Build a System, Not a Product

One of the biggest realisations I have had in recent years is that financial education begins at home, not at school. You would be surprised by how many people earn enormous amounts of money and still end up broke because they never developed a vision for their future—or simply never learned how to manage their money.

Why does society have such a complicated relationship with wealthy people? I am not talking about doctors, who may earn more than the average person but have not truly belonged to the wealthy class for quite some time. I mean people with serious money: multimillionaires and billionaires arriving in Monaco on yachts and helicopters. More specifically, I mean those who built their fortunes themselves rather than inheriting everything from their parents.

Society generally seems to respond to these people in one of two ways. We either criticise them for not paying enough tax and demand that they pay more, or we expect them to share their wealth with everyone else. Whenever someone successfully builds an empire, the people around them usually ask for one of two things: a job or money. Why do so few people ask for advice? Why do we not ask them how they managed to build what they built?

My instinct is the opposite. I would much rather sit down with them over coffee or dinner and hear their story. I would want to understand how they developed their vision, which decisions mattered most and how they overcame the problems they encountered. When people imagine building a business, many non-entrepreneurs assume they must invent something completely new or be the first person to have a particular idea. That could not be further from the truth.

When you build a business, you are building a system—not merely a product.

Let us examine this idea. Suppose we want to create a fast-food business capable of competing with McDonald’s. What is the first thing we imagine? Like drunken sailors, we immediately picture ourselves owning an entire chain rather than a single restaurant. That is what everyone wants, is it not?

The first problem with this vision—and there will be many—is that we must initially accept a much smaller objective. We are not opening 100 restaurants. We are opening one. Just one restaurant that actually works. How do we build it?

First, we rent a suitable location. We buy or lease the furniture and equipment. Then we recruit employees. Before doing that, however, we must understand what we expect from them. Otherwise, we will be unable to distinguish between the people who could move the business forward and those who might hold it back.

Next, we need to make the burgers. Where will the meat come from? What about the cheese and the burger buns? We need to find reliable suppliers. Once all these elements are in place, we must train our employees and ensure that our standards continue to be followed as the business evolves.

We began with the exciting idea of building a fast-food chain capable of competing with McDonald’s. Before putting our first burger on the grill, however, we discovered that we had to assemble an entire network involving supply chains, deliveries, human resources, property, training and marketing. This is the part that many people fail to understand. Until recently, I did not fully understand it either.

When you create a business, you are not simply producing an end product. You are assembling a system that can continue to function. That system is what investors can ultimately buy and sell. Imagine that we operate a food truck and do all the work ourselves. If we are the only people working there, the food truck is not really a business—it is a job. If we become ill and cannot work the following day, the income stops.

A functioning system, by contrast, can continue generating revenue without depending entirely on our constant physical presence. The problem is that most of us approach a new business as if we were creating another job for ourselves. We ask, “How can I cook the best burger?” Then we assume that if we cannot cook burgers, we are finished before we have even started. Someone launching a lawn-mowing service may begin by wondering when they will find the time to mow all the lawns. An entrepreneur thinks differently. They ask where they can find people capable of doing the work, how much those people will cost and how much revenue the company must generate to make the entire operation profitable. Then they ask an even more important question: Is this worth my time?

Most of us never ask ourselves that crucial question. That is where the difference begins. If I told you that you could start a business and earn €100,000 in your first year, how many of you would immediately say yes? Now imagine that earning this money would require working 12 hours a day, seven days a week, without a break, for an entire year. Do you still want your own business? Probably not quite as much.

Consider how much time Elon Musk continues to devote to his companies. I am not presenting him as a hero—the man is not particularly likeable to me—but I can still accept that there is much to learn from his ability to execute ambitious ideas.

The same principle can be seen, in different forms, among many successful entrepreneurs and investors: Warren Buffett, Mark Cuban, Barbara Corcoran, Lori Greiner, Kevin O’Leary and Robert Herjavec. Their personalities, values and approaches differ considerably, but none of them built a successful career without sustained effort.

This also explains why entrepreneurs naturally want to minimise their tax burden. Why would anyone willingly surrender more of what they created than the law requires? To be clear, I am not advocating illegal tax evasion. I mean understanding the laws of your country well enough to structure your affairs legally and avoid paying more tax than necessary. The wealthy have greater access to sophisticated advice, of course, but the basic principle—understanding the rules and making informed financial decisions—applies at almost every level.

Starting a business today is, in some respects, easier than ever. There is capital in circulation and no shortage of investors searching for promising opportunities. It is true that start-up funding is generally more accessible in the United States than in Europe, but funding opportunities nevertheless exist.

We also have access to a global online marketplace in which a message can reach potential customers almost instantly. This is why marketing is one of the most important skills a business owner can develop. As an entrepreneur, you will always be selling something: your company, your products, your vision or yourself.

Once you start a business, however, you must care deeply enough about it to keep improving it. If you do not care, the business may be doomed from the beginning.

Let us return to our hamburger restaurant. How many of you genuinely care about running a hamburger restaurant? I do not. I might want the millions or billions it could theoretically produce, but I would struggle to care deeply about selling hamburgers to customers. Then the problems begin.

A pipe breaks in the customer toilet, but you do not rush to repair it because it is not your own bathroom. Your meat supplier encounters difficulties, so you switch to another supplier offering lower-quality meat at half the price. You do not understand how the new supplier can sell it so cheaply, but you assume customers probably will not notice the difference. Little by little, the standards decline.

If you do not care about the business, your employees will eventually stop caring too.

If, however, there is a personal story behind the company—a meaningful reason why you want it to exist—you are far more likely to protect its standards and persevere when difficulties arise. You will be the person working on Saturday and Sunday, thinking about how to improve the system, while people like me are sitting on the beach or enjoying a glass of wine, as I am now. Cheers! I hope I do not get drunk before finishing this story. As I mentioned in another post, I am currently on a diet, and this glass of wine is already going to my head on an empty stomach.

But let us return to business. The idea I want to share tonight is that many highly successful people possess certain traits in common. One of them is an exceptional capacity for sustained work—often greater than anything you or I have demonstrated so far.

We should be capable of recognising and learning from that effort. When you see someone driving a Ferrari or a Maybach, resist the temptation to make an immediate judgement. The car tells you very little about the person, but if you have the opportunity to speak with someone who has built something remarkable, do not begin by asking about money or possessions. Ask how they did it. What decisions did they make? Where did their motivation come from? Which problems did they encounter, and how did they solve them?

If you want to start your own business, I am genuinely happy for you. That is why I am writing these words: to encourage you to begin building something. The sky is the limit. You can create extraordinary things if you care enough about the problem and are prepared to do the work. If you still do not know what you want to build, remember this: build a system, not merely a product—and begin by asking yourself what you truly care about.

I, for example, care most deeply about my children and my wife. For the three of them, I would move mountains.

All right, that is enough wine for tonight. I will see you in the next post.