Defining entrepreneurship: It's not about the money

Bill Walton, no relation to the Walton family of Walmart fame, has a rich and varied background, but the common thread is innovation and creativity. Though Walton has run a large, publicly traded company and made millions of dollars for himself and his shareholders, he bristles at the idea that business is about greed or profits. He says it’s about meeting people’s needs—profits are merely a byproduct. For 12 years, Walton was chairman of Allied Capital Corporation, an investment banking firm that traded on the New York Stock Exchange and managed companies worth more than $12 billion. They employed more than 20,000 people. After negotiating the sale of Allied Capital, he founded his own firm, Rappahanock Ventures, which invests in companies that he believes are doing social good, including technology and entertainment companies. Walton is also on the board of a number of conservative groups, including the American Enterprise institute and the Media Research Center.

Your organization is called Rappahannock Ventures. Let’s start there. Tell me what Rappahannock Venturesdoes. Rappahannock Ventures is a private equity firm that I started after we sold the New York Stock Exchange company I was running, Allied Capital Corporation. Essentially, we are a small private equity firm focused on new media, public policy—essentially businesses we think could make an impact on public discussion with regards to free enterprise and economic growth.

What are some of the holdings of your company? We have several. We have some in the technology area. We have a company named Stemnion that does research using the good kind of stem cells, postpartum stem cells, to re-grow skin in wounded soldiers and other people that have had burn wounds. Another company called Pure Thread … manufactures a fabric that is impervious to bacteria. It is extremely useful in hospital rooms and more mundane uses. It’s good for athletic sports wear. … We’ve also been involved in a couple of movie productions. We are launching a movie now that just is about in distribution with the famous movie comedian Jerry Lewis. It will probably be his last movie. We have big hopes for this. It is about an older man whose wife dies. He goes through a series of revelations about his life. It’s pretty moving, funny, and I think we will attract a big audience.

Max Rose, debuted at Cannes [Film Festival] last year. Yes, we debuted at Cannes. It was an earlier version of the film. We’ve since gone to post-production. We are just about to record our music, our song next week by the same producer that produced the “Star Spangled Banner” at the Rose Bowl. We are very hopeful about that, and hopefully you will see it in theaters this spring.

Just for the record, give us your definition of entrepreneurship. I have a broad and utilitarian definition of entrepreneurship, which is: an entrepreneur is a man or woman who has an idea about meeting a need and organizes resources, whether it’s talent, capital, or technology, to address that need. It’s not just in the business world. It’s in the nonprofit world, where all sorts of people organize nonprofits. They are not aiming to make a profit with it. They are aiming to make an impact on society. I think defining entrepreneurship that way gives virtually everybody an opportunity to be an entrepreneur.

It takes the definition of entrepreneurship away from the Gordon Gecko idea that “greed is good” as well, because profits are not the driving force, but meeting a need is the driving force. The entrepreneurs I know in the for-profit world view the fact that they are making money as an indication that they are doing something that the market wants. They are delivering it at a cost [so] that they can make a profit. The motivation for most of the entrepreneurs I know is creating a product that somebody wants or a service that meets somebody’s needs. It’s not going after the money. People who tend to want to go into business and go after the money tend to fail, I believe, because there is just not enough thought about what they are doing and the service it provides to the people they are selling to.

Warren Cole Smith’s interview with Bill Walton is part of a series called “The Heroic Entrepreneur.” Here the full interview on Listening In: