Tuesday, May 22, 2012

Sell Out and Become a Regular Man (or, The One Quality Every Entrepreneur Must Possess)

Frederic Tudor was born in Boston the day the peace treaty was signed in 1783 ending the American Revolution.  He rode the  earliest wave of American entrepreneurial activity, becoming one of the country’s first millionaires.  Tudor possessed all of the qualities we have come to treasure in our entrepreneurs, being described as “defiant. . .sometimes reckless in spirit. . .imperious, vain, contemptuous of competitors, and implacable to enemies.  While energetic in competition, he preferred legalized monopoly.”

(Wait—weren’t we all just given that biography for Christmas?)

What made Tudor successful, however, was his incredible, implausible, ungodly persistence.  Tenacity.  Resilience.  Obsession.

It’s a great reminder of what Peter Worrell told us in 2010:  Of all the qualities that a successful entrepreneur must possess, persistence is number one--and number two is so far behind it’s almost an afterthought.

(Pete actually used the term grit, which he defined as perseverance and passion for long-term goals, working strenuously toward challenges, and maintaining effort and interest over years despite failure, adversity, and plateaus in progress.)

Consider the classic entrepreneurial qualities.  Ethics are powerful, but there are plenty of famously unethical, famously rich entrepreneurs.  Brains are good, yet obtuse, successful entrepreneurs are not particularly hard to find.  Charming and amiable entrepreneurs who build happy teams are common, but so too are ogres and misfits and social buffoons who make those around them miserable.  We can find entrepreneurs who are wildly creative and others who steal ideas and have trouble inventing their own lunch.

But it is simply impossible to find a successful entrepreneur who quit.

At a time when Americans joked that New England had just two crops, ice and granite, Frederic Turner took the former and turned it into a multimillion dollar industry, creating a precious luxury item in markets from New Orleans to Havana to Calcutta.  He saw a market that was simply invisible to his fellow merchants, and he built that market by teaching people how to carry, store and use ice to preserve foods, cool drinks and make ice cream.  

We know Tudor was an entrepreneur because his fellow Boston merchants--who were happy to speculate in everything from coffee to mahogany to umbrellas--thought he was just plain nuts.  When he invested $10,000 in 1806 and filled the good ship Favorite with huge blocks of ice hacked from Fresh Pond in Cambridge, the Boston Gazette wrote, “No joke.  A vessel with a cargo of 80 tons of Ice has cleared out from this port for Martinique.  We hope this will not prove to be a slippery speculation.” 



Much to the delight of his skeptics, this first trip turned out to be a financial disaster.  While much of the ice miraculously made it to Martinique, Tudor lacked infrastructure (namely, an ice house) and consumer education (how to use something that had never before been seen), so that the ice melted away in six weeks and he lost $4000.  (The solution to insulation would prove to be sawdust, creating an important aftermarket for New England sawmills.)


Frustrated?  Of course.  Daunted?  Never.  For the next 15 years, Frederic Tudor shipped ice to ports from Charleston to Havana to New Orleans, building the trade, taking endless risk, suffering yellow fever, a mental breakdown, employee theft and government corruption, the Jefferson embargo, the War of 1812, the Panic of 1819, finding himself perpetually undercapitalized and, not once, but twice tasting the humiliation of debtors’ prison. 

Throughout his career--too much and too extraordinary to cover here--Tudor cajoled, implored, begged and borrowed  from every member of his family, and from his family’s impeccable network, including Revolutionary War heroes, Boston’s Brahmin community, and most of the East Coast merchant class.  (Frederic’s father had worked with John Adams, his brother with John Quincy Adams.)  Tudor took advantage of every tie offered him and every connection he could forge himself.

By 1833 Frederic Tudor had become the dominant player in the global ice trade, the nation's Ice King.  His crowning glory came that year when he sent the Tuscany with 180 tons of ice to Calcutta, crossing the equator twice and preserving its cargo for four months across 16,000 miles.  Indeed, the British in India knew what to do with ice, welcoming it with a celebration and immediately subscribing funds to construct a palatial ice house.

By 1849 Tudor had become wealthy.  In many cities ice was an essential part of living, the ice box a common feature.  A bachelor for most of his working life, Tudor married and fathered six children after the age of fifty, living until age 80 in 1864, a wealthy man with a country estate in present-day Nahant. 


Occasionally, though, he must have thought back to Dec 1817, sitting in a cold, foul-smelling prison cell wondering how he might finagle funds for his release from friends and family.  It was then that Fredric Tudor wrote a brilliant discourse on the plight of the struggling entrepreneur, one that still resonates today:
Had you not better entirely abandon this ice business?  It is a subject which wears out body and mind while it prevents you from having the standing among your fellow men which you deserve.  It occupies all your attention and appears at best subject to great hazard.   
In the course of twelve years pursuit you have arrived at little certainty. . .You stand at best a well-intentioned schemer and projector when you might, with a more regular application to common mercantile business, become a more useful and respected member of society.  It is not too late, you are not yet 36 years old and you may yet get back into the old road. 
Sell out in the best way you can and become a regular man.    
Answer: The suggestions of doubt are too late. . .My reputation is now so far pledged that I must advance. . .I, therefore, throw away every discouraging thought and determine to push on with as much exertion as I can command and endeavor to deserve success.”

If you are a committed entrepreneur, you have just one plotline--one that involves grit and persistence and obsession. Let's hope you will never choose to become a regular man or woman.




Sources

Nicholas, Tom and Sandra Nicholas. "The Ice King." 9-808-094. Boston: President and Fellows of Harvard College, 8 February 2011.  Paterson, Carl Seaburg and Stanley. The Ice King: Frederic Tudor and His Circle. Boston: Massachusetts Historical Society and Mystic Seaport, 2003.  Pearson, Henry Greenleaf. "Frederic Tudor, Ice King." Proceedings from the Massachusetts Historical Society 65 (Oct 1932-May 1936): 169-215. Weightman, Gavin. The Frozen-Water Trade. New York: Hyperion, 2003.