Monday, June 11, 2012

Small Reflections on the Big Apple

I was thinking about my recent trip to NYC and all the fodder for a post relating to entrepreneurship. Should I write about the demise of H&H Bagels  (a NY institution started by Hector Toro and Helmer Hernandez on $5,000 of seed capital), which was recently shuttered because Helmer (now the full owner) was indicted for stealing employment-related taxes (a reminder to never use the IRS as a source of capital)? What about Doughnut Plant (started by an entrepreneur using his grandfather’s doughnut recipe and now a highly successful business that sells the best doughnuts I’ve ever eaten for (only in NYC) about $3.00 a pop)?
Ultimately—and not surprisingly for those who know my passions (I did see the usual 6 shows in 4 days)—I decided to forego baked goods with holes in them and comment on the journey of Newsies The Musical to the Great White Way. First, a little background:
·   The original live-action Disney movie musical “Newsies,” which was loosely based on the New York Newsboys Strike of 1899, opened in 1992. It was filmed on a budget of $15 million and earned under $3,000,000 at the box office; it was also widely panned by critics and earned seven Razzie Award nominations.

·   However, after release on VHS and DVD, the movie developed a cult following among teens, many of whom memorized every lyric (check out this YouTube video as an example) and held sleepover parties to watch the film. Amateur theatre companies made Newsies the most requested theatrical version of a Disney property that hadn’t been adapted for the stage.

·   Disney assembled a high caliber creative team, including the original composer and lyricist (Alan Menken and Jack Feldman, respectively) along with book writer Harvey Fierstein, to create the stage version. Their hope was to mount a successful professional production that they could subsequently license for regional and amateur productions. That original version opened in September 2011 to strong critical acclaim and huge response from the film’s fans.

·   Disney decided to transfer to production to the Nederlander Theatre on Broadway for a limited three-month run in early 2012, which was extended for another two months and, finally, to an open-ended run.

·   Although the show didn’t win the Tony Award for Best Musical on Sunday (that distinction went to Once, which I also really enjoyed when I saw it off Broadway last fall), it’s tough to find a ticket for the Broadway production.
What could be more entrepreneurial than a show about enterprising newspaper boys banding together to take on big corporate honchos? After-all, many well-known entrepreneurs (including Warren Buffett and Walt Disney) got their starts delivering papers.
There may be another lesson here about taking measured steps. Most people wouldn’t guess that Disney (the same Company that brought the gigantic spectacle of “The Lion King” to Broadway—it’s still running after almost 15 years and has grossed more than any Broadway show in history!) would have set its sights so low with “Newsies.” By setting appropriate expectations and decreasing the stakes—mounting the show (which could have flopped) on Broadway would undoubtedly have cost millions more than mounting it first at the Paper Mill Playhouse—Disney found a way to build the right show for the right audience. The payoff will likely come with a long-running Broadway production and successful foreign and touring productions to follow.
Often I see entrepreneurs who set their sights on the BHAG without focusing on the small opportunities right in front of them. While it’s important to have big aspirations, particularly when you want to use other people’s money to reach them, sometimes it’s OK to think small.


  1. Do you think a company seeking VC-funding may jeopardize its chances by having modest (realistic) goals versus something big? Is your sense that in the current environment, VC funders are seeking singles and doubles more than home runs?

  2. I don't think it's an either/or proposition. You still need to have the BHAG in order to entice Venture funding, but an entrepreneur can also take advantage of small opportunities that present themselves. I still think conventional VCs want home runs more than singles and doubles, but a business with a base hit or two that is still standing the box looking to hit a home run is more attractive than one that has only swung for the fences and, to date, missed.

  3. Hey Dan! GREAT article - love how you draw the comparisons to the entrepreneurial arena from what most would probably overlook - good lessons there. As a side note, I especially enjoyed the YouTube link to the girls singing from the musical - fun stuff! Wonder if anyone else noticed where they were?!?

  4. Thanks for the props Sparky! I try to find those hidden thoughts in daily life, even when vacationing in the Big Apple. Agree that watching those two girls sing their hearts out was the most fun link in the piece--here's hoping others found it and enjoyed it too.