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5 Business Lessons from a High-End Escort

Freaking Heck's picture




 

By: Chris Tell at www.CapitalistExploits.at

At a recent meeting with a VC in Singapore a strangely interesting article Sex is Sex. But Money Is Money. was shared with me. It was written by a 24-year-old ex-New York escort named Svetlana, and I recommend it to entrepreneurs, business owners and investors alike.

Svetlana Z.

What I found most fascinating were the business lessons this girl had learned. Prostitution is certainly not what pops into most people's heads when they think business. It is said, however, to be the oldest "profession".

Let's take a look at the lessons from this lady...

Lesson 1: Ongoing capex is necessary to grow your business

This girl realised that she needed to spend money to stand out. She needed to spend money on marketing, clothing, skincare, fitness and so on.

Even if you're not a businessman, an investor or in fact inclined to think about daily activities from a business-minded perspective, you'll likely grasp the basic concept that in order to keep your house, your car or your boat in good shape you'll need to spend some ongoing money on servicing, repairs and maintenance.

If you're in a profession it's likely that you need to spend money on keeping relevant via courses, workshops and so forth. Sportsmen need to keep fit in order to perform and businesses need to spend money on keeping relevant, too. This involves, among other things, marketing, updating technology, equipment and education. As discussed before, we live in a dynamic world and it's very dangerous to think in a linear fashion.

Capex is required to grow an economy too, and from a global macro viewpoint it's important to watch these trends as investors. This is true whether you're looking at an entire country, a sector or an individual deal. Capex cannot grow faster than revenues, so the ratio of capex to revenues needs to be watched. This is, of course, how it is relatively easy to see where in the business cycle a country is. Just as revenues ,or more accurately free cash flows historically drive asset prices or valuations, so too increasing revenues will typically drive capex and falling revenues will cause a contraction in Capex.

As an investor in early stage private equity it's typical to see large capex with little to no revenues, otherwise known as burn rate, but this has a limited time frame and typically a company needs to gain a certain amount of traction during this growth phase in order to begin generating returns on this previously spent capex.

Right now, for example, a concern in global markets is that there is very little capex and it's been falling. This article from the Economist details more on the numbers and the graph below shows the contraction. In short the revenue growth globally is not telling business owners to increase capex.

Capex chart - The Economist

Side thought: Svetlana had one thing in her favour. She lives (or has lived) in NY, which means she is very close to the hose spewing liquidity into the markets. If I was going to sell my body (not that anyone would pay for it) I'd also locate myself as close to the hose pipe as possible.

Lesson 2: Do not neglect the value of uniqueness

Here was an Eastern European girl with no formal education who had little prospects, and subsequently struggled to find a job. She took the fact that she was from Eastern Europe and turned it to her advantage, instead branding herself as an exotic and foreign girl; an advantage since guys would want to hop into bed with and exotic, beautiful young girl, over and above a local girl presumably. This was her IP and she used it to her advantage.

I have a friend, Derek Sivers, who built and sold a very successful business. Derek wrote an article entitled The Philosophy of Great Customer Service about what made his company stand out, and a major reason for its success. One of the critical success points for Derek was that he had a real person answer the phone. In today's world of automation this is a discerning factor. You need to stand out and provide something unique, valuable and engaging.

Lesson 3: Study the market and position yourself accordingly

Svetlana, the girl in the story, studied her market. She learned that there were customers in all income brackets; she learned what they wanted to hear, what they wanted to see and do, and she positioned accordingly. Whatever your chosen market, it's not as hard as you think to determine what and where opportunity lies. Study your competition, know your market and you'll immediately see where gaps exist. I just got off the phone with a good friend and mentor. He just sent me this fact. I'll just cut and paste it below because I think it's relevant.

Iran now accounts for approximately 90% of the world production of saffron - $11 gram. Wikipedia on Saffron

I'll leave those with an imagination to consider this. A massive concentration of supply in anything in one place ALWAYS increases the arbitrage opportunity. Imagine if you really knew this market.

I've not looked much deeper into saffron, though. I'm a busy guy, but knowing these things has always proved valuable to me. Why? Because I'm always meeting businessmen, entrepreneurs and financiers from all parts of the world and I never know when I'll next bump into someone in the business of trading saffron.

Even writing this article may bring out someone who reads this and happens to be in the spice business and will reach out to me and I'll learn about saffron. I know this because we have the most awesome readers :) Perhaps there is an opportunity there. Perhaps not.

Lesson 4: Being an owner is better than being a worker

This isn't as simple as it sounds and though I've been an entrepreneur and owned and run businesses most of my adult life, the above statement is not necessarily true everywhere, every time. I know business owners who work 7 days a week, earn very little and at the same time I have a few friends earning high six figure salaries who work 9-5 and can go home and switch off. That said, for this girl the cost of operating under an escort service was far too high and running her own operation was far more profitable.

