From Blues to Prosperity: The Entrepreneur Effect Commentary by Mark Loschiavo

In the midst of this recession entrepreneurs may be asking themselves what role they play in the recovery of the economy, or if they even have a place.

Adversity is a funny thing. Take for instance the pearl, which is the only gemstone produced by a living entity. The formation of a natural pearl begins when a foreign substance slips into the oyster between the mantle and the shell, which irritates the mantle. It’s kind of like the oyster getting a splinter. The oyster’s natural reaction is to cover up that irritant to protect itself. The mantle covers the irritant with layers of the same nacre substance that is used to create the shell. This eventually forms a pearl. And what we have is the creation of beauty from adversity, art from irritation. The pearl is a beautiful living reminder that from adversity can come something of great value.

There are untold examples of creativity, risk, innovation and opportunism thriving in times of adversity. To name just a few:

  • Italy under the House of Borgia was notorious for warfare, terror, murder and bloodshed but still produced Michelangelo, da Vinci and the Renaissance.
  • It was during a time when Spain was suffering from a severely distressed economy that Columbus set off to discover a quicker trading route to the East Indies, and discovered America.
  • During the Great Depression of the 1930s, IBM managed to grow while the rest of the U.S. economy floundered. IBM was among the first corporations to provide group life insurance, survivor benefits and paid vacations. While most businesses had shut down, IBM’s founder, Tom Watson, Sr., kept his workers busy producing new machines even while demand was slack. Thanks to the resulting large inventory of equipment, IBM was ready when the Social Security Act of 1935 brought the company a landmark government contract to maintain employment records for 26 million people. It was called “the biggest accounting operation of all time,” and it went so well that orders from other U.S. government departments quickly followed. In fact, IBM invested in an R&D lab in 1932, which became one of the finest in the world (IBM Archives).
  • The decade of the 70s brought with it Vietnam, Japanese imports, race riots, an Arab Israeli war and Watergate. During that same decade we experienced 11% inflation, interest rates as high as 14% and unemployment exceeded 9%. In the midst of all this adversity, advances in computing technology were paving the way for a revolution in the way information is handled and conveyed. At the same time the invention of transistors and integrated circuit boards along with innovations in manufacturing, miniaturization and plastics technology launched the electronic and digital revolution. Some examples of the inventions of the 1970s include: the Space Station, Email, Liquid Crystal Displays, the Microprocessor, Magnetic Resonance Imaging (MRI), the Ethernet, the Personal Computer, Gore-Tex and the Mobile Phone. If that is not enough, the 70s produced such a rich array of music that many of the bands and musicians from that decade are still in high demand thirty years later.
  • A little known start-up came on the scene in the midst of the deep recession of the 1980s. In fact, that little known startup, Microsoft, was about to celebrate its third anniversary when Black Monday hit in October of 1987, leaving us with the single largest drop in stock prices in our history.
  • Lest we forget the dot com bust, here are two examples of the kind of fatalities the industry experienced: Boo.com, an Internet retailer of fashion apparel, spent $188 million dollars in just 6 months. Boo.com eventually had to liquidate, and went bankrupt in May 2008. After spending $1.2 million for a 2000 Super Bowl commercial, Pets.com closed its doors in the same year, leaving 320 people unemployed. On the heals of the dot com bust the United States experienced the terrorist attacks of September 11, 2001, leaving the country and the economy paralyzed. In the midst of this adversity Google, eBay, Amazon.com, Priceline, Travelocity, Paypal, Yahoo and many others weathered the storm, only to emerge stronger.

Times of adversity often bring us back to the basics, requiring us to evaluate what constitutes real value. History shows us that inventors, innovators and entrepreneurs often introduce the best value during the most difficult times.  As the Roman poet, Horace so eloquently put it, “adversity reveals genius, prosperity conceals it.”

Music is one of the more compelling examples of value being the product of adversity. Some of the greatest songs come from the singer/songwriters response to tragedy or troubled times. Whether talking about the well-known African-American spiritual, Swing Low Sweet Chariot or Eric Clapton’s Tear in Heaven, these great songs were born of adversity.  In fact, there is an entire genre of music built around adversity. It’s called The Blues.

