How Real Estate Developers Think. Peter Hendee Brown

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СКАЧАТЬ influence our predisposition to “novelty seeking,” a high “need for autonomy,” and “risk-taking propensity,” all three of which correlate with entrepreneurial behavior.¹²

      There are also correlations between the OCEAN personality traits and these other personality traits that are driven by genes. Extroverts, for example, often also possess the “impulsiveness” and novelty-seeking personality traits that correlate with entrepreneurial behavior. Further, conscientious people often have the persistence, impulsiveness, and novelty-seeking traits. And people who are open to new experiences are also typically imaginative, creative, curious, and inventive.¹³

      The Influence of Genes on Intelligence and Energy Levels

      Beyond our personalities, genes influence several other important sets of traits that correlate with entrepreneurial behavior. First, genes influence intelligence, and entrepreneurial people are more likely to be highly intelligent. Second, all people are active at some level, ranging between sedentary and hyperactive, and genes influence this “activity level.” Entrepreneurial people tend to be more active than others, and people with ADHD (attention-deficit hyperactivity disorder) are more likely to become entrepreneurs than to pursue other professions, in part because, despite their high intelligence, they are less able to focus enough to excel in areas that require hours of reading, study, and concentration, like engineering, law, and medicine. Finally, ADHD and reading disorders such as dyslexia both correlate positively with high intelligence and people with these conditions are also more likely to be entrepreneurs. Many entrepreneurs have neither ADHD nor dyslexia but for those who do have them and who can put these traits to work, the combination can lead to wild success as evidenced by entrepreneurs such as Sir Richard Branson of Virgin Enterprises and David Neeleman, formerly the CEO of JetBlue.¹⁴

      This biological perspective reveals much about the personality of the entrepreneur but genetics is not the only influence on the entrepreneurs’ behavior. Environment, upbringing, and life experience play equally important roles in creating and shaping the entrepreneur. Stepping away from the microscope, where do entrepreneurs come from, how do they get their start, what other factors influence their development, and what is it that they actually do all day long?

       The Sociologist’s View

      According to Villette and Vuillermot, the entrepreneur’s goal is to identify and exploit a “market imperfection,” earning a large, one-time entrepreneurial profit before others involved in the transaction are able to properly value their own contributing resources. This is called a “good deal,” which is when “you get a lot for a little” while minimizing your own exposure to risk. Success in exploiting a good deal requires the entrepreneur to use know-how, social position, and reputation to engage in a political pursuit that involves culturing relations with important government representatives, businesspeople, and others who can help him or her succeed. But a good deal happens only once, so the entrepreneur is in a perpetual hunt for the next good deal. Each good deal increases the amount of capital under the entrepreneur’s control, paving the way for still larger deals in the future. So for each good deal, the entrepreneur’s success depends not on economic or technological innovation but rather on a social framework, “created by real human beings using an informal web of transactions.”¹⁵

      Villette and Vuillermot then debunk a handful of common misconceptions about entrepreneurs, most important their attitude toward risk. Rather than taking huge, crazy risks, as is commonly believed, successful entrepreneurs succeed by taking measures to mitigate, minimize, and even eliminate their exposure to risk, sometimes shedding risk onto other partners and providers. They avoid innovation, which is costly on the front end and slow to show returns, and instead they tinker at the margins, producing goods that are rarely very different—or better—than those of their competitors. Rather than making grand plans, entrepreneurs try many things, pursuing those that show promise, abandoning those that do not, and adapting to whatever the market sends their way. And while some entrepreneurs claim to be “self-made,” they are often more privileged than others and their backgrounds give them advantages that others lack and that play a central role in their success.¹⁶

      Five Common Characteristics

      Indeed, in their study of nearly ninety very wealthy and successful entrepreneurial businesspeople, most of whom were men, Villette and Vuillermot found only five widely shared personal characteristics. First, the entrepreneur was raised in an enterprising environment where parents and other family members were business creators and owners. Second, the entrepreneur benefited from having more education than the average person, and his academic upbringing also provided access to a network of alumni, friends, and family of friends that supplemented family connections. Third, the entrepreneur gained experience in business very early in his career, through experience in sales, negotiations, or the creation of small companies. Fourth, when starting out, the entrepreneur benefited from privileged financing—access to capital—from family and friends. And fifth, the entrepreneur had the support of a mentor who helped him make his first “good deal.”¹⁷

      Looking through the overlapping lenses of economics, genetics, and sociology helps to bring into focus how personality traits, background, upbringing, and lucrative opportunities combine to create the entrepreneur. Throughout the rest of the book we will look at the entrepreneur through a series of more personal lenses—the career stories of individual developers. The next is a Chicago developer named Buzz Ruttenberg whose story brings these ideas to life, from his start in the business and his first good deal to his approach to risk management through the design of a condominium project that would soon face a turning market.

       Zip-Code Development

      David “Buzz” Ruttenberg was born in March 1941 and was raised in a six-flat walkup in downtown Chicago until he was ten, when his family moved into a co-op a few blocks away. He attended a private school in the city that was a short walk from his home and then he enrolled at Cornell University and graduated in 1962. After completing some graduate work at the London School of Economics, Ruttenberg went on to Northwestern Law School and graduated with honors in 1966. Ruttenberg initially practiced law for the renowned Chicago firm of Kirkland and Ellis and then moved to a family law firm while he was “developing his craft” as a developer. He left law in the mid-1980s and became a full-time developer in his early forties. But his career in real estate development really started in the 1950s, when as a child he would accompany his father on visits to the various rental properties that his father owned.¹⁸

      Ruttenberg’s maternal grandfather was an immigrant from Russia named David Wolf who came to Chicago in his early teenage years. He opened a wholesale dry-cleaning business that served hotels and other institutional laundry users. As his business prospered, he became interested in property. Ruttenberg’s parents married in 1940 and his father, David C. Ruttenberg, was an attorney who “scratched out a living” after the Depression and then during World War II. But the Ruttenbergs lived relatively comfortably although they drove old cars and initially lived in a walkup apartment in the city. By the late 1940s the rush to the suburbs was under way but Ruttenberg’s parents had no interest in moving there, and his mother knew that his father could never ride a train every day, so they stayed downtown.

      In the late 1940s, Ruttenberg’s father was introduced to a rooming-house operator named Louis Supera. The two men were close in age—born in 1909 and 1910, respectively—and at the time they met they were in their late thirties. “My father had a creative itch and an interest in real estate that he had picked up from his father-in-law, who had since passed away, and Supera knew how to collect rents and maintain B and C class buildings.” So the two men bought a nine-flat on Hampton Court, just around the corner from the Ruttenbergs’ home at 450 West Wrightwood and two blocks west of Lincoln Park. At the time, says Ruttenberg, “Lincoln Park was green but a little tired and the upscale community now known as ‘Lincoln Park’ had yet to arrive.

      “So СКАЧАТЬ