And I was right. Gary Hoover started reading Fortune Magazine when he was 12 years old and has 40,000 books in his personal library. No wonder two of his most successful ventures – Bookstop and Hoover’s Online – had to do with selling of information. Anyway, Gary created Bookstop, a pioneering book superstore, when he was 30. He saw how successful Toys ‘R’ Us was then and figured that he could use the same model to innovate the business of book retailing. He sold Bookstop seven years later to Barnes and Noble for $41.5 million, and this company became the cornerstone for the book retailing behemoth which now generates about $4 billion sales annually.
In 1990, he put up a small business publisher, the Reference Press, which became Hoover’s Online (www.hoovers. com.) It is now the world’s largest Internet-based provider of information about enterprises, covering 20,000 companies around the world. In 1999, Hoover’s went public and in 2003, was bought by Dun & Bradstreet for $117 million.
But Gary is no stranger to failure. His travel superstore TravelFest, put up in ‘93, closed in ‘99 when airlines drastically cut down commissions to travel agents.
Anyway, Gary is in Manila and will speak about entrepreneurship tomorrow at the Mandarin Oriental Manila. He was brought here by the local chapter of the Young Entrepreneur’s Organization, an international organization of entrepreneurs under 40. I have used his products, heard him speak in Sydney, read his book, and highly recommend him to entrepreneurs and aspiring entrepreneurs. Finally, a speaker who has actually founded two successful ventures that have altered the way we search for information and the way we buy books.
I also recommend entrepreneurs read his book Hoover’s Vision: Original Thinking for Business Success, which is available on Amazon.com.
Here’s Gary and his views on why we have nothing to fear about globalization, how to come up with a business idea, why Hong Kong will be the next New York, the qualities of an entrepreneur, and why you should come to his talk.
LISA GOKONGWEI-CHENG: You’ve worked for Fortune 500 businesses and set up three businesses, two of which you sold for a lot of money. What motivates you to travel around the world to talk about entrepreneurship when you could be hatching your great new business idea instead?
GARY HOOVER: I get most of my new ideas for businesses by traveling the world and observing people. Most great ideas come from looking at the world around you, from knowing what is going on around the world, where things are happening, what people are doing and what they are looking for. I also draw great energy from meeting other entrepreneurs and business people. When I get back to the USA I will embark on my next venture.
What is the central idea of Hoover’s Vision for those who may be interested to buy your book and hear you speak?
Hoover’s Vision is written for anyone who leads or wants to lead an enterprise, whether it be for profit or non-profit. It is about how to dream up new ideas, how to develop a clear and consistent vision, and how to execute that vision. It all starts with curiosity. But I also call for a great degree of passion.
So, what was the most recent interesting business idea you’ve come across? Tell us, using your central idea, why this is an interesting business.
For the next 20 years, the aging baby boomers, the key demographic factor in many countries such as the USA, will have more money and more time. However, they are likely to move from buying things to buying experiences. There is a limit on how much we can spend on cars and houses and luxury goods. But as we age we will spend more and more on experiences – such as cruises, golfing, sailing, going to historical museums and battle sights, dining experiences, learning experiences, symphonies, and museums.
I read that you have 100 business concepts in your mind. Could you share one or two with us? Just to illustrate your thinking method, of course, not to steal your ideas (laughs)!
I never worry about my ideas being stolen. Every great entrepreneur I know has more ideas than they can ever realize, and the type of people who steal ideas cannot pull them off. The lodging industry is not very innovative or cognizant of changing demographics. For example, in the USA you could open a lodging chain that only served senior citizens, or one that only served families with small children, or that only served people who love gadgets and audio/video systems. India needs moderately priced motel chains, in addition to the fine luxury hotels, as it grows a larger middle class. My next venture will relate to history museums with a focus on automobiles.
You said that the best ideas come from gaps and intersections. Could you enlighten us by giving us specific examples?
My friends and I created the first book superstore. There were successful bookstores but no book superstores. There were toy superstores, so I knew what one looked like. Bookstop was created at the intersection of the bookstore business and the superstore concept. Amazon was likewise created at the junction of the book business and the mail order business (of which the current form is Internet).
You’ve been around the world a lot. Could you tell us why some countries are more entreprenuerial than others? In the Philippines for example, the largest companies before the war are still the largest companies today. This is unlike countries like the US where many young companies like Dell and Microsoft have grown really big. What kind of culture and environment do we need to promote entrepreneurship?
