Book Summary: The Fish That Ate The Whale

The Banana Man, Sam Zemurray, embodies both the finest and worst aspects of the American ideal.

He built a large commercial empire via intelligence, tenacity, and savvy business methods as a Russian immigrant who arrived in America with little.

However, there are also unpleasant aspects to his biography, such as his personally leading a coup d'etat in Honduras so that his empire could expand unchecked.

Zemurray's legacy isn't what most of us would consider a "business hero," as Rich Cohen recounts in The Fish That Ate The Whale. However, as Cohen points out, "great men's" lives rarely do.

However, leadership and business lessons are hidden in The Banana Man's narrative that we would all do well to adopt into our daily practice - especially for entrepreneurs who are just getting started.

Here are four examples.

Lesson #1: Find value where others see waste

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I'm writing this while gazing at a dish of bananas, and I'm utterly oblivious to it. They're yellow, and the small brown spots on the peel are just beginning to appear. This indicates that when you peel them off, you'll be biting into the world's most delectable fruit.

Moving bananas from the Caribbean to the United States was a pain in the neck in 1895.

They arrived by boat and were placed into trains that would take them to their destinations - very slowly. They'd then be put into a cart and buggy and transported to a warehouse, where they'd be sold to local businesses.

When they arrived at the dock, the sight of those brown freckles suggested they wouldn't make it to their final destination.

Zemurray would be astounded to learn that up to 25% of the total shipment was destined for landfills in Mobile, Alabama, the port city closest to his home in Selma.

He felt he could carve out a place for himself and be successful. That is if he could figure out a method to get the "ripes" (as they called the freckled bananas) to the ultimate destination faster.

This is exactly the path described by Clay Christensen in his book The Innovator's Dilemma. Zemurray entered the market at the bottom, where the big guys didn't want to participate, the margins are small, and the labor is arduous.

This was Zemurray's first move toward being renowned as The Banana Man across the world.

He purchased the bananas that the fruit business was about to throw away. And he devised a plan to sell them directly from the train as it passed through the various towns on its journey to the ultimate destination.

Lesson #2: Find your way with what you have

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When you're just getting started, like Zemurray, you don't have the financial resources to compete with the big players.

You had to own the land, pay the laborers, have shipsto convey your harvests, and possess train cars to deliver your crops to their final destination back then. None of those were within Zemurray's means.

However, suppose you look at it from Zemurray's point of view. In that case, it appears that he is about to embark on the simplest company ever devised. The fruit was produced, picked, and transported at no cost to him.

Everything else he needed could be rented as needed, so he didn't have any ongoing capital costs, to begin with.

Simultaneously, he did all he needed to do to assist in his company's growth, even seeking other work during idle periods in the beginning.

The takeaway here is that being a leader and entrepreneur frequently entails making the most of the tools available to you.

The successful ones don't wait for enough riches to appear at their front door because they know it will never happen.

By the age of 21, Zemurray had amassed a million-dollar fortune thanks to his scrappy "can-do" mentality.

Lesson #3: Act quickly and creatively

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Zemurray eventually squeezed everything he could out of the "ripes" industry. He'd grown into one of the world's greatest banana smugglers, and he set his eyes on competing with the big boys by buying his own land and producing his own crops.

United Fruit was, at the time, by far the largest banana firm in the world. Over 90% of the world's bananas were grown and exported there.

Zemurray and United Fruit were both interested in purchasing a tract of rich land on the Honduran-Guatemalan border. During the investigation, they discovered that there appeared to be two legitimate owners of the land, one in Honduras and the other in Guatemala.

This appeared to be perplexing for United Fruit. Their attorneys were working overtime to find out the best approach to proceed.

Zemurray bought the land twice during this time, once from each of the owners.

This anecdote serves as a reminder that no matter how big or successful you become, thinking as a creative entrepreneur will always put you ahead of the pack.

It is important to think quickly and creatively.

Lesson #4: Stay close to the action

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Because he was near to the action and paid attention to the details, Zemurray got his start in the banana industry. And he preferred to run his firm in the same manner.

When he eventually got into the banana-growing business, he traveled to Honduras. There, he did the duties that his usual laborers did to learn everything there was to know about the industry.

This strategy also helped him flourish as the CEO of a much larger firm. He retired after selling his firm to United Fruit for $31.5 million in shares (about $428 million today).

However, as the Great Depression wore on, its stock plummeted, losing over 90% of its worth by the time Zemurray sold.

That clearly didn't sit well with him, so he acquired a controlling interest in United and became President.

The firm was being ravaged by the Great Depression, so the board of directors engaged many experts and economists to figure out how to turn things around.

Rather than listening to the economists' forecasts, he went down to the New Orleans ports and interrogated the captains of his ships and the employees. They knew what was going on on the front lines.

After obtaining the information he required to turn the firm around, he dismissed the board of directors, decentralized decision-making, and restored profitability.

You have to know the ins and outs of your business—and be close at hand.

So what are you going to do today?

Zemurray was a doer, and we must be as well if we are to follow in his footsteps.

So, before you go about your business for the remainder of the day, think of one thing Sam Zemurray would do differently if he were in your position. Then do it today.

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