“I learned about toughness in a very tough business, I learned about motivating
people, and I learned about competence and efficiency: get in, get it done, get
it done right, and get out. (...)
From as early as I can remember, my father would say to me: ‘The most important
thing in life is to love what you’re doing, because that’s the only
way you’ll ever be really good at it.’"
“My style of deal-making is quite simple and straightforward. I aim very
high, and then I just keep pushing and pushing and pushing to get what I’m
after. Sometimes I settle for less than I sought, but in most cases I still
end up with what I want.”
“[Deal-making] does take a certain intelligence, but mostly it’s
about instincts.”
The Trump cards... :
1. Think big
“To me, it’s very simple: if you’re going to be thinking anyway,
you might as well think big. Most people think small, because they are afraid
of success, afraid of making decisions, afraid of winning. And that gives people
like me a great advantage.”
2. Total focus
“One of the keys to thinking big is total focus. I think of it almost
as a controlled neurosis, which is a quality I’ve noticed in many highly
successful entrepreneurs. They’re obsessive, they’re driven, they’re
single-minded and sometimes they’re almost maniacal, but it’s all
channelled into their work. Where other people are paralysed by neurosis, they
people I’m talking about are actually helped by it. I don’t say
this trait leads to a happier life, or a better life, but it’s great when
it comes to getting what you want.”
3. Negative thinking
“I always go into the deal anticipating the worst. If you plan for the
worst – if you can live with the worst – then the good will always
take care of itself. (...) The point is that you can’t be too greedy.
If you’re going for a home run on every pitch, you’re also going
to strike out a lot. I try never to leave myself too exposed, even if it means
settling [for less].
Sometimes it means delaying [a decision] in order to minimize the risks. (...)
You don’t act on an impulse (...) unless you’ve considered the downside.”
4. Maximize the options
“I also protect myself by being flexible. I never get to attached to one
deal or one approach. For starters, I keep a lot of balls in the air, because
most deals fall out, no matter how promising they seem at first. In addition,
once I’ve made a deal, I always come up with at least half a dozen approaches
to making it work, because anything can happen, even to the best-laid plans.”
5. Know your market
“I do my own surveys and draw my own conclusions. I’m a great believer
in asking everyone for an opinion before I make a decision. If I’m thinking
of buying a piece of property, I’ll ask the people who live nearby about
the area – what they think of the schools and the crime and the shops.
When I’m in another city and I take the cab, I’ll always make it
a point to ask the driven questions. I ask and I ask and I ask, until I begin
to get a gut feeling about something. And that’s when I make a decision.
(...)
The worst of times often create the best opportunities to make good deals.”
6. Use your leverage
Donald Trump is an expert when it comes to leveraging. One of his techniques
(which he used at least twice in the deals described in this book) is to threaten
to put into practice the worst-case scenario for the other party, if he doesn’t
have what he needs.
“The worst thing you can possibly do in a deal is seem desperate to make
it. That makes the other guy smell blood, and then you’re dead. The best
thing you can do is deal from strength, and leverage is the biggest strength
you can have. Leverage is having something the other guy wants. Or better yet,
needs. Or best of all, simply can’t do without.
Unfortunately, this isn’t always the case, which is why leverage often
requires imagination, and salesmanship. In other words, you have to convince
the other guy it’s in his best interest to make the deal. (...)
When the board of Holiday Inn was considering whether to enter into a partnership
with me in Atlantic City, they were attracted to my site because they believed
my construction was farther along than that of any other potential partner.
In reality, I wasn’t that far along, but I did everything I could, short
of going to work at the site myself, to assure them that my casino was practically
finished. My leverage came from confirming an impression they were already predisposed
to believe. (...)
Leverage: don’t make deals without it.”
7. Adapt to your partner’s style
“Barron [Hilton] is wary and reserved by nature. He’s not the kind
of guy who makes impulsive decisions, so I played it very low-key. We got along
very well, and afterward I heard (...) that Barron felt very comfortable with
me. There are times when you have to be aggressive, but there are also times
when your best strategy is to lie back. Very shortly after that, Steve Wynn
of the Golden Nugget decided to make a full-scale assault on Hilton, seeking
control of the company. It was probably the best thing that could have happened
to me.
8. Get the best “location for money”
“First of all, I always believe in going after the best location, if you
can get it at a reasonable price. Secondly, I have an almost perverse attraction
to complicated deals, partly because they tend to be more interesting, but also
because it is more likely you can get a good price on a difficult deal. (...)
It was true that I had several million dollars invested (...), but I was very
confident that if I wanted to turn around and sell my assembled site to someone
else, I’d get a great deal more for it than I’d put in. There are
always buyers for the best. (...)
