But then even after all of this, he believed in a curious genetic predisposition to success. “There are some people who are constant winners in the game of life; from junior high school to high school and college, there are certain people who just have a knack for making things work in good times and bad times.” It was a version of Napoleon’s preference for a lucky general over a good one. They were the “talented tenth” who made the world run. For them, life’s challenges just toppled at the slightest touch. For others, it was one damn thing after another. Sitting atop his pile, with his wood sprite’s grin, Schwarzman left no doubt about what he saw in the mirror each morning. Life was a game of winners and losers. And there, staring back, was one humongous winner. Why wouldn’t we all want to be like Steve?
A few weeks into the second semester, Bo and I decided we had had enough of talking about businesses. It was time to set one up. We were studying entrepreneurship in a class called The Entrepreneurial Manager, taught by Paul Gompers, a career academic, expert on venture capital, and former world-class marathon runner. He burst into our classroom on the first day wearing a striped shirt and black velvet jacket, a break from the corporate uniforms worn by the rest of the faculty. His eyes bulged and his voice exploded off the walls of Aldrich 7 as if to say, “Enough theory. Let’s get down to the real stuff: starting your own business.”
The HBS definition of entrepreneurship was “the relentless pursuit of opportunity beyond resources currently controlled.” Our first case was a zinger. It was about an HBS alumnus called Bob Reiss who had made a small fortune from a Trivial Pursuit-style game based on
TV Guide.
Reiss had spotted the growing popularity of Trivial Pursuit and in less than a year had struck a deal with
TV Guide
to create a game using television questions. He designed, packaged, and manufactured his game and put it onto shelves in time for Christmas, when it sold extremely well. His story was one of seizing an opportunity, gathering resources, and deploying them. He knew the right people to finance him and help create and sell the game. It was breathtaking stuff and a change from all the stodgy corporations. By the end of the class, the entire section felt high on entrepreneurship.
As the course evolved, however, it became bogged down in frameworks and decision matrices. We were taught ways to analyze an opportunity and the different financing possibilities. We were taught to organize our thinking according to POCD, people, opportunity, context, deal. We examined the different skills necessary for starting a business and then managing it for growth. The importance of always having enough cash was beaten into us using the mantra of William Sahlman, HBS’s venture financing guru: “More cash preferred to less cash. Cash sooner preferred to cash later. Certain cash preferred to risky cash. Never run out of cash.” At the end of the course, Gompers presented us with two quotations, the first from Einstein: “One should guard against preaching to young people success in the customary form as the main aim in life. The most important motive for work in school and in life is pleasure in work, pleasure in its result, and the knowledge of the value to the rest of the community.” The second was from Gandhi: “Live as if you were to die tomorrow. Learn as if you were to live forever.”
This was all well and good, but what the course lacked was a discussion of what seemed to be the most important question for anyone undertaking his own venture: Do you have the stomach for it? It was easy to start something, but were you ready for that wet Wednesday afternoon eighteen months into the plan when customers were still scarce, your investors were losing faith, and you were running up credit card debt to pay your staff? Max, a German student, was one of the few in the class who had raw experience like this, having set up a successful financial data firm in Germany. He complained that sitting through each session of The Entrepreneurial Manager was “like hearing virgins talking about sex.” He received the lowest possible grade for the course, which told you all you needed to know about the futility of HBS grading.
Bo and I decided we should try setting up a media business. We envisioned a monster, a vast, world-spanning empire to make Rupert Murdoch feel like a pipsqueak. Disney, Viacom, even Microsoft would slither like blind, formless amoeba in the gloom cast by our shadow. If it went really well, Bo would be able to record an album of big ol’ Georgia boy rap, and we would release it around the world. Japanese teenagers would spend their nights doing the Bo, in which you lean backward as if you were seven feet tall and rest your hand on the steering wheel of an imaginary Chevy Tahoe. My role in this project would be that of muse and occasional Svengali.
