What Perot learned about entrepreneurship
H. Ross Perot: His Lessons For Entrepreneurs
But of course, as for his career, he would be best known for his run for the 1992 presidential election. He got 19% of the vote, which was the most successful performance as a third-party candidate since Teddy Roosevelt’s run in 1912.
Yet before his foray into politics, he had been a highly successful entrepreneur. Keep in mind that he was the first tech billionaire, having achieved this milestone in the early 1970s before Bill Gates and Steve Jobs launched the PC revolution.
Now Perot didn’t start his business out of his garage. Rather he got his tech chops while working for IBM during the 1950s. The timing was certainly spot-on as the computer industry was accelerating – and Big Blue was the dominant player.
The experience was transformative for Perot. He wanted to learn everything he could about technology but also spent lots of time networking. As a result, Perot quickly became one of IBM’s top salesmen, having hit his quota during the first month of 1962. Yet the company really did not recognize his accomplishments.
What gave him inspiration was reading about Henry David Thoreau’s “Walden. One quote stood out: “The mass of men lead lives of quiet desperation.”
So on his birthday – June 27th, 1962 – he started his own company, Electronic Data Systems (EDS). The initial capital was $1,000. And yes, it would be one of the best investments ever. In 1984, Perot would sell EDS to GM for a cool $2.5 billion.
It was an incredible journey and chockful of lessons. Here are just a few:
Have A Clear Vision: Through his experiences at IBM, he realized there were major pain points with customers. They would spend huge amounts on computers but not have the internal resources to use them properly. This often led to lackluster performance, losses and delays.
Perot thought there was a better way. EDS would essentially mange the computer processing for companies and for this, would get lucrative long-term contracts. It was a classic win-win. The irony is that Perot pitched this idea to IBM but the company saw the market as a meaningless niche.
But Perot was convinced that there was a large market. Although, in the early days, it was tough convincing customers of his vision. Why trust tiny EDS with their strategic technology assets? Consider that Perot got rejected 77 times before he was able to land his first contract.
But eventually the momentum would build. After 1964, EDS would more than double revenues every year through the rest of the decade.
Commitment To The Team: It’s true that some of Perot’s policies were questionable (at least by today’s standards). He had strict requirements for women skirts and prohibited men from having beards.
But there was little doubt that he had deep respect for his employees. After all, during the late 1970s, he put together a commando team – which included executives — to rescue EDS employees from Iran (the amazing story is chronicled in Ken Follett’s book, On Wings of Eagles: The Inspiring True Story of One Man’s Patriotic Spirit–and His Heroic Mission to Save His Countrymen).
Trend-Watching: Perot was hyper-aware of emerging inflection points in business and society. This ability not only allowed for robust growth for EDS but helped align his team on what was important. For example, while Perot was skeptical of big government, he did not allow this belief to get in the way of recognizing opportunities, such as when Lyndon Baines Johnson launched the “Great Society.” Perot knew this would be a boon for technology outsourcing. So he struck major contracts for the massive Medicare program. Ironically Perot would sometimes be referred to as America’s first welfare billionaire.
Clear Communication: Perot knew how to explain complex subjects (just imagine how tough it was during the 1950s and 1960s to talk to customers about computers). He liked to say that a puzzle should have only one piece. But Perot also would add a good dose of common sense and humor.
And some of his quotes are gems:
“Business is not just doing deals; business is having great products, doing great engineering, and providing tremendous service to customers. Finally, business is a cobweb of human relationships.”
“Spend a lot of time talking to customers face to face. You’d be amazed how many companies don’t listen to their customers.”
“Life is never more fun than when you’re the underdog competing against the giants.”
“If someone as blessed as I am is not willing to clean out the barn, who will?”
Tom (@ttaulli) is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction.