May 8, 2006
Serial Entrepreneur Reveals the Art of Bootstrapping
By Laura Griffin

Gary Hoover has been described as the world’s most creative entrepreneur, not only for the business ideas he generates and pursues, but also for his methods and teachings. Hoover—whose April 19 talk was sponsored by the student organization Bootstrap—founded several successful businesses, including Bookstop and Hoover’s Inc. He is beginning work on a new project in the museum and non-profit industries.

Growing up in Anderson, Indiana—a town dominated by General Motors’ presence—Hoover found himself more interested in the history and workings of GM than in anything he was being taught in school. “I asked for a subscription to Fortune magazine as a 12-year-old, so this is now my 43rd year as a subscriber,” he said.

Hoover, who wrote the book, “Hoover’s Vision: Original Thinking for Business Success,” said he has always been obsessed with understanding enterprises and what separates the winners from the losers.

“From all my research, I’ve come up with a list of about eight things that I think are the keys to building a great enterprise, whether it be a very small one, or all the way up to a company the size of General Motors,” he said.

The following sections describe the eight characteristics Hoover believes are required of entrepreneurs to create a successful enterprise.

Sense of curiosity and looking for answers in unusual places.

While brainstorming ideas and planning for a retail store that would eventually become Bookstop, Hoover studied Toys R Us’ business model. “I realized that the new breakthrough technology in retailing in the 70s was the superstore,” he said. “That is, a store that sells a single category of merchandise—toys—carries enormous selection, and has low, competitive prices.”

After this discovery, Hoover knew he wanted to create a specialty store, and when he thought more about what people would be buying for the next 20 years, he decided to start Bookstop.

“Everybody tends to look for answers in the same place. But a basic rule of discovery is that nothing has ever been discovered by looking in the same direction as everyone else,” he said. “If you are going to look in the same place as everybody else, at least stand on your head or look at it through rose-colored glasses.”

Sense of history.

Hoover emphasized that understanding trends and history is crucial to success. “You absolutely cannot know where you’re going if you don’t know where you’re coming from,” he said. “It’s all about understanding trends and understanding the lessons of history.”

Sense of place and geography.

Hoover believes that people are dramatically shaped by their environment, and often entrepreneurs forget that about their customers. He advised entrepreneurs to become informed about the customers’ surroundings, market, local area, country and the world. “Every person on earth grew up somewhere, and we’re shaped by it and the people who have built great enterprises have had a great sense of that,” he said.

Clear vision.

Use honest, direct, clear language, and do not needlessly complicate matters.

Consistent vision.

Learn to know what your enterprise stands for and what it believes in. “More enterprises have failed because they changed than because they failed to change,” he said. “I do believe in change—revolution, really—but here’s the thing: Once you understand why your enterprise exists, the core of your enterprise, stick to it and tend to do one thing or a very short list of things very well over and over again.”

Serving vision.

Beyond providing a useful, meaningful service, Hoover advised the audience to make customer service a huge priority in any business endeavor. “Saying that a company exists to make money is like saying automobiles exist to get good gas mileage,” he said. “The only valid reason for an enterprise to exist is to serve people and somehow make the world a better place.”

Unique vision.

Hoover observed that Apple and Volvo are two companies who have done an excellent job of standing out and differentiating themselves in people’s minds. “Volvo has not sold an automobile in 30 years. If they tried to sell an automobile they would just be gone,” he observed. “They only sell two things: reliability and safety, and by creating their own game, they created a business worth billions.”

According to Hoover, once enterprises understand what makes them different, every decision becomes much easier and clearer: what a logo looks like, what kind of employee insurance to choose and so on. Hoover argued that an enterprise needs its own rhythm and style.

Be passionate and do what you love.

To emphasize this point, Hoover stated simply: “Find me a lasting great enterprise that was built by someone who didn’t love what they were doing. You can’t.”

After nearly two hours of sharing insight and stories, Hoover took a few questions and closed his lecture by encouraging the audience to contact him to discuss ideas, as he always loves to hear and help develop them.

Notable Soundbites

On his book collection:

“I live with about 40,000 books. I bought an old Catholic school to house them all so I basically live in a library.”

On creating an entrepreneur’s guide:

“I don’t think there is a defined path for entrepreneurial stuff, but in my own experience, I believe in planning. I believe in business plans. How formal they are is a different issue, but because I want to build something that will last, I believe in doing research. The least amount of time I’ve spent on one of my ideas was two years.”

On solving daily problems:

“As an entrepreneur, everyday there is a problem, a challenge. And your odds of solving it are greater if you are capable of looking at it in different ways. You never know where answers will come from, but it’s not where you expect it to come from. The most powerful radar on earth is the human mind and it’s just a matter of having it turned on.”

On continuing education:

“I believe in liberal arts education. But whatever you do don’t confuse education with school. All the really well-educated people in the world get less than five percent of their education in the classroom. Where are John Mackey’s, Bill Gate’s, Michael Dell’s, bachelor’s degrees? I’m all for universities and education, but your education is not what goes on in classrooms; that’s a very tiny part of it. Your education is your whole life.”