The 2009 Entrepreneur Of The Year winners
Overall US winner
Tom Adams - President, CEO, Rosetta
Distribution and Manufacturing
Ken Solinsky - President, Insight Technology Incorporated
With his determination and iron will, Ken Solinsky has gone from growing up in a neighborhood he watched deteriorate throughout his childhood to becoming president of the global leader in providing night vision and electro-optical systems to those in the US military and law enforcement. Read more
Solinsky did not want to spend his life in the sort of neighborhood in which he grew up, a tough New York City housing project. “Going to an inner-city high school was a good thing in terms of later being able to relate to a wide variety of people within a workplace,” he says, but “I joke that I got an advanced education because my school was into drugs long before suburbia was.”
Raised by his mother alone since he was five, Solinsky remembers her having to borrow money from friends and neighbors on Wednesday so that she could buy food on Thursday before getting her paycheck cashed on Friday.
It wasn’t until his junior year in high school that his passion for learning — particularly, geometry — appeared. Until then, “I would not have been tagged as someone likely to succeed,” he says.
An offer from Uncle Sam
Solinsky attended Clarkson College, where he met his wife, Grace. When he graduated in 1971 with a BS in mechanical engineering, the economy was ailing, and job prospects were poor. Solinsky accepted a civilian position with the US Army in a program under which he was able to earn an MS in industrial engineering from Texas A&M by committing to work for the Army for an additional three years after earning the degree.
Upon graduation he was assigned to Fort Belvoir in Virginia, where he worked for the Army’s Mobility Equipment Research and Development Command. “I stayed there for about 18 months,” he says, “and couldn’t wait to get out of it. It was the epitome of government bureaucracy.” Solinsky has a deep disrespect for bureaucracy.
The Army’s Night Vision Lab at Fort Belvoir, by contrast, was “a very dynamic organization, doing a lot of exciting things,” he says. Solinsky was able to secure a position with the Lab, and his skills and strengths grew. While employed by the government, he was sent on a one-year educational assignment as a Sloan Fellow at Stanford University, where he earned a master’s degree in business management. Soon after, he was named program manager for night vision devices, becoming one of the few civilian employees to hold such a position.
After nearly 15 years of government service, Solinsky had reached a crossroad. As a program manager and engineer, he would find himself asking suppliers, “Why can’t you do things better, faster, cheaper?” He wondered if he could sit on the supplier side of the table and do any better.
Grabbing the gold ring
“That was part of it,” he explains. “The other part was if I spent my entire career as a civil service employee, I could have had a comfortable life, but I’d get to be 55 and say, ‘You never took a significant risk. You never reached for the gold ring.’ There was something in me that said I had to at least try.”
Solinsky left government service to work for a company in New Hampshire. But it wasn’t a good fit, and he no longer felt that his work was meaningful.
“I came home after just another mundane day at the office,” he recalls, “and said to my wife, ‘I can’t keep doing this. I’ve got to start something on my own.’ Without hesitation, she said she’d support and be there for me.” Together they founded Insight Technology Inc.
The following year, the new company responded to a request for a bid from the US government for infrared aiming lights. To back his vision, Solinsky took a second mortgage on his home and maxed out a number of credit cards to fund the effort. Facing stiff competition, Solinsky — who had no office at the time — was chagrined when he learned that the government wanted to conduct a pre-award survey to verify that Insight could do the job.
The solution? “We rented a conference area at a local hotel and taped out on the floor where the various pieces of equipment would be. We spent a dayand- a-half with presentations and then a half-day touring this empty loft area with masking tape on the floor. And we got the contract.”
In the years since then, Insight has experienced steady growth through an evolutionary increase in product offerings and expansion of its customer base. Solinsky’s mantra of better, faster, cheaper has guided the company’s success, providing it with a competitive edge.
In for the long haul
“If you are in for the long haul,” he emphasizes, “it’s important to do what you say you’re going to do — and then do even more. That’s particularly important in what we do, because people are literally staking their lives on our product performance.” Solinsky is a firm believer that “people have to be responsible and do the right thing.”
Also important for Solinsky is the company’s obligation to do anything and everything possible to make sure its products are delivered on time. “Too many times,” he argues, “I’ve seen companies go back to the government asking for a delay on delivery. It’s almost as though it’s expected. I firmly believe that if we run into problems, it’s not the government’s fault.”
To meet Insight’s exacting product standards and to ensure the availability of supply sources, Solinsky took the initiative of acquiring and forming several companies to consistently supply needed optical glass and precision plastic optics.
Despite entrepreneurial classes 20 years ago at Stanford that argued for building a company, then taking it public, Solinsky chooses to remain private. “The changing landscape has significantly upped the cost and complexity of being public without a commensurate benefit,” he says.
In starting a business, Solinsky says, an entrepreneur should not be focused on making money, which is just a by-product of doing a good job. A business must be able to provide something of value, he says, and should be managed on the basis of customer satisfaction.
“I don’t think you can sit back and say, ‘I want to be an entrepreneur,’ any more than you sit and say you want to be rich,” he advises. “You have to find something you’re passionate about, because if you’re passionate about it, you’ll do well.”
Dallin Larsen - Chairman, President, Founder, MonaVie
With his weight-loss company struggling, Dallin Larsen needed to reconsider his product offering. At the suggestion of a friend, he researched the acai berry, an obscure fruit grown in the rain forests of Brazil. Impressed by what he learned about the antioxidants and polynutrients it contains, he made the berry the centerpiece of a new nutritional juice blend called MonaVie. Read more
But in order to launch the product and reinvent his company, renamed MonaVie, Larsen, already deeply in debt, had to secure another round of funding, raising the stakes even higher. As the poker pros would say, he was “all in.”
