The Billion Dollar Secret

by Rafael Badziag

  Consider this: Do you think it is possible to run a software company without a computer?

  Well, Infosys didn’t have one. Why?

  Because a license was needed from the government in order to import a computer to India.

  Narayana Murthy told me he had to endure three years and 50 visits to Delhi to obtain that license. The time frame barely hints at what was involved in this endeavor. Infosys was located in Bangalore, and Delhi was some 1,500 miles away. (To put this in perspective, it’s 200 miles more than the distance from New York City to Miami, Florida.) Narayana couldn’t afford to fly, so he needed to travel by train two days each way. As mentioned, the bureaucracy required 50 visits to Delhi; if you do the math, that is the equivalent of 200 days in total travel time in a three-year period!

  Now, you are probably asking yourself: During the three years they didn’t have a computer, how was it possible for them to run a software company? How did they program?

  The team found a customer in America who was amenable to allowing them to program on his computer. Six of the cofounders traveled to the United States to work on this, while Narayana remained in India in order to clear up the formalities and obtain approval to import their own computer.

  Communication was yet another problem. Narayana informed me that it took the average Indian company five to seven years to get a phone line. Aside from the technological backwardness, the reason for the long wait was that retired government officials were prioritized to get phone lines.

  The obvious question here: How did he communicate with his cofounders and customers in the United States without a telephone (and in the days before email)?

  Narayana made regular visits to the post office, where he used a public phone box to call them.

  I asked Narayana what happened if they needed to contact him. He smiled at me and replied, “Well, they couldn’t, they just couldn’t.”

  After a year of struggling, they finally had a phone line installed. But having a phone line didn’t necessarily mean they could also get connections—especially with the United States. Most of the time there was no signal on the line; when there was a signal, it was usually busy.

  As previously mentioned, it took three years for them to obtain a license to import the computer. Yet having a license didn’t mean they could afford a computer. Complicating matters further was the fact that the software they were creating required a minicomputer, which cost hundreds of thousands of dollars—money the founders just didn’t have. Infosys was founded with $250 saved up by seven founders. Narayana Murthy faced another problem and performed another miracle, which we will discuss later.

  After the computer was imported and installed, the six cofounders returned to India to work on it. But that still wasn’t the end of the bureaucratic obstacles they had to overcome. They now had to figure out how to get the code they produced to the customer in the United States. This occurred pre-internet, so it wasn’t as if they could simply email the code to the customer. The only way to do it back then was to save the program on magnetic tape and send it via the traditional mail service. On the other side, the customer loaded it from the magnetic tape to his computer. Unfortunately, this solution didn’t work between India and the United States.

  Why not? Because any package being shipped from India to the United States needed to go through Indian customs. It took customs officials about two weeks to perform the customs procedure. This meant that it took three weeks for the code to be shipped from Infosys in India to the customer in the States. With every change Infosys made to the program, they needed to wait another three weeks before they could receive any feedback from their client. The consequence was that project durations extended to what seemed like an eternity. This process was unacceptable and akin to an entrepreneurial hara-kiri. They needed to shorten the shipment time considerably to speed up their production cycles.

  How did they solve this? The team came up with the idea of printing out the code on paper and faxing it to the United States where, on the other side, another Infosys employee typed it manually from the fax into the customer’s computer. Of course, this required additional manual work and wasn’t error free. But it dramatically increased the speed of their software shipments.

  That was not all when it came to challenges: Imagine the conditions they had to work in and the obstacles they needed to overcome while building their company in this poor developing country.

  I had a firsthand taste of these conditions when conducting the interview with Narayana Murthy. At that time, it was 45 degrees Celsius (113 Fahrenheit) in Delhi. This kind of temperature isn’t exactly conducive to performing physical or intellectual tasks. But people in India must perform their work in these conditions on a regular basis.

  Today, Infosys is considered one of the wealthiest and most developed companies in India, offering the best working conditions available for their employees. And, of course, there was air-conditioning at the Infosys guest house in Delhi, where we conducted the interview.

  Even so, there was a power outage during the meeting, and the air-conditioning system went out. Our own attempts to switch it back on failed, and the temperature rapidly became uncomfortable. Narayana called a maintenance team. After 10 minutes of fumbling, it finally clicked on. Five minutes later, there was another power outage, and the air-conditioning once again went out. We decided to leave it alone because we didn’t want to lose any more time.

  I had only a tiny glimpse of what working life is like in modern-day India. For those readers who have never had such an opportunity, can you imagine what it may have looked like to work in that environment 30 years ago—when India and Infosys were far less developed?

  Today, Narayana Murthy is a billionaire. Infosys is the largest software company in the world, employing 200,000 programmers; this is more than Microsoft, Apple, and Google combined. In 2003, Narayana Murthy was named World Entrepreneur of the Year—the best entrepreneur in the world, if you will.

