Business Brilliant

by Lewis Schiff

  41 He popped up in TV commercials: Stuart Elliott, “Madison Avenue’s Low Road; Deals, Not Enjoyable Campaigns, Were the Hallmark of 1998,” New York Times, December 31, 1998.

  41 He did radio station voiceovers: David Vinjamuri, Accidental Branding: How Ordinary People Build Extraordinary Brands (Hoboken, NJ: John Wiley & Sons, 2008).

  41 An online video-tech: “The Peterman Principle,” Businessweek, January 9, 2006.

  42 O’Hurley made his Broadway debut: Ibid.

  42 O’Hurley told one interviewer: Mabel Jong, “John O’Hurley, J. Peterman and Success: Yada, Yada, Yada,” Bankrate.com, June 6, 2003.

  CHAPTER 3: SAVE LESS, EARN MORE

  47 When Suze Orman recalls her life: Susan Dominus, “Suze Orman Is Having a Moment,” New York Times Magazine, May 14, 2009. The story offers some interesting insights into Orman’s perspective on her work. Although her books advise against the wastefulness of buying new cars, Orman appeared in General Motors ads touting a zero-percent-interest promotion. “I’m not in this for charity,” she said in response to critics. “This is a business, and anybody who thinks that it’s not a business is an idiot.”

  47 Orman’s 1999 book: Suze Orman, The Courage to Be Rich: Creating a Life of Material and Spiritual Abundance (New York: Riverhead, 1999), 66–71.

  48 Newsweek columnist Jane Bryant Quinn: Ed Slott, Parlay Your IRA into a Family Fortune: 3 Easy Steps for Creating a Lifetime Supply of Tax-deferred, Even Tax-free, Wealth for You and Your Family (New York: Viking, 2005).

  49 Anyone who has taken a serious look: Randall Jones, The Richest Man in Town (New York: Business Plus, 2009).

  49 Felix Dennis can be a fanatical skinflint: Felix Dennis, How to Get Rich (London: Ebury, 2006).

  49 Despite all the evidence: Orman, The Courage to Be Rich, page 112.

  50 Not to pick on Suze: “She’s So Money: Questions for Suze Orman,” interview by Deborah Solomon, New York Times Magazine, February 25, 2007. “My greatest pleasure is still flying private. I spend between $300,000 to $500,000, depending on my year, on flying private.”

  50 So when Orman claims that by scrimping and saving: Orman, The Courage to Be Rich, page 71.

  51 The odds are that the sole reason: Robin L. Pinkley and Gregory B. Northcraft, Get Paid What You’re Worth: The Expert Negotiator’s Guide to Salary and Compensation (New York: St. Martin’s, 2000).

  51 In 1995, Linda Babcock: Linda Babcock and Sara Laschever, Women Don’t Ask: Negotiation and the Gender Divide (Princeton, NJ: Princeton University Press, 2003).

  53 Other studies have shown: Pinkley and Northcraft, Get Paid What You’re Worth.

  53 In the coming year, 50 million U.S. workers: There were 50.1 million new hires in the United States in 2011, representing 38.1 percent of total employment. From U.S. Department of Labor, Bureau of Labor Statistics, “Annual Hires, Separations, Quits, Layoffs and Discharges, 2011,” reported by TED: The Editor’s Desk, March 14, 2012, http://www.bls.gov/opub/ted/2012/ted_20120314.htm.

  55 Most hiring managers told Pinkley and Northcraft: Pinkley and Northcraft, Get Paid What You’re Worth.

  56 In the words of one popular negotiating guide: Jack Chapman, Negotiating Your Salary: How to Make $1,000 a Minute (Wilmette, IL: Jack Chapman, 2011).

  56 After her first book came out: Linda Babcock and Sara Laschever, Ask for It: How Women Can Use the Power of Negotiation to Get What They Really Want (New York: Bantam Dell, 2008).

  58 Babcock acknowledges that it is easiest: The story about the Bermuda hotel housekeeping manager appears in chapter 9 of Ask for It.

  59 In her latest book: Suze Orman, The Money Class: Learn to Create Your New American Dream (New York: Spiegel and Grau, 2011).

  59 It’s true that the working world: Richard Vedder, “Why Did 17 Million Students Go to College?” Chronicle of Higher Education Innovations blog, October 20, 2010. Vedder is the director of the Center for College Affordability and Productivity. His analysis of Labor Department statistics also shows that “there are 5,057 janitors in the U.S. with Ph.D.’s, other doctorates, or professional degrees,” http://chronicle.com/blogs/innovations/why-did-17-million-students-go-to-college/27634.

