Success Stories

Scott Adelson, BS '84
Houlihan, Lokey, Howard, & Zukin
 
Jim Breen, MBA '79
Umbrella Entertainment Group
 
Kim Camarella, BS '96
Kiyonna Klothing
 
Jourdi De Werd, MBA '84
Greif & Co.
 
Debra Esparza, MBA '92
Business Expansion Network
 
Bruce Garipay, MBA '92
Automated Homes
 
Lloyd Greif, MBA '79*
Greif & Co.
 
Tiara Hallman, BS '92
It’s A Wrap! Production Wardrobe Sales
 
Tim Johnson, BS '88
Tavel/ Johnson Television
 
Ahmos Netanel, BS '86*
The Massage Therapy Center, Inc.
 
Alan Reed, BS '97**
Card Cutz
 
Mike Singer, BS '84*
Cherokee Uniforms
 
Todd Smart, BS '87*
Absolute Towing & Transport
 
James Sowers, MBA '84
SRS Industries
 
Larry D. Tashjian, MBA '76
Provident Investment Counsel
 
Scott Wilbur, MBA '98
Golf America
 

* Past honoree, Alumni Entrepreneur of the Year
** Past honoree, Marcia Israel Outstanding Student Award


 

Scott Adelson, B.S. '84
Houlihan, Lokey, Howard, & Zukin

What kind of business did the entrepreneur start?

Scott Adelson has actually started and subsequently sold two businesses. The first was somewhat of an apparel company that sold specially designed backpacks to school children. When the demand for his product far exceeded his capacity to produce, Scott sold the business to a large Japanese clothing company. Recognizing the limited amount of choice in home delivery food, i.e., pizza being the only real option at the time, Scott started a Chinese takeout restaurant. He started this venture with a partner and eventually sold out to that partner.

How did the entrepreneur get the idea for starting this business?

Specialty Backpacks

While attending college at USC, Scott Adelson enrolled in a program called "Semester at Sea." SAS gave students the opportunity to travel the globe and experience its wonders and riches while maintaining their studies on board the ship. Students are able to see a variety of cultures and customs, meet interesting people and explore new territory. Such an opportunity filled Scott’s mind with vivid pictures and ideas unimaginable before. SAS reinforced Scott’s desire to become an entrepreneur.

While stopped in China, Scott came across a few schoolgirls wearing backpacks that had Chinese ornaments around the top and Chinese writing emblazoned along the side. Impressed with the design and logo, Scott decided to make his own replica of the Chinese backpack and sell it domestically in the United States. However, Scott first had to find a way to fund, manufacture, market, and carefully strategize this potential opportunity. Scott does not believe in being highly leveraged in debt, nor did he want to give up an equity stake in this promising venture. Therefore, he solicited the help of his friends and immediate family for the necessary funds. Although Scott's family provided the necessary capital, he still had to put together a sound business plan that detailed the finances, manufacturing, and return on investment (Scott would not say how much everything cost).

Scott's second problem was how to manufacture this unique item. Scott's uncle owned a small manufacturing company in Long Beach, California and, at the time, the plant was not running at capacity, thus, his uncle agreed to spare a dozen of his workers. The major cost, however, was that Scott had to pay for the employee wages, machine use and the initial purchase of the backpacks. Scott bought pre-made, ordinary backpacks from a major distributor and subsequently had his uncle's employees add the necessary ornaments and exquisite Chinese writing onto them.

Scott's goal was to manufacture about 200 backpacks and then test market them hoping that retailers, department stores, and wholesalers would have the opportunity to see the creativity and uniqueness of his work. That opportunity arose when Scott gave away some of the backpacks to kids at a summer camp in Beverly Hills as one of his predetermined/scheduled litmus tests. Fortuitously, a parent of one of the children who received the gift was an owner of a large clothing retail store. The owner was so impressed with the design of the bags that he literally ordered hundreds of them from Scott and subsequently signed a long-term deal with him to produce more.

Scott’s backpacks were so original and marketable that they caught the eye of major retail stores such as Macys and Bullocks and soon Scott was selling hundreds of his customized backpacks. The production and demand for Scott’s product became overwhelming and finally, a huge Japanese clothing giant that specialized in making clothes, belts and watches approached Scott. Apparently one of their [the Japanese firm] sales representatives was in a retail store were Scott's backpacks were being sold. Impressed with the design and logo, the representative demanded to know who was the manufacturer. When the Japanese firm found out it was a young entrepreneur, it was immediately impressed and subsequently offered to buy the business from Scott. Scott knew he could not keep up with the mass production needed to meet demand and he wanted his quality product to be manufactured and marketed by a quality firm, with a huge capital base and major distribution outlets. Thus, Scott decided to move on and sold the business (would not disclose amount).

Chinese Takeout

After the sale of his apparel business, Scott basically did nothing but play golf and hang out for about nine months. It was out of pure boredom that Scott had the idea for his next major endeavor. Scott’s second business was a takeout Chinese Restaurant. During the early Eighties, in Los Angeles, the only type food that one could have delivered to one’s home/business was pizza. As Scott said, "it was Dominos or nothing" and he was extremely frustrated with the notion that no other type of food was available for delivery.

Los Angeles is a diverse city with different cultures and customs whose citizens enjoy eating a variety of foods. Scott saw this opportunity and exploited it. Scott’s takeout Chinese restaurant was probably one of the first in all of the greater Los Angeles area (pretty hard to believe, I know). Scott chose Chinese food because of the variety of dishes that could be ordered. He felt Chinese food would be ideal for people who were working late, students that were up studying, or families that just did not want to go out. The market, in Scott’s eyes, was huge.

Scott used the money from the sale of his apparel business as well as additional funds raised from family members and friends to start his Chinese restaurant. His initial investors (family & friends) were so impressed with the apparel business that they gladly supported Scott on this particular venture. However, Scott deviated from a previous belief of not having a partner and decided to partner 50-50 with an old associate/friend from USC. Scott wanted someone to complement him, as well as, shoulder half the risk. He secured a nice area in the heart of Westwood, began advertising, hired the appropriate number of employees, and brought in a manger that would be his tutor and guide.

Scott knew nothing about where to order his food from or the what various kinds of dishes to offer and the manager that Scott hired had previously worked at "Chang's Chinese restaurant" located in Brentwood. The location had been a favorite of Scott's for years and, over time, Scott and the manager became close acquaintances. Scott was able to entice the manger to work for him by giving him a premium salary plus a percentage of the profits. The manager’s job would primarily be to handle the day to day operations of the restaurant.

In the mean time, Scott and his partner would spend a majority of their time advertising. Scott primary handled the UCLA campus and passed out flyers, advertised in the Daily Bruin and approached students who were eating in the School's quad. In addition, Scott gave discounts to all students, thus, enticing them to order. Scott and his partner also focused their attention on corporate employees and residential homes located in and around the Westwood/Wilshire district. Scott's partner was in charge of residential and would travel to almost every home in a 10-mile radius of the restaurant, dropping off flyers/menus under doors and in mailboxes. Scott, however, focused his attention on the corporate clientele. Scott would find out who was staying in what building, what was their line of business, and who was in charge of human resources. Scott would try to get into contact with any H.R. person and try and make his "pitch" as to why the company should order from his Chinese restaurant as opposed to an ordinary pizza place. Scott felt that the H.R. people were the most influential in this area and could sharply change the eating habits off their fellow employees.

Although the Chinese restaurant started slowly--very few people knew of its existence--success dramatically increased as students, business people, and families, took delight in Scott's Chinese restaurant as a substitute for pizza. Scott eventually sold his 50% stake to his partner because he wanted to pursue other goals that probably would shock most entrepreneurs: Scott was going to go back to corporate America.

What is the background of the entrepreneur?

Scott is truly blessed in the sense that he comes from a long line of entrepreneurs. His father is a writer and lyrist, and according to Scott, all artists are entrepreneurs. In addition to his father, his stepfather and cousin have enjoyed tremendous success as entrepreneurs. His stepfather owns a cable TV company and his cousin founded Lorimar and Lacostes Pictures. Scott was born and raised in Los Angeles and attended USC, graduating with a degree in Business Administration and an emphasis in entrepreneurial studies. Although Scott currently works for Houlihan Lokey Howard and Zukin, immediately after school, Scott dreaded the idea of working for corporate America and; therefore, started his own businesses. Although these businesses were only mildly successful (Scott’s financial gains have come form working at Houilhan), the knowledge and experience he gained in starting/running businesses would be of help to any entrepreneur.

After selling his two businesses, Scott pursued his MBA at the prestigious University of Chicago where he majored in finance and marketing. Upon graduating, he took a job with an investment banking firm, Houilhan Locke Howard and Zukin where he has risen to the position of Managing Director.

What did the entrepreneur do to start this business?

After Scott sold his businesses, he enrolled at the University of Chicago's prestigious MBA program. There Scott excelled at his studies and graduated with a degree in finance and marketing. Upon graduation, Scott was torn between being an independent entrepreneur and joining corporate America. Scott loved the independent, risk like nature and thrill of being a successful entrepreneur; however, he also thought there could be a lot of opportunities in working for a big company. He was also skeptical about the lack of potential advancement due to having to answer to superiors and play office politics. However, Scott saw a profession that would incorporate the pros of both corporate America and of being an independent entrepreneur: investment banking. Investment banking allowed Scott the opportunity to work with a variety of different companies and in a variety of industries such as retail, biotech, entertainment, healthcare, and electronics. In addition, most salaries/bonuses of investment bankers are determined by their own deals, thus, the profession also allowed Scott the independence he craved.

Upon deciding to enter the investment banking profession, Scott had to choose for what firm he wanted to work. Recognizing that the larger firms, such as as Goldman Sachs, Morgan Stanley, and J.P. Morgan, were too big and too bureaucratic, Scott wanted to join a firm with which he could grow, be a major player and leave a lasting legacy. Thus, he chose Houilhan Lokey Howard & Zukin, a small investment bank in Los Angeles, California. When he arrived at Houlihan, the company had approximately 40 employees and only two offices. Scott quickly made his presence known and brought his expertise, knowledge, intellect, and entrepreneurial attitude to the small firm. Under his leadership, Houlihan's clients went from small boutique firms to powerhouses, such as Wolfgang Puck, SAIC, QAD, and Calloway. After seven years, Scott became Managing Director and, in addition to his normal responsibilities, Scott is responsible for most corporate responsibilities, and specifically for being the caretaker of the firm’s brand image. In addition, Scott is responsible for running the company’s information system network, which has a variety software, a major company wide database, and an elaborate wide area network that enables Houlihan's various branches to connect. Today, Houlihan has over 240 employees with 10 offices nationwide.

Joining Houlihan has been an extremely fruitful experience for Scott. Being able to invest the firm’s money in a variety of businesses is a perfect opportunity for an entrepreneur. Scott learned everything about investing/running other companies from his glory days of being an entrepreneur and it was in that short, yet imperative period, that Scott attained the skills necessary to become what he is today. He loves working with different companies as it reminds him of the not too long ago days when he was a successful entrepreneur himself. However, Scott is very careful in choosing the clients he will represent. "I choose clients like I choose my friends, they have to be people that I can admire and want to be around."

What advice would the entrepreneur give to someone thinking about starting a business?

In retrospect, Scott Adelson has a few business tenets that he feels are absolutely critical. He believes that one of the greatest gifts a young entrepreneur can have is to be full of ambition, passion, drive and naivete. Coming out of college, Scott had no idea how hard it actually was to start a business. He was oblivious to everything from raising initial capital to sales and marketing to hiring employees. However, his ignorance was in actuality a blessing. Being inundated with negative information can sometimes overwhelm an entrepreneur and force him/her to change their minds which is why sometimes knowing only a little about an industry/business that one is entering can be alright, as long as the passion and willingness to work hard are there.

Why was the entrepreneur successful at getting into business?

Initially, starting a business from scratch is extremely difficult and this can be exacerbated if the venture requires exuberant sums of start up capital. The probability of success is higher if this figure is kept low. In both the apparel and restaurant businesses, initial outlays were small and financing was achieved internally. Scott stayed away from commercial banks and from giving up equity ownership. Most of the money was attained from immediate friends and family.

Sometimes entrepreneurs take on larger ambitious plans without realizing all the intermediate steps that need to be taken in between. Going from point A to point B is more important than figuring out how to go from point A to Point C. Companies should grow at small levels, allowing the entrepreneur time to familiarize himself/herself with the different stages of growth.

Business is dependent on a successful marketing campaign without which prospective customers will never know of the company’s existence. With the Chinese restaurant, Scott advertised in the daily bruin, dropped off menus at hundreds of homes and called various office managers in downtown. In addition, Scott personally went to Westwood and distributed flyers and menus to whomever and wherever he could.

Surrounding yourself with ambitious and talented people is a key factor in ensuring the success of business. "Although the initial "idea" is important, it is people, not the ideas that make money. A great idea will not work if implemented by lousy people, however, an average idea with phenomenal people will find much success." Finding hard working, motivated individuals to join a small company is difficult which is one aspect that Scott did not quite understand in the beginning and regrets. In retrospect, Scott would recommend wide spread ownership which would reduce the risk potential while simultaneously motivating the co-partners to work just as hard.

Scott recommends just trying anything. Just do it he says, try almost anything. "One way to increase your success rate is to quadruple your failure rate." However, when starting a business, "don’t do analysis until paralysis. "Business plans are important but you can’t think of every step or problem."

Having mentors to emulate/look up to is also very important in Scott’s eyes. "Guidance and support are one of the most important things in the entire world, regardless if it’s in a business sense or any other aspect of life." Scott has always tried to surround himself with motivated and talented people and his mentors have primarily been his family, particularly his father.

All entrepreneurs are successful for a reason; however, some common traits are noticeable in all of them. Variables such as hard work, intense analysis, leadership, vision, and perseverance are just a few characteristics to be mentioned. However, when trying to study/emulate why an entrepreneur is successful, one should look at a variety of factors outside the proverbial business plan or reputable college education. External factors such as a psychological and social perspective also play a large role. Most envious people would like to believe that success is derived from luck and chance and, although these factors do sometimes happen, they are never the primary reason as to why an entrepreneur makes it. Success happens for a reason.

"The search perspective views inventions as a matter of effective search for ideas in a space of possibilities" (Effable Invention Pg. 317). This is quite true, since entrepreneurs do not blindly enter any business and, in actuality, they set parameters or guidelines to help steer their path. When Scott first decided to start his business, he was very conscious about the failure rate for projects with huge initial capital outlays which is why he undertook a systematic chance when starting his business. He only looked at businesses with small start up funds. Although Scott had more ambitious plans (starting a nation wide magazine and a venture-leasing firm), he understood there would be a sheer chance of success given the enormous complexities of these businesses. Even after Scott had concluded what type of business he would start, he expanded his search to include other variables such as market size and proximity to customers. This is one of the primary reasons that Scott decided to open a Chinese restaurant in the heart of Westwood. The start up cash was low and the proximity to customers was close.

In understanding an entrepreneur, one must look at the psychological attributes that they possess. Who played a major role in their life, what attitude do they harbor, and what motivates them. Scott Adelson comes from a long history of successful entrepreneurs, thus, at a young age he was encouraged to seek out his dreams, explore different places and ideas, take risks, and never give up hope. While in college, Scott joined the "Semester at Sea" program which allows students the opportunity to study abroad while seeing a variety of different countries and cultures. Very few students take advantage of such a program, however, Scott, with his entrepreneurial mentality, thought it would be an excellent idea. Sure enough, while visiting China, Scott had the idea for his high school backpacks with Chinese ornaments.

Scott is also successful due to his extreme patience and dedication and understands that a lot of planning and time is required to make a venture successful. Even though his backpacks were a great idea, a large amount of effort would be needed to market/expose them to huge wholesalers and retailers. Thus, Scott carefully targeted his retailers, spoke to the right representatives and gave away samples to various stores. "Many factors that figure in the success of everyday search count just as much in the quests of inventors: persistence, looking in the right places, questioning assumptions about where to look, being efficient about it, and so on" (Effable Invention pg. 318).

Scott's greatest attitudinal trait is his perseverance. "The notion of the inventive genius whipping up something in the basement overnight gets little encouragement. While such things happen, they appear to be far from the norm" (Effable Invention Pg. 319). Scott has a simple adage that he has followed throughout his entire life: you have to move from point A to point B, you can't go from point A to point Z and skip everything in between. This belief is consistent with the grain of progress and small win theory. "Everything does not fall together at once; rather, one aspect gets sorted out, another emerges, a problem erupts, gets solved, a new direction suggests itself, and so on" (Effable pg. 319). Some companies are too ambitious in their plans, trying to do too much in a limited amount of time. In contrast, Scott ensures that every task is completed before moving on to the next. When Scott opened his Chinese Restaurant, he made sure he prioritized and accomplished his goals in order (hiring a store manager, than moving on to marketing).

When an entrepreneur starts his/her own business, a large infusion of cash is usually needed and raising funds is an inherently difficult task given the risk factor of the venture. An entrepreneur has to be outgoing, articulate, and presentable to potential investors. Although Scott obtained a majority of his funds from family and friends, he still had to clearly articulate his vision, present a business plan, look presentable, and beam with confidence. "The Inventors were very sociable creatures, easy to get along with, articulate, and entertaining"(Effable Invention Pg. 327). Scott has benefited from being around institutions and individuals that promote creativity. Both during his upbringing and at USC, Scott was surrounded by friends and colleagues who loved to sit around the fireplace and throw out ideas. Rarely was Scott ever ridiculed or looked down upon for coming up with an idea. This type of encouragement/positive reinforcement allowed Scott's imagination to blossom into new heights.

Scott Adelson has been an entrepreneur throughout his entire life. He constantly thrives on the notion that the "idea" is the true foundation that governs and makes an entrepreneur successful. When Scott graduated from the University of Southern California (Class of 82) he rebuked the conventional wisdom which at the time was working for Corporate America. Scott felt there was an abundance more to learn by being your own boss in charge of your own destiny. Rather than work excruciating long hours for someone else’s dream (i.e. Corporate America), that same passion and energy could be channeled to help you achieve your own endeavors. Unfortunately, during the 1980’s, entrepreneurs were a rare breed (relative to today’s standards at least) and therefore, did not receive the same amount of respect and admiration that they do today. Such a scenario left many people doubting/criticizing Scott’s chances; however, his insatiable desire to become an entrepreneur, coupled with the brilliant ideas he envisioned paved the way for his success.

- Basel H. Nizam


 

Jim Breen, M.B.A. '79
Umbrella Entertainment Group

What kind of business did the entrepreneur start?

Umbrella Entertainment Group develops and executes marketing campaigns for specific events for their clients. This involves customer research, development of a marketing strategy, and design and implementation of all aspects of that strategy at various events across the country.

Umbrella Entertainment Group consists of two subsidiaries, Umbrella Food Systems and Umbrella Event Marketing. These two arms of the company work together to develop and execute event marketing campaigns for independent clients. Umbrella Event Marketing pursues clients, designs the campaigns and strategies, and interacts with both the clients and the coordinator of the events. Umbrella Food Systems executes the campaign designed by Umbrella Entertainment Group. Umbrella Food Systems is responsible for the field market information, including setting up and running the sponsor booths and the sale of merchandise to the event spectators.

Past projects include Knudsen’s presence at the LA Marathon, a highly publicized boxing match sponsored by GM, and promotions for 1-800-COLLECT, Kraft, Red Baron Pizza, Pontiac, Kodak, and MetLife at air shows across the nation. Currently, Umbrella Entertainment Group is focusing its efforts on developing an organized network of air shows throughout North America.

What is the background of the entrepreneur?

Jim Breen was born and raised in Edgewater, New Jersey, and is the youngest of four boys. His father was a general in the Army Reserve and the town’s Postmaster.

Jim received an undergraduate degree in accounting from Manhattan College in New York City. Before continuing with his education at the University of Southern California, Jim did a six-week internship at Price Waterhouse in the winter of 1977 during which time he discovered that he did not want to be an accountant.

Without much work experience, Jim Breen entered the MBA program at the University of Southern California and, after arriving at USC, he learned of the school’s unique graduate Entrepreneur Program. He actually failed the entrepreneur personality profile test and had to petition his way into the program.

Upon graduation from the University of Southern California’s MBA Entrepreneur Program in 1979, Jim worked for several companies, including Sambo’s Restaurants, and Jaeger Management Consultants. In January of 1979, he took a job at the restaurant chain, Sambo’s, as a financial analyst. He remained with the company for 11 months until he was fired after a takeover by another company. From this experience, Jim developed a need for independence and control of his career. In 1980, he worked as a turn-around consultant for Jaeger where he learned how to negotiate with creditors, a skill that later proved to be very useful at Umbrella Entertainment Group.

How did the entrepreneur get the idea for starting this business?

Umbrella Entertainment Group evolved out of Jim’s Chipwich ice cream distribution company, which he started on April 1, 1983. His original business distributed and marketed the East Coast based Chipwich ice cream in California.

When Chipwich filed for chapter 11 in 1986, Jim examined the business and its assets that he had built over the previous three years. He discovered that through marketing the ice cream at fairs and other events, he had developed a key core competence; access to a captive audience. His experience, knowledge, and contacts resulted in a company very different from what it was three years prior. Jim turned his company into Umbrella Entertainment Group, an event marketing company.

What did the entrepreneur do to start this business?

To make the transition from a Chipwich distributor to an event marketing firm, Jim took action. There was not a formal business plan for Umbrella Entertainment Group, rather it was an evolution of the original business plan for the ice cream company.

In mid-1986, Jim and his partner, Paul Waterman, talked about this opportunity of being in a position to offer a full package of services to various clients. They established roles, Jim responsible for the sales, and Paul for the corporate strategy.

In the weeks following, they brought on a third manager. George Van Valkenburgh was hired to design and manage the company operations. George had worked for the Oakland Coliseum, and brought operational experience to the team.

In late 1986, as the operation designs were finished, Jim researched leasing companies for the equipment needed to begin operations and found that they were unable to secure the capital to buy the equipment and were forced to lease it.

Jim found that his role was really two-fold selling, he had to sell his idea of complete show management to both the air shows as well as to potential sponsors. In early 1987, Jim cold called the air show coordinators at the Davis Monthan Air Force Base in Tucson, Arizona. His objective was to convince them of the benefits of contracting with Umbrella Entertainment Group to bring in sponsors and manage the concessions at the air show.

The second aspect of his selling involved securing a sponsor which occurred through a contact he had met while in the Chipwich business who helped him to win the business of Dove Bar ice cream. Jim brought the Dove Bar brand name to the air show coordinators, and after one or two meetings was able to convince them that his proposal would financially benefit the air show. The coordinators took a leap of faith and contracted with Umbrella Entertainment Group to manage not only the ice cream concessions, but all of the concessions of the show as well.

The next three years, Jim spent most of his time courting new clients and had to educate them about the company, air shows, and their demographics. Most sponsors took six months to a year of presentations and meetings before they would commit. Through Jim’s persistence and investment spending to groom the company, Umbrella Entertainment Group won Pontiac as a sponsor in December 1988, and several of the Kraft brands in 1991.

What major problems did the entrepreneur encounter during the startup of this business?

Jim Breen’s major problems stemmed from being under capitalized to finance the fast growth of the company, as well as underestimating the length of time and expense of gaining contracts. During the first two years, Umbrella Food Systems lost money due to debt payments on equipment. Additionally, they lost money on their first air show in April 1987. This contract was bid on the expectation of being able to bring in several sponsors; however, Dove Bar was the only sponsor contracted at the time the air show took place.

During these years, Umbrella Entertainment Group stayed one step ahead of its creditors. Jim’s experience as a turn-around consultant was crucial to the survival of the company at this time. He was able to negotiate with creditors and remain open and honest, which won the trust and leniency of the creditors.

By 1988, Umbrella Entertainment Group was generating enough cash flow from the sponsors to keep the business running. By 1990, it finally had sufficient cash flow to get financially caught up with creditors.

In 1990, once Umbrella Entertainment Group became profitable in the air show business, management opted to reduce indebtedness through operating cash flow as opposed to seeking outside equity. Jim and his partner set a goal of becoming debt free prior to further expansion of their business.

Who did the entrepreneur use for help and guidance during the startup of this business?

During the startup of his company, Jim looked to friends from USC for encouragement and support. This network of friends understood his situation and the trials of a startup. Jim also found inspiration in a friend’s father, who himself was an entrepreneur. He once told Jim that "it’s more fun getting there than it is being there."

Jim mostly relied on the support of his partner, Paul Waterman. During the start up they kept each other focused and motivated.

Finally Tom Urban, the National Sales Manager for M&M/Mars proved to be a valuable ally to Jim. Tom believed in Jim’s entrepreneurial vision, and supplied Umbrella Entertainment Group with its first sponsorship and much encouragement. Tom helped Jim land his first major account, Dove Bar, and the three-year deal with Dove Bar helped Umbrella Entertainment Group secure other sponsors. The deal also allowed Jim to tell potential clients that "we do business with Mars," giving validity to their company.

What advice would the entrepreneur give to someone thinking about starting a business?

Jim Breen agreed that the fun is in the journey. His advice could be summed up in one word: "perseverance." Jim reiterated that it is so easy to give up because a startup always takes more money and more time than originally planned. However, he insisted that you must stick with it if you really believe in the idea.

He also emphasized the importance of networks. Both friends and business acquaintances can make the difference between growth and stagnation of a startup.

Why was this entrepreneur successful at getting into business?

The article "Effable Invention" by David N. Perkins and Robert J. Weber looks at the creativity of inventions from three perspectives: the search perspective, the psychological perspective, and the social perspective. According to this framework, Jim Breen’s success with Umbrella Entertainment Group may be attributed to his educational preparation, his characteristics as a person, and his social network. These aspects have given Jim the attitude and ability needed to succeed as an entrepreneur.

Jim Breen’s search for the right idea began with his education. His accounting background prepared him for a career in business. His graduate work at USC in the Entrepreneur Program gave him the foundation and the option to work for himself instead of someone else. Furthermore, his experience in the restaurant industry as financial analyst for Sambo’s, and his experience as a consultant, exposed him to the inner-workings of many types of businesses.

"Effable Invention" would define Jim Breen’s search for his entrepreneurial idea as systemized chance. Jim systematically surveyed the opportunities for his company when Chipwich filed for bankruptcy. By carefully searching the set of opportunities available, Jim and his partner found that their company had valuable assets that were not fully realized. They took these assets, an audience, experience and contacts, and developed a new vision for their company.

Jim Breen as a person also contributed greatly to the success of Umbrella Entertainment Group. "Effable Invention" defines this as the psychological perspective. The article pinpoints several characteristics common to inventors. Intelligence, ingenuity, and articulateness are characteristics Jim possesses and which the article emphasizes.

Furthermore, persistence is identified as a crucial trait for the inventor. Jim’s persistence and belief in his idea proved to be a crucial combination that kept his business alive. These traits gave Jim the motivation to find solutions to problems instead of giving up and also helped him to persuade others to take a leap of faith and contract with his company.

Jim is a very persistent and hardworking man, is confident and enjoys the challenge of a risk. These attributes have kept him competitive and driven. His ability to work well with people and solve problems has also helped his business to grow and to succeed. Most importantly, Jim’s flexibility has allowed him to react to the business environment and adapt his company to the changed circumstances.

Jim Breen’s attitude allowed him to take risks with his entrepreneurial venture without dwelling on the consequences. He said that when starting his company, he had nothing to loose. He was young, did not have a family or a house payment, and could always go work for someone else if his business failed thereby giving him personal freedom, which allowed him to take risks without large consequence.

The third aspect defined by "Effable Invention" is the social perspective. The article emphasizes that invention is social, requiring people to interact in teams, as leaders, and with colleagues and contacts. Jim fit this description as is evident in his leadership and personal selling skills.

He and Paul Waterman worked together to discover a new entrepreneurial vision. This social support in the search phase is congruent with the findings of "Effable Invention."

Jim took a leadership role in his company and, as such, he was intelligent and humble enough to realize he could not do the job alone. He shared substantial responsibility with Paul Waterman and subsequently understood his limitations and lack of experience in operations, and brought in George Van Valkenburgh as the operations designer and manager. Jim’s leadership created this team which was forced to work socially with a common goal.

Jim’s social skills proved invaluable in selling his vision to sponsors and the various air shows and he was able to interact with key people to sell his idea. He cold called, made presentations, took meetings, and made phone calls. This encouraged many companies to sign on with Umbrella Entertainment Group before it had a proven track record.

Finally, Jim Breen’s social network of business acquaintances kept him motivated and helped him land accounts, specifically, Tom Urban from M&M/Mars became a valuable ally. Tom offered critical guidance to Jim and Umbrella Entertainment Group and gave the company its first sponsor, Dove Bar. This social network also led Jim to Paul Waterman, who was a colleague at Sambo’s, and George Van Valkenburgh, who was a business acquaintance from his Chipwich distribution company.

Jim’s educational and work background, characteristics and network of friends are all responsible for molding him into a successful, risk-taking entrepreneur. These aspects not only prepared him for the opportunity when it presented itself, but also gave him the ability to reorganize his business as the environment changed. Jim’s entrepreneurial talent enabled him to turn a small ice cream distribution company into a highly specialized event marketing company.

Over the next few years, Jim will be leading Umbrella Entertainment Group around another corner. Based on Umbrella Entertainment Group’s expertise in marketing and its understanding of the Air Show demographics and logistics, it is poised to achieve its goal of linking air shows together as a major entertainment property, just as Nascar has done with auto racing.

- Jennifer D. Malloy


 

Kim Camarella, B.S. '96
Kiyonna Klothing

What kind of business did the entrepreneur start?

Kiyonna Klothing is a Los Angeles-based partnership that caters to the "passion for fashion." It is not the conventional fashion-oriented apparel company because of its belief "that every woman, no matter what her size or shape, deserves to be attractively attired in the fashions of today." Kiyonna Klothing is a design company that focuses on a generation of young women who are size fourteen and above. With many of the traditional design companies catering to the needs of women’s clothing in the petite market, the plus size niche of Kiyonna is the fourteen and above category.

What is the background of the entrepreneur?

Kim Camarella was born into a family that possesses an educational background, as both of her parents were teachers. As a Business Administration major at the University of Southern California, Kim's passion directed her towards entrepreneurial studies where she pursued her emphasis/specialization. It was in this program that she felt as though her personal entrepreneurial flame was increased and her talents furbished.

While attending school full-time, Kim engaged in corporate America on a part-time basis gaining so-called "real-life" or "hands-on" experience. She held positions at Dean Witter as a Broker Assistant for three years and Tracker Technologies as a Marketing Coordinator for approximately one year. These two positions enabled Kim to not only establish a strong base of business experiences but also gave her the opportunity to expand her network.

How did the entrepreneur get the idea for starting this business?

During the spring semester of 1996, Kim Camarella was faced with the academic requirement of writing a business plan while in the Entrepreneur program at USC. Kim was particularly challenged by this academic requirement as she did not know about what she wanted to write. Contemplating possible ideas for the project, Kim stumbled upon the idea of designer clothing for plus-sized women from the media. She noticed the lack of advertisements for the full figured women and the idealistic nature of the fashion industry. This void was exposed as a result of the many commercials on television, commercials that neglect the majority of women in America and that depict the almost flawless nature of a women’s body.

With this idea in mind, in addition to others, Kim began to more acutely explore the validity and potential of this concept. She noticed that plus size women's needs were continually disregarded and rarely were the means to satisfy their demands offered. Research has shown that many plus size young womenhave to sew their own clothing. The cultural stigma placed upon size had steered companies away from this industry toward the "lime-light" petite markets. This was the point at which Kim decided to pursue this venture.

What did the entrepreneur do to start this business?

Having stimulated interest in the idea, Kim began the research process to verify her enthusiasm. As a participant in the Entrepreneur Program, Kim was assisted through her course work and curriculum, to achieve the goal of a complete business plan. The various sub-projects, such as a feasibility study and market research as well as alumni resources, enabled Kim to have an opportunity to gain the necessary exposure and learn the proper techniques of new business generation.

Kim began expanding her idea in generating the concept and completing the business plan prior to graduation. Furthermore, she interviewed individuals within the fashion industry to gain additional insight on the potential venture. The course work was utilized as her stepping stone to gain a systematic manner of knowledge, understanding, and exposure to the business aspects of the creation of the company and the industry. Having established the groundwork, in terms of the knowledge, the understanding, the feasibility, and the business plan, the business was ready to begin.

When did the entrepreneur do these activities?

After graduation, Kim Camarella began to work full-time, making it difficult to begin her venture. She never relinquished her dream of beginning the company, rather she continued the research and the furthering of her understanding. Her enthusiasm never waned and Kim attracted two partners that she felt were necessary for the success of the company thereby setting the stage for the actual launch. In October of 1996, Kim began to work full-time on the venture and the three formally made the introduction of Kiyonna that same month at a trade show in Las Vegas.

What major problem did the entrepreneur encounter during the startup of this business?

The founding team was responsible for all the tasks needed to support the daily operations of the business. The challenges of being young and inexperienced combined to provide the roller-coaster ride for the company during a year long span between October of 1996 and 1997. Most of the problems stemming from the uncharted encounter with a start-up were resolved over the learning curve of operations. But, the primary difficulty stemmed from the pitfall of a fruitless and disastrous partnership.

In addition, the issues faced in attempting to gain the SBA loan were almost as difficult. Kim whole-heartedly believed in the sacrifice of the present for the success of the future. For the next six months, Kim worked to enhance the business plan she wrote while in the Entrepreneur Program. During that time, Kim used her resources to the fullest extent possible. As a result of her trust in her parents and their respective backgrounds, her father’s work in the financial industry and her mother’s work as an English teacher, Kim constantly asked for critical evaluations. Kim felt it was important to receive feedback from people, such as her family, who were outside of the apparel industry. Finally, Kim felt conformable with and convinced that it was a superior business plan.

