Business Adventure by John Brooks

Top Five Case Studies from Bill Gates Favorite Book

You will be surprised to know that Bill Gates has been the richest man in the world for thirteen of the twenty years from 2000 to 2019. And for the rest of the year, he was on the list of the three richest people. The book was presented to him by Warren Buffett. In this book, the author has explained the biographies of 12 successful people in the world and this book should be read by anyone who intends to do business. This book is useful in business. People who do not understand the past keep repeating the same mistake over and over again. Because Bill Gate didn't want to be that person anymore and he understands the importance of history in business, that's why this is Bill Gate's favorite book. So it is important for us to understand all these things so that we can make the right decisions in our business. Today I will tell you about 5 out of 12 case studies in the summary of this book.

Story no. 01, (Stock exchange market update delayed)

For three days in a row from May 24, 1964, the stock exchange crashed, costing 20 billion. It all started with a very small thing. What actually happened was that the trading office was immediately updating the stock price. But due to the manual procedure, the update was delayed by a full forty-five minutes and with that in mind, investors started selling their shares. Now, as soon as big investors start selling their shares, the stock market price really start to fall. Seeing this, small investors and the rest of the people also started selling their shares. As a result, Chain reaction began, and in just three days, the stock exchange market lost a full twenty billion dollars. Now on the other hand because everyone knew that the Dow Jones index never goes below five, which was going on at that time, so everyone started buying their shares again like crazy. And the losses in the market in three days were covered in just one day. Now this whole incident teaches us that we often make big wrong decisions because of our foolish fears. Many times we make big wrong decisions just by assuming that everything is going very wrong. This fear was necessary for us to survive in the past, but not so much today. So, the first lesson is that there is no need to be scared without knowing the facts. I already have mentioned this fact in another chapter that 97% of the things that we are always afraid of and worried about never happen and even if they do happen they are not as big as we think.

Story no. 02, (Ford Company’s edsel car)

In 1950, the Ford Company invested 350 million in building a car called the Adcell Car. But when the car was launched, people called it the ugliest car and it failed. This failure was one of the biggest failures of that time. This failure was due to three reasons.

The first reason was that the American economy was booming in 1955 and people were saving the extra money to spent on luxuries. So until then, people were more interested in mid-range cars for money. And seeing this, the Ford Company decided to launch a car called Adcell. But in just three years, by 1958, everything had changed. At that time, the economy was not doing well and people were paying more attention to buying and selling cheap cars.

Another reason for failure was that the expectations of the people were so high that it became unrealistic. So when the company finally launched the car, it did not live up to expectations and failed miserably.

The third reason for failure was that its quality was not very good. There was a problem with its brakes and acceleration. This means that the Ford Company spent a lot of money on marketing and research but they forgot to spend money on quality which is the basic principle of any business.

So the three things we need to learn from this story is that we should never think that it will always be the way we think it is. And the second thing we need to learn is that we must always keep our expectations in the light of society. We should never think too much of good or bad, and we should be realistic. And the third thing to learn from this story is that we should focus more on product’s quality than research.

Story no. 03, (Piggly wiggly)

Piggly Wiggly was a huge American supermarket that first introduced the concept of self-service in 1917. In fact, it was the first market to introduce the concept of price tags on shopping cards and items. Checkout stands were also set up in the market at that time. By 1920, Piggly Wiggly was growing rapidly throughout the United States, but there were some franchises that were failing in New York. Now seeing all this, some investors wanted to take advantage of it through Beer Red. Beer Red refers to a concept in which investors take advantage of a company's falling stock price by buying shares and at the same time try to reduce the company's value to some extent. By doing all this, investor’s claim that the whole Piggly Wiggly is failing because some franchises in New York are failing. But that was not true. Seeing this, the owner of Piggly Wiggly, whose name was Clarence Sander, decided that he would now teach these investors a lesson. So he bought 99% of his company shares himself. The stock price of his company was raised from $39 and $124 in the market. Now Clarence Sander thought that it hads caused huge losses to investors in Piggly Wiggly. But it was only a matter of time. But something really happened that persuaded investors to give the NYSE some time to pay. However, due to spending so much, Clarence Saunder himself got stuck in a huge debt. Clarence Sander suffered heavy losses, after which he declared his company bankrupt, that’s why Piggly Wiggly is an unknown franchise today that no one knows about, but if Clarence Sander had controlled his emotions, it is thought that Piggly Wiggly would be the size of a Walmart today. So the third lesson of this story is that fighting at any time, especially for revenge, can ruin a person. Therefore, everyone should refrain from fighting or taking revenge as much as possible. Or become so influential and powerful that no one even think of fighting you. So we need to control our emotions most of the time in our lives.

Story no. 04, (Xerox revolution)

We can see the story of Xerox in three parts. In the first part, it became ready and launched. There was a time when people had to use Minion graph machines to make photocopies, which was difficult and expensive to use. People had to use a special kind of large paper for this, as well as heat sensitive paper to make photocopies and not merely that, but pages that come out of this machine also got wet. Then, in 1938, Chester Carlson and his assistant made a copy on the standard office page by means of the Xerograph process. The technology then cost about $75 million and took thirteen years to develop. Chester Carlson developed this technology with the help of a university. And after all that, he launched the product with Xerox in 1958, so most people at the time didn't expect it to work. The fact is that the founder of Xerox himself forbade people to buy shares of this company. But what happened next surprised everyone. Xerox increased its total revenue to $500 million in just six years. Because every year people in different offices of different organizations in the United States were making billions of photocopies using Xerox machines. As a result, Xerox became one of the most successful companies in the United States. But this the first part of the story.

The second part is the company under which it maintained its success and also contributed a lot. Chester Carlson, for example, became one of the largest donors to the university that helped him to improve the Xerox machine technology.

Now, the third part after that, when the growth of the Xerox Company began to slow down. In fact, after 1965, many business competitors began to do exactly what Xerox was doing. This means that they also started making and selling Xerox machines and that too at a very affordable price. At the time, Xerox was not inventing anything new so that Xerox users could stay with them. As a result, people stopped using Xerox machines and started using other photocopiers because they were easier and cheaper to use. Due to which Xerox failed.

Now a very important lesson you can learn from this story is that you should be aware of the latest technology in your business life and keep updating your business over time so that you can always market your product.

Story no. 05, (Tax system)

Warren Buffett is the richest man in the world, but he says his tax rates are lower than his secretary's. This means that Warren Buffett's secretary, who earns much less than him, pays more tax on his monthly income than the tax paid by his company owner, Warren Buffett, and this is the reality of the tax system. Let me explain this to you from the American system. The United States began imposing income taxes on the people in 1913 because the country had run out of money at that time. The purpose of the government at that time was to take money from the rich people of the country and that too in very small quantities. But since then, the income tax system has changed dramatically as tax rates have risen steadily. This is because everyone is aware of the hunger for money, which has also affected the government. The biggest change in the income tax system is that the original purpose of this system was to take money from rich people but now the middle class and poor people pay more taxes than rich people. The reason is that the rich people turned out to be very smart, they came up with a lot of ways for themselves in this system due to which they paid very little tax. At that moment, the middle class that works the hardest and then the government jumps up a huge chunk of its income. It has become a cruel system in which most of the middle class people are grinding. Now there are two possible solutions to this problem. The first solution is to change the tax system and replace it with a better system, which is very difficult and impossible. The second way is to start thinking like rich people. So do business yourself and advise the people around you to do business too. I have already told you this in a summary of a book called Rich Dad Poor Dad by Robert Kiyosaki.

I have told you all these things in the form of a summary of a book called: