Thursday, May 12, 2016

Why Hippies Make Great Business Leaders


Guest post from Michael Klassen:

After three decades of working in marketing, I thought I had heard or read nearly every story of innovation and entrepreneurship out there.  Then I uncovered a story of business invention and reinvention that nobody knew anything about.  A tale that featured three dozen or so people who hatched forty-some innovative ideas and products, all in less than two years’ time, that over time accrued a collective value of nearly a trillion dollars and employment for millions.. Today we fondly refer to these extraordinary American innovators as Haight-Ashbury hippies.
Who were these people and how did they do it? 

Fred Rohe was a high school trouble-maker who had a penchant for vegetarianism – very odd for a teenager in the 1950s.  He left his upstate New York home in 1959 for San Francisco to become a “beatnik” and work in the food business.  .  By the end of the decade, Fred had opened the nation’s first organic/natural supermarket, cafĂ©, trade union, and distribution center – almost single-handedly engineering what has become a $200 billion-plus collection of industries devoted to selling and distributing natural/organic food.
Judith Goldhaft employed the assistance of fabric designer and fellow hippie gal, Jodi Palladini, to create an apparel design that would permit San Francisco’s homeless women to sell their very own fabric creations.  A hippie icon, the tie-dye shirt, first produced in the basement of a Haight-Ashbury church, has consistently sold into the millions of dollars year after year for nearly 50 years.  . 

Laurel Burch sold homemade jewelry out of a fishing tackle box on Haight Street and eventually built a multi-million dollar international design company. 
Jeanne Rose (Laurel’s friend and fellow single mom), is known today as the “godmother” of herbalism, essential oils, and aromatherapy.  A best-selling author and sought-after speaker, Jeanne has helped shape the highly lucrative American health and beauty care industry over the last four decades. 

Tsvi Strauch and the late Hyla Deer, husband and wife retailers employed both young businesswomen, Burch and Rose, to help stock their Haight Street boutique in 1966, and today they are responsible for the creation of an $11.5 billion men’s accessory fashion industry.
Nancy Kamren drew from her grandmother’s yogurt and cottage cheese recipes from the Great Depression to help feed members of the Haight-Ashbury commune that she and her boyfriend lived in.  This, at a time when most Americans had no idea what yogurt was. Today, Nancy co-owns (with another well-known hippie, Chuck Kesey) Nancy’s Yogurt which made $20 million in 2010 and is responsible for shaping a yogurt and probiotic market in the US that had grown to over $20 billion by 2013.

Along with products, Haight-Ashbury hippies conceived of innovative ideas that transformed product development and advertising.  Before the hippies, most products were developed and advertised for what they DID contain; after the hippies, product were promoted for what they DID NOT contain: no sugar, no fat, no pesticides, and so forth.  Their “no-approach” was quickly adopted by 7-Up in the early 1970s for their Un-Cola campaign. 
How could we forget about the hippie music industry.  The most popular of all, I nevertheless judge hippie music a “middling industry” compared to the billions created by the sales of many other authentic hippie products, such as herbal tea, screen-printed and graphic tees and, of course, marijuana, which today ranks in the top-3 largest crops in America (alongside corn and soy beans) at between $20 and $35 billion annually.

How did they do it?
First, hippie businesspeople exercised a principled approach to their ventures and innovations by insisting on using several high-minded ideals - such as environmentalism, support for local business owners and family farmers, non-violence, and the healthy nurturing of authentic and transparent relationships – to define and guide their creative endeavors.  These principles, seen at the time as pipe dreams that had no practical impact on everyday business lent a keen sense of definition, purpose, and mission that was quickly adopted by non-hippie businesspeople who made the connection between hippie ideals, outstanding customer relations, and developing product offerings that consumers loved.

Second, hippie businesspeople were sticklers for detail. Contrary to the idea that the hippies were spontaneous and haphazard, most took a very studied and thoughtful approach to their innovations.  Artist Wes Wilson, the inventor of psychedelic design, drew inspiration from 19th century artists, such as Austrian Gustave Klimt, spending days in San Francisco art museums and libraries.   Skip Yowell and Murray Pletz, won a product design contest sponsored by Alcoa and used their meager winnings to develop a scaled-down backpack that would appeal to college students more interested in climbing the corporate ladder than scaling Mount Everest.  Their company, JanSport, eventually became one of the largest makers of consumer backpacks in the world.  Mo Siegel took a simple hippie practice of combining regular tea with natural additives and sweeteners found in nature to develop Celestial Seasonings (today owned by Kraft), and he helped create the template for a highly successful, modern-day RTD (ready-to-drink) flavored bottled tea industry.
Third, the hippies were masters of re-invention and continuous innovation.  By expanding on and developing new ways to reconfigure old products – pressed jeans into distressed denim, Army Surplus-issued apparel into Camo clothing; and centuries-old German worship styles into a $4 billion dollar “contemporary Christian worship” industry of music, lights, and entertainment – the hippies were able to work with what they had and knew, skipping a costly and time-consuming R&D process, and becoming the first kids on the block in a city teeming with new Baby Boomer consumers open to innovation and intent on “doing their own thing.”

Fifty years ago, it was anyone’s guess as to what would be the commercial outcome of the hippie movement.  Today, the guessing is over.  Fifty years hence, will employers pay special attention to the strange job applicant with an imagination primed for innovation and sure-fire money-making business ventures?  The Haight-Ashbury hippie businesspeople provide plenty of reasons to believe they should.


Michael Klassen is the the author of HIPPIE INC.: The Misunderstood Subculture That Changed the Way We Live and Generated Billions of Dollars in the Process. He is a marketing professor at the University of Northern Iowa, business consultant, and the author of five books and over fifty journal articles. He received his Ph.D. from Kansas State University in 1987 and since that time has spoken to audiences at national and international conferences and invited lectureships in Asia, Europe, and South America. His research has been featured on ABC 20/20, NBC News Magazine Europe/Asia, and he has appeared on Dateline NBC.

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