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Cedric Chin
@ejames_c
The interesting pattern, if you read enough business biographies, is that EVERY fast growing business is a finance story. You only grow from a) selling equity, b) taking on debt, or c) free cash flow, which then implies that every big business grew through one or more of the 3.
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swyx 🔜 Dev | Writers | Miami
@swyx
biggest surprise so far is that Knight spends something like 1/3 of the book constantly running out of money and negotiating with bankers and creditors. this isn't a Shoe entrepreneurship story, it is a Finance story. Nike only survived due to Knight's charm and luck.
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Cedric Chin
@ejames_c
The game that I play when I read a business biography today is to bet with myself "ok, how DID they grow big?" The answer is inevitably 1 of the 3, but the nuances are endlessly fascinating. Nike had Nissho, which was available only because Japan grew ascendant in the 80s.
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Cedric Chin
@ejames_c
70s, sorry. And Nissho had capital to spare because it was a 'sogo shosha', organised in the form of the keiretsu business model — that is, multiple businesses organised around a central bank. This model existed only in the postwar era, when family-owned zaibatsus were disbanded.
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Cedric Chin
@ejames_c
Robert Kuok grew through free cash flow from retained earnings ... because HE WAS GAMBLING HIS COMPANY'S MONEY IN THE COMMODITY MARKETS. (Actually, he also got a loan from Bangkok Bank, but that didn't provide the bulk of his growth).
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Cedric Chin
@ejames_c
Bloomberg grew off the FCF provided from his terminal subscriptions. But he also sold an initial stake to Merrill Lynch. Koch grew by 'creating' FCF — he crushed a union at a geographically strategic refinery in Pine Bend, which he then turned into a cash generating machine.
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Cedric Chin
@ejames_c
Rockefeller grew his initial empire by borrowing money — endless rivers of it! — from banks. Many banks. He had to have good relationships with dozens of bankers and bank presidents. And he would drive from bank to bank, grabbing as much cash as they had available.
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