Episode #47 - Entrepreneur Heaven - June 2015

Ed and I discussed four legendary individuals in our second installment of Entrepreneur Heaven: Steve Jobs, Thomas Watson, Sr., Charles Revson, and Mary Kay Ash. We also answered a listener question.

Steve Jobs (1955-2011)

In 1975, Jobs sold his VW microbus and Wozniak his scientific calculator, raised $1300.

Steve Jobs 7 Principles of innovation

  1. Do what you love
  2. Put a dent in the universe
  3. Kick-start your brain (creativity = connection)
  4. Sell dreams, not products
  5. Say no to 1,000 things—I’m as proud of what we don’t do as I am of what we do
  6. Create insanely great experiences
  7. Master the message—story telling (“You’ve baked a really lovely cake, but then you’ve used dog shit for frosting”)

Other thoughts

  • "Customers don’t innovate; they iterate."
  • “Innovation distinguishes between a leader and a follower.”
  • Apple Store NYC (opened 2001): Sales: $4,032/sq. ft vs. Tiffany’s $2600.
  • Retail consultant David Goldstein: “I give them two years before they’re turning out the lights on a very painful and expensive mistake.”
  • “Commentary: Sorry, Steve: Here’s Why Apple Stores Won’t Work,” BusinessWeek, May 21, 2001
  • Made sense on spreadsheet; but emotional experiences are not well captured on Excel spreadsheets.
  • Jobs benchmarked Four Seasons hotel for the store! Genius bar, concierge, etc.
  • Stanford University, “You’ve Got to Find What You Love” June 14, 2005
  • Oral History Interview with Steve Jobs, Smithsonian Institution, April 20, 1995

Thomas Watson (1874-1956)

Ed and the Think Pad He still has from IBM

Ed and the Think Pad He still has from IBM

See Richard S. Tedlow’s book, Giants of Enterprise: Seven Business Innovators and the Empires They Built.

Also, The Book of Entrepreneurs’ Wisdom: Classic Writings by Legendary Entrepreneurs, edited by Peter Krass.

Charles Revson  (1906-1975)

“The reason women by cosmetics is because they buy hope.”

Born Somerville, MA in 1906, father was a cigar roller.

No formal education, tough childhood, parents both Russian-born Jews (Revson = rabbi’s son).

With brother Joseph and Charles Lachman, formed Revlon, March 1, 1932 (Charles was 25)

Used to recall products based on just a complaint or two.

Did not want to compete on price, and he knew his company was not efficient!

Fashion accessory, not a beauty aid (selling turn of a head, touch of class).

Different shades for different outfits, moods, occasions.

Great admirer of GM—brand for each purpose and purse.

Fire and Ice: incredibly successful advertising campaign.

See one of Ron’s all-time favorite business books, the unauthorized biography of Charles Revson: Fire and Ice: The Story of Charles Revson—the Man Who Built the Revlon Empire

Mary Kay Ash (1918-2001)

Mary Kay Ash authored three books:

Listener Question

Jacqui Brauman

1 May 2015

I've been listening to you guys for a few months now. I came across Ron Baker's work in a workshop I did called "Law Firms of the Future". I Realised now that the facilitator has ripped off most of the content, but it was valuable. I've tried introducing a version of value billing to my law firm. I bought it as a sole practice 2 years ago. I now have one employee solicitor who has complete autonomy (except that I pay his professional indemnity insurance, so he won't really have full responsibility for his mistakes). What I really hope is that Ron is wrong when he says that economy of scale doesn't apply to a law firm. I hope it applies up to a point, say maybe 5 to 10 solicitors, which I hope to have? I'm still struggling with the old fashioned business model for law firms though, and am trying to think of a way to introduce some subscription service or retainer system for the ordinary mum and dad client. Love to hear a brief comment on this in one of your Free Rider Fridays.

Jacqui: There is a difference between leverage and economies of scale. I think at the level you are shooting for (5-10 employees), leverage can add to profitability.

For a study of this very issue, albeit done on accounting firms, check out this wonderful whitepaper by our friend Ric Payne: The Performance Characteristics of Accounting Firms that are Sending Their Owners Home with at Least $1 Million.