Category Creation

3The Six Challenges of Creating a Category (and How to Overcome Them)

Gustave “Gus” Levy was a college dropout from New Orleans who moved to New York City in 1928 to pursue a career in finance. Levy joined Goldman Sachs in 1933 as a trader on the foreign bond desk for a salary of $27.50 a week. Thirty-six years later, he became senior partner, ushering in a golden age at Goldman of international expansion and an increased tolerance to take on trading risk.

History will remember Levy as one of the most respected executives on Wall Street, but beyond his contributions to Goldman Sachs and the financial industry as a whole, he coined what would become an iconic adage that still echoes through the hallways of the investment banking juggernaut to this day. “Greedy,” Levy would say, “but long-term greedy.”

While the word “greedy” is rather notorious in nature, identified as one of the seven deadly sins and declared “good” by fictional villain Gordon Gekko in the 1987 film Wall Street, the spirit of Levy’s iconic phrase has powerful application in modern business. Companies that are short-term greedy are almost always outlasted by the long-term greedy. Short-term greed conjures up examples of businesses looking to maximize shareholder value quickly and by any means necessary—even at the expense of employees and customers. Several case studies come to mind, including many Internet businesses in the period between March 11, 2000, to October 9, 2002, now known as the dot-com crash. ...