THE THREE PILLARS

About 20 years ago my wife and I made a decision.  We decided to cut off all employment and any kind of real estate in order to start a new adventure, a new company.  

Actually at that time my intention was primarily to find a job (not a job, I mean an activity), that would allow me an income that would complement my passive income to improve my quality of life, there was not much vision of how I would do it.

After several attempts we found two commercial activities that showed a potential for profitability.  Importing wooden pallets to Central America (which I was fortunate enough to start with my sister-in-law, business partner and friend Carol), and selling grain by the container load from Canada to Central America.

When we were able to start operating in these two activities I realized that it was important to set clear objectives and also to take advantage of the starting point to reflect on what would be the values on which we were going to work.  This was important for me because I came from working in some companies where I did not fully share the values that commanded the decisions.  Without going into the details of what I did NOT want to be part of my company's values, I concluded that there were three principles that would help guide me in this adventure.

Purpose.

Freedom.

Profitability.

In reality there were many other very important values, such as perseverance, honesty, transparency and others that I put in my list but I thought it would be better to simplify as much as possible the message that I wanted to answer the question What is ICO?  What are we building and why do we want to build it?

The purpose of building ICO was to serve us as ICO.  That is, ICO is there to serve those who collaborate in ICO, not the other way around.  I didn't want people who would give their soul for ICO or put ICO as the number 1 priority in their life.  We all say it but unfortunately we don't all act on what we say.  Each person will assign priorities in their life to different things but the intention was that ICO would be an instrument to achieve a better life.  In several of the companies I have worked with (either as an employee or having had the opportunity to see how they operated), the company was the life of many of its employees.  They preferred to be in the office rather than at home, the company was what identified them as people "I am Juan Carlos and I identify myself as the Director/Founder/Manager of such and such company".  

I understand that this happens and maybe this is the way it should be, in fact maybe it is good that some people find their reason to be in the company they work for, I just didn't want this at ICO.  

And I must say that this was a bit of a convenience for me.  I couldn't be saying that I'm going to go to my kids' swim meet or my daughters' ballet performance on Friday, while the people I work with stay at work (even though their kids might be competing in the same swim meet or ballet event as my kids!)  

So, in conclusion, ICO is there to serve us, not us to serve ICO.

This principle was fundamental for me.  

It included the absolute trust I had to have in the people who wanted to be part of my team.  

Warren Buffett said that he looked for three elements when he wanted to hire a person:

A) Intelligence.

B) Energy.

C) Integrity.

He also said that the third was the most important of the three, because if the person has no integrity, you want them to be dumb and lazy!   A person with no integrity but intelligent and energetic is going to leave you out in the cold very quickly.

On the other hand, I had spent the last 8 years working for a person from whom I learned a lot but who was totally controlling.  She would call me several times a day and her first question was always Where are you? and the next one was What are you doing?  I had to make all sorts of excuses as to why I was having lunch with my wife, at my house!  This seemed absurd to me so it didn't take me long to establish that another pillar or fundamental principle of my company would be:

I am never going to call you to ask you where you are, I am not going to require a report detailing what you have done or what you are going to do.  You will have absolute freedom to decide at what time, in what place, at what pace and in what manner to carry out your work.  

Of course I had to grant this kind of freedom would only be possible with people with integrity and that's why I started with that explanation.

All this about freedom of schedule, time, flexibility, personal priorities taken care of, personal goals achieved and so on is all very nice but none of this will be sustainable in the long term if the operation we carry out is not profitable. 

Many companies make very long term plans because they want to build very big monsters (think Amazon or Apple).  These companies and entrepreneurs know that they will need a lot of capital to carry out their plans and that during the growth period (which may well take between 4 and 20 years) they will have to be able to bear losses (sometimes very large ones).  This is all very well and indeed it is necessary that there are such entrepreneurs with this type of vision, otherwise we would not have many of the things that make our lives easier and more useful (such as the Amazon service or Apple products), but this was not what I had planned for ICO.  My intention, I insist, was not to create a conglomerate of companies that would export products all over the world or become the leader in any market, no matter how small.  

What I did know was that my capital was limited and therefore profitability would have to come soon and stay with us forever, hahaha.  

To that end, I also decided that, unless the opportunity was imminent, I would never put the company into debt in order to sell more or to build infrastructure to have a greater sales capacity.  

I clearly knew that this would limit the rate of growth of the company but in doing my calculations I determined that the growth I needed to reach my profitability target with the capital I had was not that great and that I should not need any outside borrowing or capital contribution to do so.  

ICO has grown at a rate that I consider excellent but that I am sure could have been much higher with a greater contribution of capital and human resources.  Again, I understand that this is the way it should be for others but it was not what I envisioned.

In fact, I even questioned whether we should have grown at a certain point.  All entrepreneurs measure the success of their companies largely based on their growth, but I ask myself, why do we always have to grow and at what cost do we continue to grow?  If the cost of growth violates principle number 1, then perhaps we should even limit growth.  If my uncle Roberto heard my words he would be shaking his head and thinking what a crazy thing I am saying, hahaha.   He has the motto that "Company that does not grow, decreases!" And I understand his point but I did not want that for ICO.  We must grow if and only if, this attends to continue serving those we contribute to the company and if this growth does not come at the cost of our freedom and quality of life.

That is to say that the principle or pillar number three was:

The company must be profitable. 

And there it is.  These were the three principles on which we would build this.  

I had no idea if I was going to get many people to join ICO.  

A few months after I laid out the plan, Carol, my sister-in-law was super delighted when I explained this whole dance and I even told her, "I have done my numbers and by the time we sell 1 million dollars a year in Guatemala, I estimate that we are going to start limiting the growth, hahaha".  

It didn't cost me much to convince her and she was the first person who decided to take the path with me, we have been working together for 20 years and I hope it will be many more!

CHEERS!

JC.