Archive for the ‘Winterims’ Category

Today, the Thunderbird Entrepreneurship Winterim (#eWinterim) met with the co-founders of Fanminder, Paul Rosenfeld and Tracy Grover. With Fanminder, a small business owner can create unlimited offers and promotions that reach fans on Facebook, Twitter, and mobile phones, with no marketing expertise required. The company specifically focuses on small businesses that have a storefront (retail space). In this blog, I will discuss the three major takeaways from our time with Paul and Tracy.

We first touched on the immense amount of creative destruction when you are playing the startup space. Many startups go down, with only a few actually getting going—this is demonstrated in both Tracy and Paul’s history. Both have worked for several startups that eventually went under for various reasons. But neither could stay away. In fact, with a good sense of humor Paul self-admitted that his track record has shown (until Fanminder) that he has been “a marketing genius but a financial failure.” As for Tracy, she comes from an entrepreneurial family, though she didn’t want to be an entrepreneur initially (in fact, she purposely avoided it). She mainly thought she wanted to have an outside life—while growing up she saw how much her father worked (who was an entrepreneur), and thought she wanted to do something different. But, in the end, she came full-circle and got sucked in to the startup scene, and now firmly embraces it—she says it’s “in her blood.”

Lesson 1 was on the importance of a co-founder—their biggest advice was to find a co-founder with a complementary skillsets to yours. Tracy and Paul are a perfect example. Paul comes from the “PowerPoint background” as he puts it (aka corporate) and is an idea and strategy person (he can do the “what”), whereas Tracy comes from the scrappy “just do it” mentality, and she brings the “how” along with principles tactics of good execution and excellent speed.  However, neither of them have technical backgrounds (although Tracy previously did manage technical products)—so it’s definitely possible to be a founder, or part of a co-founder team, lacking an engineering or science degree. What’s harder is doing it alone—it’s lonely, boring (there’s no one to bounce ideas off of), and it’s easy to lose momentum, go on tangents, and get hung up on minutiae without someone to keep you on-track.

What is the hardest part, to Paul, about starting his own business? Put very simply, “the balls to do it;” to take a huge leap of a cliff, without any certainty of success, especially having come from a corporate job (Paul was working for Intuit at the time as a chief marketing officer). But, to him, there is a litmus test that is really quite simple, and asks each one of us to pose the following question to ourselves before deciding whether to embark on, or pass on, a venture: the question perpetually is “when you’re on your death bed, will you be happy with the choices you made?” These are words we should all live by—therefore, Lesson 2 is to live without regret.  For Paul, he is most proud of being able to leap off the cliff at his position in life, considering he had a family. What other advice did he have? It’s better to do startup when you’re young, but not impossible to do it late in life. In fact, it’s a myth that startups are all founded by 25 year olds. The majority of businesses are founded by people in their 40s. “You get there when you get there,” reminded Tracy.

The final lesson is on attracting quality people to work for you, especially in the situation of a co-founder team sans programming ability (in need of engineers). Tracy and Paul had an all equity team in the beginning, and many people told them that it couldn’t be done (but this didn’t stop them). “Everyone has an opinion,” says Paul, “but it really doesn’t matter. If you’re successful then it means that you have broken through all of these barriers.” The duo found that their engineers, although “working for equity” in the technical sense, weren’t really “working for equity.” In reality, the Fanminder engineers were working to learn new skills, working because they believed in the company, working because they wanted to do something cool and new, and working because they believed in Paul and Tracy as leaders. It took a certain type of person, to be sure, and Tracy and Paul were quite choosy. So this is Lesson 3—choose the right people and don’t be desperate. Don’t have the ONLY requirement be people who are willing to work for equity. Rather, hire the employees that are “oh by the way, working for equity” but really working for all those other intangible reasons. Take the people who will make the venture succeed and will do whatever it takes. Find people who will not only do what is sufficient, but also what is necessary. For Fanminder, some of the hardest working employees in the beginning actually had families, even with newborns, and a 9-5 job, but still were able to make it work because they believed in the business.

