Saturday, March 05, 2011

This is an article my father wrote for a publication called Maryland Entrepreneur Quarterly. Its long but its good..that's what she said.

The Mobley Moment


The "nature" versus "nurture" argument is a long-standing one and is applicable to virtually every aspect of life. Was Michael Jordan born a great basketball player, or did he have to really work at it? Were Martin Luther King's oratory skills inherent, or did training as a Baptist minister develop this talent? Would Abraham Lincoln and Franklin Roosevelt been considered great presidents if they had not led the nation through great crises? Was that idiot in the next office born that way, or ... well, you get the point.

Discussions of "nature" versus "nurture" with regard to entrepreneurs rage in business and academic circles. Most definitions of entrepreneurs include concepts of innovation and risk. Indeed, entrepreneurs are often thought of as being wired differently than most people. This is the fundamental rationale used by those who espouse the belief that entrepreneurs are born, not made. I am a believer in that rationale and support the "nature" argument.

Clouding this "either-or" approach to the issue, however, is that whether or not one is an entrepreneur, ongoing success in business requires innovation, management of risk, training and continuous learning. An entrepreneur who operates impatiently and rejects assistance to become a better businessperson is setting the stage for debilitating failure. A businessperson who does not foster a culture of innovation and rejects risk likely suffers a similar fate.

Continuous training and vision are particularly important for the entrepreneur who has created a successful enterprise. As revenues, profits and market share soar, business leaders often take their eyes off the ball in terms of customers, markets and innovation.

A colleague of mine noted that confidence can be defined as "arrogance under control." With the aforementioned entrepreneurs and business leaders, what was once confidence devolved into arrogance, often to the detriment of the future of the business.

An example of a once-innovative entrepreneur who misread future trends was Ken Olsen, co-founder of Digital Equipment Corporation, commonly known as DEC (full disclosure: I was offered two jobs by DEC in the late 1980s, but turned them down). Olsen, who died in February 2011, founded DEC in 1957 and is considered a pioneer and an icon in the computer industry.

DEC's success was in creating minicomputers used by scientists, engineers and other math-oriented professionals who did not require the huge mainframes used by large corporations. During its peak in the 1980s, DEC was the second largest computer maker behind IBM and employed 120,000 people. In 1986, Fortune magazine called Olsen "America's most successful entrepreneur." By 1992, DEC sales were $14 billion.

But, all too often, success leads to complacency and confidence becomes arrogance. In 1977 Ken Olsen made a prediction that spoke to that arrogance, foretold the demise of his career and his company and, regardless of all of his innovation and historic achievements, became his legacy.

Olsen famously said: "There is no reason for any individual to have a computer in their home." Well, alrighty, then! I guess we can safely say that he whiffed on that pitch.

By the early 1990s, DEC's fortunes began to decline with the advent of personal computers and desktop workstations. The company had its first quarterly loss in 1990 and, shortly thereafter, Olsen cut staffing at the company. DEC also continued its focus on proprietary technology as opposed to open systems using Intel microprocessors and UNIX software.

Olsen simply and tragically missed what was a predictable direction of the market. As a computer user early in my career, I chafed at having to sign up for computer time and go to a special computer room to perform my analysis. I longed for the convenience of having a computer in my office and/or at my home. The opportunity was there for all to see.

In 1992, Olsen left DEC at the request of the board. After several unsuccessful attempts to regain market share, DEC was acquired by Compaq Computer in 1998. Hewlett-Packard acquired Compaq and what remained of DEC in 2002.

Ken Olsen is still revered and considered a precursor to Bill Gates of Microsoft and Steve Jobs of Apple. Ironically, Gates and his Microsoft co-founder Paul Allen, used a DEC computer to create the first version of the BASIC programming language for the personal computer. Further, Dave Cutler, a former DEC employee, developed the Windows NT and Azure operating systems for Microsoft.

My entrepreneurship students at Howard Community College have never heard of DEC or Ken Olsen. Bill Gates and Steve Jobs are their godfathers of the modern computer industry.

This is akin to not understanding that before Michael Jordan, there were Julius Erving, Connie Hawkins and Elgin Baylor; that before Martin Luther King, there was Frederick Douglass; that before Abraham Lincoln and Franklin Roosevelt, there were leaders all over the world who, throughout history, held their nations together in the face of seemingly insurmountable odds. History can be cruel, and one's legacy is often beyond one's control. Ken Olsen deserved better, but the market overruled him.

Upon further review, perhaps the "nature" versus "nurture" argument vis-ˆ-vis entrepreneurs is not particularly relevant. If the ultimate goal is to create a viable, profitable going concern, then every little bit helps.

Gap analysis is the order of the day. Creativity, innovation and risk management are requirements. Continued focus on customers and markets is an absolute necessity. Upgrading one's skills is part of the success formula. Whether made or born, entrepreneur or business leader, the formula for a profitable going concern is the same: You need to do it all.

Michael Mobley is executive director of j-ref (, a small business financier that provides loans and consultation services to Howard County entrepreneurs. He also teaches a course on entrepreneurship at Howard Community College. He may be reached at 410-313-6170 or


maxwellsmusze said...

"Was that idiot in the next office born that way, or ... well, you get the point". Yep - that's definitely your dad!

Also, I didn't know any of that about Ken Olsen. Interesting.

rashad said...

I didn't know Ken Olsen either, but his arrogance reminds me of me of the folks who run newspapers, and were too arrogant to embrace the internet. they were basically put out of businesss too