The Secrets of Self-Made Billionaires

Business-wise, Hargreaves told you that he stops pursuing projects as soon as he sees that they’re not working out.

This relates to the dilemma of when to play and when to fold, so to speak. As soon as you realize your undertaking doesn’t have a chance, you need to end it, Peter says. This frees up financial resources and mental resources.

What about millionaires? Do they do the same thing?

Not necessarily. Millionaires often try for many years to make something successful even though it’s doomed to fail. It’s irrational to throw more money at something and spend more of your life on it if it doesn’t have the chance to succeed.

Next billionaire: Naveen Jain. Indian-born, he lives in Bellevue, Washington. He started out in the U.S. as a software engineer, soon hired by Microsoft. Then he founded several companies, including Intelius and InfoSpace, his first endeavor, which made him a billionaire [and from which he was forced out amidst litigation]. His Moon Express is working to bring about private space exploration. 

When he said he would have a company for traveling to Mars, people said, “Are you crazy? This isn’t going to happen.” There were probably less than 5% who said, “Let’s find out how we’re going to get to Mars and join him on their mission.” Naveen has never been a conformist.

Working at Microsoft, he told Bill Gates that an early version of Windows would be “big, fat and slow.” His immediate boss was appalled that he said that, but Jain told him he was working for the company, not his manager. It turned out his assessment of Windows at the time was correct.

He wasn’t afraid of losing his job. He just wanted to say whether or not Windows would succeed as it was designed at that point.

Just so, Jain emphasized to you that, in order to build relationships, it’s critical to connect with people emotionally.

There are three levels of building a relationship, and only the highest level impacts the success of your business, he told me. The first is who you know; the second, who likes you; the third, who trusts you. You need a high level of trust to develop sustainable relationships.

Jain also noted: You need “good eyesight” to see opportunities in front of you and to act on them.

Yes. He said you don’t need to be a visionary. What you need as an entrepreneur is to be in the present and able to recognize opportunities and developments in the world — and therefore changes in business. Usually, people are too occupied with the past or future and don’t see opportunities in the present.

Another billionaire you interviewed is Tim Draper, Silicon Valley venture capitalist. He founded Draper Fisher Jurvetson and Draper Associates, and was founding investor of Hotmail, Skype and Tesla, among others. He’s a big Bitcoin enthusiast. What’s his philosophy about success and failure?

Success is continuing to be willing to fail. To be a self-made billionaire, you must be adventurous and bold because most of the time you’re wrong. If you want to achieve something of importance, even something extraordinary, and do things no one has done before, you must be willing to fail. As a venture capitalist, Tim is even more aggressive about taking risk, though people may ridicule or laugh at him.

Draper began investing when he was a child, didn’t he?

Yes. In fact, most billionaires started to invest at a very young age. Tim got a penny a minute for working in the garden. His father convinced him to invest that money. So at the age of 9, he bought a share of Mutual of Omaha stock and put some money in a bank account. After a year or two he saw that his money had multiplied. It got him excited about investing and later, about venture capital investing.

Canadian-born Jack Cowin lives Sydney, Australia, where he became a fast food pioneer. He owns the country’s largest restaurant franchiser, Competitive Foods. In the interview, he cautioned: Don’t be in “the personal exertion business.” Please explain.

If you’re a doctor, for instance, you’re generally paid for the time you spend with a patient. So your income is limited. To free yourself of that limitation, you need to get out of the personal exertion business by scaling your [practice]. Jack was once a physician. When someone asked him how as a doctor he became a billionaire, he replied: “First stop working as a doctor. Then try to figure out how to get out of the personal exertion business.”

Cowin also argued that if you don’t take risk, “you’re wasting your time.” 

On the other hand, he said: Don’t bet your house. The No. 1 rule in business is: Don’t go broke. So take risk with a limited downside and as smart an upside as possible. He said to take many “swings” because the more swings you take, the higher the chance of your finally hitting the ball.

Chip Wilson, Canadian founder of Lululemon Athletica, the big sportswear retailer, advises to look at life from the perspective of one’s deathbed. But what good is that?

It’s to consider what you’ve achieved and what you wanted to achieve. What are the things you’ve missed in your life? Chip can’t stand the idea of going to his deathbed with any idea untried. He must know whether or not it’s viable.

He stressed the reality that life is short and to make the most of every day.

Right. If you live to be 80, that’s 40,000 days — and then you’re dead. So you have a limited time and should use that time to the best [advantage]. You should take chances. You should [take] all the opportunities you’re given in life. Don’t let any opportunities or your ideas go untried.

— Related on ThinkAdvisor:

• What 30 Years at Buffett’s Shareholder Meetings Taught an Advisor
• 2 UBS Advisors Share Their Secret to Serving Billionaire Clients
• Here Are Some of the Most Epic Mistakes by Famous Investors: Michael Batnick