When you look at any industry, obviously the top companies or individual entrepreneurs running those companies are wealthy. It's business owners who get rich. This is where the asymmetric payoff exists and it's why private equity historically has been the highest returning asset class. It is the asset class that we dedicate our lives to in our private equity syndicate.

Lesson 5: "Young guys are bad, virgins are awful, young virgins are a nightmare"

Inexperience can be costly. Mistakes are currency and I'm fortunate to have a lot of currency. I think of my mistakes as currency because without it I would not have had success. When I'm investing my capital and vetting deals, however, I don't want to pay that price. I don't want more "currency" any more than Svetlana wants young virgins. If virgins are involved in a business, and sometimes they are, I need to see a "grey hair" involved in the company; someone with currency and someone who can help the inexperienced navigate.

Take heed from this girl. Whatever you think of prostitutes she clearly has a head for business, and I personally look for business people like her when vetting deal flow. She could be an ugly old "babushka" and she'd stand out for her business savvy. I have to wonder what damage she could do if she put that brain to work in the business world. Either way I wish her luck and would definitely consider investing in her intellect and business acumen.

- Chris

 

"One thing I always say is being a great chef today is not enough - you have to be a great businessman." - Wolfgang Puck

 

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Mon, 10/27/2014 - 22:15 | 5384667 TheGreatRecovery
TheGreatRecovery's picture

A kumquat is properly eaten by placing on top of a molar, closing the lips, and then sharply closing the jaw to squash the kumquat, whereupon its tart sweetness bombards the taste buds with bliss.  Then, of course, chew the whole thing up in a leisurely fashion and swallow.

Mon, 10/27/2014 - 19:19 | 5384154 Sean7k
Sean7k's picture

You have some serious sex issues. It's a vagina. Just a variation on a penis. Further, a part of the body. 

A baseball player may use their arm and receive millions, for a while, until no one is willing to pay for it anymore. Athletes are whores and are as easily discarded as any piece of trash. Women and men are used as whores in marriage and then discarded as easily as a piece of trash. 

Create a great idea and start a company? What happens when your business skills are not up to the challenge? Discarded like yesterday's news. 

It has become the nature of the human to behave in this way. It is a lack of respect for people coupled personal greed- which are reflections of your integrity and character. YOU, obviously think you are better than a "whore". Please explain how? I expect you are a whore as well, one willing to compromise some values to retain some type of wealth or value. 

If I fell in love with a stripper or a prostitute, it would have no bearing whatsoever on whether I would marry her. An arrogant ass like you would be my last choice in the gene pool.

Tue, 10/28/2014 - 08:36 | 5385502 willwork4food
willwork4food's picture

Kumquat is sucha Kumquat..

Mon, 10/27/2014 - 14:10 | 5383051 Onan_the_Barbarian
Onan_the_Barbarian's picture

If you are human, this is what you do.  Our sexuality is an integral part of our humanity. 

To deny sexual pleasures it is to deny humanity, just as if denied our pleasures derived from great food or wine.

Is it wrong to pay a chef to give us a culinary experience we could get no other way?  Do we all have to cook at home?

 

 

Mon, 10/27/2014 - 20:17 | 5384321 nodhannum
nodhannum's picture

Jeez, what an offhand comment...If you are human, this is what you do.  Well violence and rape are aldo a longstanding part of the human experience, and just as deficating in our pants is "natural"...somehow we learn how not to do it.  It's called morality which is the difference between what one legally "can" do and "should" do.

Mon, 10/27/2014 - 18:46 | 5384078 kumquatsunite
kumquatsunite's picture

A chef doesn't spread his legs because you throw money at him. That you fail to recognize the difference means that you don't care what happens to any women in your life. Again, I'll say, if you believe this let your daughter be a whore; and if you don't have a daughter then perhaps you'll have a granddaughter who will be a whore.

It is a delusion to believe that Any woman enjoys a guy so fugly he has to pay for it. It is a delusion to believe there is any power in taking money for sex. 

And if you really think it's so great than I would consign you to being a whore to gay men for a year and then see how you feel about it. Why gay men, because you'll enjoy that as much as a whore enjoys you stupids paying for sex and thinking it is just another occupation.

