Note: I recently re-read this book and found the information and insights more valuable now than they were when I first read it seven years ago. It should also be noted that Amazon sells a paperbound edition for only $12.99. If that isn’t a great bargain, I don’t know what is.
From “acorns” of ideas to “oak trees” of business success, February 12, 2008
Ross and Holland provide mini-profiles of 100 quite different companies, some of which were later sold before they became dominant in their respective industries, others that continue to thrive under the leadership of their founders or second-generation successors. What these remarkable companies share in common (other than their great success) is that each is based on an insight with regard to how to solve a problem. Here’s an example of such an insight that resulted, not in one great company but in a product that transformed an entire industry. George de Mestral was irritated by the fact that burrs stuck to his clothes and to his dog’s fur on their walks in the Alps. He examined the burrs and saw the possibility of binding two materials reversibly in a simple fashion. He devised a hook-and-loop fastener in 1945 and later patented the device, naming it “Velcro” after the French words velours and crochet meaning “velvet hook.”
With all due respect to such insights, however, Ross and Holland repeatedly remind the reader that coming up with a “great idea” is only the first stage of what is almost always a very long and especially difficult journey. Few who embark on that journey eventually complete it. In this context, I am reminded of Thomas Edison’s observation “Vision without execution is hallucination.” Also of Darrell Royal’s suggestion that “potential” means “you ain’t done it yet.”
Here are six mini-commentaries, each of which includes a brief excerpt or two from the narrative.
Baby Einstein: Dissatisfied with videos, books, and other baby products then on the market (in 1997), Julie Aigner-Clark began making a homemade video for her infant daughter Aspen. The result was the “Baby Einstein Language Nursery” and it attracted so much attention so quickly that in the first year, sales were about $100,000 and she added other videos (e.g. Baby Bach, Baby Mozart, Baby Van Gogh, and Baby Shakespeare). By the time she and her husband Bill sold the company to Disney, sales exceeded $20-million. The Disney resources (especially marketing, promotion, and distribution) drove sales to more than $165-million in 2003. There are now 70 Baby Einstein products available. “That’s always where we hoped the brand would go but didn’t have the ability to take it.” Aigner-Clark continued as a consultant to Disney insists that she is happy with the sale.
Calloway Golf: The Big Bertha driver is probably its most famous product, certainly the one that accelerated its most rapid and most profitable period of growth. Working with his chief club designer, Dick Helmstretter, Ely Calloway developed a BB-3 prototype and tested it on a driving range and as he recalls, “neither of us could do anything but hit it great. We just sort of looked at each other and said, `”Wow, we’ll never be able to make enough.'” Calloway renamed it “Big Bertha” after a large howitzer used by the German Army during World War One. Pro golfers as well as hackers soon found that they could hit drives with it longer and straighter than with any other club. Two years before his death in 1999, Calloway explained, “Up until 1991, what was wrong with drivers is that everyone hated them. The driver was the least favored club in the bag, or the most feared. They bought them but they did not like them. Big Bertha changed the attitude of the masses from one of fear about the driver to one of affection.”
Liquid Paper: Betty Nesmith Graham was a single mother who returned to the workplace to support herself and her young son. She immediately encountered difficulties with the recently introduced electric typewriter. Making only one mistake required that an entire page be retyped and she was constantly making mistakes. Then she decided to experiment with a white, water-based tempera paint. Using a thin paintbrush, she easily corrected her mistakes. She called this liquid “Mistake Out” and began to give and then sell small bottles of it to other secretaries. By 1957, she was selling about 100 bottles a month. The next year, she renamed it “Liquid Paper.” Graham retired from the company in 1975 and died in 1980 at age 56, just six months after selling her corporation to Gillette for $47.5-million. Liquid Paper is now owned by Newell Rubbermaid.
Dyson: James Dyson built 5,127 vacuum cleaner prototypes before he got one to work properly. His was hardly an “overnight sensation” and, in fact, most of the 100 business successes that Ross and Holland examine in abbreviated accounts were achieved after several years of very hard work despite repeated failure and rejection. Dyson offers an excellent case in point.
Super Soaker: In 1982, while an employee at NASA’s Jet Propulsion Laboratory in 1982, Lonnie Johnston was working on an environmentally friendly heat pump that ran on water. He decided to attach a homemade high-pressure nozzle to the sink in the bathroom “and was startled when it fired a blast of water across the room. His first thought was, ” Gee, that would make a great water pistol.” He began to experiment with a series of prototypes (e.g. a soda bottle, plexiglass, lengths of PVC tubing, and a bicycle pump), confident that his idea had commercial possibilities. He filed a patent for “Pneumatic Water Gun” that eight years later went into production as what we now know as the Super Soaker. In 1992, David Letterman included it on one of his “Top Ten Items on the Bush Yeltsin Summit Agenda”…number ten was “Sign arms pact limiting number of Super Soaker squirt guns.” Annual sales now exceed $1-billion.
3M: The Post-it Note story is probably the best known of all the stories that Ross and Holland recount in this volume. It certainly offers still another example of the equally familiar aphorism that necessity is the mother of invention. An employee of 3M, Art Fry was a member if his church’s choir and was frustrated by the fact that the slips of paper he used to mark hymns repeatedly fell out of his hymnal. What he needed was a sticky bookmark that did not harm paper. He knew of a new adhesive being developed by Spence Silver at 3M and realized that perhaps, just perhaps it could solve his problem. It did but only after five years of additional research and development. The Post-it Note was finally launched in1980 and was an instant success. There are now more than 1,000 varieties of it on the market and together, they generate hundreds of millions of dollars in annual sales. After a 40-year career at 3M, Fry retired. “If we discover something, we have a chance to stop and look at it. This is very important because lots of things are discovered and passed by because everybody’s too busy.”
These brief comments of mine by no means do full justice to the mini-profiles that Ross and Holland provide. However, I hope they encourage those who read this review to obtain a copy. Yes, it is highly informative but also consistently entertaining. I also highly recommend Daniel Gross’s Forbes Greatest Business Stories of All Time. Don’t let its publication date (1997) fool you. Once a great business story, always a great business story. There are 20 of them in this volume (including those briefly discussed) and the paperbound edition costs only $13.06.