Finance

BIO

Seymour Schulich is a Canadian, self-made billionaire whose career has spanned financial markets to the mining and oil industries. He is among Canada’s greatest Philanthropists having donated in excess of $200 million to universities, and endowing libraries, medical health centres, lecture and music halls. Over 650 scholarships are awarded annually to students in Schulich schools. He holds degrees in science (Chemistry), Business (MBA) and is a Chartered Financial Analyst (CFA). He is an author of the recently published book “Get Smarter”, in which he shares in an accessible, anecdotal format many key lessons learned over his entire business career.

Interview

Forum Link: You have just published what essentially is a mentoring book, “Get Smarter: Life And Business Lessons”. Who can it benefit and how?

Seymour Schulich: The conditions under which I operated and made my money are gone, and I don’t think they’re ever coming back. So, to say if I watch this guy and study what he did, I can replicate his success isn’t true. What I talk about in the book is the timeless lessons that I learned reading 2500 books and operating 42 years in business, that are applicable today. These are the things I wish I would have known when I was 20-30 years old.

Forum Link: What motivated you to invest time in such a project?

Seymour Schulich: It came about because I sensed that there was a mentoring deficiency. I didn’t want to write a book just to write a book. I wanted to write a book that had a purpose. I have seven benefactions in the $25-30 million range. I wanted to try to replicate one of those benefactions through a book for a lot less money. Mark Twain said “men will do a lot of things for love; they’ll do anything for envy.” Two of my peers said that this book would do more than all of the benefactions put together, in that it would reach more people.

Forum Link: You place a special value on mentoring? Should every budding entrepreneur
find a mentor? How should they go about choosing one?

Seymour Schulich: When I was growing up my mentor was my father and then I had a professor in business school. It can be someone you work with. I think if you can find someone to help you it’s a worthwhile thing to do.

Forum Link: What are some of the key lessons for someone who wants to succeed in
business?

Seymour Schulich: That is really what the whole book is about. What I’d rather say to you is invest the two hours because I think it’ll be worthwhile. Select three key lessons that you think are the most important. This book is one level above a comic book. I mean this is not a tough book; the chapters are one to five pages. At the end I do 20 pages on the particular story of the company that I made a lot of money on. It was the law of unintended consequences. It was something that was formed to exploit the fact that I like skiing and playing poker in Nevada. That’s how it started.

Forum Link: What do you see as some of the critical mistakes new entrepreneurs make?

Seymour Schulich: The biggest mistake I think they make is they don’t get enough opportunities to see things. They want to be entrepreneurial. They want to be in business, but they don’t see a lot of opportunities. They’ll just leap at it without doing the requisite amount of work. There are a lot of businesses that are not great businesses and people, because they don’t have any alternatives and they want to be entrepreneurial, jump into them and end up losing ten years of their savings and it takes them a long time to dig out of the hole they came into. Trusting banks and trying to finance your business with banks is also very risky. If you’re exposed to a lot of things, if you get into a career like venture capital, like I did and you see a lot of things, you have a better chance to gravitate towards something that has a better chance to succeed.

Forum Link: Would you say that your approach to business is always colored by the financial background that you have?

Seymour Schulich: Definitely. In business education, you need accounting because that’s the language of business. You need statistics because you have to understand probabilities. We do an interesting thing in this book and I’ve used it my whole life. It’s called a decision maker. I used it for getting married. I used it for choosing universities. I used it for selling a $3 billion business. You list all of the positive points you can think of and all of the negative. Usually when you have a decision to make, there is some emotional fact that is overwhelming. When going to a university you might say, “Oh, I don’t want to leave my girlfriend, she lives here.” So, you write that down. I don’t want to leave my girlfriend, ten points. Now what else is there? Well, you’re getting a scholarship over there, that’s pretty important, how about nine points. You rate each one from zero to ten, in importance to you. You have the positives and the negatives, you add them up, and if the positives outweigh the negatives two to one, then that’s the ratio you need; it becomes very clear what you should do.

