In Memory of Ken Olsen

Ken Olsen, the cofounder of Digital Equipment Corp, died last week.

The story of Olsen and DEC formed the heart of my book Creative Capital. I’ve been meaning to get around to publishing a blog post explaining why Ken Olsen still matters.

In the meantime, here are some of the best links to obits and memorials of Olsen, who Fortune magazine in 1986 called “America’s Most Successful Entrepreneur.”

Ken Olsen, Who Built DEC Into a Power, Dies at 84 by Glenn Rifkin of The New York Times

Innovator’s Dilemma by Steve Syre of The Boston GLobe.

Remembering Ken Olsen by Paul Kedrosky of Bloomberg BusinessWeek

Remembering Ken Olsen by Bruce Richardson

Ken Olsen Memorial by John Furrier of Silicon Angle

Obit by IDG News Service

Obit by Chris Mellor of Channel Register

Memorial by Robert Lenzner of Forbes

Obit by Gregory T. Huang of Xconomy

Memorial by Gordon Bell on Xconomy

Deadly sins the tech industry can’t seem to shake by Bill Snyder of Infoworld

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I Am Alive! Doriot Round-up

It’s been awhile since I posted anything new on this blog. Sorry for that. I’ve been pretty swamped working at The Wall Street Journal since last April.

However, the story of Georges Doriot continues to resonate. Over the last 10 months, I have seen more than 100 Websites or blogs make reference to Doriot or feature him in a post. Here is a select list of those links:

* Fisher Investments profile of Doriot. Each week, it profiles an important figure in market history, highlighting the fascinating and often irreverent lives of key figures that influenced how capital markets came to be. (April 30, 2010)

* Finance and Business history of venture capital highlighting Doriot. (May 1, 2010)

* Creative Capital Makes Top Book List of Pittsburgh Ventures. Good synopsis of take-aways. (May, 5, 2010)

* Investing Principles of Doriot by Rocky Top MBA. (June 25, 2010)

* Great Comment on Doriot’s Belief in Importance of Manufacturing on ZDNet blog post. (July 7, 2010).

Georges Doriot Still Making News

Georges Doriot, the founding father of the venture capital industry and subject of my book Creative Capital, continues to pop up in the news. On Dec. 1, in the Financial Times, Luke Johnson, founder of the British private equity firm Risk Capital Partners, wrote an editorial, “A call to arms for ex-soldiers in business,” about the unique role that the military has played, and continues to play, in spurring innovation.

Johnson credits Doriot as the pioneer of the VC industry and for forming the “link between the military and venture capital.” As I argue in my book, Doriot learned how to become a VC during the war when he was in charge of research and development in the Quartermaster Corps of the U.S Army.

As further proof of his theory, Johnson mentions a new book, Start-up Nation, which explores the role that the Israeli military and social networks and leadership training provided by Israel’s mandatory military and reserve service has helped foster a vibrant entrepreneurial culture in the middle of the world’s most chaotic region. (At one point I considered calling my book Start-up Nation, too!)

For Doriot’s singular efforts, he was promoted to the high rank of brigadier general and was received the Distinguished Service Medal, the highest U.S. military medal given to a noncombatant, as well as being decorated a Commander of the British Empire and awarded the French Legion of Honor.

Also, the New England Journal of Technology recently ran an interview with Leo Beranek, a cofounder of BBN Technologies, a landmark technology company that was a leader in computer networking and communications. The interview was done by MassTLC chairman Steve O’Leary and Mass High Tech editor E. Douglas Banks. Beranek was presented with the Massachusetts Technology Leadership Council Commonwealth Award for lifetime achievement.

In the interview, Beranek is asked if he remembered Doriot. He replied:

“Venture capitalism really didn’t start until General Doriot came into the picture with the American Research and Development Corporation. But until then the banks were doing it. The banks were not taking any stock. They just lent you money, so they didn’t get to make any big profits from it.”

“Well, General Doriot was of course with the big venture capital firm, American Research and Development. He was very famous and very powerful because he was financing all these companies of which Digital Equipment is his most successful.”

And then he goes on to recount an amusing anecdote, which I never heard, about how Doriot threatened to sue BBN after they poached a star employee of one of the companies Doriot had invested in.

New Amazon Review: “Creative Capital is a Must Read If You’re In Business Today”

Check out a new customer review of Creative Capital, just published on Amazon.com.

Creative Capital is a Must Read If You’re In Business Today
By Carole Gunst “loves to read” (Boston, MA)

Spencer Ante has done a wonderful job writing the life story of General Georges Doriot, respected Harvard Business School professor, military general, and the father of venture capital. I had the good fortune to hear Spencer, who also writes on business for Business Week magazine, speak about Doriot’s story at the French Library in Boston before I started reading the book. His stories about the man who was so influential for U.S. business were fascinating. Here are a few of Doriot’s quotes that he pulled from the book to share with us:

* “A real courageous man is a man who does something when no one is watching him.”
* “If information is to be exchanged over whiskey, let us get rather than give it.”
* “You will get no where if you do not inspire people.”
* “Always remember that someone somewhere is making a product that wil make your product obsolete.”

From the stories about Doriot’s early introduction to entrepreneurship as the son of a Peugot engineer, to Doriot’s entry into Harvard Business School, to the importance he played with R&D during World War II which taught him how to become a venture capitalist to the part he played in the starting up of Digital Equipment Corporation, this book remains fascinating.

