One of the things that separate wealthy entrepreneurs from the rest of us is what I call 'The Moment'. It’s a point where the entrepreneur makes a decision that will change their lives. They put everything on the line – their assets, their reputation and their sanity – to pursue their dream.
For Warren Buffett, that moment came at the age of 25. In a lovely article in Forbes, he explains how he was working for his investment hero Benjamin Graham, when the retiring investment legend asked Buffett to replace him.
But Buffett, who had increased his personal investment portfolio almost 13-fold since leaving college a few years before, wanted to go back to Omaha to retire.
"This was a traumatic decision. Here was my chance to step into the shoes of my hero – I even named my first son Howard Graham Buffett. (Howard was for my father.)
"But I also wanted to come back to Omaha. I probably went to work for a month thinking every morning that I would tell Mr Graham I was going to leave. But it was hard to do.”
Buffett eventually did move back to Omaha and after getting requests from family members to manage their money, he set out on the path that would lead him to become a legend.
"Although I had no idea, age 25 was a turning point. I was changing my life, setting up something that would turn into a fairly good-size partnership called Berkshire Hathaway. I wasn’t scared. I was doing something I liked, and I’m still doing it.”
Entrepreneurs have all different types of turning points. For some it might be the decision to take a new job or leave their current one. For others, it’s the decision to leave their homeland in search of a better life. Others are forced into the turning point after circumstances conspire against them.
Let’s have a look at the turning points of a few famous Australian entrepreneurs.
Turning a bad situation into a good one is often the source of a great fortune. Trucking magnate Lindsay Fox’s turning point came when he was just 15 and his teachers at Melbourne High School had told him his academic record meant it was time to move on. Fox has often said that they were right – he wasn’t much of a student. But he clearly had some business nous, inherited from his father – a truck driver who sold beer on the weekends to supplement his income. He bought his first truck on credit and started out on the path of creating Linfox, Australia’s biggest private transport business.
Rich list member Andrew Abercrombie had what sounds like a pretty good life back in the mid-1980s. He was a lawyer in the entertainment business, with a client list that included rock group INXS. But then he turned 30. "I woke up one day and decided I didn’t want to be a lawyer when I grew up,” he told BRW back in 2007. He travelled to Switzerland to do his MBA, worked on Wall Street and eventually came home to Australia, where he bought a few businesses that were in desperate need of a turnaround. One of them was vendor finance firm FlexiGroup, which is today listed on the ASX with a market capitalisation of $630 million.
Octogenarian Len Ainsworth is best known as the pioneer of Australia’s pokie industry. But he started off running his father’s dentistry business when he was presented with the idea of making poker machines. "There was huge demand for the machines and I thought If we made them for a year we could get enough money to go back and make dental chairs and units,” he said a few years ago. He made two poker machines a week, then four and then eight. He never returned to making dentist chairs and instead turned Aristocrat into one of the world’s biggest poker machine makers.
There are hundreds of stories of immigrants striking it rich in a new country and Australia’s rich list is no different. One I’ve always liked is that of Terry Peabody, who came to Australia in 1965 as a 25-year-old engineer on the Snowy Mountains hydro-electric project. Peabody’s main job was pumping high-fluidity cement to stabilise the ground before construction began on the dams and tunnels. But he saw a different opportunity. A key ingredient in the cement was fly-ash, which helped to strengthen the cement and was being imported – at high cost – from Japan. Peabody recognised fly-ash was a waste product from coal-fired power plants and approached the coal-fired power plants in New South Wales with a deal to buy the fly-ash they had been throwing away. It took time to convince the cement sector to use fly-ash, but it allowed Peabody to build his first empire.
The strong Australian dollar has forced aviation entrepreneur Paul Stoddard out of the rich list for the time being, but the serial entrepreneur still has a great 'turning point' story. It was 1989 and a friend had told Stoddard that the Australian government’s VIP fleet was up for sale. Getting the five planes was one thing, but Stoddard also noticed that the government was throwing in a package of spare parts. That ‘package’ turned out to be 41 shipping containers full of parts – enough for Stoddard to become one of the biggest spare parts dealers in the world for certain types of aircraft. It was, as he would later say, the deal of a lifetime.