But first things first. What would our offices look like? Bo wanted something like an airport hangar. He would sit at a desk surrounded by computer screens, a sort of mission control. There would have to be a basketball court nearby. A personal chef would cook whatever Bo wanted, whenever he wanted. And he would spend a great deal of time on the company jet following his basketball team around the country and cutting deals.
I wanted something more like a Persian rug dealer’s lair. A small, quiet room with a window overlooking a leafy courtyard. The sound of water in a fountain. A wooden desk with an old-fashioned black telephone and no computer. The only other item allowed on this desk would be the single sheet of paper listing my activities for the day. There would be two leather armchairs for guests. Outside, an extraordinarily competent secretary would control access to my inner sanctum and produce the most delicious coffee. “I do apologize, Monsieur le President, but Mr. Delves Broughton is busy. He would, however, be delighted if you could join him for lunch two weeks from tomorrow. Would that be acceptable? Wonderful. We shall have the
tête de veau
prepared just how you like it.”
On a side table by the window, there might be a bowl of quinces to scent the air. Behind a hidden panel in one wall would be a television set, so that I could watch European soccer matches with my lawyer, an old and trusted friend, whose modest and affable manner meant he was always fatally underestimated by our rivals. In a series of outer offices encircling the courtyard, a team of brilliant and loyal minions would manage the minutiae of my affairs.
Bo and I would sketch out the outlines of our peculiar senior management structure each morning over breakfast in Spangler. Neither of our study groups had survived into the second semester, so we had the time. Most mornings at the table beside us, three elegant Asian women who looked like they had stepped straight from a Shanghai luxury boutique fired up their laptops and prepared for class. They spoke in Chinese at what sounded like a ferocious pace and their palpable ambition goaded us on.
Now all we needed was an idea. It came bubbling up from the frontiers of what came to be known as Web 2.0. In late 2004, a group of journalists and technologists at the Berkman Center for the Internet and Society, a curious little association housed in a Victorian building on the edge of Harvard Law School, were playing around, distributing self-made audio recordings online. They called the new medium podcasting. The principle was that any individual could make an audio recording, post it online, and distribute it for free. To me, at that time, it seemed astonishing. Blogging was already well established, but the creators of YouTube were only just starting work in San Bruno, California. Their product was still months away. Between text and video blogging, there seemed to be a window.
I tried to think about the idea using what I had learned in twenty weeks at business school. I began with the consumer. Everywhere on campus, students wandered around with that iPod glaze. Might they not like something else to listen to? Something not sold on iTunes and not provided on any radio station? I asked everyone I knew, what else would you like to have available on iTunes? News? Entertainment? Stories? Audiobooks? Lots of people said they would like to have a thorough news program, such as
The Wall Street Journal
, in audio form, which they could listen to while working out. Others said they would like to hear great lectures or talks they had missed on campus. They wanted to hear businesspeople discussing their greatest deals or surgeons explaining operations. There was no limit to the kind and length of content conceivable in a podcast. You could have anything from a thirty-second poem to a three-hour roundtable discussion.
I thought of my journalist friends. One of the main frustrations of working for a newspaper is the limiting nature of paper and ink. You could kill yourself on a story only for a bomb to go off at 7:00 P.M. right on deadline, and see it shrunk by half to make way for the breaking news. There was also the issue of meddling editors extracting your best lines or most interesting quotes so that your piece could fit in a box hemmed in by advertisements for washing machines. Every journalist I knew had far more material in their notebooks than they could ever get into print. Podcasting seemed like the ideal outlet. It would be easier, after all, just to spin your thoughts straight into a microphone than into more words for a blog.
Bo started riffing about doctors and medical students. They had so little time and yet so much to learn, they would love the idea of receiving information through their iPods. Maybe we could persuade some leading surgeons to spend ten minutes each week talking through a procedure. These people were unlikely to have time to write a blog. But if you made it easy enough for them—perhaps they could make their recording while driving home—they could just talk. The same with lawyers; we could get them to talk about cases, offer advice.
