Important Words of Encouragement From A Successful CEO

Image by: JD Lasica
By Michael Sterling

William Gross co-founded and currently runs Pacific Investment Management (PIMCO), one of the largest active global fixed income investment managers in the world with $2 trillion in assets under management in 2012, making it the world’s largest bond investor.

Gross knows a thing or two about business. He once said, “Spreading risk and calculating odds towards decisions is like playing a game of blackjack.” All it takes is a bit of skill, knowledge about your “hand” and what you have to offer the table. But in today’s world, there’s a little more to it than that. Let’s take a look at Gross’ track record:

#1) Be The Answer, Not A Copy Cat

When Gross was in high school, there was a worldwide energy crisis. In those days, if you wanted to buy gasoline, you had to line up in odd or even numbered days, buying only $5 at a time. One day, he came across an article about how there was some hope to solve the energy problem through solar energy.

It was then that Gross decided to be the solution. He built a solar engine in his shop class, and sold the blue prints through Popular Science Magazine. After $40,000 in profit, he was able to use this as a cushion to get him through college and for further projects.

As a business owner, many of us often never ask ourselves, “How can we solve the problem?” Instead, we leapfrog off of other people’s ideas and try to make it better.

Though this is a good strategy (we all want to be better than our competitors), the rewards which come from being not only the first of your kind, but the answer to whatever problem your consumers may face will solidify your loyalty across all markets.

#2) Join The Ride

Gross has said that finding a rapidly growing market is like running a race with a strong wind at your back, and he’s right. When the market is going towards a certain direction, you’d be a fool not to follow it all the way to the bank. Sometimes it can be difficult, especially if you feel like your vision is going in another direction.

Gross, for example, jumped on the solar energy trend in the mid-1970s not just because it was interesting, but because he smelled an opportunity for success. Since no one else jumped on the scene with a valuable product, Gross eventually climbed his way to the top by selling his ideas, products, and visionary templates to eager engineers.

#3) Compliment Your Partner’s Skills

Gross said at LA’s Demo Day that the biggest killer of most companies is its mix of people. He described four “types” of personalities required to build a sustainable business. They are:

Entrepreneur (E), Producer (P), Administrator (A), and Integrator (I).

The absence or excess of any one of these “types” of personalities is detrimental, according to Gross, and they all blossom over time. Most businesses today start out with an entrepreneur and visionary (most of the time, founders have a bit of producer in them also).

A little bit later on, administrators will join the team to add systems and procedures for long term sustainability. Integrators, says Gross, come last and are the “gel” of a team, allowing competing personalities to work together cohesively.

#4) Choose Investors Wisely

One of the most important things entrepreneurs forget has little to do with their team, and all to do with the investors who become involved in the company. Typically CEOs of startup companies hear the word “money” and quickly bow down to its every demand.

According to Gross, investors in startup companies MUST understand, appreciate, and truly believe in your goals and perspectives. If not, they will feel a bit uneasy when you start to innovate and take risks which is the most important thing every company can do.

Bottom Line? Don’t bend over backwards just to reap financial security. A true investor is also a gambler which means they put their money towards a company they believe will break the mold. Trust is crucial.

*Tip: A new innovation showing success are start up Accelerators. They are programs which last around 90 days and offer a business owner everything he/she would need to build their network, ideas, and platforms in exchange for a nice chunk of the company’s stock. 

Y Combinator was the original accelerator to have created this kind of system, sprouting the billion dollar companies Airbnb and Dropbox since its inception in 2005. TechStars and Launchpad LA are other great accelerators which many are saying have companies sure to break through the market pretty soon.