Sell Out and Become a Regular Man

I am reposting this May 2012 article about "The Ice King" after visiting with cousins last weekend and being treated to a bird's-eye view of Spy Pond in Arlington, one of Frederic Tudor's "ice factories." (Pictures below.) Tudor was booted from "Innovation on Tap" for length--my bad for writing 600 pages when no publisher wanted to see more than 280--but, author's foibles aside, he remains one of the most fascinating innovators of his time.

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Frederic Tudor was born in Boston on the day the peace treaty ending the American Revolution was signed in 1783. 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 (for better or worse) 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.”

What really made Tudor successful, however, was his incredible, ungodly persistence. 

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 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.)

Spy Pond, Arlington, 1852

Spy Pond, Arlington, May 2024 (from the bee-keeping meadow :)

"Innovation on Tap" Excerpt # 9: Willis Carrier, Entrepreneur (119 Years Later)

The seventh chapter of "Innovation on Tap" is the story of entrepreneur Willis Carrier and the birth of modern air conditioning, which celebrates its 119th anniversary today. The excerpt below moves the story ahead some 13 years, to the launch of Carrier Engineering Corporation as a standalone company by Willis and his partner, J.I. Lyle.

While we think of HVAC today as a multi-billion dollar, global, growth industry, the story of Carrier’s launch—in the teeth of World War I, when global trade had ground to a halt--reminds us of just how nimble, innovative, and entrepreneurial Willis and his partners had to be to succeed. 

For more on Carrier and its storied history, see here.

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Carrier Engineering Corporation (CEC) opened for business on July 1, 1915. It was a classic start-up. Willis Carrier rented two rooms in the Mutual Life Building in Buffalo for himself, a secretary, and one draftsman. “We ended up with second-hand furniture—two desks, a drafting board and stool and a few files," his secretary recalled. "We had two wicker chairs for visitors, and Mr. Carrier’s friends would ask him if he had swiped them from a tavern.”

Carrier Engineering raised enough cash to run the business for six months without a sale. "This was certainly cutting it pretty fine," Willis recalled. And, for eighteen days, the new company languished. But what World War I had taken away, it suddenly returned. 

Answer the Note: Lessons from Ben & Jerry's and Warren Buffett

I was struck by a letter printed on Sunday in The New York Times Magazine from Andrea, 37-years-old and living in London.

Andrea grew up in Cancun and loved Ben & Jerry's ice cream so much that he "wrote to them (in my 7-year-old nonnative-English) to let them know I had the best idea: They could add chocolate syrup in a little plastic bag to their ice cream."

Much to Andrea's surprise, the company responded, saying his "idea sounded delicious, but not great for the environment.  They taught me a great lesson," Andrea added, "(and gave me coupons!).  Such a lovely company and lovely people, caring for all their customers, even if they lived in other parts of the world, or were 7-year-olds."

Thirty years later, Andrea credited Ben & Jerry's with encouraging him to think about corporate values and the environment.

His letter was a reminder of my interview with Sweeten CEO Jean Brownhill for Innovation on Tap.  

"Innovation on Tap"

Innovation on Tap received a silver medal for "Entrepreneurship and Small Business" in the 2020 Axiom Business Book Awards, was a finalist in the "Business and Career" category of the 2020 Independent Book Publishers Association awards, and was longlisted for the Porchlight Business Book Awards in the "Innovation and Creativity" category.  

In July 2020, the book became an Amazon Bestseller in Business, Technology, and Innovation. 

This post includes excerpts, guest posts, reviews, videos, podcasts, interviews, and book talks, all of of them generated from the book's content.

Also available, free of charge, is a special set of notes prepared for entrepreneurs, business class instructors, and book groups that explore the book's leadership and innovation issues. See Special Notes for Entrepreneurs here.

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The video below is a 30-second summary put together by Booksplainers.

Favorite Insights from “Creation in a Time of Disruption”

Our recent virtual panel—“Creation in a Time of Disruption: How COVID-19 is Driving Innovation”--brought together three of the talented entrepreneurs featured in Innovation on Tap. Brenna Berman, Jean Brownhill, and Brent Grinna are each leading their organizations through this difficult period of pandemic and social unrest, and each was gracious enough to carve out time to share experiences and insights.

