Am I Being Too Subtle?

Straight Talk from a Business Rebel


  • On Amazon
  • ISBN: 978-1591848233
  • My Rating: 7/10

Am I Being Too Subtle is the autobiography of Sam Zell, an American businessman.

I found Am I Being Too Subtle an interesting read. However, I wish there were more details about the author's deals and investments. And I also would have liked to learn more about the private side of the author.

My notes

Introduction: No B.S.

You could say I'm an investor, or an allocator of capital. But what I really am is an entrepreneur. I focus less on specific industries and more on seeing opportunity in anomalies or trends that catch my attention.

Some might see buying and creating value from other's mistakes as a form of exploitation, but I see it as giving neglected or devalued assets, in any industry, new life. And often in my career I've been the only bidder for them – the last chance for a resurrection. I'm not claiming to be altruistic – just optimistic, and confident that I can turn those assets around. That, in my definition, is an entrepreneur. Someone who doesn't just see the problems but also sees the solutions – the opportunities.

Not surprisingly, a fundamental part of being an entrepreneur aligns with my tendency to walk out of step with the norm. I have a saying: "If everyone is going left, look right."

I make a point of shutting out the noise – doing what makes sense to me. I want everyone's opinion, because there is tremendous value in being a good listener. But then I determine my own path.

I run my company as a meritocracy with a moral compass. And for those who raise their eyebrows at that statement – who think you can't get to the top unless you beat the crap out of everybody – you're wrong. When you're a repeat player, when your world is your business and your business is your world, it's all about long-term relationships. In any negotiation I believe in leaving a little bit on the table. And in any relationship I believe in sharing the stakes. I've been doing deals with many of the same people for decades because the goal is for us to all come out ahead. And many of my employees have been with me for twenty or thirty years or more because if I do well, they do well.

Reputation is your most important asset. Everything you do, everything you say, is part of the permanent record. Your name reflects your character.

An Impossible Life

[...] I grew up believing that anything is possible. And when you're not aware there are any limitations, nothing stops you from trying.

It was 1953, and a provocative new magazine called Playboy had just made its debut featuring Marilyn Monroe on the cover. It sold for 50 cents. I bought a copy and thought it was terrific. So I brought it home to Highland Park, where it wasn't for sale, and showed it to my friends. One of them offered to buy it. "Three bucks", I said. After that, I started a little magazine import business and, in the process, learned a lasting business lesson: Where there is scarcity, price is no object.

Start by Being Audacious

One day, in the middle of my junior year, I was at a friend's apartment and he mentioned that his landlord had just bought the house next door. They were going to knock down both houses to build a fifteen-unit student housing apartment building. "Let's pitch them to manage it", I said. "Who better than us? We're students; we know what students want. We'll run the building, maintain it, and each get a free apartment." We didn't know how to manage or rent apartments. We had no clue what it entailed. It just never occurred to me that I couldn't do it. If you're not aware that you're not supposed to be able do something, the barriers to doing it are dramatically lessened.

From my parents I had learned that economic success equals freedom [...].

If you've never sold anything through cold calls or without appointments, it may be hard to imagine, but I can promise you that it's humbling. Most responses are no. Some emphatic, some really emphatic. You just build up a tolerance for rejection. You learn to keep asking and to find ways to get a conversation going. If you can just start and keep a dialogue, you have a chance.

While I was unaware of it at the time, my real compensation for that job wasn't monetary. It was learning about and getting comfortable with rejection. And as I would later realize, indifference to rejection is a fundamental part of being an entrepreneur.

I just had to assume there was a way through any obstacle, and then I'd find it. This is perhaps my most fundamental principle of entrepreneurialism, and to success in general.

If I didn't test my limits, how would I ever know what I could do?

My Own Rules

I thought I'd have no trouble finding a job with a good law firm. But after my forty-third rejection, I was beginning to wonder.

"Tell me about your deals", he said. "What?" I was taken aback. "I'm here for a job!" He waved his hand dismissively and said, "Oh, we'd never hire you. You'd last maybe three months and then you'd go back to doing deals." As I was trying to take this in and prepare myself for another rejection, he explained, "I looked at your resume and I've never seen anything like this. You're not going to be a lawyer, you're going to be a deal guy. We would just be wasting our time if we hired you, because we'd train you and you wouldn't stick around." So now I knew why I kept getting turned down.

