I finished reading Mike Bloomberg’s updated autobiography, published in 2019.It details Mike’s journey from a Wall Street firm to entrepreneur, mayor, and philanthropist. It’s a mix of his journey, the principles he lived by, and thoughts on society.
How Did Mike’s Early Years Affect His Trajectory?
Mike was raised in a middle-class family in a blue-collar community. His father worked six or seven days a week until he died. His father’s and his community’s work ethic left an impression on Mike. Now, decades later, in his seventies and with a net worth reportedly exceeding $100 billion at the time of this writing, Mike’s idea of a perfect day is one that starts with exercise and being at his desk by 7 a.m., is jam-packed until into the evening, and ends with falling into bed exhausted. Mike believes in grinding daily, even though he doesn’t have to at this stage of his life.
Mike benefited from serendipity in his youth and early in his career. A coworker at his after-school job put Johns Hopkins on his radar. He went to graduate school because that’s what everyone else in his class was doing. He didn’t know that institutional sales and equity trading was a job, but a Harvard classmate told him to apply to Salomon Brothers for the role anyway. Salomon was acquired, and Mike’s interest in the partnership was bought for $10 million. At a glance, it looks like Mike got a lot of lucky breaks. But digging deeper, it’s apparent that his work ethic put him in environments that increased his chances of getting lucky. He did everything to the best of his ability, which led to more and better opportunities.
What Strategy Did Mike Employ to Achieve Success?
Mike learned how inefficient and difficult accessing data was while he was working on Wall Street. He wasn’t technical, but he solved this problem for his firm using computers, while still doing his day job. After this experience, he was able to do the same for other Wall Street firms, and this led to him founding his company and creating his Terminal product.
The genius in Mike’s strategy was his embrace of media. Bloomberg’s core goal is to gather accurate data and help people analyze it via their Terminal. Mike recognized that each medium was a unique way to distribute his data and analysis to people who could be potential Terminal customers. Leveraging media was a way for Mike to increase awareness about Bloomberg and pull people interested in financial data to Bloomberg. He created a magnet using media that pulled customers to him and made it easier to sell Terminals to them.
Mike also understood supply-and-demand dynamics and their impact on company longevity and margins. Providing something that’s not unique means that others can provide something similar. The supply of that thing is high, and the price you can charge for it goes down. Mike wrote about the example of reporting the news—everyone can do it, so the supply is high.
Providing something that isn’t beneficial doesn’t add value and often means there are alternatives. There isn’t a great need, which can result in low demand. Michael uses the example of entertainment content. It’s nice but not necessary, and many alternatives exist, so demand can be low.
High supply and low demand equal low prices and low margins. Mike understood this and aimed for the opposite: low supply and high demand. Bloomberg was the only company able to provide accurate data and a superior analysis tool that helped financial professionals do a better job. The supply of products like the Terminal was limited and demand was high, allowing Bloomberg to charge a sky-high rate of up to $2,000 per month to rent a Terminal. Customers happily paid it.
What I Learned from Mike’s Journey
Building a media company and selling attention is a proven and lucrative business model that scales well because of the low cost of marginal replication. However, it leaves you dependent on advertising revenue, which can be unpredictable. If you can create a unique product or service with high demand, creating media related to it is a great way to attract an audience, make that audience aware of your product or service, and increase sales of your product or service. Ad revenue can be gravy, not the primary revenue source.
Mike has had tremendous success with Bloomberg and materially affected how finance professionals work. I’m glad I got to learn about his strategy for building Bloomberg. It got me thinking about media differently. Anyone interested in learning about data, media, politics, or philanthropy may benefit from reading his updated autobiography.