How were those problems solved?

The delicate issue of severing the partnership took place at a critical time in the growth phase of the start-up. Taking precautionary steps by consulting with lawyers, the three were able to reach an agreement. Fortunately, the company did not suffer any major setbacks as a result of the dissolution due to the fact that Kim and Yvonne were already performing the functions for which the third was responsible.

At the same time, in order to receive the needed loan, Kim’s persistence proved to be frustrating, but worthwhile. Attempts to receive the loan from two separate banks were futile and appeared to be a result of an inattentive committee. Kim felt dejected after the great amount of the time and effort spent writing and finalizing the business plan, presenting the samples, and arranging the purchase orders. Kim channeled this frustration towards working even harder to locate the necessary funding. After exhaustive research and referrals, Kim applied to the Small Business Administration (SBA) Women’s Pre-Qualification Program and received an apporval in only three days which was one of the fastest seen by the women who packaged our loan. Simply stated, Kim said, "do not give up."

Who did the entrepreneur use for help and guidance during the start up of this business?

Besides having come in contact herself with many people within the industry through personal contact and interviews, Kim Camarella cites that her close relations with her family has assisted her throughout the process. Their relationship can be described as interactive and open, as is evident from the business plan preparation process. The parents were always willing to lend a helping hand and continuously supported her passion. With her mother’s literary expertise and her father’s financial understanding, Kim benefited from their knowledge and experience.

What advice would the entrepreneur give to someone thinking about starting a business?

Despite being a relatively young entrepreneur, Kim Camarella has been exposed to the cruel world of business. Having learned from her mistakes, in hopes that she will be able to refrain from repeating them in the future, Kim says that one of the biggest assets one may have is the ability to learn. The ability to be attentive in examining one's surroundings and constantly attempting to achieve better results. The ability to learn has enabled her to achieve this level of success. Failure and the dangers of the future will always loom, yet if one is ready and willing to recognize, adjust, and take the challenge, he/she will be able to survive.

Why was this entrepreneur successful at getting into business?

Kim Camarella and Yvonne Buanauro are pleased with the present state of Kiyonna Klothing, but are constantly trying to learn from the company’s success and failures. Did they win the battle of a "Start-Up"? Many would say yes, but they realize that there is a long road ahead. The incremental successes and victories, over the course of business, for the two partners can be identified in their search, psychology, and social context.

Despite maintaining various responsibilities within a given time, responsibilities that range from additional school work to full-time employment, Kim Camarella never stopped the learning process. The search for knowledge and understanding was and will remain a continual process for Kiyonna Klothing. The search processes employed may be defined as the cultivated chance and good bet methods.

Kim constantly exposed herself to input and information, furthering her understanding and establishing occasional connections that would assist in reaching her objectives. Whether these objectives were the formation of a business plan, an understanding of design, or the generation of capital, the thirst for searching never diminished. Furthermore, by completing market research, they were able to identify, with reasonable certainty, the desires of the market and customers. The search to further the business is ongoing and includes the attempt to seek projects with favorable calculated risks.

The start-up phase of a business will often times bring forth unforseen occasions. Kim cited that even though her business plan submitted during her academic term at USC was considered to be outstanding, there were many flaws. These flaws were not the result of a lack of effort or research understanding, they were due to the absence of real life application. A business plan is a guideline which directs the objectives of a company, but until one is in actual operation he/she will never be able to completely comprehend the business. The flexibility and dedication of the founding team will be tapped during the many occasions in whichh the business is being "side-tracked".

Sometimes the incorrect or unacceptable behavior is not apparent, but the attentive characteristics of the founding team will enable the business to blossom. The dedication is also apparent in the mentality and enthusiasm of the founding team. The sacrifice of today's success for that of the future is the vision evident in all of the actions taken by Kim and Yvonne. Their one hundred percent commitment is distinguished through the passion for success and the reluctance to fail.

Under the social context, Kim Camarella fostered the interdisciplinary spirit by absorbing the abundance of information and knowledge of others. The personal vision harbored the concept of targeting the plus size market. Trying not to leave a door unopened, Kim was able to utilize the spirit by constantly searching, talking, surveying, and interviewing. Kim and Yvonne clearly possess the aptitude to not only recognize and establish enthusiasm but to also continue that enthusiasm to search, understand, and extract information from others and the market thereby creating a successful business.

- Avo Adourian


 

Jourdi De Werd, M.B.A. '84
Greif & Co.

What kind of business did the entrepreneur start?

Jourdi de Werd and his two partners Lloyd Greif and Steve Cesinger founded Greif & Co. investment bank. Greif & Co. offers financial advice to companies involved in mergers or acquisitions and, in addition to the three owners, employs 13 individuals. Essentially, client firms are in the process of being acquired, are looking to make an acquisition, or require assistance in raising capital for either of the aforementioned cases. Greif & Co. restricts its clients to medium-sized companies valued on the market between $20 million and $500 million, and located in the Western United States.

Put simply, Greif & Co. is a smaller version of major investment banks, such as Morgan Stanley or Merrill Lynch. The services rendered are much the same, with the primary difference being size, both in terms of the company itself and the clients it serves.

What is the background of the entrepreneur?

de Werd’s family shows a long history of entrepreneurial spirit. His father ran his own product distribution business after serving in the military. His grandfather owns a chain of restaurants. His great grandfather was a farmer that went into the elevator business. Thus, one can surmise that the environment Jourdi was raised in was infused with the spirit of entrepreneurial success.

His education continued to feed this entrepreneurial spirit. He earned his Bachelor’s degree in computer science from Cal Poly San Luis Obispo, after which he came to USC for his Master’s work. In 1984, Jourdi graduated from the USC Marshall School of Business Entrepreneur Program.

Working in addition to going to school enabled de Werd to gain experience in the startup of new companies as well as become interested in investment banking. While in school, Jourdi started no less than three businesses. The first two were publishing companies and the third was a computer software firm he co-founded in May of 1984 as a part of his Entrepreneur Program work. As a final project, his Program mentor asked him to write a business plan. Jourdi came up with the idea of selling greeting cards featuring a family member’s artwork. To push his student, the mentor said this was too simple, and in order to pass, de Werd would have to develop a plan for a software company that his mentor had already begun forming. With his mentor as an owner, de Werd successfully ran the company for three years, finally making the decision to sell in November of 1987. The startup experiences tweaked Jourdi’s interest in the process of raising capital for new companies, which in turn led him to the investment banking industry. After graduating from USC, Jourdi went to work for the large investment bank Sutro & Co., where he stayed until the founding of Greif & Co.

How did the entrepreneur get the idea for starting this business?

Greif & Co. first emerged as an idea in the heads of the three founders when John Hancock, a large mutual life insurance company, acquired their employer, Sutro Co, in 1986. The new management proposed changing the customer focus of Sutro Co. to eliminate smaller clients. de Werd and his partners felt that the organization they worked for had lost the vision of the target market, and so decided in November of 1991 to start a new company to regain that market.

At the time, financial services were in abundant supply for those clients with sizable, attractive transactions. Larger companies had numerous investment banks, such as Merrill Lynch and Morgan Stanley, that were more than willing to assist them in financing. The smaller companies did not have transactions complicated or large enough to require outside financial assistance. Thus, the medium-sized firms, between $20 million and $500 million, were in demand of these services, but were commonly ignored by most suppliers because their transactions were not large enough to be attractive. After examining this market situation, de Werd, Greif, and Cesinger realized they could use this opportunity to start their own business serving only these medium sized west coast firms. Thus, Greif & Co. became a reality in April of 1992, a mere five months after the news of the Sutro & Co. customer focus change had reached the partners.

What did the entrepreneur do to start this business, and when did the entrepreneur do these activities?

The three founders of Greif & Co. met while working at Sutro & Co. In 1986, John Hancock acquired Sutro & Co. and set about making substantial changes in the operations of the firm. In November of 1991 de Werd and his partners were informed that the new senior management no longer wanted to support the type of work with which they were directly involved. This work was primarily investment banking for medium-sized company mergers and acquisitions.

de Werd and his partners strongly disagreed with this new plan and, over the next four months, got together as a group and established a business plan to start up a new company. The plan focused on filling unsatisfied demands in the marketplace by clearly defining customers, the target market, business structure, and operations financing. They had to move quickly in order to keep their current clients’ support, and so, by March 1992, all three left Sutro & Co.

Through late March and early April, they performed the routine necessities of setting up a new business. They hired an attorney to regulate and license their new investment banking firm. As independent investment bankers, each of the three partners had to obtain licenses from both NASDAQ and the SEC to practice. Once the business permit and licenses came through, they set up their offices in a downtown Los Angeles office building and hired a secretary. They contributed only personal funds to Greif & Co.’s starting capital, although they did not expect to reach profitability for at least three years. Greif & Co. went to work in April of 1992.

de Werd described the change in actual work from Sutro & Co. to Greif & Co. as little to none. It was as if they had simply gone home one day and came back the next doing everything the same except with different business cards. All their clients made the move to Greif & Co. with them. But especially in the beginning, the three partners were determined to execute their business plan to the letter. They kept with their mission to deliver only the highest quality services, but also managed to keep their focus on the middle-sized companies they had originally left Sutro & Co. to serve. At times this meant turning down clients whose work looked attractive, but deviated from their plan. While keeping to the market segment they targeted, Greif & Co. slowly grew, all the while evolving to match market changes and specific customer needs.

What major problems did the entrepreneur encounter during the start up of this business?

de Werd takes pride in the fact that Greif & Co. really did not encounter many problems during its start up and he attributes this primarily to careful planning. While working at Sutro & Co., de Werd and his partners gained valuable experience which enabled them to avoid pitfalls with their own venture. Through their prior work, they were able to familiarize themselves with the industry and note the client needs that their large firm was not addressing. They made their business plan simple and long term, and set realistic expectations to avoid any disappointments.

Additionally, the fact that investment banking is largely a personal service industry made it easy to avoid problems in starting up a new business. Really, the three founders were doing the same thing they had done at Sutro & Co., but it was even better because it was in their new form with a focused customer list and complete control. Their already established reputation and affiliation with a well known firm such as John Hancock, ensured little to no risk of losing the funding they had invested or of running out of clients. It also helped from both a legal and tax standpoint.

They did all the work themselves, used their own cash for funding, and kept the firm small at first. This meant no errors would occur in their work, and they had no loans with interest to repay. Their small size, given the capital they put in, allowed them freedom from having to make compromising decisions in their early days. Perhaps the one thing de Werd says was a downside to starting up a new business is the increased share of time he had to spend on issues not related to investment banking, and that he had not needed to concern himself with at Sutro & Co. These are issues such as hiring employees, leasing office space, and other day-to-day administrative work. Together, however, the three founders made wise and careful decisions based on their collective years of education and experience. Greif & Co. continues to grow today.

Who did the entrepreneur use for help and guidance during the start up of this business?

de Werd says that he and his partners relied primarily on themselves for guidance.

Education and family background taught him how to properly structure a business, with a well-defined customer profile and business plan. His previous startups gave him a preliminary taste of what it was like to deal with the day to day affairs of running a business that may not be related to the product or service the business provides. Most importantly, his previous work of raising capital, handling mergers and acquisitions, and satisfying client firms at Sutro & Co. allowed him to perfect his skills as an investment banker while also safely monitoring the industry and developing a plan for how best to deliver his services to a client.

de Werd’s two partners had similar educational and experiential knowledge to draw upon, thus, together the three were a solid support base for one another. As a whole, they exuded great confidence in their abilities and intelligence, and worked as a team to not only explore all options before acting, but also to always think about how best to perform the preserving functions of the company. Add to that three helpings of the "instinct" of an entrepreneur for good business practices and the "entrepreneurial spirit" and Greif & Co. was off to a very good start.

What advice would the entrepreneur give to someone thinking about starting a business?

de Werd’s advice for becoming an entrepreneur is contained in a simple, three-step process. By achieving all three steps, a fruitful young business can emerge. First, he says, you must know the business’ mission. This means, among other things, knowing who your customers are and what type of service or product they need. Second, you have to know how to keep true to the mission and not lose focus. Here, you determine how best to deliver your services or products to your customers. This entails being sure your business is properly structured for success, and that you have a well thought out plan for providing the initial capital. The third step is to execute. Launch your business following the set mission and never faltering.  de Werd gives three pieces or rules of thumb to remember along the way:

"Aim high." Do not be afraid of taking on projects that may appear too large to handle at first. Stay realistic, but do not underestimate yourself, especially in a personal service industry. Starting up in a larger market means less competition and more opportunities, so do not let anything pass you by;

"Always have the customers in mind." First and foremost know who your customers are. If you develop a wonderful new painting tool, you may think that your customers are painters, but that would be a mistake. Retailers must be convinced they should carry the product or painters will not even have a chance to like it. Never lose sight of who your customers are, and remember that regardless of how great a service or product you have, it must be delivered at their convenience and to their satisfaction;

"Do not be afraid of failure." Entrepreneurship by definition involves taking risks, and likewise risk-taking must result in the occasional failure. If you lack the confidence to try new things, opportunities will pass you by and the world will leave you behind. Every failure teaches a lesson, and always convince yourself that if you are willing to work harder, you will be successful.

Why was this entrepreneur successful at getting into business?

Greif & Co. was successful beyond even the founders’ expectations for many reasons. The three Sutro & Co. employees found the perfect idea for a business, generated an exemplary business plan, and executed it flawlessly. Their own personal traits as well as those of their environment added to what can only be described as a great success.

de Werd describes how Greif & Co. really got started as the "Lee Iacocca Syndrome." Had Iacocca not been turned away from Ford Motors, the great Chrysler Empire probably would not have come into being. The same "sheer chance" as David Perkins calls it in his article "Effable Invention" applies to Greif & Co. Had de Werd and his partners not been led to believe that the new management of Sutro & Co. was going to change the customer focus, all three might still be working there. Yet, as it was, the search for a new business idea was over almost before it began. From that moment it was all "safe bets" made on using the same techniques and even serving the same customers as they had before.

Once de Werd and his partners had found their new business market, they relied primarily on their wits to guide them. Perkins’ psychological factor played a huge role in the startup, and continues today. One of the things that struck me most about Jourdi when I met with him was the enormous amount of leadership both he and his co-workers had. "Entrepreneurs have a lot of confidence," he told me. This is clearly evident in his attitude toward work. He is also a man who has a developed ability to envision things. From the business plan to the customers, to the market, Jourdi knew what had to be done to ensure success right from the beginning. These abilities could stem from his family upbringing. His father knew military discipline and the value of hard work. Other entrepreneurial relatives taught him to grab every opportunity that presented itself. His leadership abilities are derived from his education in the entrepreneurial program at USC, and the confidence he possesses come from the skills he learned in graduate school and perfected in his years at Sutro & Co.

The trio of partners that founded Greif & Co. worked together to sort out each and every issue in the start up phase of the company. Though many of the basic assumptions about services and the market were taken from work at Sutro & Co., their interaction was especially necessary when it came to hiring new employees, negotiating lease contracts, etc. The three showed distinct interdisciplinary skills in successfully managing these various tasks, as well as being able to provide the highest quality financial advice to their clients. The outside market, particularly those firms that made the switch from Sutro & Co. to Greif & Co. as clients, also played a special role. As the three had foreseen, there was little in the way of investment banking available for the middle-sized merger and acquisition firms, thus, competition was not a major problem. The new company could not help but succeed and grow.

- Kurt Eberle


 

Debra Esparza, M.B.A. '92
Business Expansion Network

What kind of business did the entrepreneur start?

Debra Esparza founded USC’s Business Expansion Network (BEN) in 1991. BEN provides management and technical assistance and entrepreneurial training to small and minority owned business operating in the Greater Los Angeles area. BEN’s mission is to enrich the "entrepreneurial spirit" and spark business growth and community economic development in Los Angeles. In addition to providing consulting services and training, BEN also assists fledgling businesses with loan development and financial packaging and provides access to educational and technical resources. Simply put, BEN aims to nurture business expansion and job creation.

 Five major ways in which BEN provides business support are 1) Access to Capital: BEN maintains a comprehensive database of sources of business capital including detailed information about special loan programs and eligibility criteria. Business analysts at BEN will assess a business’s capital needs, develop a comprehensive loan package and aggressively target potential sources of funding. 2) Management and Technical Assistance: BEN boasts highly trained business analysts who are eager to share their years of experience in the business world. These experts cover the distinct functional areas, both line and staff. They also help businesses lay down goals and specify supporting objectives to meet these varied goals. 3) Government / Institutional Business Opportunities: BEN understands the specific rules and guidelines under which this sector (which entails government agencies and large corporations) operates. For small businesses wanting to target these entities as their primary clientele, BEN can assist them with getting on these institution’s vendor lists. 4) Entrepreneurial Training: BEN can cater to the varying needs of small businesses, from those starting up to those wanting to expand their ventures. BEN offers a practical, "nuts-and-bolts" approach and helps you achieve your desired level of profits and sales. Specifically, FastTrac Entrepreneurial Training runs for 9 weeks for start-up businesses and 12 weeks for existing business owners. 5) Disaster Recovery / Contingency Planning: BEN actively assists those businesses feeling the economic impact of civil disturbances or earthquakes by focusing on getting these business back on track after a disaster. BEN also helps develop operational procedures that minimize the impact of future disasters.

