1,000 Dollars and An Idea by Sam Wyly

dollars2Reviewed by Susan Reimers, JD

Sam Wyly is not a household name, but perhaps he should be. Like Bill Gates, Oprah Winfrey, Sam Walton, and Martha Stewart, Sam Wyly is among the most successful entrepreneurs of our day. Forbes magazine estimates Wyly’s wealth is over $1 billion. He is the man who successfully competed with IBM and who, with a vision towards today’s technological world, sued AT&T, claiming that its government-sanctioned monopoly restricted the progress what would become the internet and causing the 1984 break-up of that monopolistic monolith. Wyly also took a small craft supply company and grew it into the wildly successful Michaels chain that is beloved by hobbyists across the country. An avowed environmentalist, he has been at the forefront of alternative energies for at least a decade. Now in his 70s, Sam Wyly still has vision.

In his autobiography, 1,000 Dollars & An Idea: Entrepreneur to Billionaire (Expanded Edition, 2009), Wyly admits, “I’ve lived a mostly private life. So why now am I publishing this book, a very public act? . . . I realized . . . that I’d been mulling over stories from my life and wondering what they had to offer others.”

Wyly’s “stories” are offered to the reader with studied reflection. This is a man who knows where he came from and understands his own motivation in his moves forward.

He loves history and he loves to read, two points that Wyly makes throughout his book. From an early age he believed that any obstacle could be overcome by the belief that it could, finding the right team, and hard work. Wyly admits that he learned much from Christian Science and the teachings of Mary Baker Eddy. He also admits that when he didn’t know something, he was willing to learn. He analyzed his own management style and astutely hired people around him to compensate for his weaknesses.

He writes of those he hired with the same respect and appreciation he expresses towards those business icons he has learned from, like Sam Walton and Tom Watson of IBM. “[E]nabling people to do good work and give them the freedom to make their own decisions is the best way to run a company. Trust, but inspect.”

With these simple, albeit important principles, Wyly navigated his life from an unpainted clapboard cabin with no running water or electricity to earning an MBA from the University of Michigan and a first job at IBM in Texas. The increasing demand for mere access to a computer at a time when the cost of a single superconducting computer was $1.5 million (approx. $10 million today) and the need to do something more, led Wyly to quit IBM and secure financing for a used computer. In exchange for housing the computer at Southern Methodist University, professors and students could access it on nights and weekends and by day it was rented to cash-paying commercial customers. University Computing’s first customers were the programmers from Texas Instruments and Sun Oil and Wyly the entrepreneur was on his way.

University Computing was highly successful and exapanded around the world. Wyly was a millionaire before he reached 30. He further expanded his interests into oil, insurance, and restaurants. Ever the visionary, he saw the future in software and the ability of computers to talk to one another. “For many people, the idea of computers talking to each other over phone lines seemed too much like science fiction,” he writes. “But not to me . . . [W]e needed to build a digital highway for digital computers.” After the military birth of the internet, “[O]ur opportunity was to deliver its private-sector sibling. We decided to call it . . . Datran . . . and started building a phone company exclusively for computers.” At the time AT&T was the government-sanctioned telephone monopoly, which meant that Datran’s mission and Wyly’s vision ran into it head-first. Datran never regained consciousness, but AT&T did fall, and Wyly learned invaluable lessons that stayed with him as he built his empire.

For example, Wyly learned how to better collaborate with government, a skill that became useful when he later grew Green Mountain Energy. He is proud of having convinced then-Texas governor George W. Bush to collaborate, noting that Texas thus surpassed California in building windmills. He admits, though, that it was more important to Gov. Bush to deregulate and create a competitive market in electricity than it was for the state to go green. Wyly is also sad that when his long-time friend became president, he reneged on his promise to regulate CO2 as a pollutant under the Clean Air Act his first year in office. Wyly nevertheless believes that the greening of business is good for the economy. He believes, “Our recent presidents and Congress have been hiding behind a false argument saying that protecting the environment is going to hurt the economy. They got it wrong. I’ve grown convinced that moving toward a carbon-free economy will create good jobs and stimulate economic growth.”

Of the current economic crises, Wyly reflects on the history of the Great Depression and writes, “despite all the similarities to the 1930s, it ain’t gonna be that bad.” He likens the recent corporate failures to the Savings & Loan failures of the 1980s, and argues that the government should not bail out the banks, insurance companies, or carmakers. He recalls that after all the S&Ls and all the big banks in Texas failed in the 80s, smaller banks replaced them and the economy came “roaring back. We Wylys had three entrepreneurial companies back then. All survived and prospered. Our bankers just showed up with a new bank’s name on their calling cards. That’s how America works.”

1000 Dollars & An Idea is an important read for those in business for its principles and for those fledgling entrepreneurs for its optimism. Sadly, Mr. Wyly’s autobiography glosses over his family life and the only recognized female influence is that of Mary Baker Eddy. Also lacking is a more detailed account of how he navigated his business through the stagflation of the 1970s, as well as any insight on how he handled the Securities & Exchange Commission’s investigation of his business affairs. Nevertheless, Mr. Wyly’s book is rich with the experience that comes from 50 years of changing the world. And Sam Wyly certainly has changed the world.

Disclosure in Accordance with FTC Guidelines 16 CFR Part 255

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