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Note: The Bookrat email is a spin-off from Anthony Pompliano's Pomp Letter. You will receive all future book summaries here, while still receiving Pomp's finance, economics, and bitcoin commentary on The Pomp Letter. Our goal is to separate the two types of content to make it easier to consume.
I read one book per week. Last week’s book was From 'Unayzah to Wall Street by Michael Field. Highly recommend reading it. If you are interested in the individual highlights that I made in the physical book, you can read those here. Hope you enjoy these notes every week.
This is the story of Saudi Arabia’s richest man, but the book is nearly impossible to find. You will struggle to even find a description of the book on the internet. That is unfortunate because we can all learn so much from Suliman Olayan's journey as an entrepreneur and investor. After building one of the largest business conglomerates in the Middle East (read about it here), Suliman gave Michael Field full access to himself, his family, his business partners, and his customers in order to get the most accurate portrayal possible. This book was awesome and it is filled with insights applicable to any industry.
💡 Idea #1 — Personal relationships are a core component to business. This is especially true in the digital, impersonal world we live in today. Field highlights one of Suliman's superpowers:
"Most Arab businessmen, if they had invested in America on the same scale as Suliman Olayan, would have aroused controversy and hostility. The fact that Suliman was generally welcomed came partly from the honesty of his transactions and from his taking the trouble to get to know the people at the top of the companies in which he invests." "From the time he first went to America he liked to build connections with important people." "He believed in “networking” long before that word acquired its modern meaning."Suliman was not only looking to build relationships with people for his own gain, but rather he looked at a relationship as a two-sided commitment. He wanted to make sure that he was spending time, money, and energy with the best people. Field explains:
"His assessment of the people—their strength, integrity and potential—is as important for him as his assessment of the companies’ economic fundamentals: their balance sheets and their position in their markets." "In every case where Suliman has bought a significant share in a company, he has approached the chairman or chief executive and asked whether he is happy with the purchase." "The stories of his involvement with Donaldson, Lufkin & Jenrette and First Chicago illustrate two unusual characteristics of Suliman as an investor: he likes to know the chairmen or presidents of the companies in which he invests, and he is a supportive investor." "Suliman regards investment as a very personal matter."💡 Idea #2 — Lay the foundation for your aspirations through old-fashioned hard work. Suliman became notorious for going the extra mile to learn before he struck out on his own. Field writes:
"Suliman was a zealous pupil. After his lessons finished he would study for hours in the Ajaji house. In the evenings when the electricity was turned off — generators began to be installed in houses in Manama in the 1930s — he would take his own mat and kerosene lantern out into the courtyard and continue his work there." "Suliman began to dream, “What if I owned this place, or the companies to make all these parts—how much money would I be making every day?” This was the germ of Suliman’s career in business. The storehouse gave him the idea of creating his own company." “Ultimately that is where my ideas came from…You should never underestimate what the storehouse meant to me. It was my university. It was where I saw capitalism working with my naked eye.” - Suliman Olayan “You could see clearly that he wanted to be successful. You didn’t see him in bars or nightclubs. He was a serious person. He was always looking for new business—and he wanted to seize every bit of opportunity that came his way. He was almost compulsively ambitious.” - Suliman’s bankerWorking hard is a key component of success, but you also have to know the right things to work on. Being as close as possible to the decision-makers can be helpful. This is where Suliman excelled.
"Suliman immediately won much of the simple construction work for buildings in the four towns. And as work progressed he became involved in their further development. Of the Saudi contractors involved with the pipeline he was by far the closest to Tapline, Bechtel and the Northern Frontier Governor, Mohammad Sudairi." "He was very energetic, very American—and he was more refined and sophisticated than the other Saudis—probably because he had lived in Bahrain. He always wore Western clothes. And he was always looking to improve himself, trying to get ahead—which set him apart from the other Saudis.” — Abdul-Aziz Al-Quraishi💡 Idea #3 — Being well-liked can be a significant advantage in business. People want to work with people they like. Field writes:
"He [Suliman] has established a reputation for utter honesty. He is also liked and admired by most of the people with whom he has done business. He is a rich man with many friends and few enemies."Being well-liked does not mean you have to let people disrespect you. Suliman tells a story of an insurance broker refusing to insure him because of his ethnicity, so he worked tirelessly to put that insurance company out of business.
