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Billionaire Insights With David Rubenstein

Self-made billionaire, David Rubenstein regularly brainstorms business, life and success habits with entrepreneurial peers like Warren Buffet and Bill Gates. Here’s his take on what makes great entrepreneurs tick.

Nadine Todd

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David Rubenstein

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  • Player: David Rubenstein
  • Company: The Carlyle Group, one of the world’s largest private equity firms, launched by Rubenstein and his partners in 1987.
  • Claim to Fame: David Rubenstein is currently number 257 on the Forbes 400 Richest People in America list. His personal wealth is valued at $2,6 billion, and his Forbes self-made score is 9 out of 10, due to his lower middle-class upbringing. He is one of 140 signatories of the Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy, spearheaded by Warren Buffet and Bill and Melinda Gates.

David Rubenstein knows a thing or two about the mindset of a successful entrepreneur. He’s not only built one of the largest private equity firms in the world, but he’s done so from the base of a blue-collar background, working hard to become the first person in his family to get a degree, to practising as a lawyer, and finally finding his entrepreneurial feet.

We-recommend-tickWe recommend: 7 Life Hacks From Rebel Billionaires

Through both the Giving Pledge and his role at The Carlyle Group, he regularly interacts with some of the most successful entrepreneurs in the world. Here are the five characteristics that he believes ultimately lead to success.

1. Tenacity

Great businesses are never just about a good idea, working hard, and then success comes easily. Most entrepreneurs face a multitude of struggles before achieving success. The tenacity to overcome those challenges is a real determining factor in what a business and the founder ultimately achieves.

Entrepreneurs don’t take no for an answer. By definition, if you’re starting a new company and selling a new product, it’s a product that doesn’t exist, but that doesn’t mean that someone didn’t already think of the idea, and didn’t think it would work.

Most entrepreneurs are trying to push against the grain and convince the naysayers that their take on the concept has merit. If you easily take no for an answer, you won’t be a good entrepreneur.

2. The drive to succeed

Entrepreneurs are driven people. It’s rare to meet an entrepreneur who says, ‘You know, I’m going to go into work today at about 10am, and I think I’ll leave at around 4pm because I want to play golf.’ It’s a rare entrepreneur who says, ‘I don’t work on weekends’. It’s a rare entrepreneur who comes from a wealthy family.

Generally, entrepreneurs are driven people who are more interested in proving their ideas work than making a lot of money. When I interact with other members of the Forbes 400 who built their companies, virtually none of them say, ‘I wanted to make money’. They say: ‘I had an idea and I wanted to prove it would work’.

In most cases, being a genius isn’t a determining factor of business success. Einstein was a genius, but there’s no evidence he was a good businessman. It takes a certain amount of intelligence to be a successful entrepreneur, but drive is a far more important determining factor: The drive to improve yourself; the conviction that you’re doing something that’s going to prove you’re correct; and the ability to work with other people, and get them to see the world the way you do are essential.

3. They’re not in it for the money

David-Rubenstein-Carlyle-Group

Obviously when you make a lot of money you’ll find people accumulating the trappings of wealth, but I don’t think most entrepreneurs are as pleased with having a yacht or a plane or multiple homes as they are with proving that the company they thought was a good idea when no-one else did is a success.

A key driver that I see over and over again is the joy entrepreneurs take in the fact that they were right and others were wrong.

4. The desire to change the world for the better

In many ways entrepreneurship is like parenthood. As a parent you have a great deal of pride for how your child develops. You will sacrifice everything for your child, and do anything to try and make their life better.

This is how entrepreneurs feel about their companies. They create them, nurture them in the early years, and see them grow and mature into an adult form. There’s an incredible sense of purpose to both parenthood and entrepreneurship.

Entrepreneurs want to make the world a better place. Businesses create jobs, help others earn a living and give them dignity and self-worth.

Entrepreneurs create wealth for themselves, their employees and society through taxes and hopefully offering a product or service that adds value to society and other businesses as well. There’s a massive sense of pride in a business that really adds value.

