Ross Perot The Billionaire Boy Scout
Ross Perot
Founder of Electronic Data Systems Corp.
Founded: 1962
"My role in life is that of the grain of sand to the oyster-it irritates the oyster and out comes a pearl."-Ross Perot
Supersalesman. Enterprising entrepreneur. Patriot. Philanthropist. Presidential candidate. In his long and colorful career, Ross Perot has played all these roles and more. This "can do" bantamweight billionaire from Texas has taken on industry giants such as IBM and General Motors Corp., helped gain better treatment of U.S. prisoners during the Vietnam War, and even spearheaded a commando raid to rescue two of his employees from Iranian terrorists. But perhaps his most important contribution, though not quite as flashy as his other exploits, was his groundbreaking work in the development of the information technology industry.
Born in Texarkana, Texas, in 1930, Perot started working when he was very young. Beginning at age 7 and continuing through high school, he tried his hand at a series of occupations, including bronco busting (he broke his nose.twice), selling Christmas cards, hawking garden seeds, selling magazines and delivering papers on horseback. Somehow he still found the time to become an Eagle Scout, which he would later say was one of the greatest achievements of his life.
Following high school, Perot entered the United States Naval Academy, where he was a battalion commander before serving four years at sea. In 1957, he returned to Texas to join IBM. A natural-born salesman, Perot was soon making higher commissions than any of his colleagues and once met his annual sales quota by January 19th.
Always on the lookout for new avenues of advancement, Perot approached IBM executives with a proposal that the company not only sell hardware, but also supply customized software and technical support. IBM wasn't impressed. Rankled by the abrupt dismissal of his idea, Perot went to get a haircut. While waiting his turn, he picked up a copy of Reader's Digest and came across a quotation from Henry Thoreau's Walden: "The mass of men lead lives of quiet desperation." He determined then and there to strike out on his own. On his 32nd birthday-June 27, 1962¬-with a $1,000 loan from his wife, Margot, Perot founded Electronic Data Systems Corp. (EDS).
EDS did moderately well, counting Frito-Lay among its first clients. But the real breakthrough came in 1965, when the newly formed Medicare and Medicaid programs created a huge market for medical-claims processing. Perot got in on the ground floor as a subcontractor for Blue Cross/Blue Shield. In 1965 alone, EDS won contracts from 11 states to computerize their Medicare and Medicaid billing systems. Finding his niche in the insurance business, Perot sought out new clients in the private sector, and by 1968, EDS was worth $2.4 million. That same year, in what Fortune magazine called "the greatest personal coup in the history of American finance," Perot took EDS public and within one week was a billionaire.
Appalled by news footage of American POWs in Vietnam, Perot decided to put his newfound wealth to good use. In December 1969, he chartered two Braniff jets and filled them with 30 tons of food, medicine and gifts for the POWs. Although North Vietnamese officials refused to let the plane land in Hanoi, the publicity Perot generated resulted in improved treatment for some of the POWs (as they reported years later, after their release).
Throughout the 1970s and '80s, Perot embarked on a number of social ventures, including spearheading Texas' war on drugs, education reform and further efforts to help American soldiers missing in action.
In 1984, on his 54th birthday, Perot sold EDS to General Motors (GM) for $2.5 billion and joined GM's board of directors. GM hoped EDS could consolidate and streamline its computerized information systems, which were scattered throughout more than 100 data centers. But problems quickly arose. GM's tangled bureaucracy made it difficult for Perot to enact what he saw as vital reforms. Frustrated, he began to publicly criticize GM with biting remarks such as, "Revitalizing GM is like teaching an elephant to tap dance. You find the sensitive parts and start poking." After two years of poking and several widely publicized battles with GM chairman Roger Smith, the EDS-GM partnership dissolved in December 1986, when GM bought out Perot for a reported $700 million.
Eighteen months later, Perot formed his second data-processing company, Perot Systems Corp. In a strange twist of fate, he was hired by IBM to help expand the computer titan's presence in the $5.9 billion systems-management market.
Perot truly made history, however, in January 1992, when during an interview on "Larry King Live," the inquisitive talk-show host asked Perot if there were any scenario in which he would run for president. Perot told a nationwide audience, "If you, the people, will on your own register me in 50 states, I'll promise you this: Between now and the convention, we'll get both parties' heads straight." The phone lines were immediately flooded with calls from people volunteering in droves for Perot's independent presidential campaign. What followed was perhaps the strangest presidential campaign in the history of the United States.
Initially, he seemed eager to pursue the presidency, but as the campaign unfolded, Perot was increasingly painted as an arrogant, paranoid man unwilling to take a stand on any given issue. Perot wasn't used to such public criticism, particularly from the press, and abruptly dropped out of the race on July 16. Urged on by his supporters, however, Perot re-entered the race on October 1, explaining that he had withdrawn his candidacy because he believed that Republican "dirty tricksters" had planned to disrupt his daughter's August wedding. Although Perot didn't carry a single state, he did win 19 percent of the popular vote, more than any third-party candidate since Teddy Roosevelt in 1912.
After his defeat, Perot returned to the helm of Perot Systems, which had begun to flounder in his absence. Through a whirlwind restructuring strategy, Perot brought the company back to profitability, and in April 1999, took it public. After just one day of trading, Perot Systems' worth skyrocketed to $3.6 billion.
A self-made billionaire who proved that the capitalist system works, Ross Perot is something of an American icon. This straight-talking can-do cowboy who's willing to go it alone is a burning example of what one person can accomplish when he or she is determined.
Paper Boy Wonder
One of the keys to Ross Perot's success is that rather than waiting for fate to shine upon him, he makes his own opportunities-a characteristic he developed early in life. At the age of 12, Perot decided he wanted a paper route. Informed that there were no routes available, he offered to create one in one of the most dangerous sections of his hometown of Texarkana, Texas. Convinced that he couldn't succeed, his employer offered him a larger-than-normal commission. But the quick-thinking Perot did succeed. He delivered his papers on horseback, allowing him to easily evade would-be muggers.
Perot Power
Ross Perot is a person who believes in getting things done. In 1979, after two Electronic Data Systems Corp. executives were taken hostage by Iranian revolutionaries, Perot masterminded a daring commando raid deep into Iran and successfully freed his captive employees. The raid was later recounted in Ken Follett's bestseller On Wings of Eagles.
