Monday, September 12, 2011
Lesson #91: My Entrepreneurial Heroes
There have been a lot of great startups, led by a lot of great entrepreneurs over the last few decades. Too many to list in this post. But, below is a shout out to few of my favorites, including a few entrepreneurial lessons we can all learn from.
Steve Jobs (Apple). One share of Apple stock back in 1996, when Jobs regained the reigns as CEO of Apple (the company he co-founded in 1976), was worth around $5. On the day that Jobs retired as CEO in August 2011, that same share of stock was worth around $366. Over that 15 year period, that was an average annual growth rate of 33% per year, far exceeding the S&P 500's 3% annual return for that peiod. Jobs out-performed the market by 10x!! That makes him, along with others below, one of the best CEO's in history, as long term and consistent success like that is almost unheard of. And, how did he do it: (i) intense focus on challenging the norm and improving the consumer product experience (e.g., via iPod, iPhone, iPad, iTunes, etc.); and (ii) a very hands-on, aggressive management style (almost to a fault). And, we didn't even talk about his early success in taking the first commercially successful personal computer to market in his first stint as Apple's CEO, or his role in helping turn Pixar into the undisputed leader in digital film animation in between. One huge hit after another. I am not sure we will ever see another Steve Jobs. So, religious attention to detail and provocative innovations will surely lead you in the right direction.
Bill Gates (Microsoft). What Jobs was to Apple, Bill Gates was to Microsoft. His run as co-founder and CEO of Microsoft from 1976 to 2006 produced an equally impressive 29% average annual growth rate for its shareholders (which frankly slowed way down between 2000-2006 due to government monopoly discussions and otherwise). The magic that drove Microsoft's success was getting their software products bundled into every piece of hardware requiring such software, hence the monopoly problems that eventually arose. But, in addition to being an equally passionate innovator and product guy, what makes Gates so special is the way he is giving back to the community via the Bill & Melinda Gates Foundation, donating billions of dollars to those in need around the world. It is not only what success you create from society, it is equally important to give some of that back to society, for charitable causes that are important to you.
Larry Page/Sergey Brin (Google). How can you argue with the success of the Google Guys, driving a 22% compound annual return for its public shareholders over the last seven years, when the overall market has been dismal and Google's valuation multiples were completely off the charts at the time of their IPO in 2004. What made the Google Guys so special were: (i) their spirit of true innovation, coming up with a whole new way of driving search results based on backlinks and algorithms; (ii) getting that spirit of innovation infused into every employee in the company (e.g., giving their engineers 20% time to build whatever innovations they want); and (iii) their ability to see far enough ahead to make big bets (e.g., acquiring YouTube for $1.6BN seemed pretty foolish at the time for a site with no revenue model, but not any more). Make sure your employees never lose their spirit of innovation, as you never know what next great idea they will come up with, to help your business succeed.
Jeff Bezos (Amazon). There are very few sizable businesses that survived the dot com boom and bust period of the late 1990's. But, Amazon is alive and well today, dominating the e-commerce space, as the #1 internet retailer worldwide, largely to the credit of its CEO and Founder, Jeff Bezos. What made Bezos so special was his ability to bet big, in ways that were contrary to popular beliefs. Bezos had a vision that e-commerce would take off, and even though the markets were imploding around him, he was able to hold strong to his vision, even though it may have confused his early investors with atypical strategies, emphasizing long term revenue growth over near term quarterly earnings. It was a huge bet with a lot of headwind, but Bezos executed it brilliantly. And, not only for buying books, but for every other merchandise category, as well, driving a whopping 42% annual return for Amazon's public shareholders since 1997 (the best returns of the group on this list). And, did I mention contributing to the ultimate demise of retailers like Borders, via electronic books read through a Kindle. So, hold true to your core beliefs, despite what others are telling you, if your "spider sense" is telling you it is the best way to go.
Richard Branson (Virgin). There is no end to the growth potential for Virgin under the leadership of Richard Branson. What started off as an airline, evolved into a music chain, mobile provider, winery business, space travel company, media business and 50 other businesses. Branson's mandate, backed up with a big bank account, was go big, or don't go at all. And, sometimes that resulted in big wins. And, other times, it resulted in highly publicized failures. But, the ups, far exceeded the downs, from one of the most adventurous and eclectic personalities on the planet. Once you have mastered your core business disciplines, think creatively out-of-the-box for your next lifestyle-brand motivated growth initiatives. Because at the end of the day, it is all about the brand.
What do all of these entrepreneurs have in common? They were able to keep the reins as CEO from founding their businesses all the way up to running multi-billion dollar, multi-national corporations (although there may have been other CEOs along the way, that ultimately got replaced by the original founders). That is not an easy feat, as the skillsets are so very different, driving success in early stage businesses vs. later stage businesses. Kudos to all of you, as a few of my entrepreneurial heroes.
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Posted by George Deeb at 2:34 PM