Self-made Billionaires

Ivy League and Privilege Not Required to Make Billions


Anyone who doubts that America is the land of opportunity just needs to speak to Harold Hamm, chairman and chief executive officer of Continental Resources (CLR)—the Enid (Okla.)-based oil & gas drilling-and-exploration company.

Born the youngest of 13 children in 1945 to sharecropper parents in rural Oklahoma, Hamm grew up in poverty. To help put food on the table, he pumped gas, milked cows, stacked sheetrock at a lumberyard, and worked countless other jobs. He did have one piece of good fortune—an oil boom practically in his backyard. In 1965, Hamm took a chance and borrowed $1,000 to buy a truck to haul water and drilling mud to local rigs.

"It was working night and day," Hamm tells Businessweek.com. "If it took 24 hours to do it, then that's what I did. It was very much hand-to-mouth, particularly in the beginning." Hamm soon became a wildcatter, making his first big strike in 1971 at the age of 26. Building Continental Resources has since made him a billionaire.

"That feeling of destiny was there from the start," Hamm says. "It wasn't about the lifestyle. It was about the future and what the future could become for us."

"Mundane and Pedestrian Fields"

Hamm is not alone in climbing from the depths to the top of America's economic ladder. Many of his fellow billionaires come from hardscrabble backgrounds, too. These are men and women who started out as immigrants or were destitute—even homeless—often with little or no formal education. They didn't bow to impediments. Experiences with poverty and struggle in their youth gave them the hunger to seek out opportunity and the determination to press on until they succeeded.

Many of these billionaires had little idea how far they would go. They saw needs and risked everything they had to build businesses around them. Says Peter Bernstein, co-editor of All the Money in the World (Knopf, 2007), a book about the richest people in America: Many self-made billionaires "made their money in surprisingly mundane and pedestrian fields."

For his part, Alan Gerry wouldn't call cable TV anything but exciting. Gerry dropped out of high school to join the U.S. Marines, then learned to repair televisions through the G.I. Bill. He founded Cablevision Industries in 1956, when a line to your house could provide only five channels.

"People heard about TV, read about TV, and there was a crying need for it," Gerry says. For 40 years nearly to the day, Gerry built a cable empire. He started in rural areas that larger companies were ignoring, then expanded Cablevision to small towns and eventually, to cities. By 1996, when Gerry sold out to Time Warner Cable (TWC) for $2.7 billion, Cablevision was the country's eighth-largest cable company, with 2,500 employees and 1.3 million subscribers.

The Dream: Building That Business

"I tell this to people I know well," Gerry says. "There is not a week that goes by that I don't have a dream that I am back in the business. Two nights ago I had it."

The thrill of building a business appears to define many self-made billionaires. Gerry wakes up to quite a nice bank account. Still, as he puts it, there's nothing like the excitement that comes with starting up and growing.

The same applies to Carl Berg, a billionaire who profited handsomely off the boom in Silicon Valley and is today chairman and chief executive of Cupertino (Calif.)-based Mission West Properties (MSW), a real estate investment trust that owns or manages more than 7 million rentable square feet. For Berg, the lure wasn't so much a matter of lifestyle. He says he works harder on venture capital today, at age 73, than when he was starting out because of the responsibility that comes with being a billionaire. "The way I'm approaching it is [that] I'm trying to give someone else the opportunity that I had," Berg says. "I do everything I can to make the company succeed."

"I have fun every day," Berg adds. "And as long as I have a brain and can do something, I'll be here doing it."

Blue Chip College Dropouts

A relatively high proportion of billionaires are college dropouts. Bernstein says that about 10 percent of the people listed in the Forbes 400 during its first 25 years had left college without a diploma. Many, he says, have but a high school degree.

Microsoft (MSFT) founder Bill Gates may be America's most famous college dropout, but the world's list of richest college dropouts also includes co-founders and CEOs Larry Ellison of Oracle (ORCL) and Steve Jobs of Apple (AAPL). "A surprisingly large number of people have made fortunes because of drive and luck," Bernstein says. "They just have unbelievable focus on accomplishing what they sent out to do."

For Hamm, it wasn't a matter of choice that he missed out on college, but financial necessity. After 10 years of running a business, he went to school to study geology and take some business courses. "I went about it all backwards and I wouldn't recommend that to anybody," Hamm says. "Come out here, make your fortune and go to college. Don't try that."

Hamm also says that attending school can hinder some people. Ultimately, he says, the goal is to keep learning—no matter what. "I always have a mountain in front of me that I'm still trying to climb," he says. "Even though it was somewhat crude and awkward, the education that I've gotten has certainly been very beneficial."

Risking Everything to Get Started

While the headlines are full of executives who fail at one company and swiftly find work at another, today's future self-made billionaires have no safety net or business-school-buddy network to bail them out. For them, there's often no second chance. Gerry poured every dime he had—$1,500 he had saved repairing TVs—to get the cable company going. Hamm had to enlist a co-signer to get the loan for his first truck. And when Berg decided to go out on his own selling real estate, he called a friend and asked for a loan of $1,000 per month "so I was confident I would be able to eat, at least," he says. "I sold five houses in the first month, so I never had to borrow the money."

Berg says he learned more in his first three years as a mortgage broker than he did in college or during the rest of his career.

Hamm says a big part of that early learning curve is how people react to making mistakes. "No. 1: Don't look back," he says. "You can never get good direction from looking backwards. Just know that you're going to make mistakes. Learn to survive those errors and hope they're not so critical that you can't survive them. Learn and go on."

The key is to move forward. "Persistence is everything," Hamm says. "Very few people have the persistence that they need to achieve the great things. I can't say hardly enough about that. It's so important to have persistence to see something through."

Click here to see the stories of 20 billionaires who began with nothing.

Stonington is a reporter for Businessweek.com.

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