Phil Castle, The Business Times
John Hendricks traces the origin of many successful business ventures to the moment when an entrepreneur poses a key question or confronts a problem.
Driven by curiosity, passion and obsession, those entrepreneurs answer questions and solve problems in turning their daydreams into reality.
For Fred Smith, the founder of Federal Express, it was finding a better way to ship important packages overnight by using airplanes. For Reed Hastings, founder of Netflix, it was an idea for creating a movie rental business after getting stuck with a late fee from a video store.
For Hendricks, founder and former chairman of Discovery Communications, that moment occurred when he wondered why more documentary films couldn’t be broadcast on television.
“That is what is at the heart of it all: curiosity and puzzle solving,” Hendricks said during his keynote speech at the Entrepreneurship Day luncheon at Colorado Mesa University in Grand Junction.
The quest to satisfy curiosity — both his own and that of others — continues to drive Hendricks as he undertakes yet another venture in launching a video on demand streaming service offering content from leading documentarians and producers. “We’re back gambling again, and I couldn’t be happier,” he said.
In a wide-ranging speech, Hendricks recounted the origin and evolution of the Discovery Channel, the difficulties involved in obtaining financing for startups, the common traits of successful entrepreneurs and the steps involved in creating a business.
Hendricks traced the origin of the Discovery Channel to his time as a history student at the University of Alabama. As part of a work study job, he ordered documentary films for professors to show in classes and wondered why the films also couldn’t be broadcast on TV.
Hendricks posed the same question to the manager of a local cable television company only to find out federal regulations at the time allowed cable TV companies to only retransmit broadcast programming. A U.S. Supreme Court ruling subsequently allowed cable TV companies to broadcast their own programming, in turn sparking a revolution that lead to the creation of ESPN, CNN and MTV.
Hendricks said he spent three years raising enough capital to launch a cable television channel offering educational programming. In the process, he discovered federal regulations limited potential investors in the venture to those with high salaries or high net worth. While he had friends, family and colleagues who wanted to invest and were far more familiar with the venture, they couldn’t. The protections were unfair, he said, given there no similar prohibitions on who’s allowed to gamble in Las Vegas.
Federal legislation enacted in 2012 allows for a wider pool of smaller investors with fewer restrictions and the growing practice of so-called crowdfunding to raise contributions from a large number of people, Hendricks said. But the issue remains an important one to monitor for those who believe its important to democratize the ability of people to invest in startups.
Government regulations and policies affect businesses in other ways, Hendricks said. He cited efforts by U.S. presidents to cut taxes to stimulate the economy. One result of lower taxes is more discretionary dollars for capital investments.
The Discovery Channel was launched in 1985 with 156,000 subscribers in the United States. By the time Hendricks retired from Discovery in 2014, the operation had grown to 49 network entertainment brands reaching a total of more than 2.5 billion subscribers in 220 countries.
Hendricks also developed Gateway Canyons, a luxury resort in Mesa County that includes lodging, fine dining and a spa as well as a museum showcasing Hendricks’ collection of automobiles. The resort also serves as a venue for Curiosity Retreats, which brings together scientists, professors and other experts — along with guests — to discuss issues related to science, technology, civilization and the human spirit.
Hendricks also has focused on CuriosityStream, a consumer subscription video-on-demand streaming service offering original factual content from leading documentarians and producers. Hendricks said he believes the next revolution in television will be streaming services that allow viewers to watch what they want when they have time to watch it.
Hendricks concluded his speech by quoting from his memoir, titled “A Curious Discovery.” Two appendixes at the end of the book include a list of what Hendricks considers important traits shared by successful entrepreneurs and 10 steps to creating a business.
Hendricks’ list of seven “inside” traits shared by entrepreneurs are:
An intense, driving curiosity.
A willingness to really “listen” to daydreams.
A burning passion that leads to periods of creative obsession.
An ability to visualize success.
Optimism and confidence that defy logic.
Self-reliance and an eagerness to undertake the risks of creating one’s own destiny.
As for those 10 steps to creating a business, Hendricks listed them in this order:
Listen to, carefully evaluate and confidently share the persistent daydream.
Gain confidence through research.
Convert your mental obsession into a comprehensive written business plan.
Make the decision to go “all in” or drop out.
Recruit key executives and employees who complete your business knowledge.
Secure financing that will fund operations until your new business becomes profitable.
Be emotionally prepared for rejection.
Define your business mission in a way that separates it from what could be a fleeting means of distribution or delivery technology.
Don’t be intimidated by not being a current player in the business sector you’re targeting.
Identify long-term consumer trends that form the basis of your growth vision.