One of the common challenges mentioned was the adjustment overnight from having mission-based, close-knit, high energy cultures to leading remote workers that ranged from Millennials (suddenly sheltering alone without any real support system) to parents trying to work while taking care of small children or home-schooling. Disruption has reinforced the dual role that work plays in employees’ health and well-being and in the health and well-being of partners, clients, and customers.  All three leaders agree that refocusing on mission helped to re-ground their teams in this unsettled time.

The conversation shifted about half-way through from one about COVID to the George Floyd tragedy and issues of equity and inclusion.  As Brenna Berman said, “The pandemic will be managed and addressed . . . [but] the social justice issue is the one that’s going to take the hard work.” The idea that entrepreneurs can use this moment to arrive at a more just and equitable workplace was a moment of epiphany for me.

The complete video can be found here on the City Tech Collaborative site--and thanks for their sponsorship.  Below, I have chosen just three of my favorite insights (lightly edited for context and clarity) from the 75-minute panel. There is much more, and I encourage you to watch it all. 

James Forten: A Fortune Made by His Own Industry

Featured in chapter 3 of Innovation on Tap, James Forten (1766-1842) lived a rags-to-riches story so impressive that he became among the wealthiest businessmen in Philadelphia, and a powerful voice for African-American reform.

Forten’s future was cast the moment he accompanied his father to work at the sail-making business of Robert Bridges, a white Quaker. By age ten, Forten had acquired the basic skills of his lifelong trade while learning to read at a nearby Quaker school.

Anxious to support the Revolution, Forten enlisted as a powder boy on the 450-ton American Royal Louis. During Forten’s maiden voyage, the Royal Louis captured four British vessels. His second cruise was met by the British warship Amphion, however, and in October 1782, Forten found himself a prisoner aboard the Jersey in Manhattan’s East River. He barely survived his seven long months of captivity.

In 1785, Robert Bridges welcomed Forten back to his sail loft, and within a year named the toughened, ambitious young man his foreman. In time, Forten learned how to outfit and repair sails for every kind of vessel that appeared in the port of Philadelphia. In return, Forten provided his older friend and boss with leadership and the wisdom of someone whose own life had once depended upon quality sails.

When Bridges retired in 1798, he lent Forten the money to purchase his sail-making business, ensuring he maintained the firm's customers. Bridges was clearly Forten’s benefactor, but support from the greater Quaker community in Philadelphia helped to level the playing field and made it possible for the talented Forten to excel.

Two Things Old Entrepreneurs Can Do For New Entrepreneurs in a Pandemic

Crises are all the same because they are all different: Something has happened that has never happened before.  It’s worse than anyone could anticipate. There’s no obvious solution—and some people doubt there is any solution at all.  We are doomed.

So it is with the COVID-19 pandemic.

If you are a seasoned entrepreneur, perhaps one who is mentoring students in an incubator or influential in your local ecosystem, here are two simple ideas to make things a little bit better.

Model Perseverance

The defining quality of a successful entrepreneur is supposed to be grit. Perseverance. Tenacity. Determination.  Resolve. The ability to struggle through obstacles and weather hard times.

Nobody wants to be locked down.  Nobody wants to wear masks or miss summer at the beach.  Everyone wants to eat at a restaurant and get their hair cut. But mercy, people: we live in a nation that stood shoulder-to-shoulder in the viscous soup of a swimming pool, spreading SARS to our closest friends.  

We live in a nation where half of us are about to fail the Stanford Marshmallow Experiment.  And the price of failure is suffering and death.

If you are an entrepreneur who built your business on perseverance, it’s time now to model that trait--alongside kindness and civility.  What’s good for entrepreneurial success turns out to be good for life success as well.

Be Optimistic

Being optimistic is not about putting on a happy face. 

It's about acknowledging that the crisis is real, that people are hurting, that solutions are elusive—but that we have been in this situation before and we have overcome.  Every single time.  We just tend to forget our own history.