Under Ms. Esparza’s guidance, BEN has developed much needed resources for entrepreneurial training and support services. BEN’s impact on the Los Angeles community has been remarkable. More than 400 youth have received entrepreneurial training and encouragement. Over 2500 businesses have received in-depth management and technical assistance. An additional 200 businesses have benefited from workshops and seminars and close to 1000 entrepreneurs have received business plan training. More than 150 USC Business students have been involved in BEN activities and have assisted 50 businesses through their business / entrepreneur classes. Finally, nearly 75 non-profit organizations have participated in entrepreneurial / strategic planning workshops and services.

 The documented results of these activities are even more impressive. More than 250 jobs have been added, 150 of these in low-income communities. Small business clients have received more than $8 million in loan approvals and have secured more than $4 million in procurement opportunities. Four youth entrepreneurial programs have become independent and self-sufficient. To sum up, small businesses have recorded dramatic increases in sales, profitability and management skills. BEN’s present looks very bright; the subsequent sections will focus on Ms. Esparza’s contributions and BEN’s past and future.

What is the background of the entrepreneur?

Ms. Esparza attributes much of her success to the immense support she has received from her family, a simple hard-working middle class family. Her father is an engineer and has worked for the same company for over 35 years. Ms. Esparza’s mother is a human-resource director and has had only 3 employers in her 35-year career. Debbie contrasts this with her theory that one will have at least five careers in a lifetime thereby implying that she may "indulge" in other fields in the future. Ms. Esparza has one younger brother as well as 28 aunts and uncles, 50 cousins and 6 second cousins that make Ms. Esparza’s extended family seem huge. What is important to note is that education has been greatly valued in the family, Debbie is one of the first in her extended family to earn a Bachelor’s Degree and the only one to date to have earned a Master’s Degree.

Debbie says she has learned much from her family in terms of values and ethics and hard work, honesty and humility are traits she has imbibed from her parents. These qualities, along with sound judgment, have been especially beneficial to Debbie in her current role as Director of BEN. Debbie says that balancing work and her personal life is often tough, but her value system helps her overcome this challenge.

Ms. Esparza has two degrees, both from the University of Southern California. She graduated in 1982 with a Bachelor of Science in Business Administration emphasizing in Finance and Business Economics. In 1992 Debbie finished her MBA with an emphasis Entrepreneurship and Venture Management. Education has been extremely important to Debbie and while she acknowledges the existence of the "paper-chase," it is the pursuit of knowledge that is important to her. USC’s Marshall School of Business has always emphasized both the academic and industrial dimensions and this has helped Debbie in her consulting work. She has a reputation for helping businesses come up with simple yet realistic solutions to their problems.

Ms. Esparza started part-time work in commercial banking at a clerical level in 1976 when she was in high school. She learned the numerous details about bank operations and went onto a management-training program emphasizing loan packaging. Ten years at Bank of America saw her rise to the Assistant Vice-President level. She accepted the position of Vice-President / Manager at Southern California Bank in April 1986. This experience in finance and specifically loan packaging gave Debbie a first-hand perspective of the financial constraints her clients face in the day-to-day running of their businesses. Debbie has been able to use her experience to help them maintain a stable financial position emphasizing the need to have liquid working capital at all times. Having achieved a prestigious rank at a young age, Ms. Esparza started to explore her inner self. She found she was living on a path paved by societal norms; in December 1989, Ms. Esparza decided to "explore" the world and understand the meaning of life.

Debbie quit her job and visited friends in Wyoming and Maine and camped in Mexico; she also indulged in philosophical thought. She wanted to "leave a legacy" and make a tangible contribution to society and she joined USC in 1990 to fulfill one of her re-defined goals of pursuing education. Debbie’s ability to deviate from this conventional path shows her immense courage, a trait that helps her overcome the toughest "dilemmas" and "situations" her clients often face in today’s competitive business environment. It was at USC that Debbie founded BEN; the next section will also cover BEN’s history.

How did the entrepreneur get the idea for starting this business?

BEN started in 1991 at the USC Entrepreneur Program as the University-Community Outreach Program (UCOP). The UCOP was a University-wide community service initiative to get involved with the surrounding communities of USC. It entailed different programs and services including educating businesses around USC and a middle school mentoring program. Ms. Esparza was a volunteer during her MBA course and later became the paid program coordinator. UCOP however was product driven; one of its programs was geared towards training high school teenagers to start and manage their micro business.

Debbie noticed that this UCOP program did not meet the entire needs of the community. She also noted that the UCOP was operating on the basis of a manual, which outlined how to implement different programs in a certain fashion. Debbie was clearly able to see that these programs did not meet the needs of the community and that a "twist" was needed. Debbie decided to go "outside the manual." In 1992 she instituted a "market-driven strategy" by expanding the services and programs of the UCOP (which was to later become BEN) to meet specific community needs. Following the civil disturbance in Los Angeles in 1992, which left businesses in the community "shattered", Ms. Esparza gathered a team of MBA students to help these businesses recover. She taught these volunteer students the fundamentals of loan packaging and literally began rebuilding one business at a time. This effort was known as the Community Enterprise Projects, and in 1993 won the University-wide Volunteerism Award.

1993 and 1994 were critical years for BEN as it successfully bid for public contracts to provide business services in Los Angeles. BEN’s budget jumped from $300,000 in 1992 to $1.2 million in 1994. Debbie’s dreams of "making a difference in a small way" were moving in a big manner.

What did the entrepreneur do to start this business?

In July 1992, Debbie "accidentally" learned about a Community Town Hall conference through a radio broadcast and decided to "gate-crash" the meeting at which she was able to meet many administrators of the City of Los Angeles. It was at this conference that Debbie learned about RFP’s (Request For Proposals) and came to know Ted Berkowitz, Program Monitor for the City of Los Angeles. Ted was very impressed with Debbie’s accomplishments and acted as a guide to Debbie and taught her how to seek funding. Ted’s most important contribution was that he was able to get Debbie on various lists, which would enable her to subsequently apply for funding through proposals. These proposals were somewhat similar to business plans; it had to present a concrete basis for requesting funds.

Debra submitted her first proposal to the City of Los Angeles Community Development Project in late 1992. She was awarded $240,242 to fund her "community initiatives" and this marked the "christening" of BEN. Debbie’s next steps were to bring BEN to an operationally-ready stage. She secured office space for BEN in the University Village Mall across from USC; she furnished the office, purchased supplies, hired assistants; in short Debbie put the "infrastructure" in place.

BEN became a household name in lower-income business homes and began enjoying tremendous growth especially in 1993 and 1994. To continue BEN’s history from the above section, Ms. Esparza was able to help BEN in the most important way possible. It is a well-known fact that businesses growing at an accelerating rate go "bust", Debbie protected BEN by controlling its external growth in 1995. She chose instead to focus on "re-creating" BEN by implementing measures to keep pace with information technology; database systems were put into place at BEN. This new infrastructure was reinforced in 1996 and 1997. It is important to note Debbie’s vision and experience in this matter, she was able to anticipate what actions would lead to BEN’s downfall. Debbie successfully controlled BEN’s growth; it is clear through her concerted efforts that BEN is a successful institution today.

What major problems did the entrepreneur encounter during the startup of this business?

As with every new business venture, BEN too wanted to establish its own identity. BEN wanted to be responsible to its mission and have access to capital to grow and develop. However, one of the major problems BEN faced was that it had its own mission, and yet it had to operate within the framework of USC. BEN’s mission was to cultivate the entrepreneurial spirit, however USC wanted it to "lean" towards "certain projects." In terms of capital requirements, BEN found itself competing with other units within USC. This was especially frustrating as BEN needed all the help it could get in this area. To make matters worse, Ben was competing for funding from both the public and private sectors against various community agencies. According to Debra, the tragedy here is that BEN is not able to stay "true to its mission" by competing against these agencies in the community. Funding serves as a continuing challenge for BEN even today.

Another critical issue that challenged Ms. Esparza was the fact that she had to deal with an overly bureaucratic system. As an entrepreneur, Debbie possesses a certain vision and her ideas needed to be acted upon in a timely fashion and yet USC is slow to respond. Sticking to formalities and rules and regulations was particularly challenging because Debbie felt restricted and limited. It appeared as though USC was preventing BEN from sticking to its mission. It is clear that BEN is able to function smoothly under Debra’s direction; however, USC still controls important decisions such as to whom and where BEN may submit proposals and who can sigh these proposals. This area is again challenging for BEN as Debbie feels that the USC administration needs to be more supportive of BEN and allow it a greater level of autonomy.

How were these problems solved?

Ms. Esparza was indeed challenged by the above-mentioned problems. However, she came out on top by "staying under the radar." Debbie managed to keep a low profile both of herself and also of BEN. She focused on her inner strengths and was successfully able to translate this concept to BEN and she deliberately controlled the number of contracts on which BEN would bid. This, in turn, allowed BEN to "grow" as an organization and not fail by expanding uncontrollably. Debbie aims to lead by example and hopes that by putting in her best, her staff will do the same which, in turn, will maintain BEN’s positive image in the community. The important implication here is that the corporate ego is kept under check while BEN maintains a positive self-image which was because of the good work it was doing. Debbie hopes that by setting and maintaining high standards, USC will recognize BEN’s many contributions and give it more autonomy and a possible increase in budget.

Who did the entrepreneur use for help and guidance during the startup of this business?

Jon P. Goodman, former director of USC’s Entrepreneur program was Debbie’s "mentor" when BEN was started. Jon was an invaluable source of help as she cut down huge amounts of "red-tape" that were to come Debbie’s way. Debbie drew much support from her family and close friends who were a great source of motivation for her. They kept her in balance, when she was elated and when she felt challenged, they successfully calmed her down. Debbie was able to turn to her colleagues in the USC Entrepreneur Department for guidance also.

An entrepreneur keeps needing "signals" from others around him or her to keep pushing the venture forward. Debbie says she has been very fortunate in this area; the above-mentioned people were able to provide support and guidance when they were needed.

What advice would the entrepreneur give to someone thinking about starting a business?

Debbie’s advice to prospective entrepreneurs is simple: "start with what matters most." Debbie says you need to first understand who you are; doing a personal SWOT analysis is very helpful here. According to Debbie, you have to enhance your strengths and work on your weaknesses; you have to make yourself strong, You have to be physically, mentally and morally tough. Understanding your family, the community you live in and broadly understanding society as a whole is very important. This is because you "build on these institutions." Of course, dollar signs are important to entrepreneurs, but according to Debbie, do what you love and the money will come automatically.

Self-confidence is critical; you need to stay motivated at all times. Debbie says that if homework is done before beginning business, one stands a much better chance of avoiding the common pitfalls commonly made by aspiring entrepreneurs. Turning to organizations, which support the entrepreneurship cause (like BEN) for guidance helps also. Debbie’s advice is simple: believe in yourself and remember that the best is yet to be.

Why was this entrepreneur successful at getting into business?

Ms. Esparza is a unique and special human being; a non-profit entrepreneur who set out with a mission and was able to realize her dream. Her success is directly linked to her method of search, her cognitive characteristics and her ability to deal with social institutions; i.e. the search, psychological and social elements described in The Effable Invention.

The search element looks at search as an effective search for ideas. Debbie’s style of search was again different in that she effectively analyzed herself and felt that there was something missing in her life. Quitting a job that paid more than $50,000 and exploring the country seemed irrational to most, if not all, of Debbie’s family and friends. However, Debbie used this time to discover that she could give something back to society through the University Community Outreach Program. Debbie was then able to realize that she could use her technical finance skills to help local entrepreneurs. Slowly, this paved the way for BEN to be born. Thus, we see "opportunity" being turned into a formal method to develop BEN. A continuum exists in this element of search; ranging from opportunity (gate-crashing the Community Town Hall meeting) to formal methods (growing and preparing BEN to advance further in the future). Debbie shows her genius here in operating on both the intuitive and sensing dimensions which is a rare quality that only the best of the best possess.

The psychological element analyzes what attributes equip and motivate searches. Debbie’s psyche is remarkably balanced. She was able to both visualize the proper direction for BEN and also take it there through a step by step process. She balanced her academic strengths and hands-on experience to give the gift of knowledge to those entrepreneurs who needed it most; those recovering from the 1992 civil disturbance in Los Angeles. Debbie Esparza clearly typifies a genius and portrays the cognitive characteristics of intelligence, ingenuity and articulateness. Debbie also approaches various issues from abstract perspectives. She is very persistent and also able to adapt to change. Managing the growth of BEN is most representative example of this element.

The social element deals with what social patterns and institutions support inventive search. In terms of this element of search, Debbie shows her flexibility. She was able to work alone when UCOP started, she then led volunteering students from the MBA program and now she heads a team of consultants and staff members at BEN. Debbie’s ability to adapt to changing social conditions and sticking to her beliefs shows her true strength of character.

On reading the journal article The Effable Invention, one notices that most geniuses exist at distinct parts of the continuum for all three forms of invention. Debbie Esparza is unique; she operates on different parts of this continuum depending on the situations and conditions she is facing at that time. She is able to effectively adapt to changes in both the micro and macro environments around her.

At this point in time, Debbie is considering various options for the future and the "third career" of her life. Some of these options might mean removing herself from BEN. One thing is certain, whether Debbie Esparza will be with BEN or not, it will survive and exceed its current success as Debbie Esparza has left a legacy and regardless of what she is doing, she will ensure the continuity and survival of BEN.

It was a pleasure to interview Debbie Esparza on two occasions. Talking to remarkable people like her and exchanging ideas with them is the best way to understand "The Entrepreneurial Imagination."

- Nikhil Aggarwal


 

Bruce Garipay, M.B.A. '92
Automated Homes

What kind of business did the entrepreneur start?

In November of 1996, Bruce Garipay began Automated Homes, a business that designs and installs electronically automated homes. Each home is equipped with a network that brings sub-systems under the control of a variety of button tools. Essentially, anything that uses electricity can be brought under control in the network, from lighting and sound to climate control and telecommunications, the possibilities are limitless.

Bruce builds each network specifically for the client; thus, he works closely with them in order to create the ideal system. For example, his first client wanted a sports bar in his home. Garipay designed a network in which, at the touch of a button, the four televisions turned on to the proper station depending on the time, day and athletic season. Additional capabilities of the network include telephoning your system on your way home and instructing it to prepare for your arrival (i.e., cooling down or warming up, etc.).

Garipay will first meet with potential clients when they are creating their architectural designs. Assuming he convinces them to automate their new home, he installs the necessary wiring when the framework is constructed. The last phase occurs when the house is nearing completion, at which time he installs the button tools or "goodies" that his clients will use to operate the system which is done with a touch screen, a small keypad, a wireless remote control, or by telephone.

The length of installation time is contingent upon the square footage of the home and the extent of automation. Currently, he primarily installs networks into newly constructed homes. Since the majority of his clients build homes in excess of six thousand square feet, the entire process takes approximately one year.

What is the background of the entrepreneur?

Similar to the Wright brothers, Garipay's parents instilled the values and ideals that have formed the foundation of his life. He believes in his goals, follows his instincts, learns from his mistakes, and, for Garipay, failure is not an option.

After catholic elementary and high school, Garipay attended California State University, Long Beach to pursue a B.S. in Financial Management. After graduating in December of 1995, he began his career at Amplicon, Inc., a financing company. Amplicon’s primary business is lending money in leasing transactions, then bundling the leases, and, subsequently, selling them to banking institutions. At the time, Amplicon was one of California's 100 fastest growing companies. Their revenues increased from $45 million to $100 million over a two-year time span. Throughout his employment at Amplicon, he was involved in many deals that provided him invaluable experience in direct marketing and negotiating transactions that he has adopted as his business plan.

In 1988, he wanted to come to USC for graduate school, but Amplicon wanted him to attend UC Irvine. Consequently, he left Amplicon in 1988 to work for Hughes Aircraft where he worked for a year and a half before following his father's example and attending the University of Southern California in the fall of 1989. Garipay’s father received his Masters of Science in from USC. In addition, Garipay continued working full time at Hughes while enrolled part time in the MBA Program at USC.

In 1992, he demonstrated his entrepreneurial skill when he won USC’s award for Best Business Plan. His business plan was based on a concept now known as ‘DirecTV’. Upon graduating from USC in 1992, his ultimate goal was to begin his own business.

A year and a half later, February of 1994, he left the security of Hughes to move to Arizona where he assisted an entrepreneur in a startup that eventually failed. In mid-1995, he worked with an entrepreneur who was turning around an existing business. However, after spending his entire career working for others, he wanted to operate a business his way. Thus, in November of 1996, he started Automated Homes.

How did the entrepreneur get the idea for starting this business?