If you are in business today or would like to be, this is a must read from a great writer about a visionary business thinker. I think you’ll agree that Doriot really pioneered the transition of U.S. business to an economy built on entrepreneurship an innovation.

Wicked Cool Recap: Boston Book Tour Pics

Big ups to Boston. Thanks to the hospitality of the Boston French Library and the local office of the pr firm Financial Dynamics, I spent three days this week in Boston giving book talks to several groups.

Each talk was a lot of fun but the most special event happened on the evening of Thursday Sep. 24, the 110th anniversary of Georges Doriot’s birth, when I addressed about 40 friends and associates of Doriot in his old townhouse on Beacon Hill. Many thanks to Jim and Cathy Stone for hosting the event at the house, which they bought from Doriot’s estate soon after he passed away in 1987. As you will see from these photos, the house is a unique and sparkling gem.

Spencer Ante, Library Chairman Gerard Mouflett and Library Executive Director Catheline van den Branden

Guests mingling in the downstairs dining room

Jim Stone welcomes guests to his home in the second floor library

Spencer Ante giving a talk about Creative Capital

Guests listening to my talk. The Stones did not rearrange their furniture so the setting was very intimate.

The ARD Men: Francis Hughes, John Shane and James Morgan

VIew from second floor balcony overlooking the dining room

Digital Equipment’s first salesman, Ted Johnson, and current ARD head Francis Hughes

Doriot Quote of the Day

Here’s one that seems appropriate for Labor Day, which also applies to startups of course.

“Never go into venture capital if you want a peaceful life. Keep on financing concrete that doesn’t move, that doesn’t call you at 2am in the morning.”

New Amazon Customer Review – “Timely Story Brilliantly Told”

A new review was just posted to Amazon.com. Check it out. Thanks Chris!

5.0 out of 5 stars
Timely Story Brilliantly Told

September 3, 2009
By Chris Burbach (Phoenix, AZ)

I initially began reading Creative Capital to learn more about the origins and history of the venture capital industry and ultimately became enthralled with the incredible life story of General Doriot. His list of accomplishments is staggering to consider in terms of both scope and impact, but his approach to life was what stood out most. The persistence, care and dedication he demonstrated to the students he taught, his country, the country he adopted or the businesses he financed was truly inspiring. Spencer Ante does a brilliant job of telling his story and putting it into the historical context of the development of the venture capital industry.

Highly recommended to anyone with an interest in American history and is a must read for any student or practitioner of finance.

Doriot Quote of the Day

“Someone, somewhere, is making a product that will make your product obsolete.”

This is one of Doriot’s best quotes, not only because it preceded Andy Grove’s famous maxim, “Only the paranoid survive,” by several decades. It shows his passion for being the best and never becoming complacent.

Non-Manic Monday: Creative Capital Featured in WSJ Column

L. Gordon Crovitz, former publisher of the Wall Street Journal, featured my book Creative Capital in his “Information Age” column in today’s Wall Street Journal (p. A9)-calling it a “fascinating biography.”

It’s gratifying when your work gets recognized in such a respected publication. And it’s even more rewarding when readers and reviewers understand some of the big ideas that you were trying to get across in the book.

On that measure, Crovitz, totally got it. Crovitz focused his column on the government’s effort to more tightly regulate venture capital. The U.S. Treasury wants VC firms declared as systemic risks and put under tight restrictions as part of the broader re-regulation of financial firms, notes Crovitz.

In his column, Crovitz wrote that the history of American Research & Development, the venture capital firm that I profiled in the book, “is a reminder that our regulatory system, by its nature focused on avoiding risk, has a hard time dealing with investment firms whose mission is to take risks.”

To bolster his argument, he summarizes ARD’s history of run-ins with federal regulators, and quotes some of my favorite parts of the witty and wise personal memos of Georges Doriot, the visionary Harvard Business School professor who pioneered the venture capital industry as president of ARD in the 25 years after World War II.

The dangers of over-regulation is one of the primary discoveries and lessons of my research. Thanks to Crovitz for bringing that point to the attention of a much wider public.

What Arthur Rock Looked for in Entrepreneurs

Here’s a story published recently in Investor’s Business Daily about legendary investor Arthur Rock. One of the pioneers of the venture capital industry, Rock famously put together the deals to found Fairchild Semiconductor and Intel, two of the most important startups in the history of Silicon Valley. Rock later invested in Apple, capping off his incredibly successful career. The investment landed him on the cover of Time magazine, a story that I discuss at length in my book. In fact, Rock was a student of Georges Doriot at Harvard Business School.

Rock and Doriot actually had many things in common. They were both investment bankers who became successful venture capitalists. They both understood the importance of technology. And they both believed that people, more than ideas or markets, were the most important ingredient of success in a business venture. Doriot’s famous saying was, “I’ll take an Grade A individual with a B idea over a Grade B individual with an A idea.”

The writer Reinhardt Krause interviewed me for the profile and kindly included a quote from me in the story. It’s an interesting profile that tries to explain Rock’s investing philosophy. Among the most important traits Rock looked for in an entrepreneur? Intellectual honesty. Rock knew that a new business would face many challenges and that in order to succeed entrepreneurs needed to be honest about the state of their business. Or as Rock rhetorically asked: “Do they see things the way they are, and not they way they want them to be?”

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