No matter the economic climate, making money is a difficult thing to do.  Ronald Cohen’s 2007 book serves as a useful reminder to young and old entrepreneurs alike that the cream generally rises to the top in business, with tough economic times causing an exacerbation rather than breaking of this rule. 

 Following a stellar, if well-trodden, career path in his 20s (graduating in turn from Oxford, Harvard and McKinsey), Cohen created what is now Apax Partners, with this book tracing the development of the company from a difficult to grow start-up to one of the world’s leading Corporate Buy-Out Private Equity firms. 

Leafing through the various business autobiographies released in recent years, from Cohen through to Richard Branson and Duncan Bannatyne, certain commonalities emerge, most notably the progression from ‘zero’ to (philanthropic, charitably-minded) ‘hero.’  The story of a passion for business, a fight for market share and a desire to succeed is rarely a subtle one as the entrepreneur’s seemingly inevitable struggles with debt, sleepless nights and family troubles are often discussed in fine detail.  In Cohen’s case the reader is expected to sympathise with the fact that the lack of an English / European stock market for small companies (such as today’s AIM, which Cohen himself helped to create) for many decades significantly hampered his chances of making money, as the infrastructure to support a company such as Apax simply didn’t exist until the final years of the twentieth century. 

However, having created a venture capital business, in The Second Bounce of the Ball Cohen is able to go further than a typical narrative of individual commercial success, giving useful titbits of entrepreneurial advice based on examples of real companies that he has invested in.  Cohen delves into his experience with companies both successful (such as Apple, Waterstone’s, Calvin Klein) and unsuccessful, resulting in some very black and white descriptions of what makes for a good leader, a good idea and a good infrastructure. 

Throughout, the theme of ‘The Second Bounce of the Ball’ emerges – that typically the world’s most successful firms and individuals are those not only able to react to imminent problems, (dealing with the first bounce) but those who are also able to foresee and proactively plan for any knock on effects (the second bounce).  Cohen cites many examples of this, the most famous being Bill Gates’ infamous recognition following the personal computing breakthrough that the second bounce of the technology ball would be in software, as opposed to hardware.  By anticipating this, Gates knew that gaining software market share was the key to future success, resulting in his key strategic decision to give away his operating system free to hardware market leaders IBM to put into their PCs, in the knowledge that this would result in an overnight software monopoly for his firm.  Cohen uses Gates and various other examples to distil business success into a three key traits:

1. Gaining such an intense knowledge of your particular sector in order to be able to sense and predict future trends
2. Having the strategic wherewithal to work out how to take advantage of the situation
3. Being able to truly inspire employees, stakeholders and shareholders to provide the support required in delivering business goals. 

Stating the obvious?  Perhaps.  But Cohen’s book has a particular piquancy in tough times like these.  For, whilst in boom periods any company can ride the waves of success on the back of hype and market overconfidence, once times turn tough and the staples of profitability and balance sheet strength are scrutinised in detail, only the best companies - with the best innovation, best products, best service and best people - survive.  You only have to look at the dotcom boom and bust of the early 2000s for good examples of this.  Or, in more recent times, take the vastly differing current fate of two of the U.K’s largest cut-price retailers – who in theory should be doing well at the moment - Woolworths and Morrison’s.  Whilst Woolworths, perennial purveyors of low quality goods with poor service levels, have been issuing profit warnings and cutting jobs, Morrison’s have been flying with their affordable prices, friendly service and emphasis on appealing directly to the customer by having in-house fishmongers, bakers and meat and dairy specialists.  Morrison’s have clearly reacted well to the first bounce of the ball: using low prices to get people in the door at time of recession and keeping them there through the quality of shopping experience.  However, Cohen would argue it is their successful anticipation of the second bounce, whatever that may be, that has the potential to catapult them to significantly increased market sure and long-term success.