April 11, 2008

Milstein Delivers Keynote Address

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Cornell Entrepreneur of the Year 2008 Howard P. Milstein ’73 delivered the keynote address, “Opportunity Always Knocks if You’re Listening,” at the culmination of Entrepreneuship @Cornell’s annual Entrepreneurship Celebration yesterday in the Statler Auditorium.
“The pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty,” Milstein said to open his speech, quoting Winston Churchill. “Nothing you encounter, or think of, is being done as well as it can be. There is opportunity in everything.”
Milstein shared several of his own successful entrepreneurial experiences in order to “springboard student pursuits and to help students recognize the entrepreneurial spirit that lives within each of us, whether we know it or not.”[img_assist|nid=29751|title=Getting all flushed|desc=Howard Milstein ’73, recipient of the 2008 Entrepreneur of the Year award, speaks in Statler Auditorium yesterday.|link=node|align=left|width=|height=0]
Despite his entrepreneurial success, Milstein did not set out deliberately to be an entrepreneur. When he was only 28 years old, Milstein’s father entrusted him with the family’s hotel operations in New York City, even though he had no background in the industry. He became the youngest person in the business, managing the operations of the Roosevelt Hotel, the Milford Plaza and the Biltmore Hotel, for a combined total of 3,000 rooms.
Although other hotel professionals were content with modest revenues at the full-occupancy Biltmore hotel, Milstein was not. From this discontent, Milstein seized the opportunity to experiment with price increases, and ultimately, the entire industry followed suit. His trial-and-error method also proved successful in gaining a 50 percent increase in revenue by decreasing the number of food and beverage operations run by the Biltmore to give the operating venues higher profit and less overhead.
The rejuvenation of the 1300 room Milford Plaza hotel presented its own unique challenges. Creative marketing allowed Milford to market the theater-district hotel as “The Hotel that’s a big hit on Broadway,” despite its once-dangerous location on West 45th Street. Milford expanded into television advertising to create the first national ad campaign for a stand-alone hotel. The 1984 advertisement, “The LullaBuy of Broadway,” featured the then-hit song from 42nd Street and Broadway dancers. Since it ran until 2001, it earned the title of the Longest Running Commercial in advertising history. In part due to the ads, the Milford Plaza boasted 90 percent occupancy rates.
When Time Warner Cable would not discount their $10-per-room rate to outfit the Milford Plaza with cable TV, Milstein started his own homemade cable system, Liberty Cable, which incorporated Pay-Per-View movies, purchases from Hollywood and broadcasts from satellite signals. Because it was much cheaper, Liberty Cable gave Milstein a generous 40 percent return-on-investment, and attracted many Time Warner customers.
When Milstein realized that Time Warner violated the Anti-Trust laws, he searched for a lawyer to take on the case. When he finally found a willing party, the lawyer was unable to convince his colleagues to join him because of Time Warner’s popularity. Milstein saw this difficulty, too, as an opportunity. His wife, also a lawyer, started a new partnership with Lloyd Constantine, and successfully sued Time Warner. Constantine Cannon, as the firm was later named, eventually went on to win the largest-ever class-action lawsuit against Visa/MasterCard Debit Card for $103.4 billion.
Although he is now in the banking industry, his original goal before his father whisked him away into the hotel industry, Milstein’s entrepreneurial pursuits have not ceased. He now serves as co-chairman, president and CEO of New York Private Bank & Trust wealth-management company and its operating bank, Emigrant Savings Bank. Milstein built the successes of Emigrant Savings Bank upon the failures he saw in the marketing strategy of ING Direct, a foreign bank that was conventionally considered very successful. Despite limited web skills, Milstein used the Internet to reduce marketing costs, and earned $8 billion in deposits while offering the highest simple savings account rate available with no fee and no minimum balance. In 2005, Emigrant Direct won Google’s “#1 Business on the Internet” award.
The Entrepreneur of the Year award originated in the Johnson School of Management in 1984 to bring recognition to the entrepreneurial contributions of Cornell alumni.
“We celebrate the impact an individual can make by designating one,” John Jacquette, executive director of Entrepreneurship@Cornell, said. “Today, ‘entrepreneurship’ is a cultural term. It’s innovative and creative thinking, adding fresh ideas and starting something, in addition to starting a new business, in the traditional sense … we are neutral about what a student’s vision of success is. If success to you is building a school in Zimbabwe, entrepreneurship can help you do that.”
According to Jacquette, the two-day Entre­preneurship@Cornell celebration is aimed at empowering students from all colleges and all fields to realize their own visions of success and for students to share their passions with entrepreneurs who have made their visions into a reality.
“I learned a lot about how to overcome the obstacles that an entrepreneur faces,” Steven Dilamani ’08 said. “It inspired me to be confident and to think creatively in order to deal with the challenges that are brought forth in doing business”
Entrepreneurship@Cornell will also sponsor almost 90 courses across the University for the Fall 2008 semester focusing on entrepreneurship for business and non-business majors, including AEM 338, a social entrepreneurship course with potential funding for student projects.
Milstein advises students interested in social entrepreneurship to sharpen their skills in the private sector, which is subject to the Darwinian forces of capitalism. With those skills, hopeful social entrepreneurs can then make a big contribution to a charity, social, or NGO board.
Today from 11:30 a.m. —1:30 p.m. in the Statler Ballroom, the Technology, Business and Resource Expo will feature 50 student, faculty, alumni and local groups to help familiarize all students with Cornell’s entrepreneurship resources and to facilitate networking with successful entrepreneurs.