The Occasional CEO: Everything I Need to Know About Innovation I Learned from Hamilton

Suppose you raised $12.5 million to launch a start-up that returned 600 percent to investors in less than 24 months. Even better, your start-up was forecast to gross $1 billion in its first decade—not including a pipeline full of product spinoffs.

Those are the impressive results generated by Hamilton, a hip-hop musical that became a windfall for its investors and redefined Broadway for the twenty-first century.

Hamilton’s creator, Lin-Manuel Miranda, is a textbook example of economist Joseph Schumpeter’s classic entrepreneur, an individual who brings a novel combination (or innovation) to market and creates new customers where none existed before.

Hamilton’s new customers are obvious. People who had never been to Broadway bought tickets for the show. America’s ambassador to the United Nations invited the entire UN Security Council to a performance. The Rockefeller Foundation helped introduce twenty thousand New York City eleventh graders from low-income families to Broadway.

What makes Hamilton especially useful to entrepreneurs, however, is that it’s also a clinic on launching innovation.

For example, the show is proof that disruptive innovation can flow from a combination of ordinary, even traditional, products or ideas. In Hamilton, Miranda combined the Founding Fathers and hip hop to create something that delighted audiences and encouraged them to think about American history in a new way.

In our everyday world, we message one another with a combined camera and phone, pull luggage set on wheels, and snack on chocolate-covered peanut butter. The point is: innovation does not require great technological breakthroughs, nor does it require new raw materials. It’s the novel combination that matters, as audiences who watched Thomas Jefferson rap can attest.

In an era that encourages entrepreneurs to “dent the universe,” Hamilton also reminds us that transformative innovation often starts small. Miranda read Ron Chernow’s biography of Alexander Hamilton in 2004 and thought that it might make an interesting mixtape. It would take eleven years of inspired, grueling work before the mixtape concept would morph into a full-scale musical that would rock Broadway.

This small start and gradual evolution are often the way dents in the universe begin. Willis Carrier tried to stop ink from smudging in a printing plant and found himself father of a global HVAC industry. Jeff Bezos launched Amazon to sell books and it became the most valuable company in the world. Mark Zuckerberg’s original vision for Facebook, the world’s largest social media platform, was to create an online directory for college students. It is only in the endless hammering applied by entrepreneurs to their original idea that a dent finally appears.

President Barack Obama makes closing remarks following
a performance of musical selections from Hamilton
(Official White House Photo by Pete Souza)

Hamilton also teaches that a genius is special, but a genius working in community can change the world. Lin-Manuel Miranda drove the creation of the show, but “the secret history” of Hamilton, writes producer Jeremy McCarter, is that, “a bunch of people from a bunch of backgrounds had to come together to make it work.”[1]

Director Tommy Kail created structure, enforced deadlines, and became expert at drawing out the best ideas in the room. Musical director Alex Lacamoire took Miranda’s inspirations and, one colleague said, “pave[d] the street” musically to allow complete songs to emerge.^{^[2]} Lead producer Jeff Seller had a dual role of maximizing profits while keeping the audience, investors, and cast happy. And Miranda was not afraid to call in outside experts, such as Broadway legend StephenSondheim, when he could not solve a creative puzzle.

Genius, structure, encouragement, direction, profits, happiness—there are many roles in a community of innovation, many ways for entrepreneurs to contribute to success. “Working with other people makes you smarter,” Miranda said of his team. “We elevate each other.”

Finally, Hamilton is a good reminder that the design and launch of a novel combination is only half of the innovation equation. Hamilton’s opening night on Broadway was a sensation. But then, the show had to be repeated night after night, dance after dance, rap after rap. Even when performers were distracted or not feeling their best.

Lin Manuel Miranda in Hamilton (Wikipedia Commons)

And each new audience brought with it boundless expectations about the show’s brilliance. Success at this stage of a product launch means that entrepreneurs focused intently on innovation must now become expert managers, building consistent process, obsessing about quality, and inspiring people to do the same thing virtually the same way, day after day. When asked during the show’s first year what he worried about most, it was clear that Miranda’s role as a creative disruptor had shifted. “The most important thing for me,” the composer said, “is meeting those expectations every night.”

Hamilton combined the familiar in new and unusual ways. It started small and only came to dent the universe as it evolved. The production was powered by a genius willing to work closely in a multitalented community, and a team that understood innovation to be part creation, part consistent, obsessive customer delivery. These are lessons that apply to Broadway, Silicon Valley and all stops in between.