Larsen’s bold gamble has paid off. Since its formation in January 2005, MonaVie has doubled its revenue every year, as the product has become an international phenomenon. “Leaders adjust. They might not quit, but they definitely make adjustments,” Larsen says. “That’s what my life has been about — a lot of adjustments.”
Hard work began early
Larsen has been honing his business acumen since grade school. Growing up in Rexburg, Idaho, he was the sixth of 10 children. His father owned a clothing business, while his mother ran the household. Both parents instilled a disciplined work ethic in their children.
By the age of 7, Larsen went out to his neighborhood selling a wagonload of zucchini grown in the family’s garden. “My mother told me not to come home until it was gone,” he recalls. Every summer, Larsen worked in the potato fields, getting up at 4 a.m. to move the irrigation pipes and going back out in the afternoon to do it again. “I worked for 7 cents a pipe and figured if I moved 100 pipes in the morning and 100 in the afternoon — that’s $14 a day — I might get rich,” he says.
Larsen worked his way through Brigham Young University by selling shaved ice. He and his brother had about 20 shaved-ice shacks scattered throughout Utah. After graduation, he talked his father into cosigning a $12,000 loan so he could open a weight-loss franchise from Diet Center. It did pretty well, and he subsequently opened four more.
In the late 1980s, a friend introduced Larsen to the concept of network marketing, a sales model that allows distributors to basically run their own business and promote a product directly to consumers. He became a distributor for Usana, a company that sold nutritional products. “I fell in love with the concept,” he says. “I didn’t do great, but I learned more about the concept of helping people and leveraging your time and efforts.”
After 10 years with the company, he was looking for a new challenge. In 2003, Larsen partnered with his brother and a friend to start Monarch Health Sciences, a weight-loss company. After leaving Usana, he didn’t have a lot of money to fall back on. To complicate matters, the company wasn’t growing. Tight finances forced Larsen to get a second mortgage.
A powerful, profitable berry
Enter the acai berry. “We simplified the story with one bottle of juice with 19 fruits and began telling the story of the acai berry, the rain forest and antioxidants,” Larsen said, describing the company’s initial marketing push.
Larsen says a number of components lined up that contributed to MonaVie’s growth and success. At the time of the company’s launch, Dr. Nicholas Perricone had written a book in which he listed the acai berry as one of the world’s greatest super foods. For the first time, people were starting to hear about this little purple berry from the Amazon rain forest. From there, things started to steamroll, with other celebrities and athletes taking to the acai berry.
MonaVie’s products are available exclusively from independent distributors. “The distributors are the most important aspect of a direct selling company,” Larsen notes. “We’re fortunate to have built the solid, trusting relationships that we have.” After four years, MonaVie has more than 400 employees and approximately 700,000 distributors in the US and abroad.
Larsen is proud of the product, not only because he believes it has made a difference in people’s lives from a health aspect, but also for what its success has enabled him to do for the acai berry’s native region. The company partners with local workers, giving them an opportunity for increased income. It leaves the harvested trees in place and plants new trees to produce more crops and preserve the rain forest.
“I have traveled to more than 50 countries, but I’ve never seen poverty to the degree I’ve seen it in the slums of Brazil,” Larsen says. “We’re making a difference; we’re making an impact down there. I am proud of that aspect of the company.”
Larsen has established the MORE Project (MonaVie Operation Rescue) to help the people of Brazil. Fundraising efforts have provided 1,500 meals per week to underprivileged children, and educated thousands of teens and adults, enabling them to find jobs. MonaVie covers all administrative costs, allowing 100% of donations to go directly to the care of the Brazilian people.
“I tell people I don’t want MonaVie to be the best company in the world; I want MonaVie to be the best company for the world,” Larsen says.
Recent additions to the product line include MonaVie Active, which promotes joint health, and MonaVie Pulse to help promote a healthy heart. The latest addition is EMV (Energy to the power of MonaVie), marketed as an energy drink without the crash.
“Sometimes the more products you offer, the slower the business grows because you have to explain each and every piece of every product,” Larsen says. But the beauty of MonaVie lies in its simplicity. “You have a bottle of juice. You’re not getting enough fruits and vegetables. Here’s a convenient way to get your antioxidants. End of story.”
Energy, Chemicals and Mining
M. Jay Allison - CEO, President, Comstock Resources, Inc.
"The third time is the charm," they say, and Jay Allison’s story is a convincing case in point. As an attorney with an oil and gas law firm in Midland, Texas, he watched his clients build their businesses in the booming energy industry. He was offered a partnership in the firm, which would have assured him a substantial and reliable income, but he was restless. Read more
“I decided I wanted to be an entrepreneur,” Allison says. He would invest in “black gold” himself.
He borrowed $10,000, invested it in an oil and gas well, and promptly lost it. He borrowed another $10,000 and tried again with the same result. Instead of giving up, he thought he’d take a different tack. Once again, he borrowed $10,000. This time, however, instead of investing in another operator’s well, he drilled his own. The decision paid off: the well produced.
From there, Allison created a business plan, and his dreams of being an entrepreneur took flight. He co-founded Midwood Petroleum to acquire and develop oil and gas properties. These early experiences led to his involvement in Ewing Oil and, ultimately, the formation of the current-day Comstock Resources, Inc. — a company that analysts now consider to be “the gold standard” in the exploration and production business.
