Spirited enterprise: Secrets of entrepreneurial success

Each year, the Spirit of Enterprise Center at the W. P. Carey School of Business presents the Spirit of Enterprise Awards™ to companies that demonstrate ethics, energy and excellence in entrepreneurship. To mark the tenth year of the award, Knowledge@W. P. Carey interviewed a selection of winners from previous years to uncover some of the secrets of entrepreneurial success.

The most successful entrepreneurs invent and re-invent themselves as markets bloom and wither, according to Mary Lou Bessette, long-time director of the Spirit of Enterprise Center, a resource for small, emerging and family businesses based at the W. P. Carey School of Business. In fact, if you made a film version of a true entrepreneur's work history, it'd be closer to a soap opera — daytime drama — than a slick infomercial, with nightmarish dilemmas, dizzying turnarounds and heart-pounding moments of joy.

Along the way, the entrepreneur pitches groundbreaking ideas and loses key clients, lands career-making accounts and builds prototypes that fail, makes millions on an innovative widget, then sells the widget company and shoots off in another direction, convinced once again that this latest project is the best idea ever.

Evolutionary entrepreneurs

Marketing whiz John Ridgway of Malibu, California, is one of these "evolutionary entrepreneurs." His company, Novocom, Inc., was the Spirit of Enterprise Award™ winner in 1998 — the second year that the award was presented. Each year, the Spirit of Enterprise Center presents the Spirit of Enterprise Awards™ to companies that demonstrate ethics, energy and excellence in entrepreneurship.

As an undergrad studying photography at Arizona State University, Ridgway wheedled free office space out of school administrators, then used his student-union digs to start a design firm before graduating in 1975. During the next few years, Ridgway, now 54, segued from art director at an alternative newspaper to graphic designer at a television station, where he handled "everything from the station's on-air presence to the display case in the lobby."

While there, he began noodling around with an idea: why not apply print graphic design concepts to the broadcast environment, from promotional spots to the studio's physical layout? By 1981, Ridgway took his ideas to Paramount Pictures, where he helped launch the hugely successful show, Entertainment Tonight.

When he arrived in California, TV shows, including news and entertainment programs, had furniture and color schemes selected by movie-industry set designers, and little attention was paid to incorporating graphics used for promotional spots and the shows themselves. But using "visual icons," Ridgway wanted to coordinate everything from the show's opening jingle to the carpet color as a cohesive, instantly recognizable "brand."

After Entertainment Tonight's debut, he set his sights on becoming Paramount's design guru, but top execs didn't see a need for the position. So in a move he calls "innovation borne of necessity," Ridgway left his cushy corporate job in 1983 to start a broadcast-branding firm, now known as Novocom, Inc. His first client was Paramount. "People think entrepreneurs try to be difficult and contrary, that they're trying to prove something. But really, we just constantly believe there is a better way, that there is opportunity after opportunity out there, and that we can do it."

Since then, he's overhauled the Academy Awards, spiffed up NBC Nightly News, showcased the Olympic Games and won six national broadcast Emmy Awards. Meanwhile, branding has become an enormous business driver. Brandweek magazine recently released its annual list of the 100 most-valued brands in the world. While Coca-Cola and Microsoft are branding megastars, even the much-smaller MTV brand is worth an estimated $6.5 billion.

But like most entrepreneurs, Ridgway gets restless easily. He sold Novocom to a partner in 2000 and founded Via Worldwide, a Malibu, California-based, international video design/music branding company, then bought Novocom back from his partner last year; now the earlier company functions as Via Worldwide's broadcasting arm. Clients range from Cine 5 Sports in Turkey to ABC News in the U.S. to Fuji in Japan.

Many entrepreneurs, Ridgway included, mentor nascent business builders and donate generously to philanthropic projects. Ridgway teaches and guest lectures at colleges in the U.S. and Europe and has endowed university scholarships in Arizona and California. He and a business partner also paid for and produced election-campaign videos that helped then-Russian President Boris Yeltsin defeat his Communist opponent.

Ridgway says most entrepreneurs share two additional traits with him: stubbornness and a "complete, egotistical belief that I can create whatever needs to be created to solve a problem. Many see these solutions in their minds very clearly. I can see the pictures framed on the walls of the studio sets before I design them," he continued. But that same tenacity can make it hard to abandon a project that's gone south, Ridgway said.

For example, since 1996, he's been struggling to produce a "distance learning product that packages learning like we package broadcast news." He thought it would take a year to get it off the ground. Ten years later, it's still not viable. "When something doesn't work for me, I refuse to admit that it is a failure. I put it on a shelf and get back to it when I have an idea that will make it work," he explained.