Garipay has a strong technical background, both his father and sister earned their Masters in Engineering from USC. While at USC, he traveled to Tokyo, Japan with the IBEAR program (International Business Education And Research). Visiting the NEC Super Tower in Tokyo was the first time he experienced electronic automation in the work environment; it had a profound influence on him. In addition, Garipay was exposed to the future of technology and telecommunications over the six years he worked at Hughes Aircraft that also had a profound influence on him.

In 1995, he bought a piece of land to build his house; however, he was unable to find anyone who could install in it what he envisioned. Thus, in order to automate the home himself, he thoroughly researched and read the available literature in order to learn about electronic automation and it was through this research that his experiences and ideas converged.

Essentially, as Perkins and Weber suggest, there was not an epiphany. All of the experiences and ideas throughout his life converged together: "There is an element of luck in discovery, however, chance favors those who are prepared." Due to his technical background, work experiences and fascination with computers, Garipay was destined to succeed.

What did the entrepreneur do to start the business? When did the entrepreneur do these activities?

In April of 1996, he decided to pursue his idea for home automation and in order to determine if Arizona was an optimal location, he conducted a feasibility study. He concluded that Arizona's real estate market was very strong and, in fact, it had the second highest number of housing starts in the USA. This is crucial because he currently implements most systems into newly constructed homes. Second, Arizona was very low-tech, thus lacking any significant head-to-head competition. Hence, it was extremely feasible.

The following September he searched for investors that could provide both technical skill and funding. Garipay nearly signed a deal with an investor that would have provided both, but he walked away. "I had to prove I could do it. I had the education, the experience, and the idea, I wanted to stand up and make it work." On January 16, 1997, he signed his first client.

Initially, he tried cold calling and sending letters, but had little success. In addition, he did not advertise at all through the mainstream media, instead, he directly targeted developers and architects. Due to minimal work his first year, Garipay had extra time on his hands and to capitalize on this free time, he went to nearby construction sites to obtain the telephone numbers of the developers. He then called each of them and explained his ideas, but this was not successful either.

Garipay's first client was a high profile, friend of his father-in-law. One evening at a Phoenix Suns basketball game, his father-in-law mentioned home automation to this friend and it intrigued him; he wanted to learn more. The following week Garipay met with him and discussed the endless possibilities of automation. Garipay's finesse and effective communication skills convinced the gentleman to automate his existing home which brought significant exposure to Garipay's business.

In March of 1997, Garipay was at a cocktail party and overheard someone discussing plans to build his new home, thus, through a mutual friend, Garipay obtained his telephone number and, the following day, called him. Initially he was not interested, but Garipay persisted and following Garipay’s ingenious demonstration, the man reconsidered and they negotiated a deal.

Later that year, impressed by his honest and sincere reputation, friends of his family who were building a home contacted Garipay and, after he demonstrated home automation and its endless possibilities, they signed a deal. Unfortunately, they were his third and last clients of 1997.

In early 1998, Garipay was at a Phoenix Suns basketball game with his wife who bumped into a friend who mentioned that she and her husband were remodeling their home. His wife gave her friend Garipay’s business card and the following week, he demonstrated home automation to them. They, too, were impressed with his knowledge, skill and products and immediately hired him.

Initially, networking and word of mouth referrals were the primary means by which Garipay obtained clients and his first four clients were a direct result of this type of marketing. Moreover, most of them knew him or knew of his in-laws. He admits, "I have to give credit to my wife. Her connections have been a tremendous asset."

In the beginning, Garipay was primarily selling to individuals; however, presently, he has builders and architects calling him and, in fact, a builder recently called him with four client referrals. Subsequently, Garipay demonstrated automation to these referrals and is currently in negotiations with each.

Garipay employed several strategies that were crucial during the startup of his business. First, he shared an office with a developer and by minimizing operating expenses, he was able to focus on creating and selling his products. Second, under the stipulation that he could use their homes for demonstrations, Garipay provided equipment to clients at a discount. Currently, he is building his own fully automated home to use for demonstrations. In addition, Garipay is always thinking about tomorrow and consequently has purchased a CD-ROM disc that lists all USC alumni. In sorting this list by zip code, he discovered that there were approximately 100 alumni in his immediate area and in the upcoming months, he plans to send them letters explaining home automation.

What major problems did the entrepreneur encounter during the startup of this business?

Garipay encountered several major problems throughout the course of his startup. First, trying to justify the expense of a product foreign to most people and subsequently selling it to them was Garipay's greatest problem. He was investing his money into a product knowing society may not understand or be prepared for it. Second, he went from unlimited resources at Hughes to limited resources without any backup. Moreover, he is involved with an industry in its infancy that requires sophisticated labor, which is difficult to find.

How were those problems solved?

Garipay spends a significant amount of time educating clients about how the network operates and why it is necessary. "In my mind I can conceptualize ideas, but I try to focus on the functionality of how things work in basic terms that most can comprehend." He is well spoken and his communication skills are exceptional; they have helped him narrow the gap between his vision and what society will accept. To further demonstrate and educate about home automation, Garipay attends several trade shows in Las Vegas each year. When trying to sell a product new and foreign to most, trade shows are a powerful educational tool. They provide a venue to both demonstrate his products and to keep abreast of technological advancements. Moreover, with the recent popularity and increased usage of the Internet and digital TVs being discussed in the media, educating and justifying expenses to potential clients has become easier.

With Garipay's drive to succeed and diligence, he was destined to persevere despite limited resources. When he has a technical problem, he is not afraid to call people and ask questions. "Technology is always changing and evolving, it is the smart guy who isn't afraid to ask questions, the smart guy finds answers."

Intentionally keeping labor at a minimum, he currently has four people working for him and, in order to meet demand, he sub-contracts for the additional labor. It is more cost effective for him to sub-contract for qualified labor than to hire full time. However, he is planning and when he exceeds $1 million in revenue, he will upgrade both his office and support staff.

Garipay believes in his products and is honest and sincere with his clients. These values have helped him gain their trust, build a credible reputation within the industry, and endure the trials and tribulations of the startup. His reputation has become so widespread that clients are actually pursuing him.

Who did the entrepreneur use for help and guidance during the startup of this business?

Garipay receives tremendous support from his family, friends, and former professors. His wife, father, and father-in-law have been great sources of comfort throughout the glory and the grief. In addition, there are two professors at USC who have been mentors. First, Garipay learned the finer points of selling and sales management from William Crookston. Considering that sales are important in his business, this knowledge has influenced his career enormously. The network he installs for each client must reflect that clients’ specific needs and desires, thus understanding them are imperative. Second, James Stancill provided Garipay with the essential fundamentals of financial management that have helped in developing his young business. Former USC classmates have also been sources of comfort and guidance. Nevertheless, in spite of the advice he receives, he acknowledges that "you can only rely on others so much. In the end when it is time to make decisions, you must have the determination within yourself."

What advice would the entrepreneur give to someone thinking about starting a business?

He stressed the importance of making business contacts and obtaining experience through internships. In addition, the guidance of family and mentors is extremely helpful and comforting when trying something different. He suggested finding a person who you trust and respect. Most importantly, however, he stressed the importance of believing in yourself, your ideas, and your tenacity and always being determined to succeed, and not afraid to fail. Fear of failure is a detriment, especially when doing something different. He stated, "defy conventional wisdom, follow your instincts, and be confident in your ideas, because things are done by those who find a way to make them work."

Why was the entrepreneur successful at getting into business?

A significant contributor to Garipay’s early success was that he possessed the cognitive characteristics described by Perkins and Weber: ingenuity, articulateness, and intelligence. His ingenious business strategies helped him secure work as well as mitigate many of the risks associated with startups. By securing work, not debt, and maintaining minimal operating costs, he increased revenues from $100,000 in his first year to a projected $1 million this year. Furthermore, he has recently closed a deal with a developer to build a ‘smart community’ on 800 acres of ocean front property in Puerto Vallarta, Mexico in 1999. This project will enable him to gain significant exposure on both a national and international scale.

Technology is complex. It surrounds us, supports us, and directly influences our lives. Garipay's expertise is in electronic automation and his strength is communication. This is valuable because, thus far, only one of his clients had understood automation prior to meeting with him, and that was just three weeks ago. Society fears that which they do not understand. Thus, Garipay’s primary objective is to educate and make certain they do understand and, if given the opportunity to talk with someone face-to-face, Garipay will close the deal.

Another factor in his success was that he possessed Perkins and Weber’s attitudinal trait of persistence. He has received numerous rejections, primarily due to society’s misunderstanding of automation. Unfortunately, society prefers to forgo home automation rather than take the time to understand it; however, they do not know with whom they are dealing. Garipay, as with most of us, does not like to lose. Nor does he falter in the face of rejection, rather, he persists. His upbringing, education, and experiences have provided him with the courage and confidence to persist despite rejection.

Garipay did not set out to discover a way to automate the home. Nor did an overnight "breakthrough" occur. Essentially, he followed what Perkins and Weber describe as a "good bet". He had several experiences throughout his young life -visiting the NEC Super Tower, working at Hughes Aircraft, Bill Gates’ development of the ‘smart house’- that contributed to the emergence of this idea. Because of his background in technology, he was able to make it work.

Essentially, his success relates back to the values and ideals instilled in him by his parents. He has high standards for himself as well as for those working for him. He is not satisfied with the easy solution, nor does he buckle under pressure. In contrast to Beethoven who stimulated creativity by pouring ice-cold water on his head, Garipay's stimulation comes from pressure. When the game is on the line, he wants the ball. He is always thinking about tomorrow’s game, and has the utmost confidence that he will win and achieve his goals.

- Colleen C. Gately


 

Lloyd Greif, MBA '79
Greif & Co.

What kind of business did the entrepreneur start?

Perceiving the need for a top-notch investment banking firm to serve the corporate finance needs of entrepreneurially owned and operated middle-market growth companies, Lloyd Greif launched Greif & Co. in 1992. He has since built his firm into the leading purveyor of merger and acquisition advisory services to medium-sized businesses based in the western United States and has gained global recognition as the "Entrepreneur's Investment Bank," the company's trademark.

Greif & Co. is involved in a broad spectrum of corporate finance activities, including arranging mergers, acquisitions and leveraged buyouts, private placements of equity and debt securities -- including venture capital and senior and subordinated debt -- and providing such financial advisory services as rendering business valuations and fairness opinions, as well as financial restructuring assistance.

Just as the Great Horned Owl in the firm's insignia is known for being a "winged tiger," famed as a superb hunter for its immense strength, incredible ferocity and stealthy ability to fly without making a sound, so is Greif & Co. renowned industry-wide as a bastion of strength and professionalism for its clients.

Although Greif & Co. is a firm for the 21st Century, its mission statement dates back to the days of the Old Testament: "Do Unto Others As You Would Have Them Do Unto You." Investment banking is a professional services business, and at Greif & Co. they treat all of their clients as if they, in fact, were the client. They pride themselves on a long-standing track record of not only meeting, but consistently beating their clients' performance expectations. The Company's professionals have developed a strong reputation for setting aggressive goals and doggedly achieving superior results for their clients. Their resolute objective is to make Greif & Co. the preeminent Los Angeles-based investment banking firm and, by so doing, bring the highest quality corporate finance expertise and services to a burgeoning middle market. "We consistently set a higher target than our clients in what we do for them," says Greif. "And as risk-takers themselves, they appreciate the fact it's my name on the door."

What is the background of the entrepreneur?

Greif's parents came to the United States from Europe, his father having survived both the Auschwitz and Dora-Nordhausen concentration camps; his mother spent World War II in hiding. Upon arrival in Los Angeles, they founded Paris Handbag Manufacturing Company, a producer of women's fashion accessories located in downtown Los Angeles. He was only six when his father died, leaving his mother to raise two young boys. Greif worked his way through UCLA undergraduate and USC graduate schools as a clerk and assistant store manager at a local grocery chain.

Greif's early work experience primarily comprised three jobs prior to founding Greif & Co. The first was during his undergraduate years at UCLA when he worked at Ralph's Grocery Company. Upon graduating, he worked at Touche Ross & Co. as a management consultant, a position he found very unfulfilling, as he disliked the idea of advising his clients but never having the opportunity to participate in the outcome or see the results of his work. Later he was offered a position at Sutro & Co., where he was the second youngest person to be hired, and from 1981 to 1988 was largely responsible for rebuilding the company, generating a 44% compounded annual growth rate. From November 1981 to March 1992, Greif was Sutro's top producer and was eventually promoted to Vice Chairman and Managing Director of the Investment Banking Division. Greif credits this time as invaluable to learning the ins and outs of the investment banking industry, as he was able to work on many projects that allowed him to attain the business acumen he now possesses.

Today Greif holds degrees in economics (BA - University of California at Los Angeles), entrepreneurship (MBA - University of Southern California) and law (JD - Loyola Law School). In addition to serving as chairman of the Advisory Council of the Lloyd Greif Center for Entrepreneurial Studies at USC, he is also a member of the Executive Committee and Board of Directors of the Los Angeles Economic Development Corporation (LAEDC); chairman of the joint Milken Institute/LAEDC Capital Access Task Force; a member of the Young President's Organization (YPO); a member of the Board of Directors of the Los Angeles Police Foundation (LAPF); vice chairman of the Board and a member of the Executive Committee of the Los Angeles Area Council, Boy Scouts of America; a member of the Dean's Forum and the Board of Overseers of Loyola Law School; a member of the Board of Directors of USC Associates; and a member of the Board of Directors of the Florence Academy of Art.

How did the entrepreneur get the idea for starting this business?

Many things influenced Greif to start his own business. One of the first major influential factors occurred while working at Touche Ross & Co., where he learned that management consulting was not his passion. It was, however, as a result of this position that he was offered the opportunity to work in investment banking at Sutro & Co. Although he did not know a great deal about investment banking at that time, he took to it like a duck to water. Following many years of hard and very successful work, he began to wonder why he had not yet started his own company. Since he was already generating more than 60% of Sutro's investment banking business, he reached the conclusion that he could probably operate his own company and reap more of the rewards.

Before starting out on this new venture, however, Greif consulted with many of his past clients. He asked them whether they would still do business with him were he no longer a part of Sutro, that is to say, were he to start his own company. The response he received was a resounding "Yes!" Recognizing that his customers were loyal to him and the quality of his work -- not to a particular company -- was all the assurance he needed to launch Greif & Co.

What did the entrepreneur do to start this business? When did the entrepreneur do these activities?

The new company began almost immediately and was basically in business the day after Greif left Sutro. He had ensured that he had enough capital to run his business for two years, and a few of the professionals with whom he worked closely at Sutro followed him to his new company. Thus, with his team and finances in place, it was time to get down to business. The company was virtually launched on March 2, 1992, the day he resigned from Sutro, and Greif & Co. had its first client by March 5. In addition to soliciting clients, Greif & Co. incorporated, became a NASD-licensed broker-dealer and leased office space. From that day forward, Greif & Co. has experienced substantial growth and success.

What major problems did the entrepreneur encounter during the startup of this business?

Greif initially projected that it would take less than a year for his company to turn a profit. Thus, he had sufficient capital for a one-year timeframe and, as an added measure of security, doubled the figure. This turned out to be an astute decision since as a result of the cyclical nature of the economy it was eighteen months before the company became profitable. In fact, Greif did not pay himself until a year-and-a-half later when the economy began to revitalize and Greif & Co. began to flourish.

Although starting a company, especially an investment bank, when the market is experiencing a down cycle can be risky, it was perfect timing for Greif. With his competitors leaving due to the recession and market pressures, Greif & Co. was able to more prominently establish its niche with middle-market entrepreneurs. By the time the economy turned around, Greif & Co. had built both a name and a growing client base, and had taken root during a period of weakened competition.

How were those problems solved?

Greif had projected the amount of capital that would be necessary during the company's first year of business and built in a safety net, doubling that amount. In so doing, he avoided the typical financial pitfalls of many start-up businesses. "We treated it as business-as-usual and kept plugging away at deals until we built up a full head of steam of deal closings," remarks Greif.

Who did the entrepreneur use for help and guidance during the startup of this business?

It was ultimately his former customers' positive response toward Greif starting his own company that "sealed the deal." Other guidance came from business associates, some of whom had been in the industry longer than he and who willingly shared their insight. A final source of mutual inspiration came via the Greif & Co. team.

What advice would the entrepreneur give to someone thinking about starting a business?

When it comes to life, Greif doesn't believe in taking no for an answer. "Entrepreneurs are alchemists," he explains. "They add value to existence -- turning iron into gold -- through strength of will, intelligence and a determination to succeed."

Why was this entrepreneur successful at getting into business?

There are obviously many reasons why Greif has achieved so much through the years. Even after only a brief interview, one can see how his intelligence, wisdom and diligence have contributed to the success of his company.

To arrive where he is today, it is apparent that Greif followed a couple of different search styles. His move from Touche Ross & Co. to Sutro & Co. can be viewed as a cultivated chance approach. These two companies, while not in the same line of work, were similar enough for Greif to seamlessly transition from one company to the other. By demonstrating his expertise in management consulting, and with a little bit of luck, Greif was able to discover his passion and land a job as an investment banker.

