Monday, April 6, 2009

Entrepreneur Corner--T. Boone Pickens

A couple of weeks ago I finished reading a book about a famous Texan named T. Boone Pickens. He is a self made billionaire and the title of the book is "The First Billion is the Hardest". Can you imagine? And I thought the first $50,000(or less) was the hardest! Anyway, if you like to learn and want to find some insight to a man that has made billions, you might want to read about this man and his story.He is after all the 117th richest person in America! I had never really heard of him until around the presidential election when he was running commercials in support of his new energy plan for America. I will post about that plan specifically in the next posting. Isn't it so great in this country to know that their is so much money to go around? I mean their are literally dozens of billionaires now that I and I imagine others that have never heard of them. That's on top of the multimillionaires and millionaires.

Pickens, in his 80's, is still at it. He's amassed a fortune over the years in many different ways. He started in oil founding an oil company that would later become Mesa Petroleum. He expanded by acquiring other oil companies. This led him into mergers and acquisitions. Later in life, he started BP Capital Management and he is currently the chair of a couple of hedge funds. He has also acquired rights to a lot of water in Texas, acknowledging that water is limited and that one day a premium price will be charged to get it. He also has interests in natural gas. He formed another company in 1997,Pickens Fuel Corp, and promotes natural gas as the best alternative fuel for vehicles. Right now he is concentrating on powering the country's transportation systems. He sees it as cleaner-burning and a major plus is that it reduces foreign oil consumption. The company was aptly renamed Clean Energy in 2001. The company now owns and runs natural gas fueling stations from British Columbia to the Mexican border.

Although it was great to see what a man can accomplish, I enjoyed reading about the man behind the companies. His grandma taught him the value of a dollar and he tries to be frugal in his life and in his businesses. He has even resoled the same pair of penny loafers since 1957. Also in the book, he tries to pass on some lessons. One is that you should always think like an owner. You have to remember that shareholders of a company are the real owners of a company. You must remember that management, and that includes CEO's, are just employees. He noted that he had found that top execs in oil companies had spent their entire working lives at one company. They avoided what in Pickens mind is the difference between success and failure. That is taking risks! He thinks that too many execs are more concerned with the 4 P's than with making profits for shareholders. The 4 P's are pay, perks, power, and prestige. He also makes the point that an owner or a CEO that doesn't own a significant amount of stock in his own company or the one he runs, does not represent their company well. How can others believe in a company if the owner or CEO doesn't?

Their are many lessons in this book for entrepreneurs. The first lesson he offers up is one I have heard before. A big deal takes just as much time as a little deal! Of course if you have never put together any "deals" before, it makes it harder to start big in my opinion. He says to do what you know best. If you have worked at a car lot all of your life, then try to start a small used car lot for example. Entrepreneurs put their money at risk. Only with risk will the greatest jobs and profits come! As a business owner you need to surround yourself with employees smarter than you in all areas of the company. Just like a sports team you need varied ages, backgrounds, and experience to make your biz well rounded. You need some rookies and some veterans! You need a mix of skills, each with their own strength. Pickens notes that a team comprised of only all- stars rarely shines. As an owner you need to lead but also listen! Developing a rapport with employees will be in your best interest.A leader encourages teamwork and keeps people focused on the future.

In life Mr. Pickens has something for us to think about too. He talks about depression and its four main triggers. They are losing a job, moving out of your home, divorce, and the death of a family member or a close friend. He also says many great things about maintaining health. He says, as we should all know, that no amount of money, success, or fame can raise a body from a bed or turn fat into muscle. He determined a number of years ago that he would recommit himself to physical fitness. He says that Arnold Schwarzenegger once said that weights in a gym never care about how rich or famous you are. Only constant and aggressive exercise can keep a human being young and fit. He says that exercise increases stamina and concentration. That means you will be able to get a lot more done and have more energy. In his 80's, I was surprised to find that it seems like his workouts are tougher than the ones I have been putting myself through lately. He has a personal trainer that really pushes him! Incredible right?--more fit than most half his age. He also that the way to live your life is with engagement,involvement, and constant action.He even gave Mesa employees , his first company,YMCA memberships. Later he would build a company gym. He believes in corporate wellness programs. He says that these programs have paid for themselves in health care savings in three years. He says that you should build team spirit by coaching your players to work together. He notes that everyone is a player and that no one is a superstar. He likens the workplace to football and he is the coach. He says that you don't manage, you should lead. People tend to follow your lead if you set a good example. You need to show loyalty and pay your employees well. Give them the best equipment and the best working environment. In the end, you will get rewarded with a low employee turnover rate.

As you can see their is a lot to learn from this man. As mentioned earlier, he is still working and earning money in his 80's. At this point, he shows no signs of slowing down either. He is now pushing another "big deal" potentially worth millions to his own bottom line, The Pickens Plan. I read in an interview, I believe in Fortune Magazine, that many say he just pushing his own agenda. What I like is that he didn't back away from it. He readily admitted that he would earn money if America could switch to alternative energy sources. However, he says, and I tend to agree, so what? The plan is ultimately in the best interest of our country. If he makes money, so what! Trust me someone is going to make money no matter if you use his plan or someone else's. At this point, don't we agree that something needs to be done to protect America and lessen its dependency on foreign oil and offer new alternative methods to creating energy?At least he is offering up a plan--I dont see our federal government stepping up yet now or when Mr. Bush was president!.... Mr. Boone's Energy Plan will be discussed in the next post!


  1. "The First Billion is the Hardest"! haha..OMG what a pimp. It would be cool to sit down with him and Buffett for lunch and pick their brains. i wonder how one goes about doing that? ;)

  2. LOL--Thanks for the comment J.Money. For those of you who need a laugh and a new twist on personal finance--check out! Buffet and Pickens are indeed two pimps on another level! Wow, I couldnt imagine lunch with those two--do they need an apprentice??