Stay tuned for more tomorrow on day 9 of the Winterim.

–Chandra Jacobs, Global MBA 2012

www.unemployedMBA.com

A note from Melissa Beran Samuelson, Clinical Instructor of Global Entrepreneurship: We finished our Winterim in India last Friday. Below, a student shares some of what she learned on the trip. The debate around microfinance interest rates in India is heated, especially around the role government regulation should play, if any.  There is talk of capping microfinance interest rates in the Indian state of Andhra Pradesh, but lenders claim this reduces incentives for competition, which they prefer as a more robust way of lowering interest rates. However, there is no research supporting the idea that competition reduces rates charged by microfinance institutions in the industry. Even so, it’s hard to find microfinance clients in India who are concerned about interest rates or even take it into consideration when deciding to take a loan.

By Thunderbird student Jacquelyn Hunter

When people hear on the news that microfinance institutions charge 25 percent, 30 percent or even 80 percent interest on loans, they often are outraged. How can these organizations get away with charging the poor these high rates, and why does no one regulate the industry? And most of all, why are the poor paying these exorbitant rates?

One of the biggest surprises to me during my three-week trip to India to study the microfinance industry is the fact that the interest rate on a microfinance loan is basically a nonissue for the poor.  When a poor person takes a loan from a microfinance institution, the interest rate is not the No. 1 or even a top 5 concern. Since the loan repayment cycle is so short, sometimes only 30 weeks, the interest rate does not have as much of an impact compared to a loan, for example, that is repaid over 20 years.  Also, the interest rate is a simple interest rate, so the impact on payments is not as dramatic as it would be on loans with compounding interest rates.
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By Sampad Das, MBA Candidate

Ronald L. Siegenthaler serves as Chairman of the Board for Xeta Technologies, a NASDAQ listed company that he helped found in 1984.  He also provides sales and marketing services for multiple opportunities through his consulting firm, Myriad Technologies. Mr. Siegenthaler started with sharing experience of his first venture. He presented insight into deal structuring which was knowledgeable as well as enjoyable. He also stressed on how important it is to learn from failure, bounce back and being confident. Some of his advices such as learn to hate losing, need to get prepared, develop a good plan, don’t be lazy be aggressive, must be creative; which he explained with interesting stories was inspirational. He concluded the presentation with his thought “THINK BIG”.

By Brent Selmins, MBA Candidate

Running a private equity firm gives a person unique insights into the entrepreneurial mind.  Sitting on the money side of the deal, Ron Siegenthaler has seen a lot of people with a lot of proposals for investment consideration.  His lifetime of success as an oil entrepreneur allowed him to be in the position to offer up millions of dollars in capital to aspiring entrepreneurs.

Mr.  Siegenthaler attributes his success to the entrepreneurial spirit—the indomitable characteristic that drives people to succeed at their goals no matter what obstacles are in their way.  He summarizes the spirit in a brief exchange he once had with a business partner.  “Why do you want to keep doing this,” his partner asked.

Mr. Siegenthaler replied, “Because if we walk out of here one day too soon, I would have been looking over my shoulder wondering what would have happened if we’d stayed one more day.”
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By Brent Selmins, MBA Candidate

Keller-Williams Realty was struggling at the outset.  Without much of a staff, founder Jim Waldrop was facing a situation where he could easily spend himself into bankruptcy.  The founder of the fledgling realty agency wasn’t about to let his new venture go under, so he took a creative leap of faith.

Mr. Waldrop and his miniscule staff brought in items to populate the office to make it look full.  Then, he set up the phone on a makeshift timer system to have it ring at regular intervals.  When prospective clients would come in to the empty office, the would ask, “Where is your staff?”