The New Innovation: Move Fast and Heal Stuff

A blur of color and cartoons

We have a box of Kashi cereal in our kitchen pantry.  That may not be a big deal in your house, but before last month, I did not know that there was such a thing as “Kashi cereal.”

Until then, when I walked down the cereal aisle in our local market, I saw just three brands: Raisin Bran, Grape-Nuts, and Life.  That’s all. Everything else was a blur of color and cartoons.

It's what marketers call my “evoked set,” and you’ve got one, too.  In fact, we’ve all got lots of them.  For cereal, beer, toothpaste, and hundreds of other items.

The evoked set, usually two or three (but rarely more than five) brands, is your brain’s way of reducing the clutter of life and staying sane.  Evoked sets tend to be stable—even unshakable.

Until now.

Innovation on Tap #8: Mary Elizabeth (Evans) Sharpe, Candy Entrepreneur & Earth Day Hero

Born in 1884, Mary Elizabeth was an
established merchant by 1900

The main eatery at Brown University is affectionately known as "the Ratty," but its official name is the Sharpe Refectory Dining Hall, named for Chancellor Henry Dexter Sharpe 1894. 

During my time at Brown in the 1970s, the portrait of a mysterious woman hung on one of the walls of the Ratty. It would be forty years--and the writing of Innovation on Tap--before I came to know the name and story of this enigmatic lady. 

Mary Elizabeth Evans married Henry Sharpe in 1920.  Her incredible entrepreneurial story--from making candy in her family's kitchen in Syracuse to running a large-scale confectionery and hospitality organization throughout the East--is featured in chapter 5 of my book (excerpted below). But it also seems appropriate on this Earth Day 2020 to remember her other gifts. 

At the invitation of Brown's President Henry Wriston (1937-1955), Sharpe became the University's unofficial, enormously talented landscape architect.  She is responsible for the design and planting of many of the trees that still beautify the Brown campus.  Mary Elizabeth was also instrumental in the creation of the Japanese Gardens at Roger Williams Park. And her pledge of more than $150,000 in 1970--along with her historical research and "determined efforts"--helped to reclaim and beautify Providence's India Point Park.  Were she alive today, she would surely be celebrating Earth Day with us.

Another of her legacies is the beautiful Rochambeau House and Gardens that she and Henry built on the East Side of Providence.  Today it is the home of Brown's French Studies.  

Innovation on Tap #7: A Model for Innovation and Community - Lin-Manuel Miranda and "Hamilton"

Author's note: The final chapter of “Innovation on Tap” is the story of the innovation community that came together around Lin-Manuel Miranda to create “Hamilton.”

This is the seventh excerpt from Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway's "Hamilton" © Eric B. Schultz, available on Amazon, Barnes & Noble, and in quantity from Baker & Taylor or Greenleaf Book Group at 800-932-5420.

Excerpt #1, about Buddy Bolden and the birth of jazz, is here.  Excerpt #2, about Jason Jacobs and the growth of Runkeeper, is here.  Excerpt #3, about Jean Brownhill and Sweeten, is here.  Excerpt #4, about Elizabeth Arden and "the right to be beautiful," is here.  Excerpt #5, about GM's Alfred Sloan (the most successful American entrepreneur ever?), is here.  Excerpt #6, about Evertrue’s Brent Grinna, is here.

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Delivering Genius

Hamilton’s opening night on Broadway was a sensation. But then—after the reviews were clipped and the parties over—the show had to be repeated. Night after night. Dance after dance. Rap after rap. Even when performers and musicians were tired, bored, or not feeling a hundred percent. And the stakes were high, because each performance brought a new audience with overflowing expectations about the show’s brilliance.

Skydeck Podcast: Not Throwing Away My Shot

Here's the latest HBS Skydeck podcast.

We focus on innovation and entrepreneurship through the lens of music--Buddy Bolden and Lin-Manuel Miranda, both featured in "Innovation on Tap."

Click here.

Thanks to Dan Morrell for a great session!


Here's Dan's intro:

Eric Schultz was working as an executive chairman for a tech company, and on his way home from a fundraising presentation at a venture firm when he had an epiphany.

