Lessons From Entrepreneurs “When Selling Out Isn’t a Bad Thing.”
Karl R. LaPan President & CEO, The NIIC
Philo T. Farnsworth, the Fort Wayne inventor of the what we now know as the television, faced the balancing act that many entrepreneurs find themselves negotiating as they become successful. At what point do you sacrifice your dream for the sake of profit? At what point does it become “selling out?”
Farnsworth was a consummate inventor, refining his system for years before bringing it to market. He continuously struggled to find a balance between scientific experimentation and delivering the goods, so to speak. This is often a tug of war for innovators – balancing the novelty and energy of having countless ideas and the reality that less than 1 percent of all U.S. patents actually get commercialized.
Tensions were particularly high in 1938, when investors began “to press for ending the experimental phase and getting into commercial production.” After rejecting the initial offer, Farnsworth agreed to a $10 million deal with RCA. This company was ultimately able to market and sell the first electronic televisions to a consumer audience. Following this move, Farnsworth sold his company but continued to conduct experiments involving radar, the infrared telescope and nuclear fusion. He really was someone who enjoyed innovation for the sake of innovation. Still, without RCA’s backing, it could have been years before TV was introduced as a household appliance.
Facebook founder Mark Zuckerberg walked a similar line. Zuckerberg valued the free flow of information, and he saw Facebook as a democratizer. For this reason, he had turned down early offers from investors, like Peter Thiel.
In a 2007 interview, he explained “It’s not because of the amount of money. For me and my colleagues, the most important thing is that we create an open information flow for people. Having media corporations owned by conglomerates is just not an attractive idea to me.”
Despite this aversion, Zuckerberg changed the course of Facebook with the IPO announcement.
May 18, 2012. This was the biggest in technology at the time and one of the biggest in Internet history. In March 2017, the company briefly surpassed Amazon.com by market capitalization. Not bad for a company started in someone’s dorm room.
The lessons here? Often founders are hesitant about handing over the reins to others for various reasons. Founding and owning your own business is a very personal thing, after all. Still, outside investors often have the cash, marketing expertise and distribution networks entrepreneurs don’t have. Imagine how different the world would be if your favorite brands didn’t have financial backing or a big company’s distribution capabilities.
Investment can be a difference maker when it comes to accelerating your venture’s growth. Look no further than The NIIC for guidance. Sourcing capital or focusing on your customer are important first steps in bringing your idea to the marketplace. Access to capital is one of the four pillars of entrepreneurial excellence that the NIIC believes any entrepreneurial venture must focus on in building their venture. Our financial expertise and connections are wide-ranging and applicable to all promising ventures; but not all ventures are investable. Come talk to a NIIC coach and learn more about how to take the next steps so that your passion and dream doesn’t just sit on a shelf. Imagine life without the television. Or worse yet, imagine life with someone else’s television getting to market before your television does.
Let’s talk, give us a call at (260) 407-NIIC (6442). Dream Big. Get Real @ The NIIC.