“They’re out getting new business for us,” he replied.  His phantom staff’s coats and personal items littering the office, and the phone ringing off the hook gave the illusion of success.  The projected image worked.  The clients started to flow, launching his entrepreneurial career into the stratosphere.

Mr. Waldrop took his creative flair and started HomeSphere at the height of the Dot-com bubble.  His experience in tough situations enabled him to navigate the turbulent waters of the bubble.  Today, HomeSphere works as a digital media lead generation service that brings manufacturers and distributors together with the homeowners and builders that need the services.

Creativity is the one characteristic that all of the speakers in Professor Steven Stralser’s Entrepreneurial share.  All of these sharp business minds have had the ability to seize upon an opportunity that most people weren’t able to see.  It certainly inspires me to think creatively about business opportunities.
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A note from Melissa Beran Samuelson, Clinical Instructor of Global Entrepreneurship: After spending our first few days in Delhi, students went on their first visit into the field, seeing microfinance in action. Our first visit was to Bazaari Microfinance, an organization that has been doing group lending for about three years.

The staff at Bazaari opened their organization to us, from meetings with the Board and Chairman, to the CEO, all the way to allowing us to meet and ask questions of their clients, microloan recipients who make around $2 a day creating beautiful tie-dyed shawls with an art called “bandage.” Others have small stalls for selling jewelry.

We spent one day in the field with them and then a day speaking with their leadership and board. A short article on our visit can be found here on the Microfinance India news page. As I watched the students in the field, it was clear that this was the moment that they had come on this trip to experience. It was a moving experience for all of them. Below is one student’s perspective on this first visit, working with loan officers, branch managers, and microfinance clients.

By Thunderbird student Renée Telkamp, R.Telkamp@global.t-bird.edu

After a plane ride surrounded by Indians, some browsing through my travel guide, and with good academic understanding of microfinance, I felt more or less ready for the real deal. The first three days of this Winterim were spent in meeting rooms in Delhi. If this sounds boring to you, you obviously weren’t with us. Cell phone banking, solar lights, unions, government regulations, NGOs, Non Banking Institutions, multiple lending and all the other concepts were discussed and put into place.
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By Melissa Beran Samuelson, Clinical Instructor of Global Entrepreneurship

Our friends in the US are seeing increasing attention to microfinance in the news through the New York Times and a blog in the Wall Street Journal. For those students with me on the Microfinance in India Winterim, the contemporary debates surrounding microfinance in India have surrounded us.  Our course started in Delhi, where we’ve had the opportunity to be introduced to industry leaders and gain understanding of microfinance, how it works, and the issues surrounding criticisms of the industry.

Byomkesh Mishra of the Royal Bank of Scotland Foundation and Shrikand Shrivastava, Vice President and Head of Microfinance at RBS Global Banking, helped kick off our program, along with playing a central role by arranging access to their partners in the industry.  The program so far has included speakers Brij Mohan, Deepak Alok, Founder and Director of M2i Consulting, and Mathew Titus, Executive Director of Sa-Dhan, the leading microfinance network in India, who have all met with us to discuss contemporary issues and implications of the current conditions of microfinance in India.
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Profile: Moritz Sticher ‘10

Company: Nail Nuk LLC  www.nailnuk.com

Nail Nuk Co-Owners:  Hector Ledesma ‘10 Tracey Shanks ’10 Moritz Sticher ‘10

Education/Professional Background: Undergraduate Degree: Optoelectronics, Graduate Degrees: MS Photonics, MBA.  Project Manager/Engineer in Optics Research and Development

Age: 33

Years as an entrepreneur: 1

 Product: Customized artificial nails sold at a kiosk in shopping malls and through an online shop http://www.nailnuk.com.

  Employees: 4

 What is the value of your Thunderbird experience in relation to becoming an entrepreneur?  As my goal was to start a business after Thunderbird I tried to tailor my courses to this requirement. I would say most useful in regards to that was beside to Prof. Hisrich’s Global Business Plan class the Entrepreneurship Winterim which I can highly recommend as it gives some deep insights into the everyday challenges of being an entrepreneur and the ups and downs linked to it.

