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Month: July 2022

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How an Indian Businessman Lost a $42 Billion Fortune

Once the world’s 6th richest billionaire in 2008 with a net worth of $42 billion, Anil Dhirubhai Ambani, lost it all by 2019.

Here’s how…

Anil Ambani was born June 4th, 1959 in Bombay India as the youngest son of the founder of one of the most powerful companies on the planet. His father,  Dhirubhai Ambani, was the founder of a company called Reliance Industries Limited which today is doing $7.366 trillion as a conglomerate, headquartered in Mumbai. It has diverse businesses including energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles.

WATCH:

https://www.youtube.com/watch?v=G_H-BoEfwjo

Dhirubhai raised his 2 sons to eventually take over the “family business”. Mukesh and Anil started as executives at Reliance in their twenties. The two couldn’t have been more different. Mukesh was more of a reserved family man while Anil earned a reputation as a flashy playboy who enjoyed rubbing shoulders with Bollywood’s elite.

 

Tragedy strikes the Ambhani family

Dhirubhai Ambani  passed away on July 6th 2002 of a sudden heart attack at the age of 69. At the time of his passing he was the 138th richest man in the world with a net worth of $2.9 billion.

Mukesh, the older brother assumed role of chairman and Anil took the office of Vice President. They were at each other’s throats almost immediately. Each had different ideas for what to do with the company and the two were making decisions without consulting each other.

It was a mess…

It became a real problem. So big that even India’s finance minister tried stepping in to get the bickering duo to make nice. After all, Reliance was one of the biggest economic powerhouses in India.

The sibling rivalry for the control for Reliance was resolved when the 2 decided to split the company down the middle. Mukesh would run the gas and petroleum businesses and Anil would run the communications and power businesses and ultimately leave each other alone.

 

Losing a $42 billion fortune

In 2008, Anil Ambani was at the top of the world as the sixth richest person in the world with a net worth of $42 billion.

But the proverbial sky was about to come crashing down.

That same year Anil Ambani made the decision to invest around $2 billion in advancing Reliance Communications Group, heavily leveraging his company into massive debt.

Then shit hit the fan…

In 2011, Anil’s Managing Director and two Vice Presidents were arrested on suspicion of conspiring to acquire mispriced mobile network licenses for companies Reliance Communications has invested in to illegally bolster the company’s share prices in an attempt to close the debt gap.

The following year In 2012, amidst scandals, Anil Ambani acquired even more debt to pay off the existing debts. Reliance Communications took a loan of over $1.2 billion from three Chinese Banks on Anil Ambani’s personal guarantee.

That’s one hell of a personal guarantee.

By 2016, many of Anil Ambani’s companies ran into debt and operational troubles. On the one hand, Reliance Power had to sell its assets. On the other, Reliance Communications lost 98% valuation in a period of just 3 short years.

RCom was unable to compete against the top reigning telecom companies and lost consumers. This brought down Anil Ambani’s net worth to $2.5 billion.

Still not a bad nest egg by anyone’s standards however, Anil Ambani’s Reliance Communication owed the Swedish network company, Ericsson, $80 million, which he failed to repay. Which shocker, lead to a major lawsuit.

In 2019, the Supreme Court of India ordered Anil Ambani to repay the debt along with interest or go to jail. In an unlikely intervention, Anil Ambani’s older brother Mukesh paid the money owed to Ericsson and yes little brother from going to jail.

Reliance Communications then filed bankruptcy in 2019. But Anil’s problems were still far from over.

He still owed over $700 million including interest to the 3 chinese banks he borrowed money from. In February 2020, Anil declared that his net worth has fallen to zero after considering his liabilities. He pleaded poverty and claimed that he didn’t hold any meaningful assets that could be liquidated to pay off the debts he owed to the Chinese Banks.

Who would have thought that a man who had a net worth of $42 billion in 2008 would claim poverty by 2020?

He still managed to turn out ahead. Today he and his wife Tina Ambani reside in one of the most luxurious homes in India. A 17 story home situated at Pali Hill in Mumbai.

