Exclusive Interview with Billionaire Sam Wyly

“The idea was spot on, but we were too early”

Sam Wyly is a billionaire Businessman, philanthropist, and author.

In 1963, Sam established University Computing Company (UCC) with the aim of catering to the needs of engineers, scientists, and researchers. Six years later, it became one of only five companies headquartered in Texas with a capitalization of $1B+.

We would like to thank Robby Butler, who is a member of our private investor club, and Director of Capital Markets & Investor Relations at Y Street Capital, for making this interview possible. Y Street Capital builds communities people feel compelled to call home: institutional multifamily, self-storage, and land development in select North American markets.

The following conversation is from a written interview with Sam Wyly who had his answers passed to us from his daughter.

1) What is the #1 most costly mistake you have made or see many investors or business owners make that could be avoided?

Sam Wyly: Sure, I would say my biggest loss was related to Datran in the 1970’s. We set out to build a nationwide data communications platform and that turned into a huge financial loss of $400M, in 1970’s dollars. That would be equal to losing $4 Billion or so in today’s dollars. It wasn’t really a mistake though, the idea was spot on, but we were too early, so the timing of it perhaps was the only mistake. The technology was not there yet, and Datran had to compete with a certified monopoly essentially in the data/telephone industry and like many others, it could not do so – so it was a mistake of American policy really. By taking the loss of Datran, it allowed America to correct the mistake and go for a competitive market instead of one controlled by a single utility provider essentially. I did the “Datran” model again in the 1990’s with Sterline Commerce and sold it in 2000 for $4 Billion to AT&T (haha), so that was a bit ironic and great at the same time.

2) What is a strategy worth far more than $1 million that you wish someone provided you with earlier on that you can share here?

Sam Wyly: Well, I always looked for opportunities and the most helpful books for me were Peter Drucker’s. I always asked the managers of my mycompanies to read Drucker’s “Managing for Results” and that added over $1M in value to our holdings. Also, I would like to add that I have provided many lessons learned that I don’t have time to write out here in my book, $1,000 and an Idea, and I encourage readers to pick up that book as well.

3) What was the major turning point, point of increased momentum, or strategic chokepoint, that once acquired or completed made everything you were doing surge forward?

Sam Wyly: For me, the major turning point that catapulted everything upward was the creation of the FEDEX location in Memphis. As simple as that sounds, I was building an oil refinery there at the time, and that enabled us to realize fabulous profits from providing jet fuel to all of the cargo aircraft now coming through there.