This is going to get really philosophical (even for the Real Estate Philosopher) so please stay with me – it is mercifully short, but very important…..
In earlier articles I have argued the value of trying to “own” a smaller niche in order to have the ability to create value within that niche. The value is created by the “power” you obtain within your niche by the confluence of knowledge, intellectual capital, experience, expertise and, of critical importance, relationships with key players in the niche. I have been recently calling these niches “Power Niches” to elucidate the “power” that comes from working in this manner.
Anyway, the “power” in the Power Niche comes from the small-size of the niche and your ability to achieve ownership within it. This makes evident that narrowing the focus is the key to success. However, as I think (philosophize) I have concluded that this is not the whole story and indeed focusing only narrowly can be self-limiting.
My thinking has evolved by adding to the mix that your ability to think of new and creative – even brilliant – ideas within your Power Niche is enhanced if you become exposed to the creative and brilliant ideas that others have thought of in other niches. This creates the optimal mixture of narrow and broad thinking that is critical for the genesis of ideas to create value.
I have noticed this in just The Real Estate Philosopher itself. Indeed, the great thinker Peter Drucker is not really known that much in the real estate industry, or the law industry in which I practice; however, he has given me numerous ideas for my law business and this publication. And other great thinkers I read about outside the industry regularly give me ideas as well. So does reading Fortune, which often profiles the reasons that some companies are great successes – or great failures. Indeed, it is one of the easiest ways to become more knowledgeable and “powerful” within your Power Niche by reading, learning and thinking outside the Power Niche.
This is very true in the legal industry. My close friend for many years, Jay Bernstein, is a real estate capital markets lawyer at the magic circle law firm Clifford Chance. He is known for creative outside-the-box solutions to client problems that have never been solved before. Part of Jay’s (secret?) is that he calls not only on his own brain but also on the brains of colleagues in different disciplines at Clifford Chance. Putting these different areas of expertise together often yields a creative solution that no one within a specific discipline could have found alone.
And I see it myself, in that my eclectic legal career history – that includes bankruptcy, litigation, securitization, corporate M&A, leveraged buyouts, entertainment and movie law, and much more – often enables me to approach legal problems in the real estate world that I would not otherwise be able to solve.
All of this somewhat contradicts my earlier writings that the best way to be successful is to be the top dog in a small niche. I acknowledge this by saying the following to sum up my (somewhat revised) hypothesis:
Optimal value creation – in the real estate world, and in other worlds as well – is achieved by obtaining ownership of a Power Niche (which is a narrow focus), and then augmenting the power of the Power Niche by gaining knowledge of as many disparate different disciplines as possible (which is a broad focus) and applying what you learn into the Power Niche. So “narrow and broad” together is the magic formula.
Ultimately, knowledge of disparate areas permits outside-the-box thinking in the area you are trying to think in.
Could it be proved that I am right here? I don’t know. It “feels” right to me and I keep seeing evidence of it. However, I guess you can’t prove something like this. But it certainly has been working for me.
Adler & Stachenfeld LLP – Our Mission is To Help Our Clients Grow Their Businesses:
Possibly you already know by now that Adler & Stachenfeld’s core mission is to “help our clients build their businesses”. This is to my knowledge unique among law firms, but what does this mean? If you are wondering, below are some examples of exactly how clients have benefitted from this business side value add (as opposed to our legal skills):
Clients and friends of D&S that are purchasing real estate assets come to us to find the necessary common equity, preferred equity, mezzanine financing and first lien financing;
Clients and friends of D&S that are seeking to move their business from one level to a higher level – often by raising money from strategic investors or teaming up with specialized counterparties – come to us for advice about what the next level should be and potential counterparties;
Clients that are seeking off market transactions and have significant funds to invest or lend regularly receive non-brokered and off-market opportunities from our firm – usually multiple connections of this nature are sent out each week;
Clients and friends of D&S come to us for ideas on how to expand their business, how to deal with competition and/or how to achieve higher risk-adjusted returns
Clients come to us for advice on marketing, as this is a subspecialty I have. My unique marketing theories have been very useful in helping our clients market individual deals and/or their core businesses;
Friends of D&S seeking a new job come to us for help in landing their next gigs, and we work hard to help them find their next gigs;
Clients and friends of D&S that are seeking to fill a position with a high-quality real estate professional and come to us for help. Of course, we never – ever -- poach people from our clients;
Clients and friends of D&S that are seeking real estate industry data and/or what is going on in the real estate industry come to us for information. We don’t have a formal data analytics program; however, we have twenty real estate partners, over fifty real estate lawyers, and innumerable clients and other firm relationships. This, plus, we are all over the capital stack. Accordingly, there is little information in the real estate world we do not have at our fingertips;
Clients and friends of D&S that are seeking temporary office space and can license space within our Hedgehog Array (our real estate “incubator”). They like the rent – which is zero (plus maybe an occasional bottle of single malt scotch);
Clients and friends of D&S that are seeking new strategic ideas that could give them a competitive advantage that are outside the box regularly come to us – and often we come to them with unsolicited suggestions. Our clients are our hobbies and not just our jobs; and
And, finally, clients come to us because we are incredibly connected throughout the real estate world and we put these connections at our clients’ fingertips.
If you are wondering:
We don’t get a fee for any of this – it is a value add for our clients
We don’t deal through brokers, so all of the above is principal-to-principal
All of this is for one reason – to help our clients grow their businesses – that is our mission.
If you are interested in any of the foregoing, please feel free to give me a call and we can see how we could weave you into our network for the benefit both of you and our client and relationship base.