I ended up working at a small firm [...] in Chicago. It was the first and only "job" of my career. I lasted four days. I spent them laboring over a contract between a linen supply company and Northern Illinois University. It was horrendous, just excruciating. On the fifth day, I went in to see my boss [...] and told him – as only a twenty-four-year-old can do – that I didn't think writing legal contracts was really a good use of my time.

I like doing deals with the same people. You get to know each other and build a mutual sense of trust.

By the time I got through both of those projects, I realized development was more complex and risky than I had thought. [...] As a result, I was cured of any inclination to become a developer. I think that to stay in that business, most developers must get 50 percent of their returns from real cash flow and the other 50 percent from the intangible benefit of seeing their phallic symbols rise out of the ground. Otherwise I can't see the reward. My takeaway was a whole new respect for simplicity. Development required multiple steps, and every step meant one more chance for something to go wrong.

I don't know how you can ever have a real partner unless you both share the same risk.

Grave Dancer

I realized that the basics of business are straightforward. It's largely about risk. If you've got a big downside and a small upside, run the other way. If you've got a big upside and a small downside, do the deal. Always make sure you're getting paid for the risk you take, and never risk what you cannot afford to lose. Keep it simple. A scenario that takes four steps instead of one means there are three additional opportunities to fail.

Opportunity is very often embedded in the imbalance between supply and demand. It could be rising demand against flat or diminishing supply, or flat demand against shrinking supply.

To me, that is the essence of being an entrepreneur – to not just recognize problems but to provide solutions.

All the opportunity in the world means nothing if you don't actually pull the trigger.

[...] "knowing the numbers" means having the discipline to listen to them – even if they're not telling you what you want to hear. Some of the best deals, of course, are the ones you don't do.

Frankly, there's no substitute for limited competition. You can be a genius, but if there's a lot of competition, it won't matter. I've spent my career trying to avoid its destructive consequences. Competition skews people's assessments; as buyers get competitive, the demand for assets inflates pricing, often beyond reason.

Buying another company based on the perception of opportunities for cross-selling and other intangible benefits generally represents a much higher level of risk than I believe is justified. Therefore, I concentrate on eliminating redundancies, which measurably reduces the capital required to run the business. [...] Redundancies are much more predictable and transparent than theoretical opportunities to add value. My focus is always on the downside. Overly optimistic assumptions lead to the graveyard of corporate acquisitions.

Whether it's in the boardroom or at the management level, I start with this: Don't depend on people unless you understand their motivations and you are confident that your interests align with theirs. Be an owner, act like an owner, and when it comes to your investments, do everything you can to make sure everybody is aligned. A lot of Wall Street's headaches – the executive compensation issues, the accounting scandals, the options backdating, the subprime mortgage mess – can be chalked up to misaligned interests created when there's too much reliance on outsiders who don't have a stake. Similarly, a lot of people who get burned by depending on Wall Street analysts, or hedge fund managers, or their local stock picker discover quickly that the advice they're getting isn't coming from a committed owner – it's coming from a professional who is collecting a fee. After all, it ain't their money.

It has never occurred to me to question whether I should do something simply because I haven't done it before.

At some point the guy I was sitting next to turned to me and asked, "So what do you do?" I replied, "I'm a professional opportunist." And that has been my response to that question ever since.

Into the Inferno

I'm a prolific maker of lists, and the more trouble I had in the early 1990s, the more I attacked it and dealt with it by making lists and checking off items as we accomplished them. My big-picture goals were all about creating liquidity by monetizing assets, fund-raising for opportunities on the horizon, and doing great deals. By zeroing in on the tasks to accomplish each of them, I avoided being overwhelmed, professionally and emotionally.


Real estate isn't just about buildings as inanimate objects. It often reflects the pulse of the nation.

The simple genius of public REITs is that they turn bricks and mortar into transparent and predictable liquid assets. And because they are required to distribute at least 90 percent of their taxable income to shareholders each year, they tend to provide high dividends.

A Godfather Offer


Zero Visibility

I am not a reckless person, but taking risks is really the only way to consistently achieve above-average returns – in life as well as in investments.

