American Hacker: Frank Lucas Waxes Poetic on the Dangers of Outside Investment

I saw American Gangster a couple weeks ago on opening night. It’s an instant classic crime film on par with Goodfellas and The Godfather, in my opinion. For all his faults, Frank Lucas (the real drug kingpin so charismatically depicted by Denzel Washington) was a very skilled entrepreneur, bootstrapping a (heroin) business methodically and quietly in the midst of fierce competition (other street level dealers in addition to the Mafia) until he’d cornered the market to the tune of $1 million a day in revenue.

If they can dissociate the business from the product, entrepreneurs will find that there are many useful business lessons to be learned here about everything from supply chain management to the importance of branding. At one point, Lucas lectures his brothers and cousins on various aspects of the business while grooming them to run point-of-sale operations. Here he speaks to the problem of outside investors and the importance of retaining sufficient equity in one’s venture:

The man I worked for had one of the biggest companies in New York City. He didn’t own his own company. He thought he owned it, but he just managed it. White man owned it, so they owned him. Nobody owns me though!

Substitute “white man” for “venture capitalists” and what have we got?

The man I worked for had one of the biggest companies in New York City. He didn’t own his own company. He thought he owned it, but he just managed it. VC’s owned it, so they owned him. Nobody owns me though!

I couldn’t have said it better myself.