"According to Suliman, “When I said what I wanted, he replied in a grand voice that he couldn’t insure me because I was an Arab, and Arabs “could not be relied upon to keep an honest payroll record”—which was the basis for this type of insurance. So I decided there and then that I might as well go into the insurance business myself. I told the man I would compete with his company and drive it out of business. He said I didn’t know what I was talking about, but eventually I did just what I said I would.”"💡 Idea #4 — It is important to have good ideas, solid execution, and talented teams in business, but sometimes you can gain a large advantage in the way you structure your business. Given the conglomerate model that Suliman pursued, it was a game-changer to bring in professionals who could supercharge the financial position through legal structuring. Field writes:
"At Bankers Trust he met Richard Bliss…one of Bliss’s contributions to the Olayan companies was partially to consolidate them. His purpose was to give Suliman’s business greater financial weight in its dealings with banks. As general rules, he advised Suliman never to guarantee anything himself and always to put a company between himself and the customer."Winners like to re-write history and tell you they had a master plan all along. Suliman has not done that. He gives an example of putting some of his assets in the United States, which led to eventually building a large public equity portfolio valued in billions of dollars. There was no master plan. Field explains:
"As Suliman has said in several press interviews, he did not begin investing in America to diversify his assets or because he thought that stock markets offered particularly good prospects for capital gain. In the early 1950s he simply wanted some investments “within the 212 area code” so that American banks would feel more secure lending to him."💡 Idea #5 — Suliman was obsessed with business. He had almost no hobbies outside of the company other than spending time with his family. This level of focus is bound to produce results when channeled in the right direction.
“My life’s work has been business. Any success I have achieved would not have the same meaning if it did not contain some lasting benefit for future generations of Saudi businessmen and women. They will have far more opportunities than I but also great new challenges. God willing, they will know the deep satisfaction that comes from trying one’s hardest no matter what — and learning every step of the way.” — Suliman Olayan "For anyone who wants to copy Suliman Olayan and make a fortune of billions of dollars, the lesson is that he or she must have complete singleness of purpose. This is a characteristic of Suliman I heard mentioned over and over again when I was researching this book." "The man is absorbed in his business: he lives for it."
This was a very interesting book. I forget how I came across it originally, but it took a long time for me to find a copy. As I mentioned at the beginning of these notes — unfortunately you will probably not find a copy available online.
My first big takeaway was how important market selection and timing is to the success of a business and an individual's career. Suliman Olayan may have come from humble beginnings, but he eventually was in the right place at the right time. Saudi Arabia was expanding at an accelerated rate and they needed vendors to build out their infrastructure, which Suliman was more than willing to do for the right price. Pick the right market. Cross your fingers that you have good timing.
My second big takeaway was how effective a dual-strategy of operating companies and investment services can be for wealth building. Suliman did not raise a venture capital fund or build a traditional private equity firm predicated on raising outside capital. He built great operating companies that threw off cash-flow and then he invested the profits into various asset markets around the world. Managing other people's money is a good business, but keeping 100% of the profits for yourself is an even better business.
My third big takeaway was that ambition is eternal. Suliman explained that he wants to build the biggest entity possible, while continuing to solve new problems. He is in the game for the game itself, not for the money. Here is how Michael Field described it:
"Suliman’s own aim, and, in his view, the aim of his business, is to continue to meet new challenges. He wants to do better and more sophisticated deals, learn more about business and all the other things that interest him, and build an increasingly big fund of capital—not because he wants to spend it, but because size is an indication of success. He wants to expand his assets in exactly the same way as the chairman of a quoted investment company would. He still sees his business as being at a young entrepreneurial stage. "My fourth and final big takeaway was the importance of being a nice person that other people want to do business with. We live in a world where an obsession with arrogance has thrived, but the individuals who pursue that strategy rarely have extraordinary outcomes. Business is predicated on selling a product or service to other people in hopes of solving a problem they have. The activity of business becomes more enjoyable, and easier, when you treat people with respect, build personal relationships, and try to always do the right thing.
As I mentioned, last week’s book was From 'Unayzah to Wall Street by Michael Field. Highly recommend reading it. If you are interested in the individual highlights that I made in the physical book, you can read those here. Hope you enjoy these notes every week. Reply to this email with your thoughts, including what you agreed or disagreed with. I will respond to as many emails as I can.
-Pomp
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