 How did the idea for the business come about? The technology involved was discovered by my partner Hector back in 2004 in China. During our time at Thunderbird we then developed several concepts in the Global Business Plan class of Prof. Hisrich which finalized in the startup of a company.

 Do you have a business plan?  How relevant is the document to the business?

We had several business plans which helped us to understand the market and the key parameters driving the financials of this kind of business. The more the business evolved the less relevant the business plan became as the reality required corrective actions to the concept.

 How have you funded your venture? We funded the venture by ourselves.

 How are you building your customer base? We are first of all relying on the high traffic of the shopping mall – currently Orlando Fashion Square. Moreover, we are using loyalty cards to create returning customers.  As an additional channel, we tried working with nail salons to make them distribute our product outside the shopping mall.

 How are you marketing your venture?

Both through flyers distributed inside the mall and in the neighborhood. Additionally, we are using different types of coupons to make customers try the product. Besides that we are using online advertisements, social media and target directly groups of interest with promotional campaigns.

 What is an average workday like for you?  Working at the kiosk for around 8hours minimum per day, while at the same time trying to do some work online. In the evenings we usually discuss strategic, financial and operational issues, create plans, deal with technology issues, order supplies etc.

 What three pieces of advice would you offer other start up entrepreneurs?

1)   Do not quit your day job till the business is cash flow positive

2)   Be patient and know that it will take longer and cost more than anticipated (rule of thumb around 2-3 times for both)

3)   Listen to the customer and be flexible to adapt your product or service to what the market demands most.

 What motivates you? I am motivated by being able to create something new and working in many different areas at the same time. I need a fast-paced environment and constant changes to remain challenged and appreciate to have great people working with me.

 Who is your greatest supporter? Our board of advisors was always there for us when we needed support besides their other obligations.

 What makes you happy?   If I am motivated and I feel that what I am doing is actually what I want to do and not a compromise. Other important factors that make me happy are the people that surround me and the place I am living.

 If you could reside anywhere in the world, where would you live? I feel most comfortable being able to change my place of living frequently and have a hard time naming a place I would want to reside as every city has its own special charm and I could think of many I like being at.

By Ian Jenkins ’10, Thunderbird MBA candidate

“All life is an experiment. The more experiments you make the better.” — Ralph Waldo Emerson.

As the winterim comes to a close, I reflect on the decision that I believe is running through all the heads in the class. Do I join the corporate world, or do I start out on my own? There is much experience to be gained in the corporate form, but then it oftentimes leads to a life that is too comfortable to leave. When you have a spouse, kids, mortgage and car payments, it is hard to leave the security of a salary and start off on your own. Thus it was fitting that the last speaker of the winterim was David Dodge. Mr. Dodge is a former T-bird who wrote his business plan during class and started a business while attending Thunderbird full-time.
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By Nada Farah ’10, Thunderbird MBA candidate

Diagnosing the pain is the key to a successful entrepreneurial journey according to our final speaker Mr. David Dodge. I have realized lately that some journeys start and end with pure irrational passion that doesnt include this step. Not to say that just deciding on a cure without analyzing the pain never works, but this strategys success is unlikely. Understanding the markets ins and outs and then scaling the potential market share with the new cure are very important steps.
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By Daniel Hunter ’10, Thunderbird MBA candidate

Our final speaker, David Dodge, was interesting simply because he is such a recent graduate from Thunderbird and has been on his entrepreneurial journey for a relatively short amount of time.  The lessons which I learned from David revolved around marketing and strategy. David’s company, Sure Prep Learning, has put forth a great deal of effort toward figuring out what unique value they add to their marketplace, what market need they are meeting, and what makes their organization so special and distinctive. Some of these questions have clear answers, but some of these questions are being answered in taking the journey.
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