Ralph Roberts, who became a pioneer of the modern cable television industry, didn't think that much of cable TV at first.
XThe future founder of cable TV, media and technology giant Comcast (CMCSA) was 43 years old and thought the business lacked the seasonal and holiday marketing opportunities of his previous retail venture, men's fashion accessories. But Roberts' entrepreneurial curiosity led him to give cable a closer look
"I realized the cable business was the best of all the ones I had invested in and decided to go forward full boat," Roberts (1920-2015) told The Cable Center in an oral history interview. "It was exciting once we realized you got to develop programming and you could do other things that would make people want to buy. ... people loved cable television because more is better." Roberts also liked the steady residual cash flow that cable provided.
Comcast co-founder Dan Aaron said in William Novak's "An Incredible Dream: Ralph Roberts and the Story of Comcast," that Roberts mulled over things endlessly until it was time to strike. Then, "once he goes into action, sparks fly."
"Once I make up my mind about something," Roberts said, "I like to stay the course."
And he did. Roberts was Comcast's president from 1969 to 1990, when he was succeeded by son Brian, and chairman of the board from 1969 to 2002. He was then was chairman emeritus until his death at 95. Under Ralph Roberts' leadership Comcast became one of the largest global media and technology companies in the world. Its 2017 revenue was over $84.5 billion and it's the largest provider of home internet service in the U.S.
"In a big company you need certain fundamentals to believe in," Roberts said. "Around here, everyone knows that integrity comes first."
Aaron said that even when the company was just a speck on the map "(Roberts) expected that someday Comcast would be the General Motors (GM) of the cable industry ... and everything he did was to prepare for that day." Aaron recalled that in 1969 Roberts was drawing up an organization chart — for the year 2000.
Roberts' son and current Comcast CEO Brian Roberts told IBD his father "had an incredible optimism, a risk-taking mentality, and a vision to build and go for it."
Because his father had a deep caring for his employees, "people would just walk on hot coals for him," Brian Roberts said. "He didn't ask for anything, he just supported and mentored you.
Ralph Roberts encouraged a supportive atmosphere where new ideas could be presented without fear of criticism. He said decision making was collective. "Everyone has the right to speak" with the goal to "make everyone feel involved."
"My father also listened better than anyone I know," Brian Roberts said. "He was in the moment, looked you in the eye and made you feel that you were most important person in the world to him."
Overcoming Loss
Born in Manhattan and raised on Long Island, Ralph Roberts was the son of Russian immigrants. His father Robert, who passed along a burning desire to young Ralph to eventually be his own boss, went to pharmacy school and then owned a chain of drugstores in the New York City area.
But the Great Depression took its toll on the business, and tragedy came to the family when Ralph was 12, when his father died suddenly from a heart attack at 42.
Roberts recalled how his mother took charge: "She kept us strong, too. She didn't fall apart and bemoan her fate. She told us we could survive, and that we shouldn't feel sorry for ourselves."
Roberts' entrepreneurial spirit then emerged: "I was always thinking, 'How could I earn a little money by doing something nobody else has ever done?'" Ingenuity and drive created part-time moneymaking opportunities to help put himself through college. And in 1940, in the fall of his senior year at the Wharton School of the University of Pennsylvania, the school announced an officer-recruitment program that promised a Navy commission. War loomed and Roberts joined up.
Roberts graduated in Spring 1941, and when the U.S. entered World War II that December he asked for a Navy combat assignment but was deemed more valuable to the war effort by utilizing his business skills. He was a lieutenant assigned as a materiel superintendent in the Philadelphia Navy Yard where warships were built and repaired. He went on to become a liaison officer with other Navy yards.
He wed aspiring actress Suzanne Fleisher in 1942, and the couple had five children.
Making Opportunities
After the war and his discharge from the Navy, Roberts partnered with an engineer in 1946 to develop products to manufacture. One was a golf putter that sold 100,000 units. Sales got a boost when Roberts got backstage where Bob Hope was entertaining and asked the legendary entertainer to pose for a picture with the putter. Roberts used the photo as marketing material.
"Everything was doing fine until one day, while I was swinging a recently made putter, it bent almost in half," Roberts recalled. "I grabbed the phone and called my partner: 'What happened? The shafts are bending like pretzels!' " It turned out to be a major manufacturing error, and Roberts decided it was time to find another business.