  It is therefore a myth that only people born in rich, developed countries can become billionaires. In fact, not only has Narayana himself become a billionaire, but he also made six of his cofounders into billionaires and at least 4,000 of his employees into millionaires.

  What most people fail to realize is that wealth in developing countries grows much faster than in industrialized countries. In 2016, the number of billionaires in Asia surpassed the total in all of North America.

  In my research I stumbled upon the phenomenon of immigrant billionaires. Yes, a strikingly high percentage of self-made billionaires made it big outside their countries of origin. They came from poor or war-torn countries with nothing in their hands, yet found ways to build great wealth. We will discuss this in greater detail later in the book.

  Billionaire Misconception: Billionaires come from well-off, supportive families.

  If you think a person must be born into a wealthy, supportive family to have a chance at becoming a billionaire, you are likely unaware of the story of Mohed Altrad.

  Mohed Altrad was born a nomad in the Syrian Desert. His Bedouin tribe lived in tents. They set up camp where they found water for the animals and stayed there as long as the vegetation was enough to sustain their herds. Then they folded the tents and moved farther in search of better pastures.

  When Mohed was born, his father disowned him. He expelled Mohed and his mother from their home and slaughtered his brother to death. Mohed was forced to live with his mother on the periphery of the tribe, his life so unimportant that nobody even noted the day or year of his birth. Even today he doesn’t know when he was born. He told me that the dates he uses now were invented because his children wanted to celebrate his birthday with him.

  That is far from being the end of this Dickensian tale. When Mohed was four, his mother died. His grandmother assumed responsibility for him and raised him with the belief that his destiny was to become a shepherd. She didn’t want him to go to school because she thought it was for “do-nothings.” Every day,
Mohed escaped from home and walked barefoot through miles of desert to the nearby village, where he could attend school.

  The teacher gave him a notebook and a pencil because he didn’t have either of these things. He had gone to school empty-handed, as well as barefoot. The only thing Mohed owned was a torn djellaba (a type of robe), which he had outgrown years earlier.

  On several occasions, Mohed tried to get basic support from his father to obtain the bare necessities, but was consistently rejected and humiliated by him—sometimes even beaten.

  When Mohed was in third grade, however, a miracle occurred: He received a present from his father—an old bicycle. It was the first and only gift his father ever gave him.

  With that bike, Mohed’s entrepreneurial genius appeared for the first time. He rented the bike out to his schoolmates for a fee, earning him a bit of money. It wasn’t much, but it allowed him to purchase some school materials.

  Realizing that school was his only chance to get out of his lot in life, Mohed studied hard. Soon he became one of the best students in his region and was granted a scholarship to study abroad.

  Many years later, after he completed his education, Mohed took over a bankrupt scaffolding company in France and developed it into a world leader in the industry. Over the next 30 years, he added over 200 companies to his business, the Altrad Group.

  Today, Mohed Altrad is a billionaire. In 2015, he was named World Entrepreneur of the Year—the best entrepreneur in the world, if you will.

  So, if you think one needs to be born in a well-off, supportive family in order to become a billionaire, you have been clinging to a misconception. Mohed Altrad was born a Bedouin on the margins of society in a poor country. He was disowned by his family, who wanted him to become a shepherd. But this didn’t stop him on his way to achieving unbridled success, proving that it can be done.

  My experiences with self-made billionaires reveal that a considerable percentage of them didn’t have an untroubled, protected childhood. From early on they were forced by circumstances to take responsibility for their lives. We will talk about that in greater detail in later chapters.

  Statistically, over 70% of the world’s billionaires are self-made, meaning that they don’t come from wealthy families. They created the mind-boggling value of at least $1 billion by their own means in less than a lifetime, which is astonishing in itself.

  By contrast, this means that less than 30% of the billionaires inherited their wealth. Among this group there is a significant share of people who weren’t born rich, but inherited their wealth from their spouses.

  To summarize, the stereotype of the rich man born into a privileged family and enjoying affluence all his life may apply only to one-quarter of all billionaires.

  Billionaire Misconception: They have studied at the best universities.

  It would be fair for you to argue that, despite all the obstacles they faced, Narayana Murthy and Mohed Altrad did manage to receive good formal educations that were critical to their respective success. But what about those who didn’t receive that education early on in life? Did all billionaires graduate from the best universities?

  Cao Dewang (or, in official Mandarin pronunciation, Cho Tak Wong) grew up in war-torn China during the Cultural Revolution in a poor village in the Fujian Province. Before he was born, his father had abandoned the family and left for Shanghai without choosing a name for the expected child. This is especially important in Chinese tradition, where the father is supposed to give a name to the child.

  As a result, the boy didn’t have a real name and instead went by a nickname until the age of nine. He and his five siblings were raised in poverty by his mother.

  It was required by law for children to go to school, but the family couldn’t afford it for several years. Finally, he was able to go when he was nine, but still didn’t have a name—an important detail for school attendance. His uncle gave the matter a great deal of careful thought and ultimately named him Dewang.