“Perhaps the most misunderstood concept in all of real estate is that
the key to success is location, location, location. Usually, that’s said
by people who don’t know what they’re talking about. First of all,
you don’t necessarily need the best location. What you need is the best
deal. Just as you can create leverage, you can enhance a location, through promotion
and through psychology. (...)
Location also has a lot to do with fashion. You can take a mediocre location
and turn it into something considerably better just by attracting the right
people. (...)
My point is that the real money isn’t made in real estate by spending
the top dollar to buy the best location. You can get killed doing that, just
as you can get killed buying a bad location, even for a low price. What you
should never do is pay too much even if that means walking away from a very
good site. That’s a more sophisticated way of looking at location. (...)
9. Get the word out
“You can have the most wonderful product in the world, but if people don’t
know about it, it’s not going to be worth much. There are singers in the
world with voices as good as Frank Sinatra’s, but they’re singing
in their garages because no one has ever heard of them. You need to generate
interest, and you need to create excitement. (...)
One thing I’ve learned about the press is that they’re always hungry
for a good story, and the more sensational the better. It’s in the nature
of the job. (...) The point is that if you are a little different, or a little
outrageous, or if you do things that are bold and controversial, the press is
going to write about you. I’ve always done things a little differently,
I don’t mind controversy, and my deals tend to be somewhat ambitious.
(...)
Good publicity is preferable to bad, but from a bottom-line perspective, bad
publicity is sometimes better than no publicity at all. Controversy, in short,
sells. (...)
The other thing I do when I talk with reporters is to be straight. I try not
to deceive them or to be defensive, because those are precisely the ways most
people get themselves into trouble with the press. Instead, when a reporter
asks me a tough question, I try to frame a positive answer, even if that means
shifting the ground. (...) When a reporter asks why I only build for the rich,
I note that the rich aren’t the only ones who benefit from my buildings.
I explain that I put thousands of people to work who might otherwise be collecting
unemployment, and that I add to the city’s tax base every time I build
a new project. (...)
The final key to the way I promote is bravado. I play to people’s fantasies.
People may not always think big themselves, but they can still get very excited
by those who do. That’s why a little hyperbole never hurts. People want
to believe that something is the biggest and the greatest and the most spectacular.
I call it truthful hyperbole. It’s an innocent form of exaggeration –
and a very effective form of promotion.”
10. Deliver the goods
“You can’t con people, at least not for long. You can create excitement,
you can do wonderful promotion and get all kinds of press, and you can throw
in a little hyperbole. But if you don’t deliver the goods, people will
eventually catch on.”
11. Hire the best and manage by merit
“I have a very simple rule when it comes to management: hire the best
people from your competitors, pay them more than they were earning, and give
them bonuses and incentives based on their performance. That’s how you
build a first-class operation.”
12. Contain the costs
“I believe in spending what you have to. But I also believe in not spending
more than you should. (...) I never threw money around. (...)
To this day, if I feel a contractor is overcharging me, I’ll pick up the
phone, even if it’s only for $5,000 or $10,000, and I’ll complain.
(...) The day I can’t pick up the telephone and make a twenty-five-cent
call to save $10,000 is the day I’m going to close up shop. (...)
Leadership is perhaps the key to getting any job done. There wasn’t a
single day when I didn’t check on the progress we were making on the rink
[a critical construction project]. (...)
I know from my own experience that the only way to get even the best contractor
to finish a job on time and on budget is to lean on him very, very hard. You
can get any job done through sheer force of will – and by knowing what
you’re talking about. (...)
Even small jobs can get out of control if you’re not attentive. (...)
[A] way we saved money was by producing very complete plans, so that contractors
could bid on every aspect of the job. When you have incomplete drawings, a small
contractor will often come in and underbid the job just to get in, knowing he’ll
be able to more than cover his costs through the change orders that inevitably
occur as plans become very complete.”
13. Fight back
“Much as it pays to emphasize the positive, there are times when the only
choice is confrontation. In most cases I’m very easy to get along with.
I’m very good to people who are good to me. But when people treat me badly
or unfairly or try to take advantage of me, my general attitude, all my life,
has been to fight back very hard. The risk is that you’ll make a bad situation
worse (...) but my experience is that if you’re fighting for something
you believe in – even if it means alienating some people along the way
– things usually work out for the best in the end.”
14. Have fun
“Money was never a big motivation for me, except as a way to keep score.
The real excitement is playing the game. I don’t spend a lot of time worrying
about what I should have done differently, or what’s going to happen next.
If you ask me exactly what the deals [I’ve made] all add up to in the
end, I’m not sure I have a very good answer. Except that I’ve had
a very good time making them.”
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