He found work as a copy writer in a Philadelphia advertising agency where one of his accounts was the Muzak Corp. and in 1951 he was offered a position as marketing and advertising director for that company.
After 2-1/2 years of commuting from Philadelphia to Muzak's New York City office, Roberts was offered a job in charge of marketing and advertising at Philadelphia-based Pioneer Suspender Co. — the nation's second largest manufacturer of men's fashion accessories such as belts, cuff links, tie tacks and suspenders. Roberts asked for a right of first refusal if the owners ever decided to sell, and when they did in 1955, he bought the company.
Roberts got needed financing from the Philadelphia National Bank by convincing the lender that if the business was sold to someone who moved it out of Philadelphia, 200 to 300 jobs would leave with it.
Booting Up
In 1961 Roberts, suspecting that trends in men's fashion such as beltless slacks did not bode well for his business, sold Pioneer and became a venture capitalist. That led to his meeting Dan Aaron, a cable television veteran who was brokering cable systems.
Aaron pitched Roberts on buying a small community-antenna TV system in Tupelo, Miss., in 1963 that had around 1,200 subscribers. Roberts agreed, provided that Aaron would run it, since Roberts knew nothing about the cable TV business. But Roberts saw a similarity to the operation of Muzak, where he eventually became a partner in several of its franchises: "You put in the equipment and every month they send you money."
"Ralph is not one to go into anything (in) which he didn't have expert partners," Comcast co-founder Julian Brodsky said in 1999.
Ever the marketer, Roberts desired a new name for his company, then called American Cable Systems. He wanted an invented word like Xerox (XRX) or Kodak (KODK) so it could be registered as a trademark. "A name that isn't an actual word is easier to remember and to advertise," Roberts said. He created the name Comcast in 1969 and incorporated it in Pennsylvania.
Roberts and Aaron expanded Comcast by acquiring several cable systems throughout the United States. But Roberts insisted that each new entity be responsible for its own financing obligations. That way if a cable system failed it didn't affect the rest of the company.
Comcast went public in 1972 and by 1988 became the nation's fifth-largest cable-TV company with more than 2 million subscribers. With the onset of the digital age in the 1990s, Microsoft (MSFT) founder Bill Gates made a billion-dollar investment in Comcast. Meanwhile, Comcast invested in content such the Golf Channel and QVC.
Under the direction of Ralph and Brian Roberts, Comcast bought AT&T's (T) Broadband cable systems for $45 billion in 2002. The purchase made Comcast the nation's largest cable operator with 21 million customers.
In 2011, Comcast and General Electric (GE) completed a $6.5 billion transaction that formed NBCUniversal, creating a global media and technology company. Comcast had a 51% ownership stake and picked up the other 49% in 2013 for $16.7 billion.
Through it all, Roberts, a dedicated family man, strove to infuse a family atmosphere into Comcast and set an example of kindness and compassion.
Comcast Chief Communications Officer D'Arcy Rudnay, who worked with Roberts for 12 years, said, "I never heard Ralph raise his voice, ever. Ralph was a most respectful and gentle human being and an extraordinary leader."
"How do you maintain a family culture when the company is so big?" Ralph Roberts said. "By being warm and friendly. … I urge employees to get to know the people in their own part of the company. That's your immediate family. Be kind, do favors, and offer help to those who may be having problems."
Among Ralph Roberts' numerous honors: He was inducted into the Cable Hall of Fame in 2000. In 2003 he received the Steven J. Ross Humanitarian Award given by the UJA-Federation.
In 2009 Ralph Roberts and his family established the Roberts Proton Therapy Center to treat cancer patients.
Ralph Roberts' Keys
Founder of Comcast who served as its president, 1969-1970, chairman of the board, 1969-2002, and chairman emeritus, 2002-2015. Under Roberts it became one of the largest broadcasting and cable television companies in the world.
Overcame: Unfamiliarity with the cable TV business.
Lesson: It's not what you know; it's what you learn.
"I used to tell our people, 'It's OK to make mistakes. I make them every day because I'm doing too much, too fast. We all are. But let's learn from our mistakes and try to make sure they're not too big.' "
MORE ABOUT LEADERS & SUCCESS:
Gen. George Squier: The Muzak Man
Investor Ray Dalio: Learning To Evolve From Failure To Success
He Dove Into The Hot Kitchen To Make Domino's Pizza Rise
The post Ralph Roberts Built Comcast Believing 'More Is Better' appeared first on Investor's Business Daily.
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