The transformation of Comstock Resources into a public company illustrates Allison’s creative thinking. The company became public through a creative transaction to complete a reverse merger with the then publicly traded Comstock Tunnel and Draining, a silver mining company with roots in the Civil War era.
“Did I ever think it would grow to be what it is today? No, I didn’t,” Allison says. “But if you are given the gift of a day and you do your best that day, good things will happen to you.”
Raised by a single mother
In Allison’s view, good things have happened to him all his life. He holds that view despite what others would regard as anything but a privileged background. His mother, Dorothy, raised him after his parents divorced when he was an infant. He never knew his father. His mother first worked as a carhop at his grandparents’ little drive-in, and then as a waitress at a Mexican restaurant.
“She waited on people for 30 years,” he says proudly. “And then she drove a forklift.”
When his mother retired — or at least when Allison thought she had retired — he sent her a dozen roses and told her she could have anything she wanted. What she wanted was to continue working. She got a job at Wal-Mart, where she worked in the linen department. She kept the job until just before her 81st birthday this past July.
The lessons his mother taught him, Allison believes, are among those many good things that have happened to him throughout his life.
“I think I inherited a really good work ethic from my grandparents and my mother,” he says. “The way they worked, that’s normal to me. The entitlement theory is not normal to me. Being lazy is not normal to me. Acting like you are better than someone else is not normal to me.”
Determined to make the team
That attitude has guided his life. Though he was small in stature, he was determined to play football for his high school in Brownwood, Texas. At the end of the ninth grade, all the boys who were interested in playing for the team were told to report to the gym. “Son, you are in the wrong locker room,” he was told. “You are not playing high school football.”
Allison insisted otherwise, and eventually became captain of the school’s winning team.
Following high school, he went to Baylor University, where he showed up at a football practice as a walk-on. After 15 minutes on the field, the coach came over to him. “Who are you?” the coach asked. “I’m Jay Allison from Brownwood, Texas,” he answered.
It turned out that the coach, the legendary Grant Teaff, was a friend of Allison’s coach from high school. Allison was given a chance. Needless to say, he took it and ran. He was a three-year letterman at Baylor and was part of Teaff’s 1974 Southwest Conference championship team.
“That is how God connects the dots,” Allison says. “It is a grace that comes to our life if every day we give our best. I was giving my best that day I was a walk-on.”
This year, the Jay and Jenny Allison Indoor Football Practice Facility was opened at Baylor. The facility is one way for Allison and his wife, also a Baylor graduate, to give back to the community.
Allison takes this approach — a combination of gratitude and fortitude — to his work. “You always reap what you sow,” he says.
Feeding the bull
That sometimes means being a contrarian. His strategy is to “feed the bull, rather than getting on it and riding it.” In other words, it is to “create wealth on a per-share basis, for a long period of time, in moderation.” Rather than taking Comstock Resources on a growth path that is rapid and risky, he has guided it to growth that is steady and strong. The success of the strategy is clear. In 2008, Comstock Resources’ stock price outperformed all exploration and production peers on the NYSE.
None of this is to suggest that the company has avoided challenges. But like the marathon runner he is, Allison simply has taken those challenges in stride. “In life, when you have a giant problem you can either run away from it, which means you haven’t handled it, or you address it,” he says. “As a corporate executive, you evaluate your problem. You don’t run away from it.”
Determination and focus are at the heart of Allison’s personal and business philosophy, as is a deep appreciation for the gifts he has been given. But as appreciative as he is of the experiences that have formed him, he does not dwell on the past. He is committed to doing the right thing right now.
“Every day you wake up, that day is a gift,” he says. “You are not guaranteed tomorrow, and yesterday is history. You have today. So do your very best today. Just focus on what you are supposed to do today.”
Ernest Rady - Chairman, Insurance Company of the West
When Ernest Rady moved from the windswept prairies of Winnipeg, Manitoba, to the warmer, gentler climate of San Diego some 40 years ago, he proved that the old adage about real estate still rings true: it’s all about location, location, location. Read more
In San Diego, Rady began investing in real estate and other local companies, setting the stage for a business career in which he simultaneously ran three large enterprises: a real estate business, a banking and thrift operation and an insurance trust company.
But ask Rady how he could find the time to capably oversee three companies at the same time, and he adds another ingredient to his formula for success: it’s all about people, people, people.
Following that formula is one of the reasons Rady built an investment portfolio that ultimately brought him significant wealth and financial success as one of San Diego’s leading businessmen. And it’s why he’s still finding success in virtually every venture he’s started.
For Rady, the initial motive to move to San Diego, however, was prompted more by a desire to escape the cold and to find a healthier environment for his wife.
Escaping from Siberia
“Winnipeg has the same climate as Siberia,” Rady says. “I never liked the cold, and when I read that my wife’s asthma medicine would make her life very difficult, I knew we had to move somewhere warm.”
Although Rady had been running his family’s affairs ever since his father suffered a stroke when Rady was only 15, his career had yet to really hit its stride. That left him free to consider moving to several cities in the Southwestern US. He and his wife eventually settled on San Diego.
Using funds inherited from his father, who was an ob-gyn doctor, and other investments in oil and gas companies in Western Canada, Rady began looking for investment opportunities in the San Diego area.
One of the first opportunities he came across was a real estate developer who needed $35,000 to finish an apartment building in El Cajon, Calif. Rady trusted the developer and invested the money, finishing the building and renting all the units. That led to buying the next vacant lot on the street and then another, starting a successful string of real estate investments that eventually led to the formation of American Assets, now one of the largest real estate groups in the San Diego region.
