general store that went bankrupt, was defeated in his run for the Illinois state legislature, had a nervous breakdown, was defeated for Congress, was defeated for the US Senate, and was defeated in his nomination for vice president, yet he persevered and became the sixteenth president of the United States.” Sid Richardson, the famous Texas oil wildcatter who created the multibillion-dollar fortune that is now the Fort Worth Bass family wealth, once said, “I’ve been broke so often that I thought it was habit-forming.” Spartanburg’s George Johnson says, “If mistakes made scar tissue, you couldn’t see me.” You can certainly see him today leading the charge on his newest hotel venture with partner Wayne Huizenga. Their OTO Development Company is building and operating a billion dollars’ worth of new hotels all across America.
Meridian, Mississippi’s Hartley Peavey, with his characteristic frankness, says, “Hell, I’ve had multiple failures, and anyone who tells you they haven’t is a big fat liar.” He particularly remembers creating what he believed was the best drum set ever. To get the high-quality sound that astounded many of the greatest drummers in American music, the design had to be unlike any other drum set. The quality was unprecedented, but so was the look. Some might say the drums were downright weird; Peavey says they were “butt ugly.” The famous drummer Kenny Aronoff tried the drums and thought the sound was the best he had ever played, but he told Peavey, “They just don’t look right.”
Despite the tremendous time, effort, and investment, Peavey couldn’t sell the innovative product because the drums didn’t look like what drummers thought drums should look like. The design was a disaster both stylistically and economically. What Peavey thought was a sure thing was a flop. He admits there have been many other innovations that have not caught the interest of the market, but in each case, he has learned a lesson that has benefited his future product introductions. Failure can breed success.
Peavey is an inventor at heart, and that passion for inventing new products is what created a highly successful $300 million company unmatched in the music business. One of his other companies, Media Matrix, provides the sound systems for the Sydney Opera House, the Great Hall of the Republic in China, the Disney theme parks, and the US House of Representatives. As Peavey and every successful scientist will agree, a failed experiment is often the grist for a future success. He says, “Winners learn from the past and let go of it. Losers yearn for the past and get stuck in it.”
RMITs agree with Theodore Roosevelt’s fervent belief that, “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.”
“Defeat is the prelude to every great success story,” says Frank Hickingbotham, the founder of TCBY and the RMIT of Little Rock, Arkansas. “There is no such thing as failure unless you quit, and I never quit. I had several setbacks and I tried to learn a lesson from every one of those defeats, but I never, ever quit.” For RMITs, all defeats are temporary; they are rarely down for the count, and they have a near-limitless capacity to pick themselves up, dust themselves off, and set about trying their next big idea. Hickingbotham started as a teacher and school administrator, then worked his way up the insurance sales ladder with National Investors Insurance Company. He founded a restaurant company and two food companies before spotting the potential in frozen yogurt. There were many bumps along the way, he says. “But I never saw a closed door—there was always a crack of light peeping through.”
Often the unexpected outside forces are just the incentive you need to make the move to change your life. The R in RMIT should stand for “resilience.” Atlanta’s Bernard Marcus, the founder of Home Depot, was fired from Handy Dan, one of the original home improvement retail chains, when he was forty-nine. He and Arthur Blank (also fired) started Home Depot and ultimately put their old employer out of business. For others it could have been sweet revenge, but not for Marcus and Blank. To the contrary. “I always knew that I wanted to own my own business, and it took getting fired for me to do it,” Marcus says. “I said to myself, ‘This is God’s will for this to happen to me and I’m going to take full advantage of it.’ ” With Home Depot, one of the greatest business successes of all time, under his belt, a couple of billion dollars in his pocket, and a personal foundation that has already given away hundreds of millions of dollars, there is no need for sweet revenge. Signaling both his amazing resilience and his forward-thinking attitude, Marcus says, “I rarely think about where I came from. I think about the here and now. People often look at the Home Depot success and only see the good times, the great result. They don’t see all the hard times we had. We had some very treacherous years, and it took a tremendous amount of energy, dedication, and determination to make it work. It’s like childbirth; it’s difficult labor, but the gift that comes from that hard work causes one to forget the pain of the time.”
North Carolina’s Bruton Smith learned about failure and bankruptcy early in his career, only two years after starting the Charlotte Motor Speedway. Because he didn’t have the capital to save the business, he was forced to place his company under bankruptcy protection. Rather than being the big boss as he so enjoyed, he was soon working for a trustee put in place by the bankruptcy court to restructure the company. Many people in this situation would have been depressed, daunted, and demoralized. Not Smith. He proudly asserts: “I became the trustee’s best friend. He called me all the time, because I knew the business; he didn’t. I worked for him for a year—for free—because I was determined to reorganize the business and regain control. We ultimately paid off all the creditors and here we are today, a thriving company.” Smith is now a billionaire and Charlotte’s RMIT.
Notwithstanding two exceptions—Jonathan Nelson of Providence, Rhode Island, and Phil Ruffin of Wichita, Kansas—all the RMITs in this book offered that at some point in their careers, they had failures. Most have “enjoyed” multiple failures. These stories are not isolated examples of a few remarkable RMITs rising above adversity. Business catastrophes are universal: The fact is that 70 percent of all new businesses fail in their first year. RMITs are not immune.