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Best Practices Case Studies Personal Development Technology

How Amazon Quietly Built the Biggest Shipping Company on the Planet

When the world took a pause during the pandemic, Amazon quietly hired an extra 400,000 workers to deliver goods from its warehouses across the country, pushing its total employee count to 1.1 million people.

People hit the buy button on Amazon.com about 13 million times a day. That’s over 66 thousand orders per hour or 18.5 per second. Then like magic, the same day or 3 days later, those 13 million orders get delivered like clockwork.

Which begs the question, how the hell does Amazon fulfill that many orders?

As it turns out, Amazon’s fulfillment system is more complicated and convoluted that any logistics company on the planet. Operationally the company competes more with FedX and UPS than they do with retailers like Walmart or Target.

So there are definitely a few factors in Amazon’s business structure that allow the company to ship and deliver customer orders so damn effectively.

Compared to it’s competitors, Amazon’s supply chain and logistics operations are far more advanced. Amazon strategically builds fulfillment centers in or near urban cities to best reach as many customers as possible. They have over 180 fulfillment centers and continues to expand every year…

The reason Amazon’s can keeps their shipping cost low in comparison to competitors by taking over the entire supply chain including delivery.

This way, Amazon doesn’t have to pay third-party companies to manage their fulfillment.

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For more information visit tylerhayzlett.com

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Case Studies Personal Development Technology Wealth

Where’s My S@#&? Why Shipping Takes Soo Long Now…

90% of the world’s trade goods are transported by international shipping. Let that sink it.

When countries went into lockdown in early 2020, restrictions on peoples’ movements resulted in significant changes in consumption patterns.

An industry with an estimated 5,500 container vessels was caught off gaurd by the  COVID-19 lockdowns. Then, when Americans flush with stimulus checks embarked on a drunk binge spending spree a year later, there simple weren’t enough ships to meet the explosive demand.

Every able container ship was pulled into service in a scramble to reach U.S. consumers.

But with 40% of US imports going through southern Californian in LA, it had become common to see up to 70 ships just floating nearby waiting to offload the products we’ve been waiting for.

According to Peter Sands, chief analyst at Xeneta, a Norwegian analytics firm for the freight industry; “Everything is so out of its normal balance it will take more than a year for global logistics to unwind.”

As if things weren’t shitty enough, there’s also a container for Asian exporters. Those big ass steel boxes are returning to Asia at a rate of only one for every four arriving in the U.S.

The global supply chain network is on its knees. After a fall in shipping demand during the early days of the pandemic in 2020, a surge at the end of that year led to delays, port traffic jams, and blockages across the world. Now, containers are jammed up in ports due to rising demand and a continuing shortage of dockworkers and truckers.

Don’t look for any solutions coming soon, supply chain experts predict the to remain a backlog in shipping to American ports that could last into early 2023.

The logjam has sent shipping costs to record highs up 449%.

So what’s the solution?

The shipping industry is lobbying for local governments to increase spending on critical parts of the supply chain. Specifically ports, railways, warehouses, and roads in order to increase capacity and cope with ongoing demand.

 

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For more information visit tylerhayzlett.com

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Best Practices Biography and History Culture Entrepreneurship Industries Investing Management Marketing Personal Development Sales

WATCH: The Decline of Pizza Hut. What Happened?

Pizza Hut was a national pizza chain before there were national pizza chains. They were at one time, the largest pizza franchise in the world.

After 40 years of being America’s dominant pizza brand, Pizza Hut officially lost the lead to Dominos in 2018. In 2019 Pizza Hut announced it was shutting down 500 of their 7,500 locations.

In July 2020 their largest US franchisee, MPC International, filed for bankruptcy. This franchise alone was responsible for 20% of Pizza Hut’s operations.

The entire history of the rise and fall of Pizza Hut is documented in this video of Company Man:

 

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Sad, but true. According to Restaurant Business, Pizza Hut’s overall year-over-year sales fell 2.2% in 2020. Meanwhile, its biggest competitors, Domino’s and Papa John’s, had net gains of 17.6% and 15.9%, respectively.