The interesting entrepreneurial conundrum occurs when the business matures, though. Some entrepreneurs want to keep creating, others can also be managers. Business owners often need to figure out which they are. Jeff Bezos, Bill Gates, Steve Jobs and Mike Bloomberg all created companies and ran them for many years, but this isn’t always the case. Many entrepreneurs are great at creating companies, but they aren’t good at running what they created.

The problem of course is that the personality of a successful entrepreneur comes with a sizeable ego.

We-recommend-tickWe recommend: The Top 25 Self-Made Billionaires In the World

The trick is to also have enough humility to understand where and when you’re adding value, and when it’s better to step down for the good of the company. The truth is, you don’t need an entrepreneur to run mature companies, you need a manager. 

5. They want to give back

When I signed the Giving Pledge, it was because of a deeply held belief that those who have been fortunate and lucky in business have an obligation to give back and help make society a better place, whether it’s by helping people to get educated, medical treatments, or supporting charitable organisations.

When I grew up, I never saw myself as disadvantaged. I didn’t know about wealth.

Looking back I can say, okay, I didn’t have the wealth that other people had, some people might have said I was slightly disadvantaged because I didn’t have a wealthy family and contacts to propel me into success, but in hindsight it was a very advantaged upbringing. The most advantaged thing you can have, as Warren Buffet has said, is the unconditional love of two parents.

If you’re fortunate to have two parents, and they give you unconditional love and support in what you are doing, that’s worth a lot more than the money you might have gotten.

We-recommend-tickWe recommend: 6 Success Secrets of the World’s Billionaires

The hardest thing in life is to achieve personal happiness. The people who achieve it are not the wealthiest people. If you’ve created wealth, put it to good use.

6. The Role of Luck

Luck is the most important thing in life. Most successful entrepreneurs have had a fair amount of luck in their business endeavours. Bill Gates is a very smart person, but it was IBM’s mistake in not buying the operating system that he developed, and letting him license it to them instead, which helped propel his success.

Steve Jobs was thrown out of his company, and only later brought back as CEO. If that hadn’t happened, he probably wouldn’t have been heard from again.

I owe a lot of my own success to luck. It was not preordained that I would be a successful businessman. I came from a modest background; my parents did not graduate from high school, and my father worked at a post office and earned a modest salary. I worked hard to earn the grades that would secure me the bursaries I needed to study law.

My goal was to work at the White House, which I had achieved as a lawyer under the Carter administration by the time I was 27. Had Carter won the 1980 election, I would have stayed at the White House, and my career would have progressed in the political sphere, as a lawyer or lobbyist for successive administrations.

Carter didn’t win though, which meant I went back to the private sector, where I soon realised I actually wasn’t a good lawyer. Had I been a good lawyer, I’d probably still be practising law today.

What seemed like bad luck — working for a single-term President and then realising I wasn’t suited to my chosen profession, actually turned out to be incredible strokes of luck, because they gave me the opportunity to pursue something I was very good at, namely private equity.

Even more fortuitous was the fact that I was based in Washington DC. I didn’t have a Wall Street background, which meant there was no way I could have launched a PE firm in New York. Washington DC was different.

No one was doing this there. People laughed at me and what I was trying to do, but they also had no one else to compare me to. This meant I could convince people to join the firm who had more financial skills than I had, although they also had no Wall Street experience.

In 1987 I started the first private equity firm in Washington DC, and thanks to luck and good fortune, it became a highly successful global company.

There’s an art to using luck though, and that starts with the understanding that luck comes and goes. Spot it and use it when it comes, but let go of missed opportunities. They happen. Fixating on them doesn’t help you find the next opportunity.

I’ve personally missed more opportunities than I’ve probably taken. I had a chance to invest in Facebook at the beginning; I turned it down. I had an opportunity to be a big shareholder in Amazon; I turned that down. I had a chance to be an initial investor in Netscape and walked away from that too. We all make mistakes.