On the contrary, their willingness to take risks makes them more prone to failure than a corporate drone who never takes any chances. But they have embraced their mistakes, learned from them, and persevered in the face of failure. Louisville, Kentucky’s David Jones had what he thought was a brilliant idea for making acute medical care easily accessible to the consumer with a fast-food approach. Med Purse was a doc-in-the-box concept that allowed a person in need of immediate care to stop by a no-appointment-necessary facility in a local strip mall. Consumers loved the concept and the convenience, but Jones and his team had forgotten they had another critical constituency—namely, doctors. The doctors who were affiliated with Humana’s hospitals became disgruntled at this new competition and threatened to boycott Humana (Jones’s cash cow) if Jones continued to build his Med Purse retail business. Jones learned the hard way, through a devastating failure, that you can’t shoot the goose that laid the original golden egg. “That failure,” he says, “reinforced the tenet of focus. I had focused on the wrong thing and lost sight of the real gold mine, Humana.”
Former basketball star Michael Jordan is not the richest man in his current hometown of Chicago—Sam Zell is—but he could well be one day given his business acumen off the court. Nevertheless, Jordan has said, “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty-six times, I’ve been trusted to take the game-winning shot and I missed. I’ve failed over and over, and yet, that is why I succeed.” In some cases, these RMITs had near-cataclysmic failures before they achieved their defining success. Bruton Smith’s bankruptcy at the Charlotte Speedway could have been the end, but instead it was the beginning of a billion-dollar fortune. The “butt ugly” drums that Hartley Peavey had such a personal and financial investment in could have sent him into a dark depression, or Michael Jordan’s failed shots could have thrown him off his game. Didn’t happen. RMITs know that failure often leads to their rightful success path. They recognize failure’s inevitability and learn from each mistake along the way—and yet they are never totally satisfied with their performance. Just as they don’t fear failure, they don’t totally trust success. That’s a powerful part of the RMIT DNA.
Even when business is good, the specter of failure helps RMITs stay sharp. Although he has built a $4-billion-plus fortune and has homes in Manalapan, Florida, and Grand Rapids, Michigan—all the comforts of a rich, full life and more—Richard DeVos, the ace of Amway, rated his success at 5 on a scale of 1 to 10. Most Americans would kill to have his track record and his fortune, but DeVos points out the dangers of complacency: “Every business and every person must constantly reinvent themselves if they desire to stay at the top of the heap. It pays to be a little paranoid.” That’s why billionaire Andy Grove, senior adviser to Executive Management and former chairman of the board of Intel Corporation, wrote his book Only the Paranoid Survive. According to Grove (who, by the way, is not the richest man in San Francisco with a net worth of $4 billion—Larry Page of Google fame is), “Every leader will eventually reach a nightmare moment—when massive change occurs and a company must, virtually overnight, adapt or fall by the wayside.” He calls such a moment a strategic inflection point. “When a strategic inflection point rears its ugly head, the ordinary rules of business go out the window,” says Grove.
William D. Sanders agrees wholeheartedly: “Unless you have the most perfect patent in the world, you can never totally relax.” When I asked Columbia’s Joe Taylor, who is now the commerce secretary for the state of South Carolina, to name the one thing that most affected his success, he stated bluntly, “I’m constantly paranoid.” Growing up with a father who was a serial entrepreneur, he said, “One week we were the richest folks in the town and then the next we were the poorest. I vowed then that I never wanted to be on that societal seesaw. For my father, the fun was in the start-up, not in the execution of the business or the day-to-day management. I vowed to be good at both.” He certainly has been, and his paranoia has paid off prodigiously.
Companies have strategic inflection points, and so do individuals. RMITs are masters of resilience and reinvention. Roxanne Quimby says, “You can never dust yourself off and say, I’m done. Success is a process, and most people simply quit too soon. People love the rags-to-riches stories, the overnight-success syndrome, but I believe that is a cultural myth. Hard work, perseverance, and never being too satisfied or too comfortable is what ultimately leads to real success.”
When asked to rate their success on a scale of 1 to 10, 85 percent of the RMITs claimed a number between 6 and 8. Even though the poorest among these RMITs is worth a conservative $100 million, most don’t feel they have knocked the ball out of the proverbial park. Harris Rosen of Orlando, Florida, who has recently completed his third major hotel property in Orlando—a fifteen-hundred-room golf resort with more than 350,000 square feet of meeting space, making it the largest in this convention city—says, “If Shingle Creek is a success, then maybe I’ll rate myself a 9.”
Dan Duncan, who is perhaps the quietest billionaire in America, certainly in Houston—a town where, as the saying goes, money is shown as much as it is grown—confidently articulates, “I’m never satisfied! I always know that I can do a better job, I can live a better life, I can treat people better than I have, and I can and must always work to improve myself.” Archie “Red” Emmerson remembers that his father was a hard worker, but he didn’t have the ambition young Emmerson possessed. “My dad was satisfied to just make a living. Not me, I have never been totally satisfied.” Stay paranoid—it keeps you on your toes, it keeps you pushing for that next rung on the ladder of success. Never fear failure; it is your friend. Remember, no pain, no progress.
