Behind Every Great Entrepreneur is a Great Comeback Story
One tends to forget, but 25 years ago things were really different. Your phone and computer--if you had one--were just tools, no more or less sexy than a filing cabinet. There was also no such thing in America as a real café, a place where you could work or just relax, and be welcome either way. And the idea of a store that could sell you virtually anything you could imagine as you sat at home was science fiction. Then came Apple. And Starbucks. And Amazon.
People who create businesses create change--and in the process make life easier, richer and better for millions. That's what they do. So it's no surprise that entrepreneurs dominate CNBC's list of the quarter century's most influential business leaders. It would be a stunner only if Steve Jobs,Howard Schultz and Jeff Bezos weren't there, along with other profoundly important business builders, like Martha Stewart, Mark Zuckerberg andJack Bogle. You can't begin to understand the past 25 years without understanding what they did, which was merely to change the course of American life.
But understanding how they did it is at least as instructive. That captures what it really takes to succeed in America and what America needs to do to enable more to succeed. At a time when half of all millennials say they want to start a business and every economist sees entrepreneurship as the way to bury the financial crisis and keep America competitive globally, this matters.
If you examine the stories of CNBC's great entrepreneurs, some themes recur. All of the founders had vision. Most embraced technology. Many got capital at crucial points. (The U.S. financial system is pretty good at funding promising enterprises.) But the thread that stands out, partly because it's unexpected, is failure. Or more precisely: the ability to absorb failure and--by determination, grit, pugnacity, whatever--turn it into success.
Picture Steve Jobs, the iconic entrepreneur of our time. You probably envision the intense guy in the black turtleneck pulling back the curtain on the next insanely great Apple product. But to complete the portrait, you also need to picture the despairing founder curled in a fetal position, sobbing on a bare mattress in his mostly unfurnished house--which is how friends found him after Apple's board fired him in 1985. The boy-loses-company motif is hardly unique to Jobs. Howard Schultz was forced out of Starbucks, and Jack Bogle, founder of the Vanguard Group, was fired as CEO of Wellington Management Company, a company he considered his own.
If we were dealing with less determined personalities, that would have been the last we'd have heard of Jobs, Schultz or Bogle. But as Jobs later explained in his 2005 Stanford commencement address, "I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. … It freed me to enter one of the most creative periods of my life."
Jobs went on to found NeXT and Pixar and returned to build Apple into the most valuable company on the planet. Schultz, for his part, parlayed his vision of a "third place between home and office" into another start-up and earned enough credibility to buy Starbucks back and bring his original idea to life. And Jack Bogle sued, won the right to run a small sliver of Wellington's business and built it into the largest mutual fund company in the world.
"I looked into finding another job," Bogle later recalled, "but I concluded my best course of action was to fight back. Thank God, I like to fight."
You have to if you want to succeed as an entrepreneur. America may love successful company builders, but it doesn't make it easy to become one. Phil Libin, co-founder of productivity company Evernote, offered this advice to would-be entrepreneurs:
Here's the most likely thing that's going to happen if you start your own company: You'll work very hard for three to seven years, scrape together just enough money to survive during that time, then close down when you get tired or something in the world changes to make your business model unsustainable. You'll lose several years of good income and, if you return to work at a big company, be several years behind on your career path. And that's far from the worst-case scenario.
The odds run maybe 4 to 1 against any start-up's merely surviving five years, let alone growing into an Apple or Vanguard. Public disgrace and near-failure feature in the stories of almost every successful entrepreneur, and CNBC's stars are no exception. Think of Jeff Bezos, driven to the brink of bankruptcy during the dot-com debacle as press wags dubbed the company Amazon.bomb. Or Martha Stewart, having sold a generation of women on her unique brand of patrician homemaking, being led off to federal prison for obstructing justice in an insider-trading case.
In a sense, it has to be this way. Creating a business from scratch is inherently risky if not borderline suicidal. There are no franchise manuals, no models to follow. Matt Salzberg, founder of a foodie start-up called Blue Apron, quotes a popular metaphor for his chosen profession: "An entrepreneur is someone who jumps out of a plane without a parachute and figures out how to build one on the way down." Errors--fatal or otherwise--are inevitable. Even Mark Zuckerberg, whose rise now seems all but inexorable, went down his share of blind alleys. (Remember Wirehog, the file-sharing add-on? Or Beacon, the feature that ignited a firestorm of invasion-of-privacy complaints from Facebook users?) What matters is bouncing back.
Which brings us back to CNBC's most influential list and what it says about the American way of innovation. Yes, America is pretty good at funding new ventures, which helps. And it tends to reward success with great wealth, which stokes motivation. But most important, it lets people fail. You can be fired, or stare into the abyss of bankruptcy or even serve time. But if you have the grit to get back into the game, you get a second chance-;humbler, wiser and better able to compete.
And that makes all the difference.
ERIC SCHURENBERG | Staff Writer | Editor-in-chief, Inc.
Eric Schurenberg is the president and editor-in-chief of Inc. Before joining Inc, Eric was the editor of CBS MoneyWatch.com and BNET.com and managing editor of Money Magazine. As a writer, he is a winner of a Loeb and a National Magazine Award.