Several years ago I met a Venezuelan oil and shipping businessman by the name Raphael Tudela. As I have come to know, respect, and admire him, he has impressed me as the quintessential street-smart executive. He has built a billion-dollar business from scratch in less than twenty years. He seldom deals in written contracts because his word is his bond. He has always made his own breaks. And his principal business, which is oil speculation, relies on his constant process of seeing opportunities where no one else does and taking advantage of them.
In other words, Raphael Tudela is a genius at taking the edge. One of the best illustrations of this –of how he has the facts, knows what people want, and figures out a way to give it to them- is the story of how he got in the oil business in the fist place.
In the mid 1960s, Tudela owned a glass manufacturing company in Caracas, but, a petroleum engineer by training, he longed to be in the oil business. When he learned from a business associate that Argentina was about to be in the market for a $20 million dollar supply of butane gas, he went there to see if he could secure the contract. “If I could get the contract,” he told me, “then I`d start to worry about where I`d get the butane.”
When he – a glass manufacturer operating alone with no previous connections or experience in the oil business- got to Argentina, he discovered his competition was formidable: British Petroleum and Shell Oil.
But feeling around a little bit he also discovered something else: Argentina had an oversupply of beef which they were desperately trying to sell. By knowing this one fact –his first “edge,” so to speak- he became at least an equal to Shell and BP. “If you will buy $20 million of butane from me,” he told the Argentine government, “I will buy $20 million of beef from you.” Argentina gave him the contract contingent upon his buying the beef.
Tudela then flew to Spain, where a major shipyard was about to close down from lack of work. It was a political hot potato and an extremely sensitive issue for the Spanish government. “If you will buy $20 million of beef from me,” he told them, “I will build a $20 million supertanker in your shipyard.” The Spanish were ecstatic and delivered a message to Argentina through their ambassador there that Raphael Tudela`s $20 million of beef should be sent directly to Spain. Once again he had found the edge and taken it.
Tudela`s final stop was in Philadelphia at the Sun Oil Company. “If you will charter my $20 million supertanker, which is being built in Spain,” he told them, “I will buy $20 million of butane gas from you.”
Sun Oil agreed, and Raphael Tudela fulfilled his desire to get in the gas and oil business.
Entrepreneurship is not only about hard work or smart work. Its also about spotting an opportunity where no one sees it.