Success by Ten

I love to uncover hidden assumptions and thus enjoy stories of the early days of some industry, where all of what we take for granted today didn’t exist. Modern portfolio theory, mutual funds, and retirement accounts are commonplace today, but were all invented and become popular between the 1960’s and 1990’s.

Success by Ten is supposed to be advice for creating a $1 billion company, but really it’s a biopic of George Russell, who grew the financial management company his grandfather founded from tiny $150,000 consulting company to a $1 billion acquisition by Northern Trust.

If you like the history of finance, then it’s an interesting read. As for its advice to entrepreneurs, it suffers from a common ailment, it is advice from an entrepreneur who only ever built one company, with that one company never having any life-threatening issues. For example, and only summarizing this slightly… if an acquirer offers you $1 billion in cash for your company, take it.

Bob’s Red Mill burned down, and Bob hit quite a few hurdles in his rise to success, so his personal and corporate biography was a bit more interesting, but for some reason I love the histories of financial instruments and financial structures, so if I only could read one of People Before Profit or Success by Ten, I’d probably read the latter.

There are a lot of great posts buried in this blog’s archives that are still quite apt. Today is another reprise, this time revisiting the (often invisible) tradeoff between efficiency and resilience. Last time I explained that tradeoff with the case study of electricity blackouts in Texas and how that related to Google’s monopoly on search and Amazon’s dominance of eCommerce...

Who invented double entry accounting? The ubiquitous system of general ledgers, income statements, balance sheets, and cashflow statements found throughout businesses and quite a lot of households? This is yet-another of those concept so taken for granted that they seem to have been around “forever”, but thanks to Double Entry: How the Merchants of Venice Created Modern Finance by...

Many of the everyday details in The Work of the Stock Market told in between the history facts are often just as interesting as the history itself. Case in point, if you read the history of time zones, it seemed like the standardization was complete in the U.S. and Europe by the end of the 1800s. Yet in 1922… The difference in time between London and New York is four minutes and one second...

The standard structure for private equity funds (and venture capital funds) is “2&20”, as in a 2% management fee (±1%) and 20% (±10%) of the profits, a.k.a. “carried interest“. Why 20% of the profits? Henry Kravis of KKR explains below, starting at 6:00. TL;DR: Necessity, as he and his partners had no capital to put at risk. Share this:Click to share on Twitter (Opens...

Despite the fact that stock markets have been operating for over 400 years, how exactly they work at the level of individual participate and individual role is rarely documented. Here in the 21st Century most of the accounts are how to make money as an investor, two or three steps away from the actual transactions taking place within the exchange. Which is why it was so fascinating to find and...