People love focusing on the upside. That's where the fun is. What amazes me is how superficially they consider the downside. For me, the calculation in making a deal starts with the downside. If I can identify that, then I understand the risk I'm taking. What's the outcome if everything goes wrong? What actions would we take? Can I bear the cost? Can I survive it?

In addition to looking at worst-case scenarios, I look at how hard something is to execute. The simpler the goals and the steps to reach them, the more likely I'll be successful. And if they aren't simple to begin with, I look at how I can untangle the complexities.

I don't like auctions, unless of course I'm running them.

My whole life has been a progression of incremental insight into determining risks. Certainly when I think about the risks I took forty-five years ago, I think, "Yeesh, that was way too high". But based on what I knew at the time, I thought it was appropriate. Nothing refines your understanding and assessment of risk better than experience. But at any time, it's about being aware and simplifying the worst downside scenario – seeing over the abyss. It's about discipline and avoiding emotional response. And then you decide whether to play or walk.

Without Borders

Change leads to new experiences and opportunity.

Behind the Deals

[...] I've always kept one thing at the forefront: the idea that culture is king. The environment you spend most of your waking hours in reflects who you are and the type of people you want working with and for you. Culture can either inspire ideas or stifle them. It can lay the basis for relationships that last decades or flip through them like a deck of cards. It is the heartbeat of your company.

A lot of the trust I have in my team has to do with my hiring process. It can be a little unusual. When I'm looking for a senior person, I don't write a job description and then look for someone to fit it. I find talented people who fit my organization and then look for ways to use them.

[...] to me, perks don't make the work fun. The work does.

Making a Difference

Being an entrepreneur is not just about what you do, it's about how you think. It's about how you perceive the world. Entrepreneurs are the ones who are always looking for opportunities to do things better. They don't just recognize problems; they see solutions. They're always coming up with new ideas, and they aren't afraid to try them. They are the self-starters, the risk-takers, those who take the initiative. They are always thinking, "I can do that better... I can fix that". There is a perennial questioning.

Today, the term "entrepreneur" has almost become synonymous with tech start-ups, but that's a narrow definition in my view. I believe you can find entrepreneurs in every endeavor. It could be a start-up, but it could just as easily be within a conglomerate, in business, in academia, in medicine, in nonprofit, whatever. An entrepreneur is anyone who is independent, creative, inventive, and willing to take risks.

[...] there is always opportunity. It may not be broadcasting itself in the form of a sector-wide trend or a blatant disruption, but it's always there. You have to be actively looking for it, and when you find it you have to do the homework, assessing the risk versus reward. It takes guts, and it's not easy. But if you've got the stomach for it, it's a great ride.

Make no little plans; they have no magic to stir men's blood... Make big plans; aim high in hope and work.

Daniel H. Burnham

Go for Greatness

I believe my purpose in life is to make a difference, and I define making a difference as driving growth. Whether it's mentoring a young executive, turning around a faltering business, establishing an incubator for new companies, or whatever, it's about progress, improvement, forward momentum.

I never hesitate to pursue a new endeavor just because I haven't done something similar before. I just use what I've learned that might cross over.

If there's one consistent theme, it's that I'm always on the lookout for anomalies or disruptions in an industry, in a market, or in a particular company. Recognizing the psychology of market extremes can lead to attractive points of entry.

You can't predict when or how you'll learn something. You've just got to keep your eyes and mind open. It's also about simply paying attention to people. Being a good listener can make all the difference.

The truth is, you never know when opportunity is going to present itself, and you might miss it if you're not paying attention.

If you're a seeker of information and a serious observer, it's all there to be learned. But with today's access to an overwhelming amount of information, most of it drivel, you have to focus on what's meaningful.

When I negotiate, I spend a lot of time thinking about the person across the table, their motivation and priorities. I work to understand which issues are the deal breakers for them – which three of the twenty things we're discussing they really care about. And of course I'm crystal clear on the ones that are most important to me. That way we can both get what we want. It's a win-win – the best kind of deal.

Negotiation that leads to a winner and a loser rarely leads to a successful transaction, or another one down the road. That's how it's been throughout my business career. Sometimes my team argues with me – they can't believe we're leaving money on the table. But I want to create an environment where everyone wants to keep playing.

The minute you acknowledge that a problem is insurmountable, you fail. If you just assume there is a way through to the other side, you'll usually find it, and you'll unleash your creativity to do so.