7. Entrepreneurial DNA

Over the years, I’ve noticed that many of the most successful entrepreneurs in the world share similar characteristics: They come from modest backgrounds, often lower-middle class; they’re driven, intelligent people, but not geniuses; they’re people that know how to motivate other people, and lead either by communicating very well or leading by example; they don’t take no for an answer; and they’re more interested in the success of their company and showing people that they are right in what they thought than the trappings of wealth.

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

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Watch List: 50 Top SA Small Businesses To Watch

Keep your finger on the pulse of the start-up space by using our comprehensive list of SA small business to watch.

Nicole Crampton

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Entrepreneurship in South Africa is at an all-time high. According to Global Entrepreneurship Monitor (GEM), total early-stage entrepreneurial activity has increased by 4.1% to 11% in 2017/2018. This means numerous new, exciting and promising small businesses are launching and growing.

To ensure you know who the innovative trailblazers are in the start-up and small business space, here are 50 of South Africa’s top establishing companies to watch, in no particular order:

  1. Livestock Wealth
  2. The Lazy Makoti
  3. Aerobuddies
  4. Mimi Women
  5. i-Pay
  6. AfriTorch Digital
  7. Akili Labs
  8. Native Décor
  9. Aerobotics
  10. Quality Solutions
  11. EM Guidance
  12. Kahvé Road
  13. HSE Matters
  14. VA Virtual Assistant
  15. Famram Solutions and Famram Foundation
  16. BioTech Africa
  17. Brand LAIKI
  18. Plus Fab
  19. LifeQ
  20. Organico
  21. 10dot
  22. Lenoma Legal
  23. Nkukhu-Box
  24. Benji + Moon
  25. Beonics
  26. Brett Naicker Wines
  27. Khalala
  28. Legal Legends
  29. The Power Woman Project
  30. Aviro Health
  31. AnaStellar Brands
  32. Data Innovator
  33. Fo-Sho
  34. Oolala Collection Club
  35. Recomed
  36. VoiceMap
  37. ClockWork
  38. Empty Trips
  39. Vula Mobile
  40. SwiitchBeauty
  41. Pineapple
  42. The Katy Valentine Collection
  43. OfferZen
  44. KHULA
  45. Incitech
  46. Pimp my Book
  47. ART Technologies and ART Call Management
  48. Prosperiprop
  49. WAXIT
  50. The Sun Exchange
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How 28-Year Old Entrepreneur Adam Fine Is Leveraging The Global Phenomenon Of Five-A-Side Football

Adam Fine of Fives Futbol discusses how he leverage a global phenomenon and the value of strategic partnerships in business.

Monique Verduyn

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Nothing about Adam Fine is by-the-book. The 28-year-old entrepreneur describes himself as a slightly big child. He’s the CEO of one of the most exciting start-ups in South Africa, having leveraged the global phenomenon of five-a-side football to start a business that has grown almost as fast as the game itself. Not bad for a venture that was launched with the princely sum of R85 000 — Fine’s life savings at the time.

He started it in 2011, with a strong focus on corporate social investment and making a positive social impact. It was by forming strategic partnerships that Adam really managed to grow Fives Futbol. He’s opened pitches in prime locations that serve both the school and corporate markets, while still being accessible for social impact interventions in local communities.

Related: 3 Local Entrepreneurs Share Their Business Challenges And How They Overcame Them

Pivoting at the right time is key to growth

The challenge:

In the last 18 months, Fives Futbol has trebled in size, and achieved some amazing milestones — it now employs 50 full-time staff, and 80 part-timers. It’s one of the factors that drives Adam, as many of his employees support up to eight family members. It’s now also represented in four provinces and 15 locations around the country. By September, there will be 18.

Quick growth means you have to be able to pivot quickly when things do not go according to plan, and mostly they don’t, Adam says. “If things are not working you should be able to ‘pivot’, to shift your focus. And do it fast. It’s not a sign that things have gone wrong by any means, on the contrary, it means you have the insight to recognise that there is a problem with the assumptions on which you have built your business model. The decision to pivot is a big one, and not something to be taken lightly. It requires you to take a hard look at your reallocation of resources, and to do it with an open mind.”

