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Building The Successful Investment Company

My first article in the new year will be dedicated to the key points which drive development of the successful investment company. If you think that it is about modern scientific approaches, financial formulas and brand-new management methodologies, then I have to gladden you: it is not. All foregoing stuff is about the successful implementation of the development strategy. The key points that drive development of the investment company are different.

In the beginning there was an idea. Everything that follows stems from the idea, your own idea. To give you an abstract example, I will appeal to the theory of chaos. The order stems from the chaos. Sounds weird: how can the order stem from the disorder? Very simple: all you need is just to generate the idea of order using your vision and understanding of what the order is personally for you (maybe current disorder is actually the perfect order for you?). To put in other words, you generate the idea of order that meets your own interests. Then you create the relevant development strategy which puts together the general development line of your idea and thereafter you apply different scientific approaches, formulas and management methodologies to implement the strategy by means of tactical implementations. Thus you realize your idea of order.

Now, let’s get back to our subject and put the abstract into the practical sphere. To prove your investment idea, answer this question: what is the idea behind your investments? If you answer is something like “to earn money”, or “to secure 15% ROI”, or “to promote advanced technologies”, then you simply do not have the idea and your business operates in the chaos, the disorder. The money cannot be the idea, because it is an effect, a fiscal instrument to measure, transfer and account the value. It is important element that must be managed appropriately. But in order to earn the money, you have to know how to earn it or more strictly – what value you want to create in order to earn the money.

I leave alone different speculative approaches rising from the money-making machine. You do not need to have any idea if all you need is just to make money from money: use different formulas, try to win milliseconds and apply speculative techniques. But it is much better to use the money-making machine to secure financing for implementation of your valuable idea. It can be as simple as making your life better and realizing your childhood dreams, or it can be as bold as creation of the “open society”. What is important to understand, if you live for money – you live for nothing, in vain. That is why the idea “to earn money” is good for nothing, but marketing bulletins.

Now about the idea: “to secure 15% ROI”. Is it an idea? No, absolutely not. It is good to define milestones, tactical goals and selection criteria and measure the success of implementation of your idea. The measure cannot serve as the investment idea. In this case your idea must spin around the question - how to secure the 15% ROI? The same is true for the last quasi-idea “to promote advanced technologies” – “how” and “what exactly”.

Now it is important question: where does the idea stem from? In most cases it stems from your personal interests. In some cases it stems from ideas of great people of the history. In some cases it is the result of deep and thorough thinking and analysis of the environment. What does it mean for the investment company? It means that in its core must be the relevant idea and in most cases it is the result of deep and thorough thinking and analysis of the environment, but in some great cases personal interests of the founder are in the core. In the later case the investment company is created to realize more general idea of its founder. And as there cannot be two captains on a ship, as two lions cannot share one territory, there cannot be two leaders in such an investment company, because it inevitably will lead to the clash of interests and ideas. Less determined partner will be depressed by his more strong-willed partner and be forced to sacrifice his idea and interests. That’s a nature law.

Can the idea be wrong? Of course, and the history has a lot of such examples. But in this case the key role is played exactly by the strong will and personal abilities of the ideologist to overcome the problems and turn bad into good for him and his idea. Different leaders use different approaches to do the latter. It is mostly determined by your personal qualities, intelligence and current environment. The important thing is to make sure that your investment idea is covered by the coherent business development strategy that allows you to secure the organic growth of your company. And thereafter: stay focused.

Now when we know, where the idea stems from, who is its ideological driver and inspirer, I have to talk about the second important point that defines the success of the investment company. The investment idea is the core, its development strategy is the shell and the ability to identify and create relevant opportunities is the driving force that makes the shell to spin around the core. The environment is constantly changing, but it does not mean that your core idea must be changed as well. The development strategy, the shell, can and must be adapted to leverage the new environment, but the core must be firm.

The best way to find opportunities is to create them. Some opportunities can be found by thorough analysis of the environment, some opportunities are created by others participants consciously or unconsciously, but it is much better to create the relevant opportunities by leveraging current conditions and state of the environment. Simply speaking, create them yourself. That is why I stressed that the idea must be firm: in this case you will be able to look at events in the environment through the prism of your own idea and interests. Should you change it – you will lose the road and will drift with the stream. Should you keep it firm – you will be able to create the stream of opportunities.

To sum up, I put it all together as the following rules:

1. Generate your own idea;
2. Create its development strategy;
3. Apply your strong will to drive implementation of your idea – be the ideological leader;
4. Learn to create opportunities by looking at the environment through the prism of your idea and interests;
5. Never, never, never ever change your idea – adapt its development strategy, but keep your idea firm.