Reflections – At home, on Father’s Day

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Last nine months have been tough for global business and mine too suffered.  Deal velocity has significantly slowed down with the thawing market sentiment.  Family loves me because I spend more time at home now than ever.  We’ve had three week long outings already and I was home for my daughter to wish Father’s day for the first time – normally an event marked by a terse text message over mobile.  A rare event in my otherwise strung life.

 

Nonetheless, entrepreneurship is indeed challenging and that’s what I like about it most.  Not one boring moment.  You are either hard pressed for time doing deals or you are busy thinking up next best way to sell.  For me, it’s business services like Private Equity fundraising, Business due diligence and research based deal making.  I hate analyst reports if I don’t see a deal at the end. Deals give me the high. This is the only filter I apply when I look for business relationships and the reason why I have so few.  Those I chose to drop off have all been gruesome brainsuckers. They try to feel you up and get their convictions examined with no specific goal.  It’s ok if you think you’re smart; but it’s something else if you don’t realize that it’s entirely arguable.  In the inscrutable world of business, nothing goes unresearched; everything is questioned. 

 

One thing that has always baffled me is why certain people hate capitalism so much. Aren’t they missing something? Ever since I was young I knew that being an entrepreneur was the most fun you could have with your clothes on – it is the greatest adventure modern life has to offer. And if you’re lucky and astute, you might even get rich in the process. Why is that so terrible? Yet all too often capitalism is blamed for many of the ills of modern life, from global warming to poverty.

 

One of the wonderful things about markets is that they self-correct ruthlessly: companies that fail to serve the customer will be overwhelmed by rivals – and go bust – and see their assets reallocated. But governments move slowly, ideologues can be stubborn and damaging legislation can take years to rescind.  Most people focus on the risks of free enterprise and are scared to join the ranks of the self-made. Some have learned to play the system of government and institutions like a game, and enjoy power, pension and profit from their position in the state sector. Why should they encourage choice and competition when they have such a safe haven as a bureaucrat, trade union official, academic, etc?

Churchill understood this when he said: “The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.”

You’ve to ride the wave as it comes. Growth is secondary. In this sort of environment question is of survival. Businesses don’t go bust because they make losses. They go bust because they run out of cash.  So manage your resources better. Stay liquid. A slowdown in the economy and rising unemployment might just stimulate more to start their own business as an alternative.  This is the only way to beat a looming recession fueled by liquidity crunch and oil price propelled inflation.  Go create wealth and pay your taxes.  No magic mantras.

 

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