I just finished watching the movie Founder; based on the story of Ray Kroc and the birth of McDonald’s. The movie was interesting in many ways, and I took away a few insights relevant to our quest as property investors.
Throughout the movie they referenced this quote from former US President Calvin Coolidge:
“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent. “
In many ways, Ray Kroc is the epitome of this quote.
He even wrote a book titled “Grinding It Out”, which spoke of how, as a 52-year-old milkshake maker salesman, he saw something no one else did, and had the faith and courage to turn a successful, family-run business into a household name. McDonald’s is now in virtually every country, had revenues of over $6B in 2016, and is said to feed 1% of the world’s population every day.
So what exactly is persistence?
The dictionary defines it as the fact of continuing in an opinion or course of action in spite of difficulty or opposition.
Persistence is no doubt an important quality for all entrepreneurs and investors. The ability to stay the course in the face of challenges may be a highly rewarding quality.
However, stubbornly holding onto your position in the face of repeated failures could also prove counter-productive to your wealth position. The challenge for all of us is how to know when persistence crosses over into just plain stupidity.
There is quote often misattributed to Einstein: “Insanity is doing the same thing over and over, yet expecting to get a different result.” So how do we know the difference between persistence and insanity?
Ray Kroc was clearly no overnight success. He tried and failed with a number of unsuccessful sales roles and business ventures. Yet at 52, he still had the passion and drive inside him to want more from his life. So, whether you like the food, the business model, or even the man, there can be no denying: persistence was a key factor in McDonald’s success.
So, on a scale of 1-10, how much persistence would you say you have?
Do you pack up stumps the minute the going gets hard or doesn’t go exactly to plan…or do you dig in and look for ways to overcome the obstacles in front of you?
What business are you in?
Perhaps the turning point for Ray Kroc was meeting Harry Sonneborn, whom Kroc referred to as his “financial wizard” and whom would go on to become President of the McDonald’s corporation from 1955–1967. He heavily influenced the decision to turn the business model from one about selling burgers to being about controlling the real estate. And McDonald’s owns a lot of real estate! In 2016, there were around 36,525 stores worldwide.
When it comes to investing in real estate, we see far too many people treating it like a hobby, instead of the potentially lucrative business it can be. We encourage all property investors to treat their property investing like they would any other business.
No doubt you would agree that in any well-run business, there are going to be structures and systems that help take the guess work out of it. To be able to reproduce a consistent result — year after year — is undoubtedly a powerful outcome for any business.
So as the CEO of your own property investment business, what do your current systems look like?
Are you efficiently and effectively allocating the appropriate amount of human, financial and emotional resources towards improving your business year on year?
In the movie, the original McDonald brothers who actually founded the business, Maurice and Richard, “failed” not because they did not appreciate great system, but because they were afraid to want to grow their business to the level it was ultimately capable of becoming. Their desire to play it small was portrayed as a contributor to their business’s eventual demise, some 6 years after Ray Kroc handed them a cheque for $3M.
As they say, in business you are either growing or you are dying!