A longtime executive with a personal interest in history, he had been struggling with how to frame a new book he was working on about the history of innovation in America. But sitting around a makeshift bar with some of the other executives who had just laid out rosy scenarios and hockey-stick returns to potential investors, the truth came out. One of the executives was running out of cash. Another had a new competitor they didn’t have a few months prior. One had lost her star software developer to a rival. This, Schultz thought, was the perfect framing: Take all of the historical entrepreneurs he was focusing on for his book, and put them in a bar. Let them trade stories, tell jokes, share insights, and see what commonalities these icons could find over a few pints. 

The result is Schultz’s new book, Innovation on Tap: Stories of Entrepreneurship from the Cotton Gin to Broadway's Hamilton, and on this episode of Skydeck, he and I discuss what two artists separated by more than a century can teach us about innovation, and why it’s important for business leaders to reflect on history.  —Dan Morrell

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.

Rethinking Innovation: An Updated, Practical List of Where to Look

 "Innovation on Tap" is available in hardcover,
Kindle, and audio versions.  It can be ordered
from Amazon, Barnes & Noble, 
Greenleaf Book Group, and Indiebound. 

While writing Innovation on Tap, I reacquainted myself with the work of economist Joseph Schumpeter and consultant Peter Drucker, two of innovation's most influential thinkers.

Using their formats, I have constructed an updated list of questions designed to help entrepreneurs identify their next innovation.

Combined, Schumpeter and Drucker offer four lessons:

1. Successful innovation is the result of structured and purposeful work.

2. The best sources of innovation are usually existing and obvious opportunities.

3. The most powerful innovations tend to involve new combinations of knowledge, process, and people, not technology.

4. The test of innovation is not its novelty, but its success in the marketplace.

Innovation and Nostalgia: The Passing of a Rock Generation

Rockers Eddie Money and Ric Ocasek died recently.  One was 70, the other 75.

It seems funny, rock musicians in their 70s.  But hold on to your hat.  “Just about every rock legend you can think of,” Damon Linker writes, “is going to die within the next decade or so.” Paul McCartney, Paul Simon, Art Garfunkel, Carol King, and Brian Wilson are 77.  Mike Jagger is 76.  Joni Mitchell, Ray Davies, Roger Waters, Keith Richards, and Jimmy Page are 75.  Peter Townshend, Rod Stewart, and Eric Clapton are 74, Van Morrison, Bryan Ferry, and David Gilmour are 73.  Elton John and Don Henley?  72.  And that leaves youngsters James Taylor, Jackson Browne, Billy Joel, and Bruce Springsteen all north of 70.

The fact that a list of living rock icons is this long is a testament to genetics, chemicals, or luck—since Vegas might not have given any of them favorable odds of reaching 35 when they were in their 20s.  The paragraph above is strewn with hard living and near-misses.  Some of the rockers listed may make it to 2030 or beyond--and I certainly hope they do—but don’t bet against the odds this time.

The Kings, Jaggers, and Stewarts of the world were born in the 1940s, developed their craft in the 1960s, and began to create music and innovate the sounds of our world in the early 1970s.  

It was a moment in time that reminds me of New Orleans in 1900 and the birth of jazz.  Detroit in 1920 and the auto industry.  Silicon Valley just after the Netscape IPO in 1995, when a collection of people gathered to do things that had never been done before, offering ideas now so pervasive that we take their innovations for granted. “I used to get up in the morning,” the recording engineer for Led Zeppelin said in 1971, "thinking, ‘Today I have another chance to do something that’s never been done before.’” 

Innovation on Tap #6: Brent Grinna: Quietly Building an Amazing Network

This is the sixth excerpt from Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway's "Hamilton" © Eric B. Schultz, available now for preorder at Amazon, Barnes & Noble, and in quantity from Baker & Taylor or Greenleaf Book Group at 800-932-5420.

Excerpt #1, about Buddy Bolden and the birth of jazz, is here.  Excerpt #2, about Jason Jacobs and the growth of Runkeeper, is here.  Excerpt #3, about Jean Brownhill and Sweeten, is here.  Excerpt #4, about Elizabeth Arden and "the right to be beautiful," is here.  Excerpt #5, about GM's Alfred Sloan (the most successful American entrepreneur ever?), is here.

