01 Jun 2012
Inspiration Is Not Enoughby Sean SilverthorneTopics:
According to venture capitalist Jeffrey Harris (MBA 1981), there are entrepreneurs, and then there are transformative entrepreneurs. The former group includes Richard Branson, who has created many great products and services but not one that changed the world. Harris is much more interested in the latter grouping, great innovators such as Henry Ford, Walt Disney, Muhammad Yunus, and Steve Jobs. These folks built businesses around ideas that changed how we think, what we believe, and how we act.
How does one become a shake-the-world entrepreneur? Seeing possibilities where others don’t is a start, says Harris in his new book, Transformative Entrepreneurs (Palgrave Macmillan). But so is something much less exotic: a passion for execution. Harris focuses on stories of business geniuses who had that most rare ability to deliver on a great or even very good idea. “Success has rarely been about building the better mousetrap,” he tells us. “Commercializing the better mousetrap is the key to success.”
Take Hugh Hefner. The father of Playboy meets the transformative entrepreneur test by ushering in an era of social freedom that also provided tailwinds for the civil rights and, yes, women’s movements of the 1960s and ’70s. But what carried Playboy to decades of success was Hefner’s workaholic attention to detail, Harris writes. “He was involved in every facet of the publication, from the pictures to the stories to the advertising. Nothing went into the magazine that Hefner had not approved.”
Like Hefner, other innovators in Harris’s pantheon never get dulled by the details. Southwest Airlines cofounder Herb Kelleher was known to personally load baggage to improve employee morale. Walt Disney, as much of a business pioneer as entertainment genius, began in 1929 to license his animated screen stars for decades of royalty income. IKEA founder Ingvar Kamprad developed a rigorous vendor-screening process that, though not sexy, provided the furniture retailer with “an impressive supply chain that is virtually impossible for others to replicate,” Harris contends.
Lack of business execution can kill even the greatest of ideas. Alexander Graham Bell invented the “speaking telegraph” but had no aptitude to build a business around it. Dean Kamen (OPM 7, 1982) had already made riches on inventions, including the first drug infusion pump, when he hit on the idea of the Segway “human transporter.” But tons of funding and big-name partners couldn’t overcome consumer reluctance. “Kamen endowed Segway with many positive attributes but not enough to break through and claim commercial success,” Harris writes.
Many of the case profiles in Transformative Entrepreneurs will be familiar to HBS alumni. But the author makes them fresh by applying his nearly 30 years of VC experience at Warburg Pincus to digest the crucial ingredients required to build a long-running, society-shaping enterprise. His underlying message: Great entrepreneurs start on inspiration but change the world with perspiration.
Class of MBA 1981, Section G