I am afraid I don’t have an easy answer for this one. I think the best we can do is to preach and teach entrepreneurship and lead by example – we being organizations like the Young Entrepreneurs Organization and speakers and teachers like myself and others. Courage and imagination, curiosity and a desire to serve others are some of the main prerequisites for an entrepreneurial culture. Of course a strong government, low barriers to entry, and a market environment also help, but true entrepreneurs can take on all sorts of obstacles.
Maybe America is too far ahead. In your book, you have a high regard for Malaysia and Thailand. Could you tell us why?
These seem to be nations where the welfare of the average person is a high-priority of the leadership. Both countries are developing large, strong middle classes. I believe the most important thing is education, both for boys and girls. Both of these countries are also growing in importance in world trade. Singapore and Korea are also countries worth learning from. But each country must follow its own unique path, reflecting its culture and traditions, its own style.
You seem to have an optimistic view on globalization. Many Filipinos, both entrepreneurs and non-entrepreneurs, are fearful of this. What would you tell us to help alleviate our fears?
I would have to hear what it is about globalization that would make someone fearful. There are some people in each nation who have concerns about it, but they differ greatly. One reason not to be afraid of it is that it is going to happen whether one likes it or not. It is a huge force that has been going on for thousands of years. It is really just starting. So, if you hate it you will be unhappy but if you figure out how to make it work for you, you can make the most of it.
You mentioned in your book that every country has a unique set of skills and talents they can sell to the world. Could you be more specific? What do you believe the Philippines has to offer the world?
I will have to visit the Philippines and talk to the entrepreneurs there, travel around and observe, to answer that question. As to specific examples, certainly we know that China has assembly capabilities, Costa Rica has horticulture and aquaculture capabilities, Italians can design anything, Parisians understand cosmetics and fragrances, India is the land of engineers, Brazil has great musical powers, and Southern Californians can design cars and cartoons.
I publish a gossip magazine and observed that our editors have been covering a show called Starstruck. It’s the biggest show on TV and is supposedly a combination of Survivor, American Idol and other American reality TV shows. I also recently wrote about a very successful startup venture in the Philippines called Go Nuts Donuts, which was patterned after Krispy Kreme. Is the world getting more homogenous because of globalization? If so, are the anti-globalization people right, at least where the right of a country to preserve its culture is concerned?
No, they are wrong (to be concerned). Each country has its own culture and its own contributions. It is up to the entrepreneurs of that country to figure out ways to export their strengths. The people of New Zealand sold the whole world on kiwi fruit and Antonio Carlos Jobim sold the world on Brazilian beach jazz (bossa nova). In the future, the world will be full of Japanese Anime, Chinese food, Mexican colors, French perfumes, Malaysian pewter, Thai silks, and Seattle software and coffee.
Yes, the integration of the global economy gives every participant a global market, and the Internet only accelerates this. If someone really makes the very best product and no one is creative enough to come up with something better, then maybe that product will rule at least for a while – look at Kodak film and Coca-Cola. But even those dominant products will come from every corner of the globe.
But it is unlikely it will really become too homogenous. Look at the oldest major high-tech industry – autos. Forty years ago it was the "big three" and a bunch of weakling competitors in Europe and very little coming out of Asia. Today, it is a free-for-all in which even Korea and France are successfully competing with innovative products. Consumer choice is much greater than it was 40 years ago.
Asia will become the main provider and main consumer of all things, because of its population and its energy. The world is very fluid. No one will remember Krispy Kreme or Survivor or their local clones in 50 years – maybe in 15! Unless their leaders and creators are especially astute, adaptable and international in their perspective.
Throughout history, world powers come and go. America is now the sole world power with Europe before it. Do you think that the future will be a world of balanced powers or will one powerhouse continue to dominate? If so, who will this powerhouse be?
I believe it is likely to be balanced between multiple powers, like it has been for most of history. And I believe that power will be more spread around in terms of types of power. Japan is an economic power but not a military power. Israel is a military power but not much of an economic power. Economic power is increasingly more important than military power, which countries have the most clout depends on the people and leaders of those countries. China will be very important for sure, as will the USA. Germany and Japan need to accept immigrants or their populations will shrink and their economies will therefore shrink. If they have good leaders and courageous people, Brazil, India, and Indonesia can all become great because of their large populations and large landmasses. Some have great natural resources. But smaller countries can become important, too. Malaysia and Singapore and the UAE may be the next Switzerland and Netherlands. It is up to the people. Education is the key.