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Author's note: Sometimes, stuff happens to entrepreneurs and they just have to be ready.  Such is the case with Brent Grinna as he prepared to launch a technology company designed to bring educational fundraising into the 21st century.  Today, EverTrue has more than 300 education partners and is the leading advancement automation platform.  And Brent remains one of the best networkers and community-builders I have ever met.  But, not so long ago, EverTrue was just an idea and Brent was just figuring it all out.  I appreciate him letting me include this story in the book; it says great things about the Boston venture community, and it made me laugh out loud when I interviewed him. Read on: 

At this point Grinna had an idea, a mock-up, interest, an apartment, and a skeptical but supportive wife. That’s when he heard about an event called the Venture Summit East, a very large gathering of leading venture capitalists and entrepreneurs. “I’m living across the Charles River at the time,” he says, “and I see that the ticket is going to be $2,000 to go to that event. There’s no way I’m paying $2,000, but I reach out to the organizer, explain my situation—I’m an aspiring entrepreneur, just graduated from Harvard, I’m living right across the river—and asked if he needed any volunteers. He said sure, come work the registration desk.” 

By helping with registration, Grinna could attend some of the sessions and the luncheon presentation. He found as he handed out name tags that he knew almost nobody except for local venture capitalist Jeff Bussgang (HBS ’95) from Flybridge Capital Partners. “He’d been an entrepreneur-in-residence at Harvard Business School during my time there, and I’d been bouncing ideas off him along the way. So I see Jeff at lunch and I go and sit down. And Jeff says, ‘Brent, I’m so glad that you’re here. I’ve got to introduce you to these guys. This is Walt Doyle; he’s got a very cool company called WHERE doing some interesting work around mobile. You guys should definitely meet. I want you to hear his story and tell him your story. And I want you to meet Scott here, as well.’” 

Grinna explains, “Walt is this super-high-energy guy, and he says, ‘Tell me about what you’re doing! What’s your story?’ I start telling him about the Brown experience and the reunion, and he says, ‘I totally get it. I’m really involved with Middlesex, which is where I went to high school. I see the challenges. Where are you working out of?’ I tell him my apartment in Cambridge (and my wife is questioning that!)—but that’s where I am.” Doyle tells Grinna that he’s just moved into new space and invites him to visit.   

As Grinna and Doyle are talking, Brent notices that Scott is taking notes. Grinna decides, “That’s probably OK; we’re at a conference, and I guess you take notes. So I shoot these guys thank-you emails that night, and Scott writes back with this whole set of questions. It seemed cool he was so interested in my business, so I replied with all these answers. I wake up the next day, and I find out that Scott [Kirsner] is the technology reporter for The Boston Globe. And he writes an article, ‘New Start-up EverTrue Revolutionizing Alumni Development.’ And he has all these quotes. I don’t think I even knew he was a reporter—and I’m so oblivious I’m confirming comments and quotes in an email exchange. So this article hits,” Grinna adds. “It’s got screen shots, it’s got my story, and all of a sudden, all day, I’m getting emails from people wanting jobs—my inbox is flooded. EverTrue is not a real company, but now The Boston Globe thinks it’s a real company. So, it’s a real company.”

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Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway’s “Hamilton” is the story of 300 years of innovation in America told through the eyes of 25 entrepreneurs--living and departed--who have gathered to "talk shop" in an imaginary barroom under the watchful eye of economist-turned-bouncer, Joseph Schumpeter. 

From Eli Whitney and his cotton gin to the Broadway smash, Hamilton, their stories capture the essential themes of entrepreneurship, highlight the rules for success, and celebrate the expansive sweep of innovations that have transformed our world.

Innovation on Tap # 5: Alfred Sloan: America's Most Successful Entrepreneur?

This is the fifth excerpt from Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway's "Hamilton" © Eric B. Schultz, available now for preorder at Amazon, Barnes & Noble, and in quantity from Baker & Taylor or Greenleaf Book Group at 800-932-5420.