The creation of Greif & Co. is a style of search known as a safe bet. Since he had gained expertise in the field of investment banking, had acquired many contacts, and had learned the ins and outs of the business, it was only logical that starting an investment banking firm of his own would likely be a successful undertaking. Another aspect that pointed toward the future success of Greif & Co. was that Greif's former customers were so supportive and indicated they would continue working with him were he to start his own firm.

Clearly, several methods of search were used to lead Greif where he is today. Although the company has achieved much in a short period of time, careful planning and a lengthy search process played an important role. Moreover, Greif's life and work experiences prior to launching Greif & Co. helped him to reach, and even exceed, his goals. Finally, Greif's success can be attributed to a social context, as one constantly finds him in business meetings, on conference calls or at social events, meeting people and establishing relationships. Greif has built a strong company team and counts many friends in the industry. As has been highlighted in numerous books and journals, success is not derived from isolation, and Greif certainly exemplifies this principle.

Greif's attitude is also key to his ongoing success. As stated earlier, he is intelligent and hardworking, as well as tenacious. On a cognitive level, Greif is extremely keen, articulate and to the point, always striving to do his best on behalf of the client.

From a psychological standpoint, Greif is level-headed, able to visualize his goals and knows how best to get the job done. He sticks to the basics and does what he knows how to do well. In so doing, he has crafted a very successful company.

Education also plays a significant role in the success of an individual. Thus, another reason that can be accredited to Greif's success is his educational background. An extremely bright and well-read man, Greif has earned degrees from three universities. He also constantly gains invaluable knowledge through his day-to-day work experiences.

As can be seen, there are many reasons why Lloyd Greif is a successful entrepreneur. Although no two entrepreneurs' stories are the same, many commonalties can be found, the most significant being that the life of the entrepreneur is filled with a lot of hard work. Greif concurs that there are no "shortcuts" to success.

While Greif believes the tools that make an entrepreneur successful can be taught, he contends that the drive, passion achievement-orientation and love of entrepreneurship are innate qualities. "When I talk to students coming through the program, I recognize that twinkle in their eyes," says Greif. "They're all vying to come up with the next great idea or successful product."

- Aric Davison


 

Tiara Hallman, B.S. '92
It’s A Wrap! Production Wardrobe Sales

What kind of business did the entrepreneur start?

Tiara Hallman is the Co-founder of Its A Wrap! Production Wardrobe Sales, a retail clothing outlet situated in the heart of Burbank, California. Not just any purveyor of fashion, this store liquidates wardrobe for film and television production studios and independent production companies and sells it to the general public at a discount. The merchandise that is sold in this 6,800 square-foot showroom is picked up straight from the sets of film or television shows or from wardrobe departments of major studios and production companies. The apparel is marketed as movie and television memorabilia as well as discount fashion clothing. The majority of the stock is contemporary wardrobe, but the store also sells vintage clothes, costumes, western apparel, Sci-Fi, or specialty items such as sportswear and gear. With a continuously changing inventory, the store currently sells wardrobe from the movies Scream 2 and Face/Off, the television series Melrose Place and Beverly Hills 90210, and the soap operas General Hospital and Another World, to name but a few.

The concept behind this enterprise is rather simple: when a studio or production company finishes a movie or show, they are left with a stock of wardrobe that is usually stored away or otherwise liquidated. It’s A Wrap! provides the service of either purchasing the wardrobe from these companies or agreeing to sell the wardrobe for them on consignment, providing the valuable benefit of alleviating these businesses’ wardrobe budgets and reducing their storage and security costs. It’s A Wrap! offers to store production companies' wardrobe during post-production and makes it readily accessible any time it is needed for re-shoots. In addition, the store provides free pick-up from these companies’ facilities and negotiates to pay half of their costs to ship the wardrobe from various filming locations as far away as Maryland and Toronto.

It’s A Wrap!’s customers have the unique opportunity to purchase an item previously worn by a famous movie or television actor or to own a piece of movie history. Many of these items are brought from all over the world, while others are custom made or one of a kind. The store receives new stock every day of the week, offering shoppers a virtually endless variety of clothing at substantial savings, with prices reduced as much as 95 percent off retail prices.

The geographic location of the showroom provides a strategic advantage for It’s A Wrap!. Home to Walt Disney Studios, the city of Burbank is centrally located and close to other major film studios and independent production companies in such nearby cities as Santa Clarita, Hollywood, and downtown Los Angeles. This places the company within accessible distance to its suppliers, helping to reduce costs of transporting wardrobe to It’s A Wrap!’s warehouse, which is also in Burbank. The store’s location is central to its customer base as well, as its proximity to three major freeways makes driving to It’s A Wrap! convenient and quick.

 What is the background of the entrepreneur?

Tiara comes from a long line of entrepreneurs as far back as her great-grandfather who came to America from England after World War II and opened his own toy store called Ted’s Toy and Hobby Shop. Ensuing generations would follow in this spirit of entrepreneurship, as Tiara’s grandfather, uncle, and mother eventually started businesses of their own. In particular, Tiara’s mom, Janet Hallman Dion, was greatly influenced by this entrepreneurial environment, which helped to instill a belief in her ability to own and manage her own business. In fact, the idea to retail wardrobe came from Janet, who established a partnership with a colleague in 1981 to open the original outlet selling wardrobe called Retake Room. However, after ten years of operation, the partnership turned sour and dissolved. Leaving the partnership but not her business concept, Janet started another store of her own, which would later be known as It’s A Wrap! Production Wardrobe Sales.

The fact that she inherits a family history of entrepreneurs would not be lost on Tiara, as she too would follow the career path of her predecessors. Even as a child, Tiara had demonstrated entrepreneurial spirit, from selling lemonade in the park to selling hand-made mistletoe decorations at Christmas. She was twelve years old when her mom created the Retake Room, giving Tiara early exposure to the retail and entertainment industries. The combination of family influence and early exposure to entrepreneurship were critical factors that made Tiara gravitate towards this field. She commented that she "felt comfortable with it" and that it "felt right" for her to become an entrepreneur herself.

As an undergraduate at the Marshall School of Business at USC, she enrolled in the Entrepreneur Program and graduated in 1992. Tiara believed that the program was an invaluable learning experience and has prepared her for what she would encounter in her own startup. This preparation included various activities from learning how to write a business plan to looking to the past and the future and to acquiring the lingo and knowledge specific to her field. Especially noteworthy in this program were the entrepreneurs and experts in the industry who shared their true-to-life stories and offered their practical advice and personal insights. She credited this education as being one of the most useful learning experiences she has ever had--and one that she continues to draw from.

During the summer prior to her graduation, Tiara interned for Northwestern Mutual Life Insurance Company. While her friends went vacationing in Europe, Tiara remained in Los Angeles to work and attend a two-week training course in sales. From this experience she learned the value of persistence and the power of being a good salesperson. "Never taking the first ‘no’ as a no," Tiara has the quality of firm tenacity without being overly aggressive. As an example, if a potential supplier declined to sell her the company’s wardrobe, she would probe to uncover the reasons behind the "no" in an attempt to address the person’s hesitation. She does not give up, because she sincerely believes in what she is selling. She maintains that having the ability to sell is critical in one’s life, since all actions inevitably involve some type of selling or persuading others to "buy into" your product, whether it is a good, a service, your skills, or your ideas.

The establishment of It’s A Wrap! represented Tiara’s first foray into the entrepreneurial world as well as a continuation of the Hallman tradition of startups. She was present at the store’s inception in 1991 during her last year in college and was made a partner in the business shortly after. Upon graduation, she began working at It’s A Wrap! immediately, accepting no opportunity to take a break between school and complete immersion into a full-time career. Tiara was quick to mention that the partnership arrangement was far from being a "sweet deal," as she started with minimal money, lived at home, and received no pay for the first year and a half of work. With sheer determination, Tiara and Janet "worked at it together to make it what it is today," a company that has grown from a tiny 800 square-foot shop to its current operation that brought in over $1.2 million in revenues in 1997.

How did the entrepreneur get the idea for starting business?

As previously mentioned, the original idea to sell movie clothing to the public was developed by Tiara’s mother, Janet. It was during the early 1980s that many companies were downsizing their work force, and Janet was one such employee caught in this wave. After she was laid off from her job at CBS Studios, an executive at the studio asked her to run an auction for the company and offered to hire her back at less pay. Janet refused to work for less pay, but agreed to run the auction. Witnessing the studio sell their wardrobe for small amounts of money, Janet saw a valuable business opportunity to take these clothes and sell them at retail to the general public.

 What did the entrepreneur do to start this business?

Since the concept to sell wardrobe at retail began with Janet who brought the idea to life, It’s A Wrap! has its origins in the first shop, Retake Room, that she started as a partnership with her colleague from CBS Studios. The two partners opened this store in February 1981 in Studio City, where they sold clothing in a space of 800 square-feet. After a decade of operating a profitable business together, the relationship between the two became increasingly disagreeable, resulting in an eventual disassociation on unfavorable terms.

Unable to continue working with her partner, in November 1991, Janet decided to open another store on 2705 West Burbank Boulevard in Burbank under the same company name. During this initial startup, Tiara, now in her last year at USC, remained on hand at this new location to provide assistance to her mom. As she became involved in the store’s operations, she learned the particulars of the business and gained an understanding of how the retail and entertainment industries operated. This experience in the field and the interaction with people in the industry helped Tiara build a familiarity and knowledge of a business that she had only previously observed from a distance.

In March 1992, Janet’s partnership in the Retake Room legally dissolved. The split was a rather abrupt one, since Janet essentially left the entire business with her partner, taking none of the files, client phone numbers, wardrobe, or other assets with her. Without delay, Janet and Tiara started their own company on April 1st with an entirely new operation. The store that they opened had no name yet, and it was not until mid-April that the name "It’s A Wrap!" was conceived for the new store as a result of a customer’s suggestion.

After Tiara graduated from USC in May of the same year, she made the decision to go into business with her mother at It’s A Wrap! instead of following the usual path to go to work for a company. In July, Tiara became a legal partner with Janet in It’s A Wrap! holding a 50 percent share of profits and losses. Tiara’s first actions as partner were to contact studios and production companies to ask if they were willing to sell their wardrobe. Thus began Tiara’s ongoing efforts to build relationships with clients.

The date, May 1993, marked a turning point for the business when It’s A Wrap! received its first media coverage on Channel 5 News at 10. This story helped to build the store’s credibility and prompted Tiara to jump on the media band wagon and initiate her own publicity campaign for the business. Her work paid off, as the store received subsequent media spots that included a string of news stories on television channels from 2 to 13 and news coverage on CNN. Later, Tiara would make an appearance on The Oprah Show in May 1996 to display the store’s variety of clothing to a national audience.

In May 1994, two years after initial startup, Tiara wrote a business plan for It’s A Wrap!. During this time, Tiara was making plans to move the business to a larger store, which would require huge financing. With this in mind, she drafted the business plan to be presented to a banker in request of a loan. As it turned out, the loan officer was less concerned with the plan itself than with the company’s financial information, and in the end, her application was denied. Not to be defeated, Tiara turned to other sources to finance major purchases, which included personal credit cards, charge accounts, and internal funds. In commenting on the process of writing the business plan, Tiara admitted that the plan helped to align her thoughts on the company’s current situation and future plans. However, she did not believe that writing the plan was a crucial step in the startup of It’s A Wrap!.

After months of planning and preparation, It’s A Wrap! moved to its present location on 3315 West Magnolia Boulevard on July 1, 1994, and held its grand opening. With the old store closing down just the night before, Tiara and her crew worked all through the night to make the transition smooth and seamless for its customers. The new building, approximately five times larger than the old store, was a 50 percent lease-purchase with the option to buy after one year. After deciding that the market in Burbank was secure enough to remain in this location, the partners made the investment the following year.

In June 1996, two years after the store’s expansion, It’s A Wrap! reached another milestone when it successfully obtained a $100,000 line of credit with Wells Fargo Bank. This credit gave them more spending power, enabled the store to purchase more wardrobes and upgrade its facilities and helped build financial creditability.

In May 1997, It’s A Wrap! leased a 3,000 square-foot warehouse in Burbank in order to accommodate the increasing amount of wardrobes that it was receiving. Up to this point, inventory had been stored in public storage bins. As more companies began entrusting their wardrobes to It’s A Wrap!, the store needed larger storage space to receive and hold large and consistent shipments of merchandise.

In the following July, It’s A Wrap! was incorporated with Tiara and Janet as officers of the company. Although they are no longer the business’ legal partners, the two entrepreneurs still work as diligently as ever and consider each as other as equal partners in the venture.

Today, in 1998, Tiara is contemplating the idea of expanding the business even further by adding a new location in Century City. Already, she has sent out questionnaires to gauge the potential demand and has received positive feedback thus far. In support of this possible plan for expansion, Tiara foresees that she will be writing a new business plan for It’s A Wrap! within the next twelve months.

What major problems did the entrepreneur encounter during the startup of this business?

Tiara found that one of her initial problems during the startup of It’s A Wrap! involved losing contacts with many suppliers. After spending considerable time to develop a relationship with someone, she would unexpectedly discover that the person had moved to another city or company. Janet likened these contacts to "gypsies," as she explained that production companies often set up tent somewhere, make a movie, and quickly move on. Other companies may be bought by big studios and thus, dissolved. People in the industry come and go frequently and without notice, at times they stay for a year before moving on to another company. This was an extremely frustrating experience for Tiara because she was forced to begin new searches for contacts and to re-establish relationships with suppliers. The inconstancy of her contacts imposed formidable obstacles for the business especially during startup, as the company was just beginning to establish a name for itself.

Another difficulty concerned the acrimonious terms under which Janet had left the partnership at Retake Room. When the relationship severed, Janet left the business to the other partner, complete with all the files and telephone numbers. Starting another retail store under different ownership required Janet and Tiara to distinguish the new store from the old one so that no confusion would arise from customers and suppliers. However, this challenge was further complicated by the ex-partner’s efforts to bash It’s A Wrap! by sending slanderous videotapes and letters to major studios and independent production companies. Although unsuccessful for the most part, these attacks have occasionally created confusion for It’s A Wrap!’s clients.

 How were those problems solved?

To resolve the issue of lost contacts, Tiara stayed updated on the latest events in the industry. She made an effort to keep informed of the latest film productions and spent as much time as possible developing contacts with these new movie suppliers. This required that she dedicate a substantial amount of time on the phone nearly every day to secure new accounts and to keep studios and production companies aware of It’s A Wrap!’s business.

As for the telephone numbers of clients that were left behind with the old partner, Tiara worked to inform clients about It’s A Wrap! and their new location as quickly as possible. Deciding that the store needed to project a more professional image, Tiara created letterheads and business cards to be sent out to all prior, existing, and potential clients. In addition, Tiara frequently took her clients out for lunch meetings as a method of building stronger relationships.

The situation concerning the personal attacks by the ex-partner against It’s A Wrap! remains ongoing. Although she has sought legal assistance to prohibit the ex-partner’s behavior, Tiara has discovered that little could be done to resolve the issue, short of pulling her clients into the fray. Even as of this writing, Tiara has learnt of yet another letter that was recently sent out to a major studio to discredit her personally. She has yet to take any forceful action, as she hopes that the matter will eventually work itself out. As a buffer against potential harm, It’s A Wrap!, throughout the years, has earned a reputation among industry participants for being easy to work with and reliable. The fact that many studios and companies are giving It’s A Wrap! repeat business is evidence that Tiara’s relationship-building efforts and attention to quality service have not been wasted.

 Who did the entrepreneur use for help and guidance during the startup of this business?

Tiara looked foremost to her business partner and mother, Janet, for guidance. Janet’s prior experience in this line of business provided a valuable resource to Tiara, who often consulted her for advice and suggestions. Their interaction extended beyond the traditional mother-daughter relationship, as their familiarity with each other helped to strengthen their working relationship and build a solid foundation of mutual trust and respect. They often used each other as a springboard for ideas and threw ideas back and forth at each other to find ways to improve their business.

Her boyfriend Dominic was also a key supporter during the critical startup phase. He encouraged her to pursue her general interest in business and in this particular entrepreneurial venture. He made certain that Tiara carried out all the goals that she had set for herself. He was unwavering in his confidence and emotional support at times when she would become mentally exhausted under the strain of assuming most of the management and operational responsibilities. Now her business associate at It’s A Wrap!, Dominic continues to be a reliable source of assistance and understanding.

 What advice would the entrepreneur give to someone thinking about starting a business?

The first piece of advice that Tiara offers to aspiring entrepreneurs is to write a business plan. Much different and more effective than simply thinking or talking about action steps, committing your ideas to paper forces you to think through issues that you would not normally think about unless you were actually writing a business plan. This process helps to solidify several broad issues in your mind, such as what you want in your business, where you want to go, and where you are at the moment. It helps you to discover whether the business will work with your lifestyle and your financial life, and whether the business will provide you with the things you need. The business plan also helps you to see reality by forcing you to deal with practical issues like financial planning and feasibility studies.