Pizza Hut’s declining sales were due in large part to the pandemic, which closed hundreds of locations across the country. The chain’s largest franchisee also declared bankruptcy, which caused the company to lock the doors, shutter 300 locations, and offer up another 927 locations for sale.

Pizza Hut was once known as a fast-casual dine-in pizza place with white and red checkerboard tablecloths. Fast-forward to 2021, and consumers don’t want dine-in pizza, they want to take it home…

 

For more information visit tylerhayzlett.com

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Best Practices Biography and History Culture Entrepreneurship Industries Investing Management Marketing Mergers & Acquisition Personal Development

All the Brands Pepsi Owns Will Shock You…

Pepsi is a brand that everyone knows, because as their website states, their products are sold in 200 countries. Which is pretty freaking crazy considering Google says there are only 195 countries on earth…So it’s safe to assume they have officially saturated their target market.

But as big as they are, they’re even bigger than you might think.

Pepsi is no longer a beverage brand. They are now Pepsi Co, a conglomerate that consists of 23 brands that generate of $70B in annual revenue. Pepsi is one of the biggest companies on the planet.

 

A Brief History of Pepsi:

Pepsi was originally promoted as “Brad’s Drink” in New Bern, North Carolina in 1893 by Caleb Bradham, who crafted it at his drugstore. It was later renamed Pepsi-Cola in 1898, “Pepsi” because it was advertised to relieve dyspepsia (indigestion) and “Cola” referring to the cola flavor.

You read that right, Pepsi was originally marketed as a cure to an upset stomach.

As product sales increased, the company pivoted overtime to appeal to a larger audience and diversify its products.

Fast forward to 1950 Alfred N. Steele, a former VP of Coca-Cola Company, became the CEO. He focused on creating giant advertising campaigns to increase sales. His efforts increased Pepsi’s earnings 11-fold during the 50s and made it the instant competitor of Coca Cola.

In 1965 Pepsi-Cola merged with Frito-Lay, Inc. They then diversified further with the purchase of three restaurant chains:

Looking to add even more diversification PepsiCo acquired both the Tropicana and Dole juice brands from the Seagram Company in 1998, and in 2001 it then merged with Quaker Oats company.

Here is the massive list of brands Pepsi Co owns today.

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For more information visit tylerhayzlett.com

Categories
Best Practices Biography and History Culture Economics Entrepreneurship Industries Investing Mergers & Acquisition Negotiations

WATCH: The Secret to Five Guys Franchise Success

Five Guys is a burger chain of restaurants with over 1,700 locations doing $2.3 billion in sales founded by a dad and his 4 sons (hence, the 5 guys).

For comparison, there are a total of 378 In-N-Out Burger locations and 350 Johnny Rockets.

Worth mentioning, in addition to the 1,700 locations, Five Guys has an additional 1,500 restaurants currently in development. So if you haven’t been to one yet, just wait.

In just 2 decades, Five Guys has become one of the fastest growing, successful restaurant chains in the United States making them a brand worth knowing and a model to look into.

The Five Guys Origin Story:

In 1986 the founder, Jerry Murrel, along with his 4 sons started a single burger restaurant. As the story goes: Parents Jerry and Janie Murrell offered  an ultimatum to their four sons: “Start a business or go to college.”

The business route won and the Murrell family opened a carry-out burger joint in Arlington Virginia with the following business plan:

“Sell a really good, juicy burger on a fresh bun. Make perfect French fries. Don’t cut corners.”

When they say they don’t cut corners, they mean it. Fun fact: there are no freezers at any Five Guys locations, just coolers. Because freezers aren’t necessary when you only serve fresh food.

By concentrating on quality, they scaled the business model built on high ingredient costs, a limited menu, and absolutely zero paid advertising. They also refuse to deliver. Five guys doesn’t deviate from what they’re good at. Cooking badass cheeseburgers.

Five Guys Opened Franchise Locations in 2003

Early in 2003, the “Five Guys,” began offering franchise opportunities. In just under 18 months, Five Guys Enterprises sold options for more than 300 units. The overwhelming success of franchising a local restaurant made national news and word spread to new markets.