Excerpt #1, about Buddy Bolden and the birth of jazz, is here.  Excerpt #2, about Jason Jacobs and the growth of Runkeeper, is here.  Excerpt #3, about Jean Brownhill and Sweeten, is here.  Excerpt #4, about Elizabeth Arden and "the right to be beautiful," is here.

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Author's note: Dimaggio or Williams, Aaron or Ruth?  Beethoven or Mozart--or Bach? Coke or Pepsi? How 'bout Moxie?!  Who was America's most successful entrepreneur ever?  It's an impossible question, of course, perfect for a barroom argument.  Which is why I took my shot at it in "Innovation on Tap."  My vote goes to Alfred Sloan, who seems (in baseball terms) like Stan Musial--faded more than he should be.  And, for those of you who are introverts--the brilliant "Silent Sloan" once wrote, "Asking favors and pushing myself into places where I am a stranger always did go against my grain."  It's a good reminder that there is no prototypical entrepreneur, only lots of articles on the web saying there is.  Read on: 

Alfred Sloan built the largest, most innovative, and arguably most important company in the world—one that fundamentally transformed the twentieth century. In 1918, he joined a General Motors that was disjointed and nearly bankrupt, with just 12.7 percent market share behind Ford’s 55 percent. He faced America’s greatest industrialist at the top of his game in a fluid and hypercompetitive market.

By 1929, when nearly 4.6 million vehicles were sold, GM’s 32.3 percent share topped Ford’s 31.3 percent. When Sloan retired as chairman in 1956, GM held a 52 percent market share and was one of the world’s most profitable, admired, and best-run companies. Its annual revenues surpassed the GNP of half the world’s countries.

Alfred Sloan (public domain)

Sloan is credited with not just saving General Motors, but with being the father of the modern corporation, a genius of consumer marketing, and the most effective CEO ever. An internal memo he wrote became a sought-after best seller in the 1920s, and his book, My Years with General Motors (1963), was the bible for a generation of managers who aspired to lead like America’s most famous CEO.

Sloan is known for creating effective public relations, implementing long-term forecasting, hiring professional designers to spearhead GM’s parade of annual models, and funding both a series of technological breakthroughs and long-term, visionary research and development. Historian Daniel Boorstin writes that when Sloan asked his staff to look out five years into the future to envision something new and better, he helped invent the modern world.

Sloan is known for other accomplishments as well. He encouraged his best friend, Walter P. Chrysler, to launch his own company when Ford was failing in the 1920s. “GM, in its own interest,” Sloan believed (unlike many of America’s most famous entrepreneurs bent on monopoly), “needed a strong competitor”. . . .

Above all, Alfred Sloan innovated in two essential areas: the effective organization of a complex institution (what he would call “centralized administration with decentralized operations”), and the brilliant segmentation of consumer brands designed to create endless demand. The German philosopher Arthur Schopenhauer (1788–1860) wrote that talent achieves what others cannot achieve, a fitting tribute to the legendary work of Henry Ford. But, Schopenhauer added, genius achieves what others cannot imagine. That was the contribution of Alfred Sloan.

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Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway’s “Hamilton” is the story of 300 years of innovation in America told through the eyes of 25 entrepreneurs--living and departed--who have gathered to "talk shop" in an imaginary barroom under the watchful eye of economist-turned-bouncer, Joseph Schumpeter. 

From Eli Whitney and his cotton gin to the Broadway smash, Hamilton, their stories capture the essential themes of entrepreneurship, highlight the rules for success, and celebrate the expansive sweep of innovations that have transformed our world.

Innovation on Tap # 4: Elizabeth Arden: A Right To Be Beautiful

This is the fourth excerpt from Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway's "Hamilton" © Eric B. Schultz, available now for preorder at Amazon, Barnes & Noble, and in quantity from Baker & Taylor or Greenleaf Book Group at 800-932-5420.

Excerpt #1, about Buddy Bolden and the birth of jazz, is here.  Excerpt #2, about Jason Jacobs and the growth of Runkeeper, is here.  Excerpt #3, about Jean Brownhill and Sweeten, is here.