  59 In 1979, about 28 percent of American workers: Analysis of Labor Department statistics by the New America Foundation; Sherle R. Schwenninger and Samuel Sherraden, “The American Middle Class under Stress,” April 27, 2011, http://growth.newamerica.net/publications/policy/

  the_american_middle_class_under_stress.

  60 The management consultant Umair Haque: In “The Economic Roots of Your Life Crisis” Haque writes fully in the spirit of Business Brilliance: “If we really want to smash through the straitjacket of life crisis, we must recognize the deeper dilemma and refuse to settle for anything less than breaking it. One tiny, trembling, but decisive step at a time, we can arc our own journeys towards a life searingly well lived. It’s not easy. I know. It can feel paralyzing, debilitating, panic-inducing. But here’s the secret inside the secret. Institutions fail. But life goes on.”

  62 On this subject, I’ll give the final word to Linda Babcock: Babcock writes in the concluding chapter of Ask for It: “Always getting what you ask for in a negotiation—always hearing yes and never risking no—means that you never ask for enough. Excessive caution, rather than protecting you from rejection or losing face, can actually prevent you from getting all that you’re worth, all you deserve, and all that’s available.”

  CHAPTER 4: IMITATE, DON’T INNOVATE

  65 Gary Kildall was a thirty-year-old Ph.D.: Three excellent books give somewhat similar accounts of the Kildall-Gates rivalry: Robert X. Cringely, Accidental Empires: How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition, and Still Can’t Get a Date (Reading, MA: Addison-Wesley, 1991); James Wallace and Jim Erickson, Hard Drive: Bill Gates and the Making of the Microsoft Empire (New York: Wiley, 1992); Stephen Manes and Paul Andrews, Gates: How Microsoft’s Mogul Reinvented an Industry—and Made Himself the Richest Man in America (New York: Doubleday, 1993). Additionally, one very thorough chapter devoted to Gary Kildall’s story appears in Harold Evans, Gail Buckland, and David Lefer, They Made America: From the Steam Engine to the Search Engine: Two Centuries of Innovators (New York: Little, Brown, 2004).

  67 By the mid-1980s: Gary Kildall’s attempt to sell Digital Research to Bill Gates is recounted in Harold Evans et al., They Made America. The book provides the following entry from Kildall’s unpublished memoir regarding Kildall’s final meeting with Gates: “We parted friends for some reason I don’t understand today. However, this rejection by Bill was one of his big business mistakes.”

  71 So in the late summer of 1980: In Hard Drive, James Wallace and Jim Erickson write: “In a series of meetings with Microsoft after the initial rebuff from Digital Research, Sams threw the operating systems problem in Gates’s lap. ‘This was the negotiating tactic we took with them,’ said Sams. ‘We wanted this to be their problem, to find us the right operating system, one that we could integrate successfully on our schedule.’”

  73 Where did Kildall go wrong: The quote is from Gordon Eubanks, interviewed for the PBS documentary Triumph of the Nerds, Oregon Public Broadcasting, 1996. Eubanks was a longtime friend and associate of Kildall who later went on to become president and CEO of Symantec, the antivirus software maker. Eubanks once told an interviewer that he learned from Kildall’s example that “if you’re going to run a company, you have to take the long view. You have to run it to succeed, and you have to run it for the people who work there.. . . Gary really didn’t have the passion and the drive. He was a great person and we were very good friends. I really thought highly of Gary. He was a tremendous amount of fun, but running a business was not something that was high on his list.. . . Bill [Gates], for anything you want to say about him, Bill really wanted to build a business, and he was aggressive, maybe ruthless. But mostly he was just aggressive. Gary really had the upper hand. He just didn’t play the cards right.” Gordon Eubank
s Oral History, Computerworld Honors Program International Archives, Cupertino, CA, 2000, http://www.cwheroes.org/archives/histories/Eubanks.pdf.

  74 Thomas Edison did not: Kendall F. Haven, 100 Greatest Science Inventions of All Time (Westport, CT: Libraries Unlimited, 2006).

  74 And Henry Ford did not: Joseph W. Barnes, “Rochester and the Automobile Industry,” Rochester History 43, nos. 2 and 3 (April and July 1981).

  74 The names Swan, Selden: Dobrev’s quotes are from Sarah E. Needleman, “In Race to Market, It Pays to Be a Latecomer,” Wall Street Journal, January 20, 2011.

  74 In The Myths of Innovation: Scott Berkun, The Myths of Innovation (Sebastopol, CA: O’Reilly, 2007).

  74 Most inventors who: Thomas Astebro, “The Return to Independent Invention: Evidence of Risk Seeking, Extreme Optimism or Skewness-Loving?” Economic Journal 113, no. 484 (2003): 226–239. The study was also mentioned in an article about entrepreneurship, “Searching for the Invisible Man,” Economist, March 11, 2006.