In an episode of Company Man (with 1.2M views), they break down the full history and the unique way the Murrell family grew the Five Guys unbelievable growth story.

WATCH:

Getting hungry yet?

Three Key Lessons Driving the Success of Five Guys: 

#1 Simplicity of menu – F#$% chicken sandwiches!

“When we first started, people asked for coffee. We thought, Why not? This was our first lesson in humility. We served coffee, but the problem was that the young kids working for us don’t know anything about coffee. It was terrible! We tried a chicken sandwich once, but that did not work, either. We do have hot dogs on our menu, and that works. But other than that, all you are going to get from Five Guys is hamburgers and fries.” – Jerry Murrell

#2 Obsession with old school quality control

“The magic to our hamburgers is quality control. We toast our buns on a grill – a bun toaster is faster, cheaper, and toasts more evenly, but it doesn’t give you that caramelized taste. Our beef is 80 percent lean, never frozen, and our plants are so clean, you could eat off the floor. The burgers are made to order. That’s why we can’t do drive-thru’s – it takes too long. We had a sign: “If you’re in a hurry, there are a lot of really good hamburger places within a short distance from here.” People thought I was nuts. But the customers appreciated it.” – Jerry Murrell

#3 No paid advertising. Word of mouth is still a thing?

You read that correctly. Five Guys doesn’t do advertising. Jerry believes that the customer is the biggest salesperson:

“Treat that person right, he’ll walk out the door and sell for you. From the beginning, I wanted people to know that we put all our money into the food. That’s why the décor is so simple – red and white tiles. We don’t spend our money on décor. Or on guys in chicken suits. But we’ll go overboard on food.” – Jerry Murrell

Badass…

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For more information visit tylerhayzlett.com

Categories
Best Practices Biography and History Body Language Culture Entrepreneurship Negotiations

How to Hack Networking? David Burkus’ TedTalk Went Viral

Hate networking but know you need to be doing more of it?

Here’s the only video you need to watch today. It’s one of the most watched videos on TedEx with over 2 million views on how to hack networking.

In his talk David Burkus, author of the book “Friend of a Friend“, examines the science of how networking actually works and reveals what the best networkers really do…

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Who is David Burkus?

David Burkus is a best-selling author, a sought after speaker, and business school professor. In 2015, he was named one of the emerging thought leaders most likely to shape the future of business by Thinkers50, the world’s premier ranking of management thinkers.

His book, Friend of a Friend, offers readers a new perspective on how to grow their networks and build key connections—one based on the science of human behavior, not just canned networking advice.

David is a regular contributor to Harvard Business Review and his work has been featured in Fast Company, the Financial Times, Inc magazine, Bloomberg BusinessWeek, and CBS This Morning.

For more information visit tylerhayzlett.com

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Accounting Best Practices Biography and History Growth Investing Personal Development

The Number 1 Rule of Money – Patrick Bet-David

In an interview with host Lewis Howes on the show School of Greatness (which has been watched by over 1.3 million people), Patrick Bet-David explains the #1 rule of making money. And with a personal net worth estimated to be north of $200 million, he should know a few things about the topic…

In the interview Bet-David explains that the first rule of understanding the management of money is that it’s just a game.

“the only thing to know about money is that it’s a game. It’s that simple. Just like any game, you can get better.”

“Money’s Just a Doubles Game”…

According to Pat, the entire game of money is about doubling your money.

For example, if you have $1,000 cash in your bank account, you are 10 doubles away from having a million dollars. You’re five doubles away from $32,000, 13 doubles away from having $8.192 million, and 14 doubles away from $16 million dollars. How soon can you double your money?

That’s it. It’s a doubles game. Can you take that $1,000 and double it to $2,000 in the next year?

Now that it’s $2,000, you’re nine steps away from a million dollars. If you already have $100,000 in your account, then you’re three to four doubles away from a million dollars. Building wealth is a piece of cake when you understand the doubles game.