Author's note: Elizabeth Arden, whose real name was Florence Nightingale Graham, immigrated to the United States from Canada in 1908 and made her fortune, riding (and guiding) a fundamental transformation in how Americans thought about beauty.  Although this brilliant entrepreneur was slender and stood just a little over 5 feet tall, one reporter noted, “she was about as fragile as a football tackle; and anyone who mistook her wispiness for indecision quickly discovered that she had a will of steel and the power to execute it.” Arden might remind modern readers of Steve Jobs: gifted, driven, and just a wee bit scary.  Read on: 

. . . Her business grossed a phenomenal $2 million a week in 1925. Arden rejected a $15 million offer to sell at the start of the Depression and continued her expansion . . .  

Elizabeth Arden
Source: New York World-Telegram and the
Sun staff photographer:
Fisher, Alan, photographer.
[Public domain]

If loyal and generous with good performers, Arden was also a tough and demanding boss, saying, “I only want people around me who can do the impossible.” With employees, she could be mercurial, as journalist Margaret Case Harriman wrote: "She is tyrannical and exacting or affectionate and lavish, by turns. Her employees, seldom knowing from one hour to the next whether to expect a calling down or a champagne party, have learned to take what comes with a good deal of serenity" . . .  

A true innovator, Arden launched a steady stream of new products. When told that production of a “fluffy” face cream was impossible, she vehemently disagreed until she found a chemist who would create Cream Amoretta. She launched the “Vienna Youth Mask” of papier-mâché and tinfoil, which applied heat via an electric current. She created cosmetics to complement clothing, not just skin color, and encouraged the everyday use of mascara and eye shadow. In her first twenty-five years, Arden developed more than a hundred items. She tried each new cosmetic on herself—and often on her staff—and had the final say on all product development decisions, brand names, and advertising . . .  

Arden retained a lifelong passion for improving women’s looks, sometimes noting the flaws of a visitor to her company and recommending lotions and creams on the spot.

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Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway’s “Hamilton” is the story of 300 years of innovation in America told through the eyes of 25 entrepreneurs--living and departed--who have gathered to "talk shop" in an imaginary barroom under the watchful eye of economist-turned-bouncer, Joseph Schumpeter. 

From Eli Whitney and his cotton gin to the Broadway smash, Hamilton, their stories capture the essential themes of entrepreneurship, highlight the rules for success, and celebrate the expansive sweep of innovations that have transformed our world.

“Innovation on Tap" # 3: Jean Brownhill: A Community of Trust

This is the third excerpt from Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway's "Hamilton" © Eric B. Schultz, available now for preorder at Amazon, Barnes & Noble, and in quantity from Baker & Taylor or Greenleaf Book Group at 800-932-5420.

Excerpt #1, about Buddy Bolden and the birth of jazz, is here.  Excerpt #2, about Jason Jacobs and the growth of Runkeeper, is here.

Author's note: Jean Brownhill, a trained architect, founder and CEO of Sweeten, is one of the few African-American female entrepreneurs in the US to raise more than $1 million in venture capital and has been named “The Contractor Whisperer” by New York Magazine.  Jean’s amazing entrepreneurial story includes several moments of "epiphany" when she suddenly saw the world in an entirely new way.  Jean has a neat shorthand for these moments, saying her “brain rewired."  Read on:

Then came the terrorist attack on 9/11. “It really freaked me out, which is the understatement of my life. It was another moment when my brain rewired,” Brownhill recalls. “I was coming across the Manhattan Bridge on the train, and we could see the first building on fire. Then we watched the second plane hit. And we just sat there on the bridge. Someone had a beeper. They said, ‘I think it’s a terrorist attack.’ And I’m sitting in a steel tube that I can’t get out of, on a bridge. It was so frightening.” 

At a loss for what to do, Brownhill went through the motions of going to work, sitting at her desk, and then having the surreal experience of walking home over the bridge, alongside people covered in ash.

“Over the course of the next few months,” she says, “I started thinking to myself, ‘Oh my God, you just spent five years of your life completely focused on learning how to build buildings. You have no idea why anybody would want to take them down. You have no idea the kind of economics or political conditions that brought this attack about.’ And so, I decided that I needed to understand about money and power.” This quest would mean reading every book she could find about money, trying to understand economic and social drivers. It was a self-education that would eventually lead her away from a traditional career path in architecture . . . 