“We’ve always concentrated in areas in which real estate entitlements were hard to come by,” Rady explains. That strategy limited overdevelopment in those regions. He adds that American Assets also priced most of their units to be affordable for the middle class, ensuring high occupancy rates, even in today’s market.
Sold for $4 billion
Flush with the growing profits of American Assets, Rady next invested in a radio station before buying a major interest in Morian Pacific, a small thrift and loan insurance operation. He grew to know and admire the members of the management team, who were let go when the company was acquired a few years later. So he hired them to run a new start-up company: Western Thrift and Loan.
Starting out with only $850,000 in capital, the company began operations in a trailer in Orange County. It soon outgrew the trailer, eventually becoming a billion-dollar-plus enterprise called WestCorp. In 2004, Rady sold the company for $4 billion, to Wachovia, now part of Wells Fargo.
After founding WestCorp, Rady continued to diversify, launching the Insurance Company of the West in 1971 to focus on the underwriting of select commercial insurance risks in California.
It’s all about people
Asked to define a common thread that connected his four major business areas, including oil and gas, Rady doesn’t hesitate to point to the people he hired to run those businesses.
“My role was to allocate capital and resources, I knew better than to be the day-to-day manager,” Rady says. “I could do that because I have a good feel for people, and know how to help them steer the business in the right direction.”
At one time or another,” he adds, “all these businesses required different management abilities and strengths at different stages.” For example, Ray Jenkins, who helped Rady found WestCorp, was the perfect person to build that company from a thrift with assets of $850,000 into a $500 million company, Rady notes. But Jenkins retired when he knew it was time for him to move on.
Not a hermit miser
As Rady sheds his businesses and more of his business-related responsibilities, he’s picking up the slack with charitable activities. Several years ago, he donated $60 million to the Children’s Hospital, now called the Rady Children’s Hospital. He’s also a major supporter of the business school at the University of California at San Diego, which was also recently renamed in his honor.
“I’d have preferred to make those donations privately,” Rady says. But when his name was published on a listing of San Diego’s richest citizens, “I had a choice, to either be known as a ‘rich, old hermit miser’ or be recognized as someone who gave back to his community. Since I didn’t want to be a hermit miser, I chose the latter.
“I have always enjoyed working with children and I’d welcome the opportunity to get more involved in mentoring business students at UCSD,” he adds. “In my mind, I’m 45 going on 72. I have no intention of ever retiring.”
Bruce L. Downey - Former Chairman, CEO, Barr Pharmaceuticals, Inc.
As an outside attorney working on Barr Pharmaceuticals’ legal issues with the Food and Drug Administration, Bruce Downey had a close working knowledge of the generic drug company’s strengths and weaknesses, and the marketplace in which it was operating in the 1990s. The board of directors thought enough of his work and insight to offer him the job of president in 1993, promoting him to CEO and chairman a year later. Read more
Although Barr was a pharmaceutical company, it was hardly a member of the category known as Big Pharma. To grow the company, Downey devised a strategy that would refocus Barr’s product line toward generic products with significant barriers to entry, a category whose very name described the difficulties of achieving success.
Downey explains the difference between being an ordinary generic drug manufacturer and one whose specialty he led Barr to pursue. “Generics go to market when a patent expires,” he says, “but ours had no generic competition because they were off-patent, or the raw materials were unavailable for some reason, or were otherwise not salable.” In other words, these drugs were too much trouble for most generic drug makers to bother with, such as generic birth control, or generic blood thinner, or generic chemotherapy products. Barr also went after drugs with existing patents the company thought it could challenge. An example was Prozac.
In a risky business, Downey had steered Barr to the riskiest sector of that business. Yet he succeeded. “You cannot be too riskaverse — you have to be willing to change, whether you know it’s a rock or a lily pad you’re going to.”
Downey emphasizes the value of strategic risk-taking. He believes it begins with the product selection process, taking a portfolio approach to research and development, rather than a one-off selection of a product to pursue.
This approach reveals a secret to his success. “We had a very good research and development group,” he says, which was able to sniff out the right drugs to target. “Of course, not every one of them was successful,” he adds, yet “we had the highest margins in the industry.” His legal department also played a crucial role in Barr’s success, Downey says, by picking the right battles to fight.
As a result of this strategy and the company’s changed business focus, Barr was successful in 90% of its patent challenges and has grown from two locations in New York and New Jersey to seven, with a presence in 30 countries overseas. The company has a leadership position in a highly focused brand and generic market of cardiovascular, oncology, and female healthcare.
The workforce he assembled in 15 years at the helm of Barr bears the imprint of Downey’s personality and persuasiveness. He attributes his skills with people to his first job working with his father. “He had a strawberry farm and we picked and sold most of them to big grocery stores,” Downey recalls. “My father let me keep a portion of the strawberries and I sold them door-to-door. There is no better training to learn how to size people up than selling door-to-door. You need to be able to figure a person out in 30 seconds and you need to be right, or you don’t sell strawberries.”
His accuracy in identifying leadership qualities in the people he hired at Barr has become an industry standard. No fewer than seven CEOs or COOs now in the pharmaceutical business were once executives at Barr. Says Downey, “Of all we achieved at Barr, this is the thing I am proudest of.”
Overcoming the odds
Perhaps the best example of how Downey led the turnaround at Barr Pharmaceuticals is the 1997 introduction of the generic version of the blood thinner Coumadin. It was a high barrier-to-entry product that had been abandoned by the generic industry as having little or no chance of success. Barr developed a generic version and successfully launched it despite significant odds.