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About Patrick Bet David:

Patrick’s amazing story starts with his family immigrating to America when he was 10-years old. His parents fled Iran as refugees during the Iranian revolution and were eventually granted U.S. citizenship. After high school Patrick joined the U.S. military and served in the 101st Airborne before starting a business career in the financial services industry. After a tenure with a couple of traditional companies, he was inspired to launch PHP Agency Inc., an insurance sales, marketing and distribution company.

He did all of this before turning 30…

About Valuetainment:

Patrick also created Valuetainment, a media brand with the purpose of teaching fundamentals of entrepreneurship and personal development while inspiring people to break from limiting beliefs or other constraints.

It has been referred to as “the best channel for entrepreneurs” online and has evolved into an emerging media network providing news, other content partners and a weekly podcast.

Additionally, Patrick speaks on a range of business, leadership and entrepreneurial topics including how and why to become an entrepreneur and the importance of learning how to fully process issues.

For more information visit tylerhayzlett.com

Categories
Growth Management Personal Development

Finding the Lions Within Your Organization

When we talk about the challenges of remote work, the first thing that comes to mind is those that employees experience. However, employers have their fair share of challenges too – ensuring productivity, making sure employees feel connected to the organization. Employers have to solve the problems for the organization to survive.

Another particular area of concern is the lack of opportunity for teamwork and collaboration. The physical separation of employees and the continued reliance on remote teams can often lead to issues with collaboration. Remote work has, in some ways, caused employees to miss out on getting “chance” encounters, which is often the catalyst that births new ideas.

When employees are in the same office, it is “easier” to make people understand the tasks assigned to them. If and when an employee has a question, a quick walk to a colleague’s or manager’s booth can easily get answers. Remote work hinders this.

Remote work presents several issues, however, many of the challenges of working remotely that affect both the employees and employer can be resolved by effective leadership. A leader who can prioritize regular communication, provide the right equipment, and adopt a degree of flexibility in working arrangements when possible is indispensable to organizations.

But the question now is how do you find Lions who are up to the task within your organization?

Internal Leadership Development

This is where internal leadership development comes into the picture. This is a program that provides training to individuals so that they can become effective leaders and players within an organization. Most programs focus on developing and polishing a prospective leader’s abilities to handle crucial responsibilities in an organization by teaching them the dos’ and don’ts’ of a successful leader.

Why is this important? We submit there are two main factors why it’s beneficial for organizations to “build from within.” First, there’s no better place to look for employees who understand your business than those who are already in it. Second, it gives the employees a tremendous boost in morale to see one of them take on a more active role in running the business. It gives them an idea that as long as they are loyal and provide results, they can also be part of the leadership.

Starting an Internal Leadership Development Program

Your internal leadership development program does not have to be complicated. In fact, the simpler it is, the more effective it will be. What’s important is that, first, you have to define the leadership roles of your organization. Leaders function better and more efficiently if they have complete knowledge and understanding of the leadership goals set by the organization.

Second, focus on development versus training. Leadership is a culmination of various skills acting in unison – charisma, the skill of persuasion, the ability to negotiate, and the ability to see the bigger picture. Thus, instead of teaching people how to do this, pick people who have shown results AND already possess these skills and develop them.

This will help participants acquire skills that can help them become efficient leaders.

Bottomline

There are numerous benefits of leadership development programs. Thus, you must come up with a development program that reflects your work culture while aiming to fill the leadership gaps within an organization.

The responsibility for creating the leaders of the future lies with the leaders of today. If you want to learn more about the intricacies of leadership development programs and enter the business sphere, you can visit MarketAtomy.com to know more.

 

Danna Olivo is a Growth Strategist, Author, and Public Speaker. As CEO of MarketAtomy LLC, her passion is working with first-stage business owners to ensure that they are prepared and equipped to launch and grow a successful small business. She understands the intricacies involved early on in business formation and as such the challenges that come with it. A graduate of the University of Central Florida’s College of Business, Danna brings more than 40 years of experience strategically working with small and medium businesses, helping them reach their growth goals. danna.olivo@marketatomy.com