Joseph Machalis, 30-year faculty member of the Julliard School noted that the Blues is a native American musical and verse form—a blending of both traditions. The word ‘blue’ has been associated with feelings of sadness and depression since Elizabethan times. Washington Irving is credited with coining the term ‘the blues’ in 1807. In the 1800s the blues was associated with songs sung by African-Americans, expressing the extreme suffering they endured as slaves, and usually took the form of “field holler”. The field holler gave rise to spirituals and the blues in an attempt to express their profound despair.

Southern prisons also contributed significantly to the blues tradition through work songs, songs of death row, murder, prostitution, the warden, the hot sun and other hardships endured.

Although the blues can be traced back to the 1800s, some argue that the first blues song ever written down and published were in the early 1900s. Two of early 1900s pioneers were W.C. Handy, an African American cornet player and composer from Alabama, known as the “Father of Blues” and Hart Wand, a white violinist and publisher from Oklahoma. Handy composed and Hart published Memphis Blues, and St. Louis Blues in 1912 and 1914 respectively. Mamie Smith recorded the first vocal blues song, Crazy Blues in 1920.

Interestingly, the blues started to gain in popularity after the First World War when troops from all parts of the United States were exposed to it from Southern Whites. During the 1920s and 1930s the blues became a national craze, with blues singers like Bessie Smith and Billie Holiday. During that time it became a musical form more widely used by jazz musicians and blues singers.

During the thirties and forties the blues continued to spread northward with the migration of Southern blacks into Northern cities like Chicago and Detroit. Some of the more notable urban bluesmen of that time were Muddy Waters, John Lee Hooker, T-Bone Walker and B.B. King. It wasn’t until the early 1960s that white American and European musicians discovered the urban bluesmen, creating a proliferation of blues-based bands like the Rolling Stones, the Yardbirds, Cream, Canned Heat and Fleetwood Mac.

Since the sixties, several rock guitarists, such as Eric Clapton, Jimmy Page, Jimi Hendrix and Eddie Van Halen have used blues as a foundation for offshoot styles. The latest generation of blues players, including folks like Stevie Ray Vaughan, Robert Cray and Kenny Wayne Shepherd, has drawn a new generation of blues listeners.

Blues as a Parallel to Entrepreneurship

Starting with the lyrics, early blues frequently took the form of a loose narrative. The singer voiced his or her personal woes in a world of harsh reality.  Often an entrepreneur’s concept for a new product or idea takes the form of a loose narrative, where the entrepreneur is voicing his or her response to a problem or a need in a world of harsh reality.

Scholars characterize the early development of blues music as a move away from group performance to a more individualized style. They argue that the development of the blues is associated with the newly acquired freedom of the enslaved people.  Entrepreneurship often results from an individual wanting to break away from the corporate constraints of large companies, and express their newly acquired freedom from the institution.  In many ways entrepreneurship is the ultimate expression of individualism.

There are few characteristics common to all blues music because the genre took its form from the unique characteristics and styles of individual performers.   It is equally challenging to characterize entrepreneurs or entrepreneurial companies because of the unique characteristics and styles of individual entrepreneurs.  For decades researchers have tried to pin down or provide definitive characteristics of successful entrepreneurs. While many characteristics have been identified, they are in no way definitive, complete or common to all.

Some common characteristics found in much of the blues include:

Call and response—initially expressed in shouts. Now more likely seen in guitar riffs. Think B.B. King and Eric Clapton in the Album Driving with the King.  Likewise, the process of new venture creation is one of call and response. Common phrases to describe this in the entrepreneurial world include:

  • Build and test quickly and inexpensively
  • De-risk assumptions through the use of surveys, focus groups, etc.
  • Talk about, and get feedback from, as many people as possible during the concept and development stage of building the new venture.

Typically there is not significant accompaniment or sophisticated harmonies.  Likewise, the watchwords for most successful entrepreneurs and prospective investors include:

  • Keep it simple
  • Stayed focused
  • Don’t try to be all things to all people.

Typically unbounded by formality or any particular musical structure.  Entrepreneurial ventures thrive on informality and fluidity of structure to enhance agility, speed to market and optimum utilization of scarce resources.

©Mark P. Loschiavo

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