Starting from Scrap

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This week’s book was written by a financial entrepreneur, a Stephen H. Greer, and entitled Starting from Scrap (ISBN978-158080166-9, Burford Books, 2010).

The book is well written, and quite amusing in parts, but is certainly a ‘warts and all’ description of someone wanting to make it in the business world, without any real training, but able to fly by the seat of his pants.

As a teenager he was expelled from boarding school for breaking all the rules, and it was only after this that he realized he needed a high school certificate before he could go to university and progress from there.

With his father pulling as many strings as was necessary, he did eventually get into Penn State University and from there into the business world.

He began in a chemical company with an office in Germany, but soon found that the entrepreneurial spirit needed to stretch its wings, and without any real plan he went to Hong Kong, as Asia was opening up in 1993.  His ticket to Hong Kong was cadged from his father’s frequent flyer miles, and he flew into Asia first class.  “I’m not backpacking.  I’m going to do business and I should have that attitude.”

Full of bravado and bluff he opened up a company, which was going to be the vehicle he needed to do business and survive.

Stumbling across the fact that steel mills in Asia needed scrap stainless steel to feed the mills, he slid himself in between the scrap suppliers and the purchasing mills.  He had no scrap yards himself, only a glib tongue which managed to get him lines of credit to pay off suppliers, while reaping good profits from the purchasers.

All the way through the book are bon mots of advice printed in italics.  These included “Always use time lines in negotiations,” (to proceed quickly with the deal); “You don’t get rich trading scrap or crap.  You get rich trading equity,” (as he leveraged his company towards the big time, using other successful companies to propel himself upwards).

He is quite forthright and his description of himself is that of the classic Type A, achieving at any cost.  Setting up scrap yards through China, Thailand, Malaysia and Mexico he jetted between them all putting out as many fires as he produced opportunities.

At B. 785 on the Bookazine shelves, it is not inexpensive, but for someone looking for information on the ‘real’ side of being an entrepreneur, this is a good book.  Like many of his ilk, he began very young and bluffed his way through to the position where he could sell the company he had founded for millions of dollars after 12 years.  However, the cost personally is probably more than anyone, other than the driven Type A, would be prepared to pay.

Part of his deal was he had to stay on as CEO for three years, and even though he was now financially secure, he needed the stimulus of relative insecurity to keep him going, which he has found in a private equity firm, but this time not starting from scratch.