Our idea was starting to take shape. We would create a website that would be a supermarket of audio content. Users could come and find a favorite journalist or a renowned surgeon and download an audio file. We would try to get them to subscribe and download audio files every week— and pay for them. We would then pass on a piece of the revenue to the creators to keep them interested. Our role in this would be to sign up the speakers, help them create recordings, and then manage and market the website. Bo created a spreadsheet outlining our revenue and cost forecasts for the next two years. We were going to be rich!
HBS was a wonderful place to get this thing going. Everyone seemed keen to help. We had lunch with a section mate who used to work in the strategy department at Disney. He warned us about the difficulty of building a content brand. Another, who had worked at Yahoo!, advised us on our website layout and functionality. Finally we created a ninety-second pitch, which we recorded onto Bo’s iPod. We took turns speaking and even had a cool soundtrack going in the background. Feeling pretty good about it, we asked for an appointment with Gompers. “This week’s crazy, but I have fifteen minutes available in ten days’ time,” his assistant said. This was absolutely normal at HBS. Everyone was always “crazy.” Nine times out of ten, if you asked to meet someone, student or faculty, they always said “things are crazy right now, but . . .” The few who said “great, whenever you’d like” were that much more precious.
So, ten days later, Bo and I turned up to see Gompers in his office in Morgan. He kept us waiting for ten minutes. When he finally waved us in, we set up the iPod and played him our pitch. He fidgeted in his seat for the entire ninety seconds. When the recording was finished, we asked him what he thought. He rambled awhile, sounding unenthusiastic. We asked him how we might find financing. He suggested we bootstrap the business as far as we could. He said that he could not see the potential. We tried asking him a couple more questions, but he excused himself, saying he had a doctoral class to attend. We had received maybe seven minutes of his time, and he could not have been less encouraging. We left cursing his name.
“What the fuck,” I said to Bo back in his colossal SUV. “You’d think the entrepreneurship professor might be a little more enthusiastic about his students trying a little entrepreneurship.”
“Yeah,” Bo said, “but do you think if he were a real entrepreneur, he’d have been a professor all his life?”
“But even if our idea sucks, you might expect him to encourage us a little. Say, ‘Good for you for trying to do something.’ ” I then descended into a minute or two of violent cursing. Bo seemed to enjoy my Anglicized versions of familiar American swear words, and soon we were vowing one day to prove Gompers wrong.
Next we turned to the anti-Gompers. Rodger had been a part of our section for just a few weeks of the first semester, until he dropped out to run his business and take care of his ailing mother. He was an entrepreneur to his fingertips. I had never met anyone like him, someone so obviously jazzed by the idea of setting up a business. He did not dwell on the difficulties or sacrifices, the financial hardship or personal commitment. He looked at potential, the creation of something new and vital, and he wanted in. As far as he was concerned, there was no other business life worth living besides that of the start-up entrepreneur. Rodger was the same as age as me, but he had already set up and sold one technology business and was on to his second, a cell phone service for students. He had received funding from Bain Capital, one of the most prestigious venture capital firms. VC firms tend to invest in people more than ideas, so Bain’s involvement was a vote of confidence in Rodger’s ability to make things happen. The moment Rodger heard what Bo and I were up to, he swung into action. “I’ll introduce you to some VCs,” he said. “They’ll love it.”
“But we’re just getting this going.”
“Just meet these guys. They’ll be looking at you anyway more than the idea. If there’s anything you can’t answer now, just say TBD.”
“TBD?”
“To be decided.”
Before I could make any further objections, my in-box began to swell with advice and online introductions orchestrated by Rodger. Within a week, we had meetings arranged with three of Boston’s most prominent venture capital firms and one in Silicon Valley. It was almost too easy.