Recognizing the historical barriers to widespread commercial acceptance of the product, Downey supported management’s decision to conduct the first clinical comparative tests of its generic against the brand product itself to eliminate physician resistance to the product’s sameness, safety and efficacy. The brand manufacturer launched a 40-state campaign to prevent substitution, but Downey and his team built a successful counter-legislative effort to preserve access to the Barr product.
progress in coming out with products and its aggressive acquisition of companies that significantly expanded Barr’s intellectual capital, product franchise and industry-leading infrastructure. By investing in these areas, Barr was able to take a leading position in quality and regulatory compliance and customer service, while building a corporate culture that empowered individual decisionmaking and a management philosophy that emphasized cross-operational skills development at all levels.
This became important in 2003 when Downey was unexpectedly afflicted with transverse myelitis, a neurological disorder caused by inflammation of the gray and white matter in the spinal cord. Early treatment enabled him to carry on with his responsibilities, but the outstanding management structure he had created at Barr clearly eased the pressure on his recovery.
Shareholders win big
On December 23, 2008, Barr was acquired by Teva Pharmaceuticals, with a return to shareholders that amounted to a phenomenal 5,000% increase in share price from the time Downey took over to the close of sale.
Downey remembers his time with Barr fondly, especially the early years when, he says, “It was easier to generate enthusiasm with a small company. Our motto was ‘Cooperate internally and compete externally.’ The bigger we got, the harder that was to do, but we still got a lot done.”
Downey today is still extremely active, sitting on the boards of two established health sciences companies and two startups. He is a driving force for research into disorders of the spinal column, and a major contributor to construction of the Barrow Neurological Institute in Arizona, among other philanthropic activities. And, if that weren’t enough, he works part-time at the venture capital firm NewSpring Ventures, in Philadelphia. The busy schedule doesn’t bother him at all, he says, because “I’m doing what I want to do.”
Media, Entertainment and Communications
Timothy J. Leiweke - President, CEO, AEG
Give the right person the right tools and watch what happens. In the case of Tim Leiweke, handing him the right tools 14 years ago resulted in the creation of AEG, a multibillion-dollar global sports and entertainment empire. Not only did Leiweke accomplish it all by doing it his way, but his way became the template others would follow. Read more
From its one-team beginning, AEG now employs 15,000 people worldwide, operates 52 major sports complexes, convention centers and venues and is the second-largest live entertainment company in the world.
“Having the ability to wake up every day and believe our best work is in front of us is a fantastic feeling,” Leiweke says. “You’ve got to have an entrepreneurial spirit to be that way, knowing that there is a better idea and a better opportunity that is going to come our way today.”
In his view, “AEG is really a company that is about giving people a reason to cheer.”
Three jobs at a time
Throughout his career, Leiweke has given many people reasons to cheer. He developed his strong work ethic as a child. Having lost both his mother and stepmother to cancer, he learned that he wasn’t going to be handed anything. He started working at the age of 14, taking on three jobs at the same time — working in a bakery in the morning, at a deli after school and on weekends and delivering newspapers. He hasn’t slowed down since.
At the age of 23, Leiweke was the assistant general manager of the St. Louis Steamers of the Major Indoor Soccer League (MISL). He was able to cut through the fan apathy and inject local interest into the team by developing a unique marketing and entertainment culture. His innovations included team introductions featuring theatrical lighting, music and special effects that are now the standard among professional sports teams.
A year later, he was the youngest general manager in professional sports history when he joined the MISL’s Baltimore Blast. In 1981, he became vice president and general manager of the Kansas City Comets, and in 1986 became the team’s president.
He went on to serve in executive roles in the National Basketball Association with the Denver Nuggets and Minnesota Timberwolves (Leiweke was the expansion team’s first employee).
A turning point
The turning point came in 1995 when Philip Anschultz and Ed Roski purchased the National Hockey League’s Los Angeles Kings from bankruptcy protection and hired Leiweke as its president.
Leiweke had already proved he could get a city interested in a sports team. To accomplish this with the Kings, he knew he had to move the team out of what was one of the oldest facilities in the NHL. The challenge was how to create a 20,000- seat arena in downtown Los Angeles in the face of direct opposition from several key political leaders, zero funding from the city and an apathetic community.
Realizing that to be a financial success the new arena would have to be a multitenant and multi-use venue, Leiweke worked to get a commitment from the NBA’s LA Lakers and was then able to add the city’s other NBA team, the LA Clippers, as the third major tenant. He accomplished this even before he had acquired the land, permits or funding.
It took Leiweke two years to acquire the land and secure the financing for the arena. With the local government refusing to dedicate any public funding to the project, Leiweke put together an innovative plan relying on sponsorship and naming rights deals, the sale of luxury suites and club seats, the creation of other new revenue streams and the first-ever asset-backed privatization scheme for such a venue.
Finally, in 1997 the Staples Center was announced. “We made a commitment to come into downtown Los Angeles when no one else was doing it and began to build what eventually became AEG in Los Angeles,” Leiweke says.
The business model Leiweke created for the LA Kings with the Staples Center has now evolved into AEG’s business model with the creation and touring of live programming (sports teams and performing acts) on a worldwide basis, along with the development of unique properties such as LA Live, a $2.5 billion sports, entertainment and residential district in the heart of Los Angeles.
LA Live, which opened in 2008, is expected to play a significant role in making Los Angeles the destination for residents and visitors, thereby improving its ranking as the 27th convention destination city in the US. LA Live is forecasted to produce an estimated economic impact of $10 billion, creating more than 25,000 jobs and generating $18 million in new annual tax revenues.
