Entrepreneurs: The Value of Ideas

A group of aspiring Johnnie entrepreneurs packed a forum during Homecoming 2012 in Annapolis to talk with three visionary alumni: Harold Hughes (A84), senior managing director at Alliance Bernstein, an investment management company, and Board of Visitors and Governors member; Jac Holzman (Class of 1952), record executive and founder of Elektra Records; and Dominic Crapuchettes (A97),founder and co-president of North Star Games. They share their insights with The College alumni magazine.

What are the skills and qualities needed to be a successful entrepreneur?

HH: You need to be relentless and willing to take calculated risks. We often read stories about entrepreneurs who took ridiculously stupid risks [that] somehow work out well. What we don’t hear about are [endeavors] that failed. Resiliency, a strong set of analytical skills, and the ability to take calculated risks are so important.

JH: Most important for me is understanding what commitment is and making it – not only to a project, but also to every minute aspect of an idea. In the early ’70s, for example, I was given a finished tape of the band Queen’s first album to demonstrate a London studio’s [capabilities]. The band was going to sign a deal with Columbia [Records], but they had only committed verbally. I pursued them relentlessly for three and a half months, waiting for Columbia to drop the ball. Ultimately, I was able to swoop in and sign Queen to Elektra. To be a successful entrepreneur, you need to have a strong belief in yourself. Part of commitment is saying, “I’m going to pretend I’m right and see how it turns out.” It’s amazing what happens when the world understands that you are committed to something.

DC: Being a Johnnie, when considering an idea, I look to Plato and Aristotle and ask myself: What is the good? How am I serving the community? With any pursuit, it’s important to understand how to bring value to the community and determine efficient ways to do [it]. To be an entrepreneur requires commitment to an idea, [which] usually takes considerable time – sometimes 10 to 15 years – to come to fruition. Fundamental skills such as understanding finance, accounting, and marketing are also essential.

Is it necessary to have an MBA?

HH: Avoid the danger of being defined by a degree. I did not pursue postgraduate certification and instead used exactly what we learn at St. John’s – how to learn what we need to know from all available resources around us, including people, nature, and books, of course. Study every day, and study what you love to do. Your ideas define your value. Focus on the joy that making ideas work can give you. If you are taking risks and paying attention, your postgraduate curriculum creates itself for you. In the financial world, I tended to hop around and learn everything I could from many different areas of the financial services industry.

JH: I don’t think it’s vital, but it depends upon whether you’re going to start a company. Steve Jobs, for example, didn’t need an MBA. He just needed an idea. Starting from nothing [but an idea] is the best kind of entrepreneurship, though it can be dangerous, because the chances of somebody else having the same idea at the same time – and doing it better – are gigantic. I’ve learned that nothing is too ridiculous not to give it a shot. Spend some time on an idea to see how you feel about it. When I played a record for someone, it was [about] my feeling when I was playing it: Am I elated? Am I embarrassed by that track? How you feel about certain situations may tell you the truth more than your rational mind can.

DC: The MBA degree is probably not essential, but for me it was indispensible. When I was at St. John’s, I had no idea about things like marketing, development, or supply chain. When I was working on my master’s degree at [the Smith School of Business at] the University of Maryland, there was a big learning curve for me, which is probably true for a significant number of Johnnies. I learned how to run an operation by chartering a salmon-fishing boat in Alaska during the summer. From my experience [with North Star Games], I’ve found that having a good business partner and finding the right employees is crucial to building a company and developing successful ideas.

Why do Johnnies excel as entrepreneurs?

HH: In order to be a good entrepreneur, a person needs to have the ability to make decisions sometimes without having all the data. Johnnies have a strong set of analytical skills based on their deep understanding of truth and ethics, not just right and wrong, but the laws of nature. Business school offers one equation and one variable. Entrepreneurs need to make decisions using multiple variables. Johnnies are adept at making [such] decisions. I’ve been in my career for 29 years, but I know that in another 29 years, my job may not exist. I’ve trusted my decisions to stay [in a position] or move on.

JH: Listening is something Johnnies typically do quite well. It took me a long time to learn how to listen because I have so many ideas, but it has been so important to me. My St. John’s experience was the perfect incubator. I did a lot of listening [because my] class had a number of seasoned [World War II] veterans who had seen a lot of life. I’ll never forget the opening question at the first seminar: Do you think Achilles wanted to die to achieve immortality on the battlefield? One of the veterans started talking about [his experience at] war, and I learned to respect the real-life grounding they had. I had grown up [in New York City] in a protected environment, so for me, being a Johnnie was about shedding that environment and connecting with the world. Connecting with the world is the seed of our entrepreneurship. Sometimes the challenges and opportunities don’t lie forward; they lie backward. Maybe [we] missed something that [we] should have looked at more carefully.

DC: Johnnies probably make better entrepreneurs than they do business people. We are really good at learning how to solve problems and to work through them in order to determine a best course of action. Being able to discuss ideas and figure out solutions to problems is such a valuable life skill. For someone interested in a start-up venture, success is dependent on one’s ability to work well with other people. For example, my business partner and I partnered with a company that went bankrupt, and they owned the rights to all our games. I maxed out three credit cards to win back our inventory. That was a huge risk, but I felt I could declare bankruptcy and start over if I had to. Fortunately, sales went very well, and our leap of faith paid off.

What advice would you give to budding Johnnie entrepreneurs?

HH: At a time when so many people emphasize service to society, there is a feeling that making money is evidence of a lack of service. But that’s not always the case. While Frederick Smith was a student at Yale, he wrote a paper that became his business plan for Federal Express. He received a low grade on that paper, but he persevered and found something that serves society’s need.

JH: An important aspect of entrepreneurship is knowing when to let go. Follow your instincts. Trust yourself and don’t be afraid. Pursue an idea because you love it, and hope that others will see its value. You may inspire others to accomplish things. You never know how it’s going to turn out. [At the forum,] I was impressed by the student interest. The idea to put the plaque up between the two dorm rooms I had at St. John’s was great.

DC: I’m an advocate for finding your passion. In business, it may take three to five years to develop a brand and work out the kinks. If you lack passion for what you’re doing, you’ll run out of steam and likely give up. Focus on adding value to others. Any good business is serving the community, which Johnnies do well. Determine what the community needs, and provide value in the most efficient way possible.

--By Gregory Shook