A Little Publishing Story
In 1924, two young fellows pooled their $4,000 in savings and rented a one-room office at 37 West 57th Street in New York. They wanted to publish books. But with no authors in their stable, their future looked bleak. Their phone rang only when someone dialed a wrong number. They decided they must dream up their own book ideas, and started to write ideas on index cards. Finally they picked one of their ideas – the creation of an inexpensive crossword puzzle book. They asked others about the idea, and nearly everyone told them they were crazy. The leading distributor of books thought so little of the idea that he told them, “If you must publish it, keep your name off it, or you’re dead in the publishing business.” Publishing such an insignificant title was sure to lead to a permanently scarred reputation in literary circles.
But in the next ten years, Richard Simon and Lincoln Schuster sold 1,500,000 crossword puzzle books. Would you have listened to the experts or would you, like Simon and Schuster, have plowed ahead?
A Big Entertaining Story
Walt Disney was tired of taking his daughters to shabby amusement parks. For years, he dreamed of opening a nicer, cleaner park for families. But it was only a dream.
Elsewhere, in 1948, the government decided that it was wrong for the big movie studios to control most of America’s theatres. So Paramount, Fox, and Warner had to sell their extensive theatre chains. Paramount, with the largest chain, created a new company, United Paramount Theatres. One of Paramount’s smart young lawyers, Leonard Goldenson, left the studio company to run the theatre chain.
But Goldenson thought the future was in television as well as film. This was not a common belief in the entertainment business, and most movie people were downright hostile to the new medium: Jack Warner banned televisions from appearing or being mentioned in Warner movies. As badly as Goldenson wanted into television, there seemed to be no way in. The two dominant networks, CBS and NBC, had tied up all the good local affiliates – 60 stations each. Only the struggling ABC, with just nine affiliates, was available, and no one really wanted it. At least not at the $25 million price that Life-Savers founder Ed Noble wanted for it. Goldenson went to his board for approval to pay the $25 million. They balked at the idea of buying an also-ran network. In the end, Goldenson finally convinced the board, and United Paramount took over ABC.
By the early 50s, ABC had survived, but it was still an also-ran. Enter Walt Disney. He needed the money to build his dream amusement park, but no banker would hear of it. They could only picture those shabby amusement parks that Walt so despised. So he went to the television powerhouses, offering to provide television programming and access to his library of classic films, if they’d help him finance his dream.
Sarnoff, the technological pioneer at NBC, said No. Paley, the programming wizard at CBS, took longer, but also said No. That left only Goldenson, the also-ran, the guy without the deep pockets of the other two networks. But Walt had to keep trying if he was to make his dream become real.
In the final event, Goldenson became convinced that Disneyland made sense. He extracted an arm and a leg from Disney to help get the financing – a weekly TV show, access to the film library, and all the profits from the food sold at Disneyland for ten years. Now Goldenson’s only problem was getting his hands on the $15 million to build Disneyland.
Enter our third character, Goldenson’s business acquaintance Karl Hoblitzelle. Hoblitzelle had started as an administrative assistant at the St. Louis World’s Fair of 1904. After the fair, he heard there might be a need for more vaudeville in the Southwest, and headed to Texas. There he built a chain of vaudeville – and later movie – theatres, including the nation’s first “atmospheric” theatre, the Majestic in Houston, and the now-restored Paramount in Austin. But Hoblitzelle was a man of broader vision than many old vaudevilleans. He had wisely invested in his neighbors’ burgeoning businesses – producing and selling a commodity called oil. And he had become Chairman of the Board of Dallas’s powerful Republic Bank. Who do you think lent Disney the money for Disneyland? Hoblitzelle’s Republic Bank. Who guaranteed the loan? Goldenson’s United Paramount-ABC.
Two struggling entrepreneurial leaders, Leonard Goldenson and Walt Disney, were able to find each other, take a chance on each other, and draw in an older businessman with vision, Karl Hoblitzelle. These were independent men acting freely in pursuit of their dreams. Without their visionary acts, today there probably would be no ABC, there would be no Disneyland or Disney World. If you had been Goldenson, could you have convinced your board to buy ABC? If you had been Disney, would you have had the fortitude to keep going after being turned down by industry leaders? Perhaps most important, if you had been theatre-owner Hoblitzelle, would you have had the foresight to take a flyer on your friends’ oil businesses – and then, later, on the nascent theme-park industry?
In all of these stories, what parallels can you find in your industry or enterprise?
Learning More About Business History
For understanding business history over the long pull – from 3500 BC to Yahoo, I like Foundations of Corporate Empire: Is History Repeating Itself? by Karl Moore and David Lewis. In Worldly Goods: A New History of the Renaissance, Lisa Jardine tells how trade and commerce led the way for art and thought. Produced in conjunction with a PBS series, Money & Power: The History of Business by Howard Means covers everyone from the Medici to Bill Gates. You cannot beat reading old business periodicals for providing new insights, especially Fortune and Forbes. For some great general business histories and books on specific companies and industries, here is a starter list. Additional titles are recommended later in the book, in the sections on technology and specific industries. For more business history sources, see our website at www.hooversvision.com. The senior statesman of business historians, Alfred D. Chandler, focuses on the history of management and organization in such classics as The Visible Hand: The Managerial Revolution in American Business and Scale and Scope: The Dynamics of Industrial Capitalism. Other favorite business history books include Brand New: How Entrepreneurs Earned Consumers’ Trust from Wedgwood to Dell by Nancy F. Koehn, Masters of Enterprise: Giants of American Business from John Jacob Astor and J. P. Morgan to Bill Gates and Oprah Winfrey by H. W. Brands (which includes a lot of my favorite business people, such as Sarnoff and Disney), and The History of Black Business in America: Capitalism, Race, Entrepreneurship by Juliet E. K. Walker. The best overall business history surveys are two college texts with identical titles, A History of American Business by C. Joseph Pusateri and A History of American Business by Keith L. Bryant, Jr., and Henry C. Dethloff. The Pusateri book is organized chronologically and includes reviews of major academic theses of business history (like those of Chandler), while the Bryant and Dethloff book is organized by industry and talks more about specific companies.
Histories of Specific Companies and Industries
Perhaps the best business book everis My Years with General Motors by Alfred P. Sloan, Jr. – how enthusiasm and common sense took over an industry and revolutionized management practice, by the man who did it. My favorite book on Disney is The Magic Kingdom: Walt Disney and the American Way of Life by Steven Watts. Sony: The Private Life by John Nathan is a story as amazing as that of any US business. One of my favorite business autobiographies is Be My Guest by Conrad Hilton. Also recommended are Wall Street: A History by Charles R. Geisst, A Nation of Steel: The Making of Modern America 1865-1925 by Thomas J. Misa, and The Hollywood Studio System by Douglas Gomery. The railroad industry probably has more lessons to teach us than any other industry – it was America’s first big industry, a pioneer in everything from investment bubbles to technology application. It proceeded to become a mature industry, then a near-dead one, then reborn. It has “seen it all.” So much to be learned. The best place to start is with American Railroads and The Routledge Historical Atlas of the American Railroads by John F. Stover. And the story of an enterprise, a construction project, and a man: The Baldwin Locomotive Works, 1831-1915: A Study in American Industrial Practice by John K. Brown; Nothing Like It in the World: The Men Who Built the Transcontinental Railroad by Stephen E. Ambrose (a master historian tells what is probably the single most dramatic story in the annals of the American railroads); and The Life and Legend of E. H. Harriman by Maury Klein (in a field full of dreamers, Harriman stood above the crowd).