“We believe in running at the wall, no matter how many times you fall down, until the wall caves,” Leiweke says. “The hallmark of AEG has become its ability, as an organization, to see opportunities when others see impossibilities.”
Cities get needed boost
AEG transformed the Millennium Dome, once viewed as a monumental failure, into London’s O2, Europe’s state-of-theart music and sports venue. When AEG undertook to build the O2 World Arena in Berlin, many said it would never succeed. It has succeeded and has sparked a social renaissance in the city.
“We don’t mind finding underdeveloped markets like Los Angeles, Las Vegas, New York, Berlin, London, Shanghai, all the places we are at right now. They offer great opportunity; they offer diversity from real estate to content,” Leiweke says. These are the kinds of projects that have been rolled out, using the AEG model.
Leiweke believes in giving back to the community and has invested time and effort in numerous charitable causes within each of the communities where he has lived and worked, from the Midwest to Denver, Minneapolis and Los Angeles. He has been honored by a number of organizations such as Para Los Niños, Inner City Arts, the American Diabetes Association, the Greater Los Angeles African-American Chamber of Commerce, and many others.
AEG has now turned its attention to China, where it will be developing up to 12 arenas in partnership with the NBA and Australia.
“This economy is the greatest challenge we have ever faced. But we see it as an opportunity and the opportunity is pretty clear,” Leiweke said. “If we can make sense in this environment, if we can thrive in this environment, if we can grow in this environment, we can grow in anything, and we are growing.”
Real Estate, Hospitality and Construction
Lee R. Anderson, Sr. - Chairman, APi Group, Inc.
Call it Midwestern sensibility. Call it military-style execution. Call it Anderson-family drive. No matter what you call it, Lee R. Anderson’s approach to business and life has enabled him to build a small Minnesota plumbing supply business into a $1.6 billion construction conglomerate that comprises more than 33 independent companies in the life safety and industrial and specialty construction industries. APi Group operates in 33 states, Canada and the United Kingdom. Read more
While giving a nod to both geography and the military, Anderson is quick to point to his father, Reuben, as the guide who both placed and kept him on his path. “He was an extremely hard worker and he expected that from others,” Anderson says. My dad thought warehouses were invented so teenagers had a place to work in the summer.”
Off to West Point
While his own schooling stopped at the eighth grade, Reuben Anderson understood the value of formal education, and he helped his son appreciate that as well.
“I considered myself a rather typical teenager,” Anderson says. “When I was 18, I was thinking of college as a place to go to have a good time. I had enough ability to be accepted at Harvard and Dartmouth and other schools. Dartmouth sounded good, like a lot of fun, but my dad had other ideas. He decided West Point would be right for me and, luckily, I finally acquiesced. That was maybe one of the luckier things I ever did. The education I got was just outstanding. The academy’s emphasis on integrity and ethics helped reinforce the lessons about hard work and character from home.”
And just as his father played a big role in Anderson’s entrance into the Army, he played a similar role in his departure from it.
“My dad was in the plumbing contracting business, and he had a heart attack in 1962,” Anderson recalls. “I enjoyed the military, was about to be transferred to Europe, and I didn’t have any thoughts about getting out at that particular time. Dad said I needed to come home, to get started in business, and he told me ‘I can help you if I’m still around.’ That’s the way he was. Again, I said, ‘All right, dad.’ He always made good decisions.”
It’s likely quite a few people say the same thing about Reuben Anderson’s son.
A stroke of luck
Anderson’s father did make one miscalculation: he hadn’t expected his longtime partner to resist having Lee fill his father’s position in the firm. But Anderson, who has always considered himself lucky, says the situation worked to his advantage. Rather than push the issue, he went to work as a salesman in a separate company owned by his father — the small plumbing supply business that would become APi Group.
“I kept annoying the man who ran the company,” Anderson says. “I asked him so many questions that he threw his pencil box at me and said, ‘You have so many great ideas. Why don’t you run the place; you probably will anyway,’ and walked out.”
Anderson did take the helm as president of the company in 1964 and was doing well when, a few years later, fortune smiled on him again. One of the contractors his company worked with was struggling with a lack of resources and a weak balance sheet. Anderson saw the acquisition of the company as an opportunity to grow his own business. Not long after, another opportunity presented itself, and Anderson made that acquisition as well.
“It wasn’t really by design,” he says. “We started out thinking we could grow the business by making a bite-size acquisition and created the model we’ve used for doing this very successfully.”
One bite at a time
“Bite size” is an important part of that formula. “We find businesses that are similar to ours, that in many cases we can just attach to existing companies that we own, creating a larger footprint across America,” Anderson says. “And we’ve never been willing to put it all on the pass line, or say ‘I’m all-in.’ Every acquisition we do is small in nature, but we do a lot of them. We look for companies that, quite frankly, we feel are similar to our culture.” That similarity in culture is very important, because, generally, APi is not seeking to make big changes.
“Just about all the mergers we have effected have allowed the principals to remain with their company,” Anderson says. “We accomplish this by not interfering with day-to-day operations. We never put our name on their letterhead or even advertise the purchase. We do not waste each other’s time by calling for meetings or sitting in their offices.”
Spotting the people that fit with APi is what Anderson views as his biggest asset.
“I’m a pretty creative guy, and one of my strongest attributes is the ability to identify good people and find good people to work with,” Anderson says. “Throughout my entire business career, I’ve had a lot of good people who have done the heavy lifting of day-to-day decision-making.”
