Often times after a radio show or podcast has become popular there is a desire to release a book and How I Built This fits into the pattern. There is a podcast called How I Built This by Guy Raz which resulted in a book published by Houghton Mifflin Harcourt, NY, 2020. The podcast is Guy Raz interviewing entrepreneurs about their journey to become successful. In the book, Mr. Raz groups the answers into categories and as a journalist adds stories around the theme of the chapter.

In every business, it starts off with a small selection and eventually the selection becomes larger as the company grows and expands. There are rational reasons why, people ask for more products and services and sometimes the new products are the growth areas for the company. In the book are a couple of examples which are described in greater depths. One example is Stacey’s Pita Chips. The company started off as offering pita sandwiches from a hot dog cart and because people liked the sandwiches there tended to be a line up. Someone thought it would be nice if they offered chips from the leftover pitas to people as they stood in line. Soon people were asking for the chips in larger batches and the owner had to decide which path to take – pita sandwiches or pita chips. The pita chip company was eventually bought by Pepsi and you may have seen them in a supermarket.

Another example is Justin.tv. The company allowed for lifestyle live streaming and various categories were soon up and running. The company founders noticed one video category was outdrawing all the others combined – gaming. The division was spin off to a sister site called Twitch Interactive.

There are many other examples, the issue is it takes an immense amount of emotional maturity, no matter how old you are, to recognize the business you are leading is bigger and more important than your idea on which that business was originally built.

If you work for someone else, one of the things in the back of your mind is if I won the lottery (became rich) I would not have to work anymore. Anyone who works for the lottery always says this type of expression. What if you owned a business and made lots of money, would you keep working? If you were wealthy, what motivates you to stay involved with the company? The answer eventually turns back to the reason why the business was started or the mission first. What is the purpose of the business? The answer is the reason why you turn up to work, to stay with the business when times are tough and you wonder if it will be a success and once the business is a success, why you stay.

Linking to dividend paying stocks, companies begin for multiple reasons and once in business, most try to add on to satisfy customer needs and expectations. Some of these needs are done in house and when they are done in house, once in a while the business grows and soon dwarfs the main business, what does the owner do? Many companies will spin off the divisions, while retaining a significant ownership and let the division do as well as possible. Part of the reason this is done is everyone once in a while Wall Street likes everything to be done in house, then they change their minds and want companies to focus on the core business. Often the business that are spun off become profitable in their own right and as a shareholder you own one business for almost free. When the business is spun off, as a shareholder you have a choice keep the shares or sell them in the open market, what is the best option?

There are more questions than answers, till the next time – to raising questions.