Entrepreneurship in the blood

A multi-generational dose of that same "never say die" mentality has sustained the family business Adolfo and Kay Torrez started more than five decades ago. But Azteca Wedding Plaza of Phoenix, winner of the 2003 Spirit of Enterprise Family Business Award, isn't the first company founded by the entrepreneurial twosome, according to Gregory Torrez, their son, now president of Azteca. Originally, they ran a small restaurant and bar, along with a photography studio that evolved into a floral business. Then Adolfo started a furniture business, followed by a wedding business that's since grown into Azteca.

"My dad noticed that most bridal departments carried a small inventory of gowns, so he told my mom to buy a large inventory of several hundred gowns. It changed the industry, the way wedding gowns are sold," Torrez explained. Customers flocked to Azteca, which began offering more wedding-related products (tuxedos, flowers, invitations, accessories) and services (drycleaning, heirloom preparation) as time went on.

But once wedding-gown production shifted from the U.S. to lower-cost offshore factories in China and India during the late '80s and early '90s, competitors like David's Bridal, owned by the May Co., began importing 10,000 gowns at a time, he said. New challenges continue to emerge. Machines that automated the expensive hand-beading characteristic of the finest wedding gowns further reduced the retail price of Azteca's core product. And an increasing number of brides now surf the Internet for the best designer dress bargains.

It's not uncommon for a woman to spend two or three hours trying on gowns at Azteca with a sales representative, then go home and order the desired gown online. The upshot is that Azteca foots the bill for the bride's research but doesn't snag the sale. "Just like my parents had to create new ways of delivering a product or service, we are adapting, figuring out how to capture that market," Torrez noted. One area where offshore factories and big department stores fall short is the "personal, one-on-one touch that encourages customers to see our gowns as having greater value."

So Azteca employees are trained to facilitate an environment of "excited expectation" honoring the bride, congratulating the family and celebrating the wedding party members. At his sprawling store, Torrez said, shopping forays and gown fittings become part of the wedding pomp. "We capture the percentage of the marketplace that wants this environment, one bride at a time. It's a matter of building a relationship with a person who's walking on air with happiness, of assuring them that on this day of all days, they will be special," he added.

Exploit the niche

This ability to repeatedly zero in on and exploit a niche need is perhaps one of the most crucial entrepreneurial skills. Take Sitewire Marketspace Solutions of Tempe, winner of the Spirit of Enterprise 2005 Monster Entrepreneur ASU Alumni Award, for example. Co-founders Margie Traylor, 41, and Bret Giles, 42, offer online marketing to a well-defined segment of the business world: companies with a specific product or service and defined sales goals.

"Don't ask us to execute your idea. We are the agency to go to when you've already got a specific business or sales objective and are looking for an online marketing plan to get there. We'll get your from Point A to Point B," Giles explained. Golf course operator Sun Corp., which asked Sitewire to improve and expand its tee-time scheduling ability online, is a typical client, as is HireRight, a background-screening firm that seeks to attract corporate employers of a particular size. Like many other successful entrepreneurs, Giles and Traylor pick clients carefully, working only with those who share their values.

"We turn down business every month because it doesn't fit with us. For instance, we won't work with clients in pornography or gambling or illegal activities. We stay away from offshore companies and anything else we consider to be 'fringe' business," he said. Their commitment to ethical business decision making extends to hiring procedures. Job applicants must complete a "core-value" questionnaire that poses questions about real-life choices.

"We compare their value set to ours. Generally, the applicant with similar values is a much better fit for Sitewire," Giles said. Why this insistence on workplace virtue? Giles calls it a practical as well as spiritual issue, noting that "any time we have gone against our value set and personal belief system, it has always turned out to be a poor decision, business-wise as well as in other ways. The key is to celebrate growth without forgetting why you're in business in the first place."

Talking Points:

• This year the Spirit of Enterprise Center recognized five companies for "ethics, energy and excellence in entrepreneurship." The 2006 winners, announced Sept. 20, are AIR Marketing of Tempe; Complete Print Shop Inc. of Phoenix; Data Doctors Computer Services of Tempe; DLC Resources Inc. of Phoenix; and Grand Canyon Railway of Flagstaff.
• Creative energy propels many business builders to become "serial" entrepreneurs.
• The determination that helps entrepreneurs to succeed may also cause them to hang on too long to an idea that doesn't have a market.
• In an increasingly global, media-driven market, entrepreneurs find success when they tailor their business model to an unfulfilled, new or underserved niche.
• Thriving in a niche sometimes means turning down possible customers that do not fit the company's competencies.
• Hiring the right people is key — screen applicants to determine if they share your company's values.