That brings us back to Anderson’s own decision-making skills, honed as a cadet at West Point. The academy’s emphasis on character and integrity became the foundation upon which Anderson has built his business and his life.
Taking the high road
“I think everybody has two roads — high or low,” Anderson says, “and I’ve tried to consciously determine which I was on. I’m always trying to be honest and forthright. The way you conduct yourself and make decisions is something people can’t take away from you. They can’t destroy it; only you can do that.”
Mindful of all the military did for him, Anderson strives to give back to both West Point and those who serve in the nation’s military. APi has a “wounded warrior” program through which it helps injured military personnel reenter civilian life under the best possible circumstances. The program takes advantage of APi’s large footprint to locate program hires close to home or near a military treatment facility.
Generous donations provided by Anderson and his family also have enabled construction of the Anderson Rugby Complex at West Point, completed in 2007, and the Anderson Athletic and Recreation Center, now being built at the University of St. Thomas in Minnesota.
“I’m not perfect by any means,” Anderson says. “It’s something you work on your whole life. But I think if you’re always consciously focusing on it, it becomes easier and easier.”
Robert Klein - CEO, Safeguard Properties
When Robert Klein was growing up, his father put it to him straight: “My child, God blessed you with a mind and cursed you with a mouth.” Read more
Klein tells the story with great gusto and fondness today, without a hint of offense. “My father worked at a butcher store, and he was the smartest guy I ever met,” he says.
He took his father’s words to heart and put each characteristic of his personality to good use in his unconventional but highly successful career as an entrepreneur. From taxicabs to produce packaging to mortgage field services, he has operated on wit and wisdom won in the trenches of experience more than from any formal business training.
“I did not have much of an education,” Klein says. “I was one of those rabble-rousers.”
However, he did have the most important qualities of an entrepreneur: confidence and the willingness to take risks. Besides, he says, “I couldn’t hold a job. I had to become self-employed somehow.”
He just needed to figure out what it was that he could do. He reviewed his options and arrived at an answer. “I knew how to drive,” he says. “OK, that was something I could do. I could make a living.”
A cabbie in New York
At age 16, Klein borrowed $5,000 from his father to start his first business. He secured a medallion — a license to operate a taxi — and became a taxi driver in New York City. Because the number of medallions issued by the city was limited, medallion prices kept rising, and he kept on buying. From $5,000 to $18,000 to $75,000, he kept buying until he had five medallions in all. When the price hit $85,000, he sold.
Robert Klein, entrepreneur, was on his way.
An uncle who was a produce wholesaler in Cleveland offered to sell Klein his business. Klein looked the company over, figured that was yet another thing he could do, and headed to Cleveland.
He analyzed the business to see how he could make it better. “I tried to understand exactly what my clients’ needs were,” he explains. “You need to understand your clients’ needs and bring them actual value.”
One particular value he saw proved to be especially advantageous. Rather than take shipments of, say, sacks of onions from farmers, he could package the produce himself and put his clients’ labels on them. The supermarket chains loved it. “I went into the packaging business,” Klein says.
While the enterprise was a hit, the work was all-consuming. “I’ve never done anything on an even keel,” Klein says. “I have always done things in extremes — I am committed 100%. My day started at 2 in the morning and, because I’m a workaholic, it didn’t finish till 9 or 10 at night.”
When his wife informed him that he had missed his daughter’s 16th birthday, he took stock. The demands on his time, as well as competitive changes in the produce business, convinced him to sell.
Unsuited for life of leisure
For three or four months, Klein relaxed and traveled with his family. But a life of relative leisure did not suit him. “I let the word out to my attorneys that I was looking for something to do,” he says. Once again, that “something” was undefined.
He learned from his attorneys that a local mortgage field services company was about to shut its doors. He investigated the business, liked what he saw and decided that he had found yet another venture. True to form, he took an unconventional route to enter his new career.
Unable to come to terms with the owners, he waited for the company to close. Then he hired its now-unemployed office manager to teach him the ins and outs of the business. “I rented a basement and she came to work for me and trained me,” he says.
He formed a new company and, to maintain consistency with vendors and customers, made a strategic decision to give it a name with the same initials, SPI, as the previous business. And he approached his new venture with the same philosophy — focusing on the customer — that had worked so well for him in the past. Safeguard’s brand promise is “Safeguarding our clients’ interests.” The company’s motto is “Customer service = Resolution.”
It has proven to be a winning formula. Today, Safeguard is the largest privately held mortgage field services company in the US. Every month it inspects and maintains more than one million defaulted and foreclosed properties across the country for banks, mortgage servicers and investors.
Responding to change
Since Safeguard’s founding in 1990, the mortgage industry has undergone dramatic changes. At one time, banks issued and serviced mortgage loans locally. Through the 1990s, banks began to sell their loans to government investors and private Wall Street investment firms to generate new capital and make new loans. As a result, community banks no longer managed or serviced loans locally. National mortgage service companies were retained to manage and service loans across the country.
For Safeguard, which began as a regional company serving clients in three states, this has meant adopting a nationwide business model. The risks were significant, as thousands of subcontractors had to be engaged on a national level to perform work to Safeguard’s quality standards.
To ensure that Safeguard’s customer guidelines would be followed, the company invested millions of dollars in customized technology that gives clients and contractors around-the-clock access to updated property information online. Clients can see the status of every property in their portfolio on a real-time basis. Such innovations are among the reasons for Safeguard’s growth.