Well what if it isn’t two, what if the factors are roughly even, and that happens a lot. I’ll get it and look at them and I’ll say, “Well the factors are even, but if this factor changed, and this factor changed, then it would become a positive, or conversely, if this changed and that changed it would become a negative.” So at least you know, well you say, “I still don’t know what to do, but I know if I got a scholarship to school, it would throw enough weight behind it that I would do that.” At least you’d know what events would have to happen to turn a neutral decision into a positive or negative decision.

I’ll tell you a funny story about a guy who is worth $5 billion. One of the richest men in the country calls me up - I don’t want to reveal his name - but he calls me up and says, “I love the book.” He says, “The decision maker, chapter one, I’ve been doing this my whole life. I list the factors. I never thought to weight them.” I said, “Well, you haven’t been doing so bad not weighing them.” But he says, “I never thought to weight them.” If you knew the guy, you’d fall off your chair, you wouldn’t believe it. He is one of the most successful people in the country and he’s been using the system, but he never weighted them.

Selling a $3 billion business, we must have had 20 positives, 15 negatives, and the weights were actually about 82 to 25 in favor of doing it, a positive, favorable outcome. If people can get the methodology of using that, then that alone is worth the price of the book 1000 times over. It’s all in chapter one.

Forum Link: You have funded a business school, a music school, a medical centre, and a library of science and engineering among others. Is philanthropy an extension of your entrepreneurial attitude, of wanting to get good things done?

Seymour Schulich: I get a lot of kids coming up to me and they say, “I want to give back. I want to do something.” And I say, “You’re 25 and you can give time, talent, or treasure, and treasure, if you’ve got it, is the easiest thing to give.” Wait until you’re older. Get your career in line, get your family in line. If you study the great philanthropists - the Annenbergs, the Rockefellers, and the Carnegies - they all were in their sixties when they were doing their things, so don’t get too carried away with this business of giving back too early, because I think it’s a mistake. I think you’ve got to attend to business first. Business is a means to an end; it’s not the end in itself, but it’s a very important thing. It will enable you to get the freedom to do what you want to do. Being successful in business is a good way to do it. If you have it, treasure is the easiest thing to give.

Forum Link: You are known to be a very savvy investor, getting annual rates of return as high as 40 percent. What’s your secret?

Seymour Schulich: You’ve got to have patience and you’ve got to stick with things and wait for the opportunities to present themselves. I used to go out to Labrador and the natives there would have five fishing rods and they’d set them up with rocks. Cast them out, set them up and then run down, set up another one, and of course being a city boy, I just had one. I noticed those guys caught more fish than I did. That is to some degree what entrepreneurship is all about. It’s about a lot of things you do, which won’t work, some of them do, but the more things you’re exposed to, the better chance you have of finding something that really works.

Forum Link: You are quite passionate about playing poker. Does that factor in your decision making? Do you acknowledge that you will never have enough information to make a decision with absolute certainty?

Seymour Schulich: What poker teaches you is patience. You can’t win in poker without it, and I don’t think you can win in business without it. It’s funny. When I’d be in deals with guys and I’d be pushing the idea of patience on them, I’d be saying, “Why is it that I’m the old one here and I’m the one telling you to be patient, and you’re the young one and you’re impatient?” They’d say to me, “Well, it’s great for you, you’ve already made your money. You can afford to be patient; we can’t.” I would say “it’s just the converse”. Buffett’s got it right; you sit out there and watch the pitches go by, and it’s the only game where there is no three-strikes-you’re-out. You just sit there until you find the right pitch and then you swing at it. You can wait and you can let 1000 pitches go by if you want.

Forum Link: What are some other secrets to making good decisions?

