WATCH: Sam Zell Shares the Secrets of His Success With Dean Scott DeRue
Nobody knows entrepreneurship like Sam Zell. The Chicago-based founder/chairman of Equity Group Investments has made several fortunes in fields like real estate, energy, and communications.
A two-time University of Michigan graduate (BA ’63, JD ’66), Zell is a major benefactor of the university, the business school, and particularly its entrepreneurship programs, endowing the Zell Lurie Institute in 1999. The Zell Family Foundation donated an additional $60 million to Michigan Ross entrepreneurship programs in 2015.
Recently, Scott DeRue, the Edward J. Frey Dean of Michigan Ross, interviewed Zell at a gathering of alumni in the Chicago area. Zell offered thoughts on what drives success, the connection between loyalty and corporate culture, and his most famous miscalculation in business.
Among the topics Zell addresses:
“Nobody is right all the time. As a matter of fact, if you play baseball, you get paid $25-30 million a year for being right one out of three times. I only want to be right 70 percent of the time. The real key is: How wrong are you on the 30 percent? And as long as the risk you undertake is appropriate to what you can handle, it works.”
“The best deals are the deals where the negotiators have reached the point of indifference, where they would take either side of the transaction. The name of the game is not to kill your opponent. The name of the game is to jointly reach a solution that’s mutually beneficial.”
“I’ve been on the Forbes 400 I think since it started. If you look at the list of the people on the Forbes 400, and you eliminate the people that inherited the money, everybody else went left when conventional wisdom said ‘go right.’ … There are very few examples of high-margin businesses or high-margin activities that are done by everybody. Because if they were done by everybody, they wouldn’t be high margin.”