  After Dewang’s initial excitement, the school turned out to be a challenge for him. He felt restless and uncomfortable “as if there were nails sticking up through his seat.” His defiant nature and taunts against the teachers behind their backs didn’t earn him their sympathy. The boy’s struggles weren’t about his grades, but rather, his conduct. He was labeled a “bad kid” at an early age. Each time his teacher turned around to write on the blackboard, he would stand up and mimic him or her to make his classmates laugh.

  When Cao was 12, his father finally returned home. Every evening, he sent his son to the liquor shop to buy booze for him. On his way home, Dewang started to take increasingly bigger sips from the bottles. Before long, he developed a drinking habit.

  In the mornings, Dewang needed to wake up early to gather kindling for the home oven. This made him feel tired in the afternoons, and on one occasion, he fell asleep in class. The school director humiliated him in front of everyone, but Dewang refused to let him get away with it. “I caught him in the loo, climbed to the top of the wall, and merrily urinated on his head,” he described to me.

  Needless to say, this never happened again. Dewang was forced to leave school after finishing only five grades. His family actually felt relieved as they couldn’t afford his education anyway.

  It is important to note that dropping out of school in China after only five years of schooling essentially means that you are illiterate. Chinese scripture consists of 90,000 characters out of which 5,000 are used regularly. Chinese people spend their entire lives learning to write.

  With limited education by the age of 14, Cao Dewang became a village doormat. He was assigned the task of taking care of only one communal cow. His salary was barely enough to survive. But nobody was willing to entrust an illiterate, rascally, alcoholic youth with greater responsibility. Dewang hit rock bottom simultaneously with the turning point in his life.

  This was when Dewang refused to give up on himself and decided he would do anything needed to rise from poverty. He became determined to self-educate himself. He began by reading his older brother’s schoolbooks, taking them with him as he watched the cow. Unfortunately, there were thousands of characters he couldn’t understand. He tried asking his brother for help, but there were too many of them, and his brother grew impatient.

  The solution: a dictionary. But a good one, like the Xinhua Dictionary, would cost 0.8 yuan—a huge sum of money for a cowhand at that time. Here his spirit started to show the first signs of genius and a relentless will.

  He woke up early to trim grass at the river before going to work and sold it as hay to the horsekeepers in the village, saving them some hassle. They paid him pennies, but he saved them meticulously. After a full year of saving, he was finally able to buy the Xinhua Dictionary and at least understand the words. In order to accomplish this, he looked up each character in the dictionary until he could understand all of them.

  Dewang remained unsatisfied with his body of knowledge. In order to gain a real understanding of the concepts in the books he wanted to read, he required an encyclopedia. It goes without saying that an encyclopedia cost even more than the dictionary: 3 yuan. It took him another three years of saving to be able to afford it.

  As the years passed, he worked on improving himself step-by-step until his efforts paid off. Over the course of many years, he took on numerous jobs and positions, including greengrocer, tobacco trader, fungus grower, construction worker, engine repairer, cook, salesman, purchaser, and factory manager. Eventually, as an entrepreneur, he built Fuyao Glass—the world’s largest auto glass manufacturer.

  In 2009, nearly 50 years after hitting rock bottom, Cao Dewang was named the World Entrepreneur of the Year—the best entrepreneur in the world, if you will. He is now a billionaire.

  Cao Dewang never graduated from any school. He never attended any university. He was born in a backward country, and his poor family couldn’t even afford an elementary education for him. In spite of all that, he is now among the wealthiest peo
ple in China.

  So, if you think that in order to become one of the world’s wealthiest people one needs to be born in a rich, developed country, come from a well-off, supportive family, and graduate from a top university, then you are holding onto misconceptions and underestimating your capabilities. This way, you limit yourself and what you can achieve. Most of the self-made billionaires don’t satisfy one or several of these conditions. Many, like Cao Dewang, don’t satisfy any of them. They are myths unsupported by reality.

  The first thing I learned from the billionaires is that external factors do not determine their success.

  What is it, then, that enables some people to overcome seemingly hopeless beginnings and achieve unbelievable success, whereas others live regular lives and don’t accomplish anything remarkable, despite having spent their lives surrounded by the best conditions?

  It turns out that what determines extraordinary success is the right combination of internal factors that are all common among self-made billionaires. I call them the Billion Dollar Secret. The first one is the realization that you can overcome all unfavorable conditions and become extraordinarily successful in business despite or maybe because of them. It’s your inner workings that make you excel in business, not the conditions outside you.

  You will discover the other 19 principles on the following pages.

  - Drifters believe you can only succeed when conditions are perfect, but whatever the conditions, there is always something stopping them.

  - Millionaires are strong to take their lives into their hands but still believe their success depends on favorable conditions.

  - Billionaires know they have it inside them, and they make it big in business independently of external factors.

  For more stories on this topic, go to:

  http://TheBillionDollarSecret.com/resources