Tiara also stresses the importance of recognizing where your strengths and weaknesses lie. If you are not strong in a particular area, she suggests forcing yourself to learn about it and to make a dedicated effort to improve. For her, she admits that she is not particularly strong with financial numbers, which explains why Janet’s primary responsibility is to manage the store’s finances and cash flow. Rather than ignoring this aspect of the business, Tiara makes herself become more involved in the company’s finances and acquire at least a working understanding of the numbers. Tiara also adds that remaining strong in your strengths is just as important as shoring up on weaknesses. Realize what you do well and stick to your core competencies.

Lastly, Tiara emphasizes getting in touch with people in your industry. These contacts will help you throughout your entrepreneurial career, not only as a way to open yourself up to future opportunities, but also as a means to seek advice from people in the industry and from whom you can learn through an exchange of ideas and experiences. As a related suggestion, Tiara advises entrepreneurs to stay abreast of their industry. Stay knowledgeable by reading newspapers and business-oriented magazines, such as Wall Street Journal and Inc. Magazine.

 Why was the entrepreneur successful at getting into business?

In listening to Tiara’s story, it was not hard to identify key characteristics and environmental influences that have contributed to her success as an entrepreneur. From a search perspective, in which entrepreneurial activity is viewed as a search for ideas from a vast set of possibilities, Tiara’s persistence has been a virtue that has enabled her to continually pursue different avenues and find ways to create value for her customers and suppliers. She never accepts an initial "no" for an answer, rather, she sees the response as an opportunity to learn more about her clients and how to better meet their needs. Knowing the information behind their decisions has expanded her knowledge base and thus her space of available ideas, from which she is able to scan for creative ideas and choose among feasible options. During the startup of It’s A Wrap!, her tenacity has been the glue that held everything together, especially during the first years of startup when the store experienced more than its usual share of difficulties from Janet’s ex-partner’s efforts to deliberately discredit the company.

Being a good listener has been an important element in Tiara’s search for ideas. She is attuned to her environment and the people in her work and social spheres. Her ability to recognize business opportunities has been made possible through careful listening to what others have to say. She learns from a broad spectrum of people, from the diverse speakers in the Entrepreneur Program to her business partner and employees. She is responsive to the concerns of others and makes it a point to stay in touch with her customers, either by directly asking for their input or by simply talking with them casually in the store. By being attentive to details, Tiara has been able to identify areas in which she could take her business to a new level or improve an existing situation.

Tiara’s preparedness to take advantage of new opportunities also facilitates her continuous search process. Her background is filled with examples of actions that Tiara has undertaken to prepare her for the entrepreneurial world. Her exposure to entrepreneurship as a child helped to instill a type of mind-set that encouraged both creativity and hard work. She became a young student of entrepreneurship by watching her mom work at the Retake Room and learning from her experiences. Later, her years at USC provided a more formal education, equipping her with the analytical tools and skills needed to bring a business concept to life. Even from her personal interest in clothes and fashion to her internship at Northwestern Mutual Life Insurance, her experiences as well as a prepared mind have made her ready to exploit opportunities as they arise, making her search for workable ideas seem almost effortless and natural.

Certain psychological attributes become evident in Tiara that lend a better understanding of her achievements. The most obvious quality that one immediately observes is her ability to communicate well with others on all levels, whether with clients or customers in a casual or professional setting. She understands the importance of being able to effectively articulate one’s idea or product. As part owner of It’s A Wrap!, one of her many responsibilities includes procuring new business as well as developing relations with existing clients. This task requires her to perform many social functions, a role that comes naturally to her since she enjoys meeting with people. She also assumes the management role of overseeing the crew at the store, and her unassuming demeanor and ability to relate to others has allowed her to communicate her vision for the business to all employees.

A relentless curiosity combined with an open-mindedness toward new and different perspectives is another quality that typifies this entrepreneur. Tiara not only is one to question her environment, but she also tries to actively pursue the answer until she arrives at a satisfying explanation. She welcomes new ideas and input from all sources and seeks to increase her knowledge in different things. As a way to extend the type of learning that she received in the Entrepreneur Program, Tiara has joined Town Hall of Los Angeles, a speaker’s forum that invites various notable figures from all over the world to talk with members of this organization. Recommending these events to everyone, Tiara sees these series of speakers as an invaluable opportunity to hear from a large pool of diverse viewpoints who speak on different topics, some of the past speakers include Elizabeth Dole, Larry King, and Magic Johnson.

Other attributes that provide fuel for Tiara’s actions are a passion for her work and a solid belief in her product. Her drive remains unfazed by the hard work and long hours that she must commit to the business because she thoroughly enjoys her work. She has effectively combined her knowledge of the retail and entertainment industries, her skill in sales, and her love of clothes to create a business that is consistent with her lifestyle and interests. What results is a fierce passion and vigor for a business concept that is matched in intensity by a strong belief in what she does and what she offers to her customers.

From a social perspective, Tiara has been fortunate to be raised in a family that encouraged and supported independent thinking and action. Although she believes that entrepreneurship is both something a person is born with and learns later in life, she asserts that this ability hinges more on what a person is exposed to in life. Tiara attributes her own entrepreneurial proclivity to being exposed to her mom’s business all her life, turning her onto a way of thinking that is grounded in the principle of doing something for herself and working hard to make it succeed. The guidance and unwavering support that she received from her family to start her own business helped to create an external environment that was nurturing to her entrepreneurial imagination.

Having been set up in an entrepreneurial situation for the majority of her life, Tiara has worked to maintain the same type of working environment at It’s A Wrap! that she has grown accustomed to and believes is necessary for the business’ success. Believing that good customer service begins with the employees, she establishes relationships based on mutual respect with all her employees. Everyone at It’s A Wrap! is treated as equal. In a line of business that allows merchandise only sixty days to liquidate, the entire crew must work closely and cohesively together in order to inventory, process, price, steam, tag and put the merchandise on the floor in a timely manner. Tiara often looks to her employees for their suggestions for improvement and input on the customers. It is not surprising that the family-like working atmosphere that she has cultivated for her business at It’s A Wrap! has, in turn, become a source of inspiration and creative energy for Tiara.

- Angela Chan


 

Tim Johnson, B.S. '88
Tavel/Johnson Television

What kind of business did the entrepreneur start?

Tim Johnson is currently a partner at Tavel/ Johnson Television in Beverly Hills, California. In 1997, he teamed up with Connie Tavel, a successful talent manager, to form this new production company which, drawing from Tavel's pool of talent and Johnson's experience in the television industry, is currently producing a modern-day Miami Vice called The Coast for ABC. Johnson believes that the company will soon be producing at least five television shows.

The partnership has two major functions. One primary company objective is to procure and maintain a strong talent base and produce television shows. Connie Tavel has been a mainstay in the entertainment industry for many years and is a talent manager for many of Hollywood's hottest stars. She is responsible for providing the production company with the best talent available. Notable talent affiliated with Tavel/ Johnson Television includes Helen Hunt and Craig T. Nelson. Unlike talent agencies, talent management companies are also involved in the actual production of films and television shows.

Tim Johnson has recently taken over as the head of television production at Tavel/ Johnson and is in charge of the entire production process. Television producers must pitch projects to the networks, oversee production schedules, oversee payroll, ensure that necessary equipment is on the set, ensure that the networks are happy . . . a producer’s list of responsibilities goes on and on. Tim’s current responsibilities as head of production are beyond that of a producer of one television show, as he must oversee the production of many shows at the same time. Tim likens his work to that of a general contractor and is the main organizational force of the company. He must select viable television concepts, skillfully organize their creation, and furnish the networks with a finished product.

Tim feels that his affiliation with Connie has enhanced his ability to excel in his job in that he believes that access to talent is the key to success, and Connie’s clients provide Tim with an exemplary talent base. Tim is confident that the new partnership will be instrumental in his effort to produce successful television shows.

What is the background of the entrepreneur?

Tim Johnson grew up in a large family in Minneapolis, Minnesota. Always fascinated with the entertainment industry, Tim came to USC in 1988 as a twenty-year-old transfer student. He had already produced a film back in Minnesota, but he was not interested in attending the USC School of Cinema. Rather, he entered the entrepreneur program with the belief that these studies would better prepare him for the management end of the entertainment industry. Tim wrote a detailed business plan and feasibility study during his senior year at USC which laid out the framework for the production of a feature-length film entitled Real Combat.

After graduating in May of 1989, Tim decided not to carry out his business plan because, at this time, Tim realized that his future would lie in the television industry. Tim developed a rather low opinion of the film industry. Expressing his displeasure with the film industry, Tim noted that "TV was an industry rather than a playground"; the mere thought of working on independent films made him nauseous.

Intent on working in television, Tim tried to contact Barney Rozenzweig (Class of ‘56), an established television producer with Weintraub Entertainment. Although Tim had no connection and had never met Rozenzweig, he knew that Barney was a USC graduate and a die-hard supporter of the University. He thought that this would help him get his foot in the door. After receiving numerous letters and countless telephone messages, Rozenzweig finally contacted Tim one year later in 1990. They had a brief conversation, but Tim did not hear back from Rozenzweig thereby leading him to practically writte off his hope and desire to work with Rozenzweig.

Yet another year passed before Rozenzweig contacted Tim and brought him into Weintraub Entertainment as his assistant. Although Tim had always been intent on running his own production company, he felt that working for Rozenzweig would provide him with better experience than he could have gained on his own. Tim’s initial career strategy was to enter an established company as high up as possible and learn for free on his boss’ time. Tim gained invaluable experience, such as learning how to mount a show and pitch it to the networks, while working as Rosenzweig’s assistant. He helped Rozenzweig pitch The Trials of Rosie O’Neil to CBS. In 1992, having worked for Rozenzweig for one year, he decided it was time to venture out on his own.

Tim "thinks that his business is more about acts of god. You just have to show up for it." While Tim worked as an assistant on Rosie O’Neil, a writer named Beth Sullivan was hired to work on the show. The two collaborated on many occasions and they developed a strong relationship. After Tim left Rozenzweig in 1992, he and Beth combined forces to form a television production company called The Sullivan Company. Tim and Beth began to pitch television shows to the networks, and Tim was able to draw on the experience he gained while helping Rozenzweig pitch Rosie O’Neil. Although Tim was the front runner for The Sullivan Company and essentially oversaw all of the operations of the company, his affiliation with Sullivan was necessary because he could not have approached the networks without her. Network executives only accept pitches from established producers, and Sullivan already had strong connections at the networks.

Tim feels that he "lucked out" in meeting Sullivan. Their show, Dr. Quinn Medicine Woman, was picked up by CBS (the title character was named after Tim’s grandmother.) Once again, Tim relied on his past experience when he was called to oversee the production of Dr. Quinn. The television show remained on the air for 5 full seasons, and Tim learned a great deal about television production. In 1997, Tim left to start Tim Johnson Productions. He produced a pilot, but he quickly learned that he needed more star power to ensure the success of his company.

Toward the end of 1997, Tim went boating with an agent friend. The two discussed the current status of Tim’s career, and the agent informed Tim that he had a manager friend who happened to be interested in teaming up with a producer. One week later, Tim met Connie Tavel and the two formed Tavel/ Johnson Television.

How did the entrepreneur get the idea for starting this business?

Although Tim's venture with Tim Johnson Productions was short lived, Tim learned a valuable lesson about the television industry. Accessing top talent had become his major obstacle and he needed more leverage with the top talent in Hollywood. Tim needed a partner that could supply him with the star power that is required of a strong production company. Since the networks give him money to produce the shows, his need for capital was minimal. Tim explained that talent is as crucial to survival in the entertainment industry as cash is to survival in entrepreneurial ventures. When Tavel's previous partner left, Tim was brought in to head up the television division. He currently has access to the best available talent, and has been successful in pitching projects to the networks.

What did the entrepreneur do to start this business?

Although Tavel/ Johnson Television has been in existence for less than one year, Tim Johnson has essentially been working up to this position since graduating from USC. Tim believes that his prior experiences have been critical to his current success. He explained that "you need to learn how to crawl before you learn to walk before you learn to run before you learn to sprint." Over the past several years, Tim has had several valuable learning experiences:

Crawl: When working for Rozenzweig, Tim learned how to mount a television show. Through observation, he learned how to approach the networks with a project and make a successful pitch.

Walk: While working with Beth Sullivan, Tim gained first hand experience in pitching shows to the networks.

Run: Tim's experience in producing Dr. Quinn was invaluable. He learned how to prepare production schedules, obtain talent, meet deadlines, oversee post-production, procure equipment, maintain a budget, obtain insurance . . . he attempted to apply this knowledge to Tim Johnson Productions.

Sprint: Tim now has access to the networks and can apply the knowledge gained through producing Dr. Quinn to his current position at Tavel/ Johnson. He now is capable of setting up and building the infrastructure of a full-fledged television production company.

Tim's functional role within the new organization is more complex than his role at The Sullivan Company in that he must now oversee television production from a higher level. Rather than getting his hands dirty with day to day production, Tim spends much of his time developing new projects. His short-term goal is to successfully pitch five or more television shows to the networks. In order to reach that goal, Tim must select a viable concept, refine the idea, and then pitch it to the networks. If the networks accept the pitch, the company will produce a pilot episode. If the networks approve the pilot, Tim will spearhead the production process.

When did the entrepreneur do these activities?

Tim graduated from the Entrepreneur Program at USC in 1989. He spent the next two years trying to land a job in the television industry. His persistence paid off in 1991, when he began to work with Barney Rozenzweig at Weintraub Entertainment. He left Weintrab in 1992 to start The Sullivan Company with Beth Sullivan. He was the producer of Dr. Quinn, Medicine Woman for five years. He started Tim Johnson Productions in 1997 and produced one pilot, but realized that he needed a partner with connection to top talent. He and Connie Tavel teamed up in late 1997, and they have begun to produce their first show, The Coast.

What major problems did the entrepreneur encounter during the startup of this business?

Tim's long term goal is to one day be a studio head and everything he has accomplished thus far has kept him on track to achieve this goal. Along the way, he has encountered several hurdles. When Tim first graduated from USC, he had no connections in the television industry. He could not have started a television production company at this time, because his lack of experience in the industry would basically guarantee failure.

Once he had obtained quality experience at Weintraub Entertainment, Tim encountered his next obstacle. Although he had previously been involved in pitching shows, Tim was unable to get in the door at the networks and clearly needed an ally who would provide the clout necessary to be heard by the networks.

After five years with The Sullivan Company, Tim felt that he was able to venture out on his own. He learned very quickly, however, that he could not operate without a pool of talented actors and actresses. He needed a partner that could provide him with quality talent, the most crucial of Hollywood assets.

How were those problems solved?

Tim’s immediate goal after graduation was to work at an established production company at the highest level possible. He went straight to the top of Weintraub Entertainment and worked as Barney Rozenzweig's assistant. This did not happen overnight, however. Tim displayed an extraordinary amount of persistence in his quest to obtain this job. Phone call after phone call, letter after letter, Tim's perseverance and tenacity eventually paid off. Landing the position as Rozenzweig's assistant sparked Tim's career; he gained valuable experience that paid off down the road.

Success in the entertainment industry is heavily dependent on a person's ability to develop key relationships with the right people. Throughout his career, Tim has forged and cultivated key relationships that have been critical to the continued growth and success of his career. Tim's position at Weintraub put him in direct contact with Beth Sullivan, a colleague that would eventually provide him with a ticket into the networks. It was his relationship with Beth that made it possible for him to get in the door and pitch the networks. Likewise, Tim's friendships within the television industry provided him with the connection to Connie Tavel. She was able to provide Tim with the talent he desperately needed. Tim's vast network of friends and colleagues has provided him with the strength and resources he has needed to overcome the obstacles he has faced thus far.

Who did the entrepreneur use for help and guidance during the startup of this business?

During the early portion of his career, Tim relied on the support and advice of a family friend. The mentor, formerly with the talent agency CAA, was someone that Tim could always count on to tell him the truth. The agent was not afraid to tell Tim when he was "full of shit." In this industry, that type of advice is offered relatively infrequently.

The mentor also helped Tim learn how to negotiate. He taught Tim that the key to successful negotiation is to think one step ahead of the person with whom you are dealing. In order to do so, he was advised to go into every situation "convinced that everyone else is a mental midget." Looking at Tim's track record, this advice appears to be rather sound.

What advice would the entrepreneur give to someone thinking about starting a business?

Tim believes that tenacity, desire, and faith are a successful person's most valuable assets. He feels that too many people give up too early. Tim is a true believer that "there's always a storm before the calm" and that only a person with tenacity, desire, and faith will reap the benefits of riding out the storm. Tim once tried to pitch a project, but he was completely unsuccessful. He believes that his efforts were doomed from the start, because he didn’t believe in the project. All along, he knew that the idea was way ahead of its time. He suggested that all young entrepreneurs read Think and Grow Rich by Napoleon Hill, a book that describes the importance of tenacity and faith.

Why was this entrepreneur successful at getting into business?