Mon, 10/27/2014 - 19:20 | 5384150 lotsoffun
lotsoffun's picture

kumquat - you are actually a really male chauvanist.  you clearly do not understand - men and women are different.  very.

it has nothing to do with: 'It is a delusion to believe that Any woman enjoys a guy so fugly he has to pay for it.'

it has nothing to do with enjoy.  it has to do with a job.  it's about money.  and when they are capable to do it, and they decide that they like the money (because the smart ones really do make plenty), then they will.

i don't do diapers.  i don't do bed pans.  i'm not interested in being a nurse.  it would digust me, i am simply not capable.

women can.  the women that would have sex with a guy like you - they really don't care.  they get paid a lot more for letting you grunt and groan for a few seconds then they would having to wipe the shit off your sorry ass when you are sick.

in the countries that have legal prostitution - they have a very mature attitude, ultimately.

and that atttitude, understanding is: if you can't keep you mother/wife/sister/daughter/granddaughter in the style that they want/need/are accustomed to - then they will move on to find people that can.  if that insults your male desire to keep women as your servant, despite your inability to earn enough money to keep them satisfied (or equally to create a culture where they are satisified with what they have) - so be it.  they are going to rent it to the highest bidder.  (short term).  but they also see it in a way that means the slavery to guys like you is over.  if they are going to be forced to fuck some guy they don't really like, they might as well get paid.

and in the end - you support pimping.  which really is the worst of it.  using other people's work to serve your gain.

sorry bud. 

 

Tue, 10/28/2014 - 10:58 | 5385981 Sokhmate
Sokhmate's picture

Rollo and others call this hypergamy

Mon, 10/27/2014 - 22:16 | 5384654 TheGreatRecovery
TheGreatRecovery's picture

Yes!  Men went out in a group or individually to hunt.  Women had to stay behind because one can't hunt when one is six months pregnant or nursing a baby, or watching a toddler.  Men went silently because they had to sneak up on the prey.  Women talked all the time because a lot of noise, as a group of talkers might make, warned away many predators who were hunting for a lone, and therefore easily attacked, target.  Men had to practice a sort of "sports" teamwork in which some would sneak behind the prey and then others would flush it out, and to do that men had to have a plan and signals and so forth.  Women had to negotiate with one another to make sure someone would watch their kids when they had to go do chores that can only be done alone.  When men, out hunting, found an available female from another tribe, they would try to mate with her, because that's what's kept the gene pool from getting stale.  When the hunting party returned, women had to compete for the best hunters (whether they were handsome or not) or the alpha-males in the group, whichever men would get first pick of the kill, because women had to eat to make milk for their babies.  So women want a man who can provide, and they don't want competition from other women for that part of the kill which would feed them so that they can make milk for their babies, while men want to mate with any available females they can.  At least, the survival-of-the-fittest parts of their brain do, and those parts haven't changed in the mere million years humans have been around.  So all this behavior serves survival and natural selection, and WILL continue.

Mon, 10/27/2014 - 15:22 | 5383398 tarsubil
tarsubil's picture

Saying we shouldn't drink water out of the toilet is denying a basic instinct, our very humanity, that is critical for our survival.

Mon, 10/27/2014 - 14:14 | 5383041 TheGreatRecovery
TheGreatRecovery's picture

Lots more people sell sexual teasing than plain sex: politicians, television personalities, salesmen, saleswomen, actors, actresses, models, the guy or girl in the next cubicle scheming to get the supervisory position that just became vacant.  We give all those people a lot and we get WHAT in return?  Ha!

People like Svetlana are just honest about it.  You go, girl!

I think the inhuman ones are the Wall Street Creeps who rip off their own country every day to get money to pay for extra sex and for their Porsches, color TVs, and nights on the town.  Come to think of it, maybe that's why Blankfein thinks he's doing God's work, since, after all, God DID buy him a Porsche, a color TV, and a night on the town.  :-)

Mon, 10/27/2014 - 16:38 | 5383633 sleigher
sleigher's picture

yep!  Really...  What is dating exactly?  You wine and dine some girl to get them to have sex with you.  The girl just gets gifts instead of cash.  It isn't all that different if you think about it.  And don't give me that love crap.  Yes it happens, but I doubt it happens nearly as often as some would like to think.

Mon, 10/27/2014 - 20:22 | 5384333 nodhannum
nodhannum's picture

I think Johnsons secretary had the same plan vis a vis farmers that were paid to not grow so much corn and wheat...it was called the PIC program...Payment In Kind Program.  The Dating Program.

Mon, 10/27/2014 - 22:59 | 5384814 CheapBastard
CheapBastard's picture

"Having sex with virgin is a bad experience; but as far as bad experiences go, it's pretty good."

 

[paraphrasing Woody Allen]

Tue, 10/28/2014 - 10:35 | 5385887 Buckaroo Banzai
Buckaroo Banzai's picture

"Every orgasm I ever had was right on the money" -- Woody Allen

Mon, 10/27/2014 - 18:49 | 5384086 kumquatsunite
kumquatsunite's picture

If you are wining and dining ONLY because you think you might get sex that's on you not on her. Most women are looking for a relationship. Random sex doesn't work well for women, never has and never will. Look at the std rates and the out-of-wedlock rates. Again, perhaps your mother was a whore, and if not let's just imagine you grew up with your mother being a whore to feed you...feel good? Like all those guys having at her?