Certainly, too, the ongoing mortgage crisis has meant a significant increase in property inspections and maintenance orders. Safeguard’s annual sales more than doubled from 2006 to 2008, and it added more than 200 new employees.
While it may seem counterintuitive to Klein’s drive for success, his response to the mortgage crisis has been to undertake substantial initiatives aimed at foreclosure prevention. And recognizing that his business has profited from natural disasters, Klein also donated $500,000 for the relief of people with spinal cord injuries and other disabilities who survived the ravages of Katrina and other hurricanes.
“My father taught me that if God is good to you, there is always a payback,” he says. “I just feel it is important to pay back.”
Paul Sagan - President, CEO, Akamai Technologies, Inc.
It seems inevitable that Paul Sagan would today find himself at the head of Akamai Technologies, the leading provider of managed services for powering rich media, dynamic transactions and enterprise applications online. He has the bloodlines. Read more
“My earliest influence was my father, who was — and still is — a journalist and publisher in the Chicago area,” he explains. “He led me to be interested in media and technology, how media changes technology, and how media changed technology, which is the thread that got me from traditional media to new media.”
Sagan’s father owned a chain of daily and weekly suburban newspapers, most of which he sold when he retired, keeping just one.
Started as a cub reporter
Growing up, the younger Sagan worked every aspect of the business, except for the pressroom. “While in high school, or even a little before, I worked as a cub reporter and photographer for the family business. I worked in paste-up and even ran the switchboard one summer. So I learned the whole business and was just fascinated by the media business overall.” At every stage of his life, Sagan has been an avid student, working hard and applying his knowledge to whatever tasks were at hand.
When Sagan was earning his undergraduate degree from the Medill School of Journalism at Northwestern University, high-growth technology was not yet online. “Television was the new media at the time,” says Sagan. “It was changing things dramatically, linking people to live events instantly via satellite. It was the place to be, and my father pushed me that way. That’s why I wound up at CBS.”
Three Emmy awards
broadcast news at WCBS-TV. Never interested in being an on-camera personality, he moved through the ranks as a news writer, producer and executive producer and, at 28, was the youngest person in the network’s history to become news director. He is a three-time Emmy Award winner for broadcast journalism.
Sagan is unique in combining insight and experience in both media and technology. After working at CBS, he moved on to Time Warner, where he was a senior member of the team that developed the company’s online, cable online, electronic publishing and internet publishing activities. He also designed and launched New York City’s cable news network, NY 1 News.
A founder of Time Warner’s Road Runner broadband cable modem service, Sagan became the president and editor of new media at Time Inc. and served for a year as a senior advisor on information technology with the World Economic Forum in Geneva. Then, in 1998, he was recruited to join Akamai, a start-up dedicated to intelligent internet content delivery. Sagan was named president in 1999.
2001: a difficult year
As he grew in the industry, Sagan acquired managerial and leadership skills through hard work and determination. All his abilities were called upon as Akamai and the industry were severely challenged in 2001. First, with the bursting of the tech bubble early that year, Akamai’s stock price plummeted, dropping from a high of $345 at its peak to 56 cents per share by October 2002.
Even more daunting for the company, both from a business standpoint and on a personal level, was the death of Danny Lewin, an Akamai co-founder and its chief technology officer. He was aboard one of the planes that struck the World Trade Center on September 11, 2001.
“Danny was one of the technical founders and was really the driving force behind the development of the culture of the company,” Sagan says. “He was an iconic person in the company and in the industry. We thought he was irreplaceable, but we really just had to look deep inside ourselves and say we really believed in Danny’s ideas and were going to stay here and make them work.”
Ironically, as an immediate result of the attack, Akamai’s system was tested as never before. What occurred was exactly what Lewin had predicted would happen: the internet became a primary means of communication for individuals through email to friends and family, for those seeking news through websites, and for companies that then turned to Akamai for its assistance in handling increased loads on their websites.
At this critical juncture, Akamai was rolling out EdgeSuite, its first real enterprise offering, which enabled businesses to save money by using Akamai servers for their web business.
“We saw it as something our customers really needed,” Sagan says. “They were willing to sign up to buy it. We said, ‘Let’s go make this thing successful.’ And we did. There was great satisfaction in doing that and so honoring Danny in that way. But I’d trade the business success to have him back.”
Named CEO in 2005, Sagan has continued to fuel Akamai’s growth through his vision and leadership. The company’s 2008 revenues of $790 million were up a healthy 24% over the previous year. Around the world, it offers the most widely used platform for content delivery and application acceleration, with more than 42,000 servers in 70 countries within 1,000 networks.
Fighting for reform
Committed to giving back, Sagan believes that he learned his drive toward civic involvement from his parents. “I think one of the last bastions of denying civil rights on a regular basis in our society are the horrible educational opportunities we give so many people, particularly the less privileged and poor. I spend a lot of time fighting for public education reform — particularly the support of charter public schools,” he explains.
Sagan works on improving the state of journalism today. Toward that end, he is co-chairman of the Medill Board of Advisors, a member of the Dean’s Council at the Kennedy School of Government at Harvard University and a member of the advisory board of the Shorenstein Center on the Press, Politics and Public Policy at the Kennedy School.
Looking back, Sagan notes, “We’ve had some hard times. You can look at the data point at the end and say, ‘Wow, that must have been just fun all of the time.’ But, no, it wasn’t fun all of the time, and it was pretty miserable a lot of the time. We weren’t even sure if we’d make it through. But we did, and that’s more rewarding than winning the easy way, which usually is pretty fleeting and not very fulfilling.”