7 Business Lessons From Texas Billionaire Fernando De Leon

Fernando De Leon has one of the more unusual backstories of those on the Forbes Billionaires list. His life began with a lucky break: His pregnant mother crossed over from Matamoros, Mexico into Texas to give birth to him in a U.S. hospital, meaning that De Leon was immediately an American thanks to birthright citizenship—a constitutional protection that President Donald Trump is currently attempting to end.

Though he grew up in Mexico, his status allowed him to attend school in Texas. He crossed the border every morning to get to class. “Constantly pivoting between these two different social systems, seeing the way things do or don’t work in either location,” he tells Forbes, “begins to inform your idea of: why do some companies work? Why do some political systems work? It was pretty formative early on.”

His family fell into poverty when his father died, and he kept them afloat by convincing American real estate big wigs doing developments abroad that he could handle important translation jobs even as young as about 13. That early experience in the real estate world proved useful in 2006 when he founded Leon Capital, which started out developing homebuilder lots and then apartment buildings. The company is now a conglomerate that spans 11 industries, including dentistry, mental health and insurance, and generates over $800 million in revenue. De Leon owns at least 70% of each subsidiary and is worth $2.8 billion, per Forbes estimates.

De Leon’s remarkable biography was recognized on Tuesday when he was given the Horatio Alger Award, a prestigious prize for Americans who have overcome adversity to become prominent leaders. In recent conversations with Forbes, he shared some of the secrets to his success.

1. Build businesses that improve lives.  “In America, the people that are rewarded are people that build things or companies that provide utility to others,” says De Leon. “We need to invest in things that make people’s lives better. If we do that, capitalism rewards us.” That alone may breed some success, but he adds that building significant wealth also requires affecting a significant number of lives.
2. Remain terrified of being broke.  Because he grew up with scarcity, De Leon says he has “this fear of being broke that’s constantly tugging at me.” It’s helpful, he explains, because complacency is dangerous. “That fear permeates every decision with a sense of prudence. We’re trying to be conservative with everything.” He’s always looking for ways to save money.
3. If you want to get rich, own your own business.  Don’t just be an employee; owning a business is one of the best ways to build real wealth, says De Leon. Ownership also incentivizes the hard work that ensures the company’s success—which is one reason why the leaders of Leon Capital’s businesses often have stakes in them.
4. Immerse yourself in multiple cultures.  “If you look at people who have built businesses, I bet you’ll find that they’ve usually traveled to other countries, worked in other countries, seen other things,” he says. “Some of them are immigrants, some of them are second-generation immigrants, some of them lived abroad.” Becoming immersed in different cultures helps people expand their worldview in ways that benefit their businesses, he says
5. Hire people who think unconventionally and have endurance.  Speaking of recruitment, here’s what De Leon looks for when hiring top-level employees: “Tell me how you’re able to solve problems that are not institutionally prescribed,” or “Give me a contrarian viewpoint on an existing problem.” Building a successful business often involves disruptive thinking, he says. He also needs leaders who have “endurance” and can handle the inevitable bumps that arise when starting a new company
6. Make sure your managers are experts.  De Leon makes sure his senior managers are subject matter experts who know every detail of their businesses, including relevant costs at all levels. If a manager can’t answer his questions during a meeting—if, for example, he sees them consulting a direct report for the details—he’ll shift capital away from that business, or possibly even kick them out of the room. Accurate data is essential, he says. “We’re making big decisions. We’ve got to be right.”
7. Study the competition.  “There are always little things that incumbents kind of fake,” says De Leon. Those are vulnerabilities that you can exploit. Finding weaknesses requires analyzing everything your competitors seem to do successfully with dogged skepticism—and then having enough audacity to believe you can challenge them. “The incumbents always have some kind of unfair advantage. If you can find a way to replicate or beat that, you can pretty much build a business in any industry.”