Tue, 10/28/2014 - 10:24 | 5385838 JRobby
JRobby's picture

kumquatsunite, mixed emotions on this reality check. I voted ^

Tue, 10/28/2014 - 00:45 | 5384989 malek
malek's picture

Muahahahaha!

Let me just cite this: "Western yuppie males are socialized, for instance, to believe in feminism, that women will behave logically like our equals and let us know what they want to do, etc. Nothing can be further from the truth."

Mon, 10/27/2014 - 17:58 | 5383884 Lore
Lore's picture

That is my observation as well.  Many modern shack-ups are genuinely loveless, hardly deserving of the term 'relationship' at all, more like 'associations.'  To my mind, such people are much more deserving of the label 'whore.' 

Tue, 10/28/2014 - 11:03 | 5385997 Wild Theories
Wild Theories's picture

and not to mention some of them can end up costing you a whole lot more than a working girl, at least prostitutes tell you the price up-front

Mon, 10/27/2014 - 17:03 | 5383718 CrazyCatLady
CrazyCatLady's picture

Dont worry, i dont think you will ever find it.

Tue, 10/28/2014 - 10:21 | 5385834 JRobby
JRobby's picture

It is really not anyone's decision. It happens when it does.

Mon, 10/27/2014 - 14:07 | 5383028 Richard Chesler
Richard Chesler's picture

Agreed. Using "congress critter" instead of "girl" and "presidential candidate" instead of "lady" would have the exact same effect.

 

Tue, 10/28/2014 - 08:43 | 5385515 willwork4food
willwork4food's picture

That is an offense to prostitues. If a girl promised to have sex with you, took your money and split leaving you naked and blue she would be no different than the leaders we have today in the US.

Kumquat-get a life and stop judging others decisions on your narrow one-world Baptist viewpoint.

Either you are world myopic or you have 5 daughters and are scared to let them out of the house.

Tue, 10/28/2014 - 10:20 | 5385832 JRobby
JRobby's picture

+1000

Mon, 10/27/2014 - 13:27 | 5382884 williambanzai7
williambanzai7's picture

The fact that highly educated Harvard Soviets have something to learn from this article speaks volumes.

Mon, 10/27/2014 - 12:53 | 5382692 IPURDOM75
IPURDOM75's picture

Contrary to what the author of this article think, Easten girls prostituting themselves are most of the time very well educated (economics, finance etc..) The problem is that they can make so much better money with prostitution than with a normal job.....This article shows us a good proof...

Mon, 10/27/2014 - 18:47 | 5384083 Buck Johnson
Buck Johnson's picture

They sure can.

 

Mon, 10/27/2014 - 15:16 | 5383377 Harbanger
Harbanger's picture

In fairness, men should charge women for sex.  No? What, don't they enjoy it?

Mon, 10/27/2014 - 22:51 | 5384784 jeff montanye
jeff montanye's picture

only with you, you big stud king.

Mon, 10/27/2014 - 13:08 | 5382782 Ghordius
Ghordius's picture

I was too a bit put off by the "Svetlana example" being uneducated. In my experience, the uneducated stay at home, it's the educated eastern european girls that want to go around the world, and only a fraction of them are interested in prostitution

but again, Eastern European universities tend to range from cheap to completely free and educate those who qualify, not those who pay for admission (must be some remnant of socialism there that has not yet be put out /s)

Mon, 10/27/2014 - 22:35 | 5384730 Mediocritas
Mediocritas's picture

Correct now, but with a darker history. (Bear in mind I'm married to an East European biochemist who provides a great source of living history).

After the fall of the USSR, the looting and exploitation was on a level few Westerners understand. The people in the East were almost unbelievably naive and many girls fell prey to "modeling" opportunities (amongst other predatory techniques) in the West. (Again, my wife's father was a high-ranking police officer so I hear all about this). Svetlana's vintage matters when considering her probable education level.

Fast forward to now and the level of naivete is still remarkably high, but nothing like after the fall of Communism (guys like my wife's cousin with his huge American truck, US flags on his clothes and dreams of moving his family to the USA one day, and this from a guy who makes a good income in Holland and should know better!). Today, yes, you're right, the travelling girls are generally the more educated ones (though not necessarily wise), but it wasn't always that way.

Eastern universities continue to produce high quality students, which is remarkable given their poor funding situation. This is particularly true in the hard sciences, mathematics and engineering. Performance matters, a legacy of more left-wing times, though the $s for grades model is slowly creeping in.

Tue, 10/28/2014 - 12:06 | 5386249 NotApplicable
NotApplicable's picture

I would say that they turn out high quality students because the students cannot afford NOT to be high quality. It's all about economizing along the lines of opportunity costs.

Mon, 10/27/2014 - 15:46 | 5383493 TuesdayBen
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