Do you agree with George W. Bush’s vision for America and the world? Why and why not?
I do not know precisely what you mean here. I believe that the most important points of Mr. Bush’s vision is the same as almost every other American’s vision, the same as John Kerry’s vision. They are not that different. It is an election year and they both try to make the other one look like an idiot but that is not really very helpful. The USA will not be much different no matter which one wins. Both are honest good men. (All I can do is give you my honest opinion). Both would like a world at peace. Both want to make sure American civilians are never massacred on our home soil again. They may differ on the exact methods to do this, but not in the overall vision. I believe all Americans dream about a world in which all nations are free and democratic, in which all people are prosperous. There may be a few Americans at odds with these ideals, but they are hard to find (luckily).
In your book, you believe that peace can actually be achieved through trade because no two democracies have ever fought each other. That’s similar to what Thomas Friedman said in The Lexus and the Olive Tree. He said that no two countries with McDonald’s have ever been at war. Tell us more about that and whether this is more or less true after 9/11.
I think this is just as true as it has always been; trade is our greatest hope for world peace.
You said the world’s next New York City would be Hong Kong, Shanghai, or Singapore. Now that is a very interesting proposition! Could you tell us why you think so?
New York is the capital of the world in an economic sense, as London was before it. I believe that, as Asia takes over the world’s economy, the capital will move there, although the power will probably not be as concentrated as it once was (in fact NY does not even dominate the US like it did 40 years ago). Everything is more decentralized. My bets are still on Hong Kong but each of these cities will be very very important. As will be Jakarta and Manila and Bangkok and KL if they want to be, at least at that "second rank" of power like Paris, Milan, LA.
You are a very, very wide reader and give a long reading list in Hoover’s Vision. If you could choose only five books to recommend to a beginning entrepreneur, what would they be and why?
My book (laughs) – but it is a good starting place because it leads you to all those other books. I believe in surfing and observing throughout life, so only five books would be too few. I have 40,000 books in my house, which is probably too many!
Who are the three entrepreneurs you admire the most and why?
Again, three is too hard – you ask hard questions (laughs)! Walt Disney, Thomas Edison, Bill Gates would be a good start.
Businesses like Wal-Mart and Nike are both admired for their vision and success yet some activists are concerned by what they say are unfair business practices. It must be very difficult for entrepreneurs to build companies that are both humane and successful. What do you think?
I do not believe that Wal-Mart has unfair business practices. It is easy to be jealous and envious of success. I have not studied Nike nearly as much as I have Wal-Mart, but also doubt that unfair business practices are common there. Great companies must be serving and humane in order to be successful. That is a core result of my research about which I will speak in Manila.
Your book is very understanding of developing economies. For example, you say in your book that First World countries should not have the same standards on the environment or cheap labor for developing nations. Could you elaborate? Given this, what’s your stand on piracy and intellectual property infringement by developing nations? Could we justify this by saying that this is a cheap way of spreading information to poorer nations?
That again is too complex to answer quickly. But there is a difference between asking a nation to reduce jobs so it can preserve the forests when people can’t eat, and preventing the theft of ideas and products. So I believe we must have strong agreement by all nations on preventing piracy and theft – whether of land or movies or music. Creators have the right to be paid for their creativity, and patent and copyright laws are some of the most important underpinnings of capitalism. Database software costs hundreds of thousands of dollars and a 30-megabyte hard drive cost $36,000 when I first looked a computers. Today, that software costs $100 and the hard drive costs $20 because of the creativity of inventors. That is the way to bring access to poorer countries, not by stealing the inventions and cutting out the inventors from profiting off their work.
What is your own vision for your life?
To go to sleep so I can make my 7:30 a.m. speech in the morning (laughs). Really, to better understand the world, to learn as much as I can, to do some more innovations in addition to the ones I have already done, to share the best ideas with young people...
Tell us about your next business idea.
I can do that next week when I am in Manila.
If you want to know more about the Young Entrepreneurs Organization or YEO, check out their website, www.yeo.org. There are details on how to join the local chapter.