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7 Smart But Cruel Business Moves That Helped Some People And Businessess Earn Millions

Published on 2 July, 2017 at 11:00 am By

History is full of inspirational stories of people beating all odds and getting things done their way. Like the case of Steve Jobs, who was kicked out from his own company, Apple, and later came back to reclaim the same company and make it what it is today.


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In this list, however, you are going to read about 7 intelligent business moves that helped some people make millions, but at the same time they are called ‘brutal’ because these the business moves brought miseries to many.

1. Lou Pai: Made millions out of an affair

Lou Pai was one of the top executives of Enron, once America’s fifth richest company. When he joined Enron in 1987, it was a regional energy company but soon it became one of the biggest energy companies in the world. Pai, who was a mathematics wizard, seemed to foresee the collapse of the company though it is not an admitted fact. In the late 90s he was involved in an affair with a stripper and got her pregnant. When his wife came to know about it (or perhaps he made it appear so), she filed for divorce. To settle the case, he sold off all his shares in the company when the price of each share was $72 in June 2001. He made an estimated $280 million out of the deal, paid his wife an undisclosed amount, which is thought to be in tens of millions, married the stripper and moved to Colorado with her.

In just five months after he left, Enron’s share fell to $1 in November 2001 and on December 2, the company filed for bankruptcy. Pai made millions from a quickly sinking company and became the second largest landholder in Colorado.

 

2. Henry Ford: Tricked shareholders to sell all shares to him at cheap prices

Henry Ford, the founder of Ford Motor Company who revolutionized the industry with his entry, was not only a very able engineer, but also a cunning businessman. He never wanted the company to become public, but it eventually became public. Ford started retaining profits and slashed the dividend payments in order to have more cash for the company’s expansion, which the shareholders didn’t like. A lawsuit was filed and Ford was directed to make decisions in the best interest of the shareholders.

To eliminate the shareholders, in 1918, Ford transferred his presidency to his son Edsel Ford but retained the authority to make the final decision and started a new company ‘Henry Ford and Son’ and pretended that he was going to take himself as well as the best employees of the Ford Motor Company to the new company, and as was his plan, the shareholders got scared and started selling their shares before the company became worthless. Ford bought back the shares in cheap prices and became the sole owner of the company once again.


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3. Starbucks: Throwing local business out of competition by opening too many stores at one place

You must have seen that the Starbucks outlets are weirdly clustered together in close vicinity, which doesn’t make much sense. But it is a business strategy of the company and is working great for it. Unlike other companies, Starbucks are not franchised, and most of its outlets are owned by the company. So even if a few stores don’t sell much, the company as a whole makes profits in the long run.

Once the company identifies a location, it opens multiple stores there and takes away the business from the local shops until they cannot function anymore and close down. Then, the Starbucks store reduces while retaining the customers so as to have maximum profits. This strategy is called ‘business cluster’.

 

4. Ray Kroc: The man who legally screwed the original founders of McDonald’s

McDonald’s was originally founded by two brothers Richard McDonald and Maurice McDonald back in the year 1937 in California and they were doing great business. Ray Kroc, who is credited to be the founder of the company, appeared on the scenario only in the year 1954 when the McDonald brothers bought eight milkshake machines from him. Becoming curious about what the McDonald brothers were doing with so many machines, he visited their store and was left impressed. He proposed to them to nationally expand their restaurant and eventually bought the US franchise rights. Kroc soon unleashed the potential of the chain and in the year 1961 bought the company from the McDonald brothers for $2.7 million. However, the brothers claimed that the sale contract didn’t include their original restaurant in San Bernardino and it could not be transferred.

Since Kroc had the company now, he forced them to change the name of their original restaurant to The Big M and opened a brand new McDonald’s restaurant near the restaurant. In six years, The Big M was out of the business. Kroc basically took everything from the brothers legally but running them out of business was sheer pettiness.



 

5. George Soros: The man who made $1 billion in a day and caused an economic disaster

To put it in simple words, George Soros, an investor, and some others discovered a fault in the British Monetary Policy which Britain had adopted when it entered the European Exchange Rate Mechanism (ERM) in the year 1990. They had pointed that out to the authorities, but it was ignored.

The function of the ERM was to bring stability among the different currencies in Europe before a common currency could be adopted i.e. Euro. But the problem was that Britain was facing inflation and to maintain the exchange rate required to remain in the ERM, the Bank of England had to keep buying pounds. George Soros, among others, started borrowing pounds and selling them in the open market until the Bank of England could not buy more, causing the value of pound to fall. Britain exited ERM.

Soros bought back the pounds at a cheaper price and made a profit of $1 billion in a day. He literally cashed on their stupidity. The day is known as “Black Wednesday” and he became ‘the man who broke the Bank of England’. Soros basically caused an economic disaster for the country. Of course there were others, but he was the main man.

 

6. Emaar Properties: Forced tenants to use stairs to reach their rooms on 163 floor

The owner of the world’s tallest building Burj Khalifa, Emaar Properties, came up with a brutal strategy instead of a lawsuit to deal with some tenants who were not paying the rent. Since court cases take time. Even if at the end of the day the court asks the tenants to pay the money, if they don’t have the money the owner would receive nothing.

So instead of moving the court, Emaar Properties decided to block their access to air conditioning and elevator cards, forcing them to vacate the property or pay the rent because it became impossible for them to reach to floor 163 via stairs several times a day or remain inside their rooms in scorching heat with windows that could not be opened due to safety reasons.

 

7. Marcus Licinius Crassus: Became one of the richest persons of all time by taking advantage of distressed people

Marcus Licinius Crassus was one of the ten wealthiest persons of all time. Crassus, who was a 1st century Roman general and a politician, is credited to be one of the key persons who transformed the Roman Republic to Roman Empire.

Crassus was the first person in history to form an organized fire-fighter brigade and it is believed that it was through this brigade that he was able to accumulate so much of wealth.

Whenever there was a fire in Rome, he would arrive at the spot with his brigade but instead of trying to put out the fire, he would do nothing but negotiate with the people whose property was on fire or were threatened by the fire. He would offer them a very low price for all the properties and wait for them to accept it. The poor people would panic as minutes went by and they would eventually agree to his offer instead of seeing their properties being charred to ashes and lose everything. Once they arrive at a deal, he would command his 500 men brigade to start working. Using this tactic, he became one of the largest property owners in all Rome and one of the wealthiest persons ever.

 


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Brutal, isn’t it?

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