How you can learn from the rise of Straton Beaumont and...
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Every business’s dream is to survive, thrive and eventually succeed. Growth takes time, plus monetary and personal investment. The Wolf of Wall Street however was a different case. This movie was based on a Wall Street stockbroker Jordan Belfort and Danny Porush, who owned Stratton Oakmont Inc.
Stratton was the biggest over the counter (OTC) brokerage firm in the country between the late 1980s and 1990. It started off as a small firm, bought a broker-dealer and later bought an entire firm.
They ran schemes that involved inflating share prices, providing false statements about stocks and even holding on to stock to drive their prices even higher. Eventually, they would sell these cheap stocks at a high price.
Important lessons from the rise of Stratton Oakmont
Although the company was based on unorthodox ways, running a company from the ground up needs skills and discipline. Here are some guidelines to run a successful business.
Execute Your Ideas
Stratton Oakmont’s success was based on two conditions:
- The rich love gambling – especially when it seems like an authentic business opportunity. Although others in wall street had the same idea, none had been able to execute it successfully
- Teaching uneducated young minds to sound professional as stock brokers over the phone
Keep things simple. Belfort's ability to transform young people without a sales background or an education into charismatic stockbrokers was based on simplicity. Keeping instructions simple in a way everyone would be able to digest understand and execute.
Word quickly spread about a businessman who turned uneducated people into young millionaires
Have a loyal team
Jordan Belfort surrounded himself with loyal people. Danny and Kenny, his two old friends were not the brightest people but they were Belfort's fiercely loyal long term friends. The upside was
- It reduced the chances of being double-crossed by two-faced employees.
- Prevented Belfort from making the wrong decisions supported by 'yes employees' - a loyal team will raise their concerns if a decision doesn't sit well with them.
Dress for success
Stratton Oakmont made sure that from the onset, all employees were well-dressed. The good dressing was meant to boost their self-esteem and charisma. A tailor was hired to make suits for new employees.
Little organizations are liable to own less individual assets and less up-front capital to devote to quality initiatives. However, top administration responsibility and availability can be more demanding in a small businesses, and internal communications can be more straightforward.