  75 By Berkun’s estimation: Myths of Innovation. The eight hurdles to innovation are: Finding an idea, developing a solution, sponsorship and funding, reproduction (manufacturing), reaching your prospective customer, beating your competitors, timing, and finally, keeping the lights on. Every invention requires the inventor to clear all eight hurdles, while tripping over any one of the eight spells failure for the entire effort. This is why, Berkun writes, there are more than 4,000 mousetrap patents, and yet only 20 have ever produced profits for their inventors.

  75 The other side of the coin: The latest study by Paul D. Reynolds is Entrepreneurship in the United States: The Future Is Now (New York: Springer, 2010).

  75 A survey of a far more elite group: Amar V. Bhide, The Origin and Evolution of New Businesses (New York: Oxford University Press, 2000).

  76 The notion that you can get rich: Statistics from the International Shark Attack File say that there were no shark attack fatalities in the United States in 2011 and just 11 total between 2000 and 2011. Every year, however, there are about 50 insect sting fatalities, according to the American College of Allergy, Asthma, and Immunology. The National Weather Service counted 29 lightning strike fatalities in the United States in 2010. During the same year, the Bureau of Labor Statistics logged 129 fatal falls from ladders.

  77 It wasn’t until 2002: Adam Cohen, The Perfect Store: Inside eBay (Boston: Little, Brown, 2002).

  77 Even without such corporate spin: Jeremy Seabrook, “E-mail from Bill,” New Yorker, January 10, 1994.

  77 If there is any harm done: Pino G. Audia and Christopher I. Rider, “A Garage and an Idea: What More Does an Entrepreneur Need?” California Management Review 48, no. 1 (Fall 2005).

  78 As Dan and Chip Heath would write: Dan Heath and Chip Heath, “The Myth about Creation Myths,” Fast Company, March 1, 2007.

  78 Audia and Rider concluded: Audia and Rider, “A Garage and an Idea.” Audia was interviewed for the radio program This American Life, episode 383, “Origin Story,” June 19, 2009. He told host Ira Glass: “[If] you want to become an entrepreneur, the obvious thing to do is to first go get a job in an industry you’re interested in and learn, and then eventually, later try to create a company.”

  78 Bhide came to a similar conclusion: The quote appears in The Origin and Evolution of New Businesses, 32–33.

  78 Larry Ellison, the billionaire founder: Oracle Corporation CEO Larry Ellison quoted in Matthew Symonds and Larry Ellison. Softwar: An Intimate Portrait of Larry Ellison and Oracle (New York: Simon and Schuster, 2003).

  78 The passage of time: “[Gates’s] genius has never consisted in seeing further than anyone else, but in seeing the near-future more clearly, and understanding much better than his competitors how to exploit it. Time and again, Microsoft has recognised the potential in someone else’s idea and simply done it better, always in marketing and, less often, in design.” “I Have a Dream,” Economist, November 25, 1995.

  79 Within six months: Gates’s syndicated newspaper column at the time: “I revised The Road Ahead this year, and it’s such a thorough overhaul that in many ways it is new. I rewrote several chapters and added about 20,000 new words.. . . It’s unusual to revise a book completely just a year after it was published, but it was necessary because my near-term view of the future has changed so much in the past year. The rise of the Internet provoked me to reinvent my company, and the book needed the same re-evaluation.” “Only Ever Wanted to Make Enough Money to Hire Friends,” October 23, 1996.

  79 “No matter how much Bill Gates”: David L. Green, IQuote: Brilliance and Banter from the Internet Age (Guilford, CT: Lyons, 2007).

  80 Steve Ballmer, now Microsoft’s CEO: The Ballmer quotation is from an interview for the PBS documentary Triumph of the Nerds.

  80 It was the summer of 2004: The quote about round numbers and other details is from the thoroughly researched and well written “The Accidental Hero,” by Matthew Boyle, Businessweek, November 10, 2009; see also a Q&A interview with Frankel, “A Subway Hero,” by Suzanne Zionts, FoxBusiness, November 18, 2009, http://smallbusiness.foxbusiness.com/entrepreneurs/2009/11/17/qa-subway-franchise-owner-dollar-foot-long/.

  81 As ideas go: Robert M. Schindler, “The 99 Price Ending as a Signal of a Low-Price Appeal,” Journal of Retailing 82, no. 1 (2006): 71–77.

  82 The “irritatingly addictive” TV jingle: Boyle, “The Accidental Hero.” “The idea was to use hand gestures and an irritatingly addictive jingle to convey both the price (five fingers) and the product (hands spread about a foot apart).” An executive with Subway’s ad agency was quoted as saying, “We wanted to create the feeling that this was a movement taking hold.”