The solution:

In Adam’s case, construction delays, councils taking their time to approve, or having to put money into rolling out sites as opposed to marketing, means the promotion of a new site will slow down, for example, because the business does not yet have a large marketing budget.

“When we run behind on the construction of a new site, R40 000 can suddenly become R100 000 — but here’s the thing: If a deal comes along that will probably harm your business in the short-term but enable significant long-term growth, sometimes you have to juggle what you have so you can make it work.”

The Lesson: Choose your investors carefully

Fine says he’s lucky to have a solid group of investors that he has cultivated over six years. “Their input is invaluable. They’ll say, ‘slow down’ or ‘have you thought of this?’, ‘have you factored in that?’ The ability to develop a good relationship with our investors has had a significant impact on the success of the company. Over and above money, they provide wisdom, guidance and connections.”

His relationship with his investors is key. While many entrepreneurs make it just about the money, Adam understood something else — he has a pretty cool brand with a great cause behind it. So, while investors are asked for money all the time, he was able to offer something more than just a business idea — alignment. He generated enthusiasm for the ‘why,’ behind the business. Like most of us, it makes investors happy to know that they are helping to make a positive difference.

And while it’s easy to bandy about the word ‘partnership’, Adam has worked hard to make that a reality. He set out to find like-minded people who are passionate about the business and the cause, which is why they are able to serve as great resources for advice and insight.

Related: Richard Branson’s ABCs Of Business

“The best way to ensure that you and your investors have a valuable and lengthy partnership is to make sure that everyone is aligned on the vision.”

This includes Adam’s team. The internal culture of an organisation is vital to its strength and growth. “Without our team we don’t have a business for investors to support — our people are critical to our success. They’re the executors of the vision at the end of the day.”


The Lesson:  The value of strategic partnerships

Much of the growth of Fives Futbol has been fuelled by finding the right sponsorship partners in key industries. To overcome the challenge of a limited marketing budget, Adam has secured sponsorships with big brands like Adidas, Total Sports, Debonairs, and Klipdrift, allowing Fives Futbol to use their access to communities as a marketing platform to derive income as well as scale. And it works both ways.

“Because we have a national footprint and a team of people, we run activations for our partners, which also provides us with an ancillary revenue stream,” he says. “Knowing how to join forces with other businesses has been a key factor in making the business successful. Our strategic partners have enabled the business to leverage their brand to give us more exposure. When it works well, a strategic partnership can be just what you need to speed up the growth of your business.”

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Watch List: 15 SA eCommerce Entrepreneurs Who Have Built Successful Online Businesses

The advent and advancement of the online marketplace has led these entrepreneurs to successfully build and grow their ecommerce empires.

Diana Albertyn

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South Africa’s ecommerce market is worth R10 billion per year. By 2021, the number of online shoppers is expected to have reached 24.79 million.

“Our recent research on SA shows people are browsing three hours or more on their mobile phones and 25% shop online. They trust local brands,” says Geraldine Mitchley, Visa senior director for digital solutions in sub-Sahara Africa.

These entrepreneurs have cashed in on ecommerce and launched successful online stores that have either established their dominance in the market, or are taking the e-tailing world by storm.

Here’s how these 15 ecommerce capitalists are making money using the Internet:

  1. Aisha Pandor
  2. Andrew Higgins
  3. Kerryn Tremearne
  4. David Davies
  5. Andrew Smith, Paul Galatsis and Shane Dryden
  6. Trevor Gosling
  7. Nicholas Haralambous
  8. Justin Drennan
  9. Neo Lekgabo
  10. Ryan Bacher
  11. Tracy Kruger
  12. Luke Jedeikin
  13. Tarryn Abrahams
  14. Sascha Breuss
  15. Antonio Bruni
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