How Did Josie Esquivel Become a Star Analyst? What Were the Sources of Her Competitive Advantage?

Part I: How did Josie Esquivel become a star analyst? What were the sources of her competitive advantage?

Esquivel’s success as a research analyst was largely in part due to her determination to be one of the Wall Street stars ranked by the Institutional Investor (II) for sell-side analysts. From the moment Esquivel learned about the II Rankings from her brother, she was intrigued by the rankings and knew that was what she wanted to achieve. Even the low probability of only 5% of US research analysts being ranked by the II did not deter her from this goal. At the start of her career, Esquivel was driven by the challenge and determination to attain the top II ranking while after being ranked by the II, she focused on retaining her ranking. This drive gave her actions and goals a meaning which she didn’t lose sight of throughout her career as a research analyst.

Additionally, Esquivel’s drive allowed her to focus on how to achieve her goal. At an early stage in her career, Esquivel decided to ask other analysts for help in becoming ranked by the II. This included approaching Helene Becker, a star analyst covering airlines at E.F. Hutton. She did not let Helene’s reputation as a tough person or the fact that she was older and had more outside experience than Helene perturb her and asked Helene her for help in making the II rankings. Also, Esquivel took notes from her meeting with Helene and continued to reference these notes for years later. Esquivel’s belief that there was nothing wrong with imitation and that imitation was part of the creative and learning process allowed her to grow from other’s strengths.

Esquivel’s success was also attributed to understanding her own strengths and weaknesses and being able to leverage these to achieve her goals. Esquivel’s main competitive advantage was her inside experience and understanding of the apparel industry and fashion trends and her valuable industry contacts. This was evidenced when she was able to leverage her contacts at J.P. Stevens, a mill which was being bought by another mill, by publishing constant updates while her competitors found it much more difficult to get access to information and hence lost out. Additionally, Esquivel built on her strengths by providing excellent customer service and building strong, enduring and indispensable relationships with management including CEOs of major apparel companies who sought her help for strategic advice.

Esquivel was also successful because she understood her weaknesses and was comfortable with addressing and seeking help to overcome them. Esquivel was at a disadvantage by not having the technical knowledge required by the financial market and her position. In order to prevent this from hindering her success, she adopted a very methodical and student like approach to learning from training sessions and other people. For example, she had a black book in which she used to write everything from “what to say when no one picks up the phone to her calling schedule” and she referenced this book all the time. Also, when her first industry reports did not get a good reaction from Jack Rivkin, Esquivel approached him and asked him directly on how to make her reports better. In turn she never forgot his advice to reveal “the butler did it” at the start of her reports to improve the quality of her reports. This ability to be comfortable with oneself and to continue to learn from others was a key strength that Esquivel possessed.

Another competitive advantage that allowed Esquivel to succeed as a research analyst was her ability and confidence in thinking out of the box and differentiating herself from the herd of other Wall Street research analysts. Esquivel realized that she had to make people read her reports because they were different from the rest of Wall Street and offered unique information. To achieve this goal, she would try to write about Y when everyone else on Wall Street was writing about X. Also, she became well known for her monthly “Clothes Lines” report which included 10 year statistical industry summary data and was not provided by any other analyst in the apparel sector. Esquivel’s personality of not totally conforming and having her own style also added flare to her reports and made them unique. Also, her confidence in her abilities and analysis was a competitive advantage since it allowed her to persist with her analysis and face people who did not agree with it, while many other analysts would have either chosen to conform to expectations or hide. This competitive advantage allowed her to persist and later succeed with her “buy” recommendation on Nike, when she received a lot of flak for it from the industry.

Lastly, Esquivel’s success was also due to the support and development