The next year, as part of her ongoing self-education in economics, Brownhill read Roger Lowenstein’s Buffett: The Making of an American Capitalist. “I was so inspired by Warren Buffett and the example he set that I wrote him a letter,” she says. “When I got a response from him, that was the next moment my brain rewired again. Impossible things might be possible. This incredibly important person wrote me back.” She adds, “The letter back from Warren Buffett was the moment that ignited the belief in my entrepreneurial vision, that I could shape my own life. It all clicked in.”

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Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway’s “Hamilton” is the story of 300 years of innovation in America told through the eyes of 25 entrepreneurs--living and departed--who have gathered to "talk shop" in an imaginary barroom under the watchful eye of economist-turned-bouncer, Joseph Schumpeter. 

From Eli Whitney and his cotton gin to the Broadway smash, Hamilton, their stories capture the essential themes of entrepreneurship, highlight the rules for success, and celebrate the expansive sweep of innovations that have transformed our world.

"Innovation on Tap" #2: Jason Jacobs: A Cheerleader For Community

This is the second excerpt from Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway's "Hamilton" © Eric B. Schultz, available now for preorder at Amazon, Barnes & Noble, and in quantity from Baker & Taylor or Greenleaf Book Group at 800-932-5420.

Excerpt #1, about Buddy Bolden, is here.

Author's note: Jason Jacobs launched Runkeeper in August 2008, making it one of the first apps in the Apple Store. Three years later, Runkeeper had six million users, a close-knit and enthusiastic running community, and $1.5 million tucked away in a rainy-day fund.  What could go wrong?  Read on: 

Your author is a long-time user.

By 2011, the venture capital world had emerged from the Great Recession of 2008 and markets were frenzied. The entrepreneurial ecosystem had also become infatuated with scale and pedigree. “The tech media really cared about sizes of [funding] rounds,” Jacobs says, “and who they were from. If you wanted to get the credibility and the megaphone of the media—when it came to things like hiring the best people or getting strategic partners interested—there was no better way to do it than to raise a big round. Whoever raised the biggest round was perceived as winning.”

Such a plan required a big idea, and in 2011, Runkeeper launched the Health Graph. It was a strategic direction that would nearly sink the company. 

Runkeeper’s Health Graph began by integrating third-party devices, such as sleep monitors and Fitbits. It seemed an impressive idea; there were so many health and fitness devices coming to market, and nobody was emerging as a hub. Google Health had just shut down, Microsoft HealthVault was struggling, and bottom-up, direct-to-consumer relationships were the future. “There was a moment in time when nobody owned this space,” Jacobs says, “and here we were with the biggest audience. We had momentum and a passionate community. Why not us?” 

When Jacobs went out to raise his big round, however, there was pushback. “How big could running really be?” investors asked. He was determined to prove the doubters wrong. “If you take some narcissistic twenty-something with a megaphone, all hopped-up on energy drinks, with a big audience, and the press talking about him all day long,” Jacobs says, smiling, “in this emergent field that nobody knows anything about, but everyone thinks is the next big wave, and he just lays it out there with fervor—in that moment of heat maybe you can make a lot of things happen that couldn’t otherwise. . . .”

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I just love that quote, which perfectly captures the crazy excesses of the startup world of 2011.  Jason would push Runkeeper to the brink and then--spoiler alert--pull it back, exiting successfully and moving on to chapter 2.  You can read more about Jason's next chapter here and here; it turns out that not only is @jjacobs22 a great interview, but he's also an excellent interviewer.

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Innovation on Tap: Stories of Entrepreneurship From the Cotton Gin to Broadway’s “Hamilton” is the story of 300 years of innovation in America told through the eyes of 25 entrepreneurs--living and departed--who have gathered to "talk shop" in an imaginary barroom under the watchful eye of economist-turned-bouncer, Joseph Schumpeter. 

From Eli Whitney and his cotton gin to the Broadway smash, Hamilton, their stories capture the essential themes of entrepreneurship, highlight the rules for success, and celebrate the expansive sweep of innovations that have transformed our world.