Thursday, September 22, 2011

James Altucher Tells You How to Run a Business

James Altucher has some great insights about running a business, in an new post. The oddest thing about his post is that he calls it "The 100 Rules for Being an Entrepreneur" and then labels his rules A through ZZ, which means there are 52 not 100, but the 52 are mostly solid.

One further note, though he says his rules are for "entrepreneurs", running a business is close to being an entrepreneur, but not exactly the same thing. There's a crossover between businessmen and entrepreneurs, but they are not always the same thing.

I have personally done deals where I have not run a business, used no capital and spent less than a week on a project, but got in the middle of putting people together that made me serious $$$$$. It's a kind of knowledge arbitrage, which is true entrepreneurship, though understood on a theoretical level by very few. The economist Israel Kirzner seems to be one of the few that gets it. He should get the Nobel Prize in economics for his insight.

If people understood Kirzner's insight, the world would change. There would be hope for the poor, since according to Kirzner, and I believe he is correct, it is not capital or labor that is at the essence of entrepreneurship, it is the spotting of opportunity and putting the pieces (the deal, if you will) together.

What entrepreneurship is about is not taught in schools, because teachers are the very opposite of entrepreneurs. Their schedule is laid out for them, their class plan is largely government approved as are the books they teach from. Consequently, teachers and the school system reward students who follow plans. Opportunity seekers who want to mix things up and change things are suffocated.

There is no course anywhere that I am aware of in the poorest public school or at Harvard that teaches what an opportunity is or how to spot one, but there are plenty of courses about the down trodden and what the government needs to do to help them. B.S.

I have on two separate occasions made $50,000 plus with homeless men, simply because I have spotted knowledge they had that others would be willing to pay big dollars for. One deal closed within a week. The other deal paid me monthly $10k plus checks, for about six months. I did nothing other than putting people together.  Others supplied the capital (in one case millions---I used the homeless man to get to the millions!), the labor, the expertise. I just put them all together, that's entrepreneurship, seeing the opportunity. Putting a business together can be entrepreneurial, but entrepreneurship is not necessarily about a business. It is really about putting things together.

In high poverty areas there have to be opportunities galore for big money, yet very little of the opportunities are being taken advantage of, because most are taught by the education system that its government that has to help the poor, so the damn poor sit around waiting for the government to help. It's a tragedy.

But, I have digressed greatly. Altucher's insights are solid for running a business. They are here.


  1. I agree that entrepreneurship can be spotting opportunities, but a more broadly applicable definition is "a capitalist that takes unusual risks" because, without capital, there is no risk involved that you are subjecting yourself to. Opportunities may arise that you just can be aware of and make some money out of without taking any risks, but, an entrepreneurial business requires capital to be sustainable. For a fantastic discussion on this topic, see Peter Klein's The capitalist and the entrepreneur, essays on organizations and markets.

  2. @Chandra Duggi

    Why can't entrepreneurship be about knowing where the capital is also? Your definition is not a "more broadly applicable definition" it is a narrower definition, since a person has to have capital to start with.

    I don't know what you mean by "unusual risks". Risk occurs becasue we don't understand the future fully. Placing capital is not necessarily entrepreneurial. Do you think that putting capital in Treasury bills is entrepreneurial. The essence of entrepreneurship is spotting opportunity, including where capital is available to get a deal done.

  3. The homeless business deserves a long detailed post of it's own.

  4. Robert, I really want to know more. I have a great following. Can I interview you?

  5. I think between these two deals, and the one time you told that person to sell fortunes on the street corner, you have personally helped more homeless people than almost every politician ever.

  6. I always wondered if Mises Rothbard or Hayek ever did any interesting business deals.