Seymour Schulich: We talk about partners in the book. The thing about partners is that you can get these wonderful ideas at 4 o’clock in the morning and then you come in the office and say, “I have this wonderful idea.” And your partner will say, “It’s a wonderful idea but you haven’t thought of these three things.” Then you say, “Oh, gee, I haven’t thought of those three things.” That’s a great role that partners often play.

I’ve had good partners my whole life and they’ve kept me from going off the track. You have a lot of ideas and the most valuable thing an emperor can have is people around that tell him when he has no clothes on. What you see in business is dictatorial behavior, and no one wants to tell the emperor that they have no clothes on. So the company goes off the track because everyone is so scared that they’re going to lose their head if they tell the emperor what he doesn’t want to hear. Most business relationships, and relationships in life, are based on respect and loyalty. If I had an idea and I couldn’t sell my partners on it, I’d say, “Well, geez, these aren’t stupid guys, and if I can’t sell these guys this idea, there must be something wrong with it.” I didn’t say, “Well I know better than them, and I’m smarter than them, and they don’t understand.” The rule of partnership is that if you don’t agree on a course of action, then you don’t do it. It’s mutual veto power that is the real key to partnerships.

Forum Link: What do you consider your greatest success?

Seymour Schulich: Business is a means to an end. I’ve endowed six schools, I’ve created about 650 scholarships annually, so in my mind that’s probably the legacy that I’m really leaving. You really say to yourself “you really die when you’re forgotten”, so what are you going to do to try to make sure that you’re not forgotten?

Forum Link: How do you decide to back a venture?

Seymour Schulich: I talk about the four types of leadership out there in companies. There’s amiables, there’s analytics, there’s drivers, and there’s dreamers, and that’s based on psychology. If you back dreamers, your results won’t be too good. I haven’t had much luck with amiables either. Amiables are people you like a lot, but often times they don’t make the hard decisions, or won’t make any decisions; a lot of times they are procrastinators, but they are very likable.

One of the chairmen of the banks once said his job was to make sure a decision, if it was wrong, would be painful, but not fatal. That’s what I think you should be looking out for in business, that if you’re wrong it shouldn’t be fatal, it should just be painful. I found that in business, it’s better to make five decisions in a timely and disciplined manner and if only three of them are right, you’ll probably be alright. Funny enough, in our royalty business we analyzed later how many of the royalties ever paid back, were ever any good. It’s true we made 40 percent compounded over 19 years, we had a better record than Buffett, but only 30 percent of our decisions ever worked out. The ones that really worked, worked in spades, but an awful lot didn’t work.

Forum Link: Do you have one major rule you apply to everything you do?

Seymour Schulich: A reporter called up and said, “Hey, you got all of these quotes in the book and all of these ideas. If you had one quote to make, what would it be?” The quote was: “Don’t be too smart, don’t be too tough” and that’s my father’s quote. I think you get in more trouble in business being too smart and too tough than any other single thing. Trying to be too aggressive with people, trying to get the better of the deals. Leave something on the table and let the other guy save face, and then the other guy will be happy and want to come back and deal with you or will speak favorably about you. That should be the way it is because if you do business in a way that will have people speak badly of you at some point, you’re going to have trouble continuing.

Forum Link: Are there some characteristics that make a great entrepreneur?

Seymour Schulich: Funny enough, one of the things I think makes a great entrepreneur is insecurity. My parents came out of the depression and were very insecure. I think they passed on a lot of their insecurities on to me. I don’t think rich men’s offspring have a great record of success because A, they have no insecurities and B, they have no fire in their bellies.

Forum Link: With all of your investments you’ve made in philanthropy, what would you hope that the outcome will be?

Seymour Schulich: You hope for only one thing. You hope that the world is a better place for you having been there. That’s really about what you hope. Everyone wants to make a difference if they can. Otherwise, what’s it all about? I think women get that satisfaction with children, taking care of the next generation, but I think you want to wake up and say, “The world was a better place for my having been here”.

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