The principle “No pain, no gain” has been made famous by numerous exercise gurus and muscle machines, but it applies even more aptly to becoming truly wealthy. Hartley Peavey of Meridian, Mississippi, says, “I believe that life is a test to see how much BS you can take. The problem with most folks is that when the going gets tough, they stick up their hands and they surrender.” In good old Mississippi fashion, he calls it “the watermelon seed syndrome. That’s what happens when you put a watermelon seed between your thumb and forefinger and squeeze,” he explains. “The seed flies right up—you can’t hold on to it.” Peavey believes the watermelon seed syndrome is what happens to most people in business and in life. They can’t take the pressure, they give up too soon. They don’t pass his test of handling the BS that life inevitably throws at all of us.
Peavey sums it up by saying, “Without question, failure is painful. Paranoia, though, helps to keep one sharp. Never feeling as though you have truly made it can be difficult. Yet in moderation, paranoia, pain, and failure are all healthy. Failure isn’t fatal. And paranoia can breed progress.”
For many RMITs, what Hartley Peavey calls “life’s BS” means coming from hardscrabble circumstances or having a family that lost it all when they were young. Leroy Landhuis of Colorado Springs grew up on a farm “dirt poor,” as he says. Fellow real estate developer Jorge Pérez of Miami was born to educated, wealthy Cuban parents who lost everything in the Cuban Revolution. “I saw what it was like to go from having everything to having nothing at all.” Pérez did not want history to repeat itself, so he pursued his education in Argentina and Colombia vigorously before coming to the United States to attend college at C. W. Post and then earn a master’s degree in urban planning from the University of Michigan. Even though his business is the largest Hispanic-owned company in America and has blessed him with a multibillion-dollar net worth, he says, “I have never played the Hispanic card. I have never used it to get ahead. I never wanted to be considered a Hispanic developer—I just wanted to be considered a great developer.”
RMITs also prove that being branded a loser early in life may not be so bad after all. Fully 72 percent of the RMITs were less than A students, or weren’t the fairhaired children in their families. New York’s Carl Icahn remembers that his atheist father said to him while the youngster from Far Rockaway, Queens, was at prestigious Princeton University: “Look, son, you don’t have any real talent, you’re not an artist like your mother, you’re not a musician like me, so you better be a doctor.” Being a dutiful son, Icahn went to medical school for two years, but never felt the passion. In fact, he couldn’t abide the cadavers, so he left and joined the army. He didn’t find his perfect pitch during his six months in the army, either, but he did win $10,000 playing poker. “All humans collect something,” he discovered; “I collect money.” He has collected at least $16 billion since his humble beginnings in rough-and-tumble New York.
Like Icahn, many RMITs didn’t get a lot of parental encouragement at home. Many weren’t at the top of their class, either, and a surprising number of them were thrown curveballs of significant learning differences. Even so, RMITs have a way of making lemonade out of lemons. Bill Doré’s father had ADHD (attention deficit hyperactivity disorder), though it was not actually understood at the time or recognized as such, until Bill himself was diagnosed with the same disorder many years later. While Bill’s father often found it difficult to maintain a job because of his lack of focus, his hard-charging son adapted by channeling his ADHD into action, ultimately building a small, nearly bankrupt diving company into a highly successful, publicly traded global concern.
As a young boy, Doré vowed not to be in the same position as his dad, working like crazy from job to job with little to show for it. While his father couldn’t give him much in the way of material possessions, he did imbue Doré with a powerful work ethic. Doré mowed lawns, delivered newspapers, washed automobiles, and even shined shoes to make spending money during his youth. He says, “There was no allowance—I had to make my own way.” Several RMITs like Doré cited having a learning disability as a blessing. Charles Schwab, the founder of his namesake discount brokerage, is dyslexic, as are John Chambers of Cisco and Richard Branson of Virgin Atlantic. All are billionaires. Their pain powered great progress in their lives.
Having to overcome a learning disability, parental criticism, failure, or societal cynicism is what RMITs often credit with fueling their success drive. Bill Sanders of El Paso, Texas, today heads his own company, Verde Realty, after having built an estimated fortune of half a billion dollars in the real estate investment trust (REIT) business. Sanders founded LaSalle Partners, one of the most successful REITs in the country, which he later sold to GE. Sanders says of his youth, “I wasn’t a top student in high school, and yet I was accepted into the Ivy League’s prestigious Cornell University, where I was in the bottom quartile of my class.” He was motivated by his early failures to work harder to outpace his peers at Cornell. To this day, he has never lost sight of that try-harder value. He says, “No pain, no progress.” That great philosopher and pugilist Muhammad Ali scored a knockout when he said, “Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with the extra ounce of power it takes to win when the match is even.” Failure is your friend. Resilience is required.
• Never fear failure. Have the courage to fail.
• Failure is often the greatest teacher.
• No pain, no gain.
• Resilience is the most universal quality among RMITs.