  82 One restaurant consultant told: “‘Five dollars is the magic number now,’ says restaurant consultant Malcolm Knapp. Boyle, “The Accidental Hero.”

  82 Paul Orfalea, the founder of Kinko’s: The Kinko’s 24-hour story is from Orfalea’s brilliant autobiography, as told to Ann Marsh, Copy This!: Lessons from a Hyperactive Dyslexic Who Turned a Bright Idea into One of America’s Best Companies (New York: Workman, 2005), 61–62.

  83 A legend called: A version of “Columbus and the Egg” by Indiana-born children’s author James Baldwin can be found at the Baldwin Project, www.mainlesson.com. A monument to Columbus on the Spanish island of Ibiza is in the shape of a large egg, commemorating the legend.

  83 Damien Hirst, the conceptual artist: Sarah Lyall, “Is It Art or Just Dead Meat?” New York Times, November 12, 1995.

  84 When Paul Orfalea sold: Six years after Orfalea and 125 Kinko’s partners sold a 27.5 percent stake in Kinko’s to a New York buyout firm, the firm paid Orfalea $116 million for his remaining stake. RiShawn Biddle, “Kinko’s Cuts Ties to Founder,” Forbes, January 13, 2003.

  84 It’s true that, even by Orfalea’s own estimation: Orfalea and Marsh, Copy This!, 135.

  84 Kinko’s began as a one-man operation: Ibid., 7.

  85 “The customer walks into a store”: Ibid., 22.

  85 Orfalea came to realize that: Ibid., 9.

  85 Throughout Copy This!: Ibid., 61.

  86 People should feel soothed: Ibid., 42.

  86 He got angry when: Ibid., 45.

  86 In the years before e-mail: Ibid., 55.

  86 Once, Orfalea persuaded the local owner: Ibid., 43.

  87 “In retail there are few secrets”: Ibid., 202.

  87 Losing out to Bill Gates: Evans et al., They Made America.

  88 “I expected too much of educators”: Kildall’s friend and colleague, Tom Rolander, gave the eulogy at Kildall’s memorial service and read aloud a four-paragraph excerpt from Kildall’s unpublished memoir, of which this quote is a part. The eulogy and other documents related to Kildall and Digital Research can be found at www.digitalresearch.biz. On the site, Kildall’s son writes an homage to his father: “Like other great inventors before him, Gary was greatly disappointed when he discovered that innovation clashes with the business world. He learned the hard way that even in suc
h a young industry, it is cutthroat business practices and not great products which guarantee success. It was simply not in Gary’s nature to hoard knowledge, to buy out his competition, or to take credit for work that was not his.”

  88 Disappointed inventors: The movie Flash of Genius was based in part on a New Yorker article by John Seabrook, “The Flash of Genius,” January 11, 1993. It was later included in Seabrook’s book, Flash of Genius: And Other True Stories of Invention (New York: St. Martin’s Griffin, 2008).

  89 Kearns died: Matt Schudel, “Accomplished, Frustrated Inventor Dies,” Washington Post, February 26, 2005: “In his final years, [Kearns] drove around in two aging vehicles: a 1978 Ford pickup and a 1965 Chrysler. Neither had intermittent wipers.” See also Reed Johnson, “The Cantankerous Man behind the Wipers,” Los Angeles Times, October 3, 2008: “Even so, the movie understates the real-life Kearns’ volatility and vehemence. It also drastically underplays his family’s resentment of Kearns’ bullying, obsessive ways, which eventually shattered his 27-year marriage and caused his children to distance themselves physically from their father. As Tim, Kearns’ second-eldest son, told me when I interviewed him: ‘We all got to the point where it was him or us. And you always choose yourself.’”

  90 In e-mails since made public: Evans et al., They Made America, 543.

  90 The lawsuit dragged on: Ibid., 544.

  CHAPTER 5: KNOW-HOW IS GOOD, “KNOW-WHO” IS BETTER

  95 In 1951, a twenty-one-year-old stockbroker: The story of Warren Buffett’s failed gas station appears in Buffett’s authorized biography by Alice Schroeder, The Snowball: Warren Buffett and the Business of Life (New York: Bantam, 2008), 169.

  97 Ed, if you hadn’t: As of March 2012, Forbes ranked Buffett the third richest man in the world, with a net worth of $44 billion. Bill Gates’s fortune ranks second with $61 billion, behind Mexican telecom magnate Carlos Slim’s $69 billion.

  98 Back in 1958: Buffett’s history as a corporate raider is portrayed vividly in Schroeder, The Snowball, and in the unauthorized biography by Roger Lowenstein, Buffett: The Making of an American Capitalist (New York: Broadway Books, 2001).