David N. Perkins and Robert J. Weber's Effable Invention delves into the creative process of invention. In their essay, Perkins and Weber discuss three aspects of the inventive process. The authors investigate the search for invention, the psychological traits of the inventor, and the social setting in which the invention is created.

The Search: The search metaphor relates to the steps that the inventor takes in crafting his invention. The inventor may not always be headed in the right direction, but there are certain qualities that keep the inventor on track. "How does the searcher go about finding a workable idea among the many possible ideas? Obviously not by considering them all." Tim Johnson’s success can be attributed to his knack for putting himself on the right track. In 1989 Tim made a key decision regarding his career and, after graduation, decided that experience would be necessary before he could start his own production company. Surprisingly, he did not jump at the first available opportunity. He desired a position that would put him up at the top of a company, where he could meet key people and see important decisions being made. Tim waited two years before he started to work for Rozenzweig. This decision put Tim on the fast track; at Weintraub, Tim put himself in the position to learn how to run a production company.

Psychological: Perkins and Weber discuss psychological characteristics that contribute to an inventor's success and note that inventors share similar psychological attributes. Inventors do not achieve their goals overnight; therefore, they are steadfastly persistent in their search. Tim Johnson demonstrated an extraordinary degree of persistence in his attempt to break into the television industry. After graduation, Tim spent the vast majority of two years trying to land a job as Barney Rozenzweig's assistant. Had he abandoned his quest, it is unlikely that Tim would have received such an extraordinary opportunity to learn from one of the industry's best. Tim's persistence is admirable and marks his undying tenacity and desire.

Tim's optimistic attitude underscores his reaction to the problems that he has faced throughout his career. Tim stresses the importance of forward momentum in everything he does. He said that getting beaten down is inevitable and what is important is how you keep the forward momentum and get back up to speed. Tim needs to maintain forward momentum while running the production company. It is inevitable that he will pursue projects that will not become hit television series. Tim feels, however, that he should continue to work on these projects just to keep the forward momentum going. Tim's philosophy is to "make more right decisions than wrong decisions. Don't question it, just fucking do it."

Social: Tim works in an industry that often mixes business and pleasure. Meeting the right people and developing relationships is extremely important to individuals in the entertainment industry. As the head of television production, Tim must constantly interact with agents, employees, and network executives. Tim believes that developing relationships within the industry has been key to his success. Without these relationships, Tim would have been unable to overcome the obstacles he has faced over the past nine years.

- Steve Levin


 

Ahmos Netanel, B.S. '86
Alumni Entrepreneur of the Year - 1996
The Massage Therapy Center, Inc.

Ahmos Netanel

What kind of business did the entrepreneur start?

With over twenty thousand clients and fifty-plus staff, The Massage Therapy Center, Inc. reigns as the largest massage therapy center in the United States. The Center’s therapists are fluent in the numerous techniques of massage. In order to custom tailor every session based on the individual needs of the client at the time of appointment, the therapists provide a combination of many approaches to massage including: Swedish Massage, Acu-pressure, Deep Tissue Massage, and Sports Massage.

The Center creates the ultimate environment for both the client and the therapist. Every detail is devoted to one’s comfort: from the temperature and lighting, to the serene music, to the soft flannel sheets and luxurious robes. All of this is the result of Mr. Netanel's creative vision.

What is the background of the entrepreneur?

Born the youngest of three, to two entrepreneurs, Ahmos grew up knowing that he was destined to be in business for himself. His father, owner of a construction company, often stressed that his employees had a better life than he. After all, at five o'clock they went home and "sat on their balconies and ate watermelon". He, on theother hand, put on a suit and attend business meetings. One would think this would have led Ahmos to shy away from a business of his own. Instead, Ahmos developed a strong work ethic and realized that though there were some drawbacks to heading one's own company, there were far more benefits.

Before leaving Israel, his birthplace, Ahmos served in the military as a head of an anti-terrorist unit. Serving in this capacity truly honed his leadership ability. Also, it developed a sense of tenacity in him. Forced to achieve specific objectives, Ahmos developed a "no quit" attitude and learned to "hang in with nails forever".

While receiving a therapy session at a health club, Ahmos started talking with the therapist about how one becomes a massage therapist. He was so interested in the idea of possibly developing a professional career in this practice that he enrolled in a Massage School in Santa Monica. After six months of formal training, he started practicing massage therapy for himself and through a massage company. This helped finance his education at The University of Southern California, where he was pursuing his undergraduate degree in entrepreneurship.

As he honed his skills in the practice of massage therapy, he was quickly recognized and became President of The American Massage Therapy Association (AMTA) which proved to be a very challenging position for Ahmos. He was responsible for developing basic goals, operations, and policies for the organization and, more importantly, he tried to bring a stronger sense of professionalism and business strategy to the Association’s members. At the time, a lot of therapists did not really perceive their practice as a business.

How did the entrepreneur get the idea for starting this business?

The idea for The Massage Therapy Center, Inc. came to Ahmos in an interesting, and somewhat lucky, way. As President of The American Massage Therapy Association, Ahmos was interviewed by The Los Angeles Times in 1987. Two paragraphs resulted in over four hundred inquires from consumers wanting referrals to quality massage therapists. Ahmos quickly realized this unique business opportunity. He could create a facility where customers could come and be introduced to the best massage therapists in practice.

What did the entrepreneur do to start this business?

Ahmos was involved in every aspect of developing his business, and he did it primarily by himself. In 1986, he developed a business plan at USC on such a company. He chose the topic not because he really foresaw himself opening such a business, but because he had so much experience in the industry and so he did not have to do any industry research.

After graduating, Ahmos continued to work doing massage therapy and giving seminars on the industry. In September 1987, the aforementioned interview took place and the idea developed rapidly from there. Ahmos used the business plan he had developed at USC as somewhat of a skeleton outline and modified it to fit the business objectives he had in mind. He structured the investment deal and convinced his brother to outlay the $150,000 he needed to get the project off the ground. Raising the initial capital required was not as grueling a process as it is with most start-ups, "a half-hour and a napkin, the rest is history".

Ahmos incorporated the company in November 1987 and over the next few months he pieced together all of the necessary requirements. Ahmos described the start-up as a "jump-in" process, as he learned through doing. He worked with a contractor to develop the location, he hired an Administrative Director, he obtained his DBA and developed the company's logo and trademark. Because the company was undercapitalized, Ahmos had his hands in all facets of the its development and was constantly juggling the numerous responsibilities a start-up requires. There were many days he was running on only a couple hours of sleep.

In June 1988, The Massage Therapy Center opened its doors. Initially, the company did not fare too well, as it was in the red for some time. However, Ahmos was able to eventually overcome this, through new marketing efforts and by adjusting his business concept to keep up with the needs of his consumers. Over the next ten years, it grew to be the noteworthy company it is today.

Currently, Ahmos is preparing to do another startup and his new company, Spa Euphoria, will absorb the current business and thus, the cycle begins anew. With his new business plan, Ahmos seeks to raise $6 million. He envisions a new 'landmark' building and envisions changing the massage therapy industry. In September 1999, this idea will come to fruition.

What major problems did the entrepreneur encounter during the startup of this business?

Perception proved to the biggest obstacle Ahmos faced. Ten years ago, most individuals equated massage therapy with "massage parlors"-places more like whorehouses than legitimate businesses. City zoning proved very tough and Ahmos was in a constant struggle with City Hall.

To obtain a conditional use permit (the permit required for a business like The Center which specifies all the conditions that must be met in the running of the business), City Zoning, the Police Commission, the County Health Department, the Office of the City Clerk, and the Department of Building and Safety all have to agree that a business like The Center is not a "detriment to society". In addition, all landowners and property owners within a 300 yard radius are entitled to come to the City Hall hearing to voice their concerns.

After filing with the City Clerk, the Vice Squad came out to issue its opinion. The sergeant would not budge on the conditions that were required to be met. For example, he wanted windows in all doors of the business, so that the police could come in and view what was occurring. This demand posed an obvious problem for Ahmos, as customers expect the right to privacy. In addition, a business owner in the community voiced opposition to the business, due to his preconceived notions of the massage business.

Similar problems arose with companies integral to advertising Ahmos' business. For example, phone companies deemed massage businesses, limousine services, and escort services as 'fly-by-night operations'. As such, they wanted the money for year ads in the Yellow Pages up front, rather than on a monthly basis. This posed a significant problem because Ahmos was forced to come up with a year's advertising at once ($16,000 for GTE), before even opening.

Although Ahmos learned a lot about business in his instruction in school, he lacked the knowledge of "how to be an employer". He was not familiar with all the intricacies of running a firm; over-time laws, severance pay, etc. His optimistic view of people resulted in his being too lenient in his business practices sometimes.

How were those problems solved?

Ahmos learned through doing. Through researching the city requirements for operating such a business, Ahmos was able to comply with the zoning laws. However, he had a tremendous struggle with City Hall in getting the business approved.

At the time, the City was redoing its ordinance and came to Ahmos, as President of the Massage Therapy Association, hoping to get an endorsement from him. Basically, Ahmos stated that he could not give any endorsement on an ordinance that was at the same time prohibiting him from setting up a business. Eventually, Ahmos was able to gain the approval from the Police Commission.

After meeting with the owner of the company who was opposed to the establishment of The Center, Ahmos was able to convince him that his business was legitimate and that it posed no unfavorable ramifications. In fact, this owner later became a client of Ahmos’. With the approval of the two sources that were initially opposed to The Center, Ahmos was now able to obtain his business permits.

To ease the burden of substantial up-front costs, many of his creditors were somewhat lax with him. His landlord let him get by with deferred rent payments. He had to carefully manage his cash flow.

Ahmos was forced to change the way he handled working with people. He had a situation with a key employee some time back that was serious to the well being of the company. Because he initially had a "let's work through it attitude" and it is easier to maintain the status quo than change, he gave the employee more leniency than was justifiable. After the problem did not remedy itself, he was forced to let the employee go. As a result, Ahmos adopted a different strategy, to not prolong situations. "No one likes to be a hard-nose, but you have to do what is in the best interest of the company". In other words, Ahmos learned to wear the many hats that come with running a business.

Who did the entrepreneur use for help and guidance during the startup of this business?

Ahmos' investor significantly helped in the start-up. Not only did he provide the necessary capital, but he also had previous experience in creating a company. Ahmos was able to apply some of the investor's knowledge to his own situation. The investor was able to refer Ahmos to an architect, helped him with the creation of contracts, and helped develop the initial advertising campaign.

The Administrative Director played a significant role as well. The AD helped set up the office, implemented the operations of the company, and aided in the accounting. Basically, the AD helped Ahmos take care of the day-to-day operations.

What advice would the entrepreneur give to someone thinking about starting a business?

Steven Jobs said it best, "Use your head to follow your heart, and not the other way around". As the most important thing one brings to the business is energy, Ahmos stresses that one must find something he/she is truly passionate about. He/she must be driven and ambitious, willing to put forward the work. "If you are not driven, you're dead".

One must learn to motivate his employees, instilling his vision on the company. Because a business has limited resources, an entrepreneur must learn to maximize what he/she has. "The trick is learning to make a dollar work as ten". Only through constant energy and dedication can one's vision become reality.

Why was this entrepreneur successful at getting into business?

Ahmos Netanel has been extremely successful in his development of The Center. This success can be attributed to his strong correlation with the description given in Perkins and Weber’s "Effable Invention". Specifically, it can be viewed from three perspectives: the search perspective, invention as an effective search for ideas among the possibilities; the social perspective, the social trends and establishments that support these searches; and the psychological perspective, what mental faculties enable and compel these searches (Perkins and Weber, 318).

Ahmos was successful from the search perspective because he was able to find a field in which he had an interest and could flourish. The social trends that enabled him to successfully start his own firm were educational institutions, the need for a service that was at that time unavailable, and the networking opportunities he possessed. From the psychological perspective, his success was aided by his business knowledge, his tenacious attitude, his passion, and leadership ability.

Ahmos could have pursued a career in numerous fields when he graduated from the University of Southern California. However, because he had been practicing massage therapy for some time, it seemed to be a natural fit to focus on this business practice. Since he considered himself to be "unemployable", he definitely needed to be in business for himself. However, he was not sure in what capacity he would serve. He faced many options, he could continue providing massage therapy himself, continue familiarizing the public with massage therapy as President of the AMTA, or create a business where he matched therapists with clients.

The social trends substantially contributed to Ahmos’ idea in starting the company. If so many individuals had not demonstrated an interest in the placement service The Center now provides, it is highly unlikely such a company would ever have come to realization. Ahmos, like the majority of other successful entrepreneurs, quickly recognized a business need and worked to meet that need.

His education at USC played a significant role in his understanding of social trends. His course work enabled him to formulate a business concept to meet consumer needs. He was familiar with business planning and knew where to go to create a business.

Further, because Ahmos knew the best massage therapists in practice, he had the ability to bring them in on the start-up. That is, Ahmos did not need to take the time to go search for individuals to staff his company. They were lining up for the opportunity.

Ahmos possesses many of the personality traits common to successful entrepreneurs. He is extremely passionate. He is able to pass his vision on to those around him and to instill a sense of direction in his employees.

He is remarkably tenacious. When he commits to something, he follows through. This sets himself apart from most individuals. However, he does not feel this attribute is necessarily a great thing. He has had to work on "letting the small things go". Entrepreneurs cannot control every aspect of their lives. So, it is paramount that the entrepreneur identifies the important things and work on those.

Ahmos possesses great leadership ability, as do most entrepreneurs. This ability has developed from his experiences with others throughout life. One has to "test the waters" to determine the best approach to dealing with people.

Because he is authentic and does not posture, Ahmos is able to make firm business decisions. Some entrepreneurs do not think their business ideas through enough, and, consequently, make unsound judgment calls. An entrepreneur who does this cannot be successful.

It is extremely difficult to reduce the qualities of a successful entrepreneur into a concise writing. How can one communicate the essence of an individual in an essay? But, by talking to Ahmos, it is apparent that he embodies all of the characteristics of a successful entrepreneur.

- J. Ryan Mummert


 

Alan Reed, B.S. '97
Marcia Israel Outstanding Student Award
Card Cutz

What kind of business did the entrepreneur start?

Alan Reed established Card Cutz in 1995, a specialty greeting card company. It does not make just plain, ordinary greeting cards, rather, Card Cutz specializes in making three-dimensional greeting cards; each package comes with a blank card, an envelope, two-sided sticky foam, and punch-out pictures. With the package, the cards can be arranged in whatever way the customer wants. There are several different categories of cards including birthday, "thinking of you," "I love you," friendship, and congratulation cards.

The cards are targeted at a specific niche market within both the greeting card and the arts and crafts industries. The product is designed for people who want to go the extra step in providing their loved ones with a more meaningful card. Anyone can go to the store and quickly pick out a card that shows and says everything the person intends to say. However, for those people who want to show they care enough to take the time to make a card but lack the creativity, these greeting cards are perfect.

Surprisingly, there were no such products out in the market prior to the ones made by Card Cutz. There are other alternatives to the typical greeting cards like rubber stamp cards and computer generated cards. However, there is no true greeting card that is considered a high-end gift and novelty like these cards.

What is the background of the entrepreneur?

Alan was born in 1975 to an attorney for a father and a homemaker as a mother and grew up in the Los Angeles area. During his childhood, he was strongly influenced by the entrepreneurial spirit of his family. He and his brother used to buy clothing in downtown and sell it at the swap meets. Alan also sold cookies and had a lemonade stand, both of which were not successful, but taught him persistence at a young age. This all stemmed from the fact that several members of his family owned their own businesses, including his father. In addition to being influenced by his family, Alan attributes a great deal of what he is today from a revelation that occurred at age ten.

When Alan was ten years old, he was diagnosed with diabetes and, as such, Alan had to adjust to taking care of himself very quickly. With the daily-required doses of insulin, Alan had to be responsible at a very young age, which helped him mature and grow. From this, he learned the value of life and health and he also began to appreciate his family and friends even more. In a nutshell, this is what Alan believes is the key to business. Just as he values his family and friends, Alan realizes that valuing and trusting clients and customers is extremely important. In other words, he recognizes that it is important to put other people before himself.

As a result of his understanding the importance of his health and of being in good shape, Alan became very interested in sports. Prior to his diagnosis, he had been interested in sports, but became even more so after he learned of his condition and became as active as he could. Thus, he considers himself an athletic person and most people would agree as he participated in basketball and tennis in high school. In fact, it was in his high school, Birmingham in Van Nuys, that he also developed some of his leadership skills by being the captain of the basketball team and in charge of team-building skills.

During this time, Alan also began building his resume. He began painting street addresses on curbs and went on to work at Big 5 as a shoe salesperson. He also worked at a real estate office and at the Juvenile Diabetes Foundation where he assisted the organization in its fund-raising efforts. Alan also worked at a convalescent home as an administrator-in-training and did everything from changing bedpans to paying the bills. Alan has always worked well with the elderly and has been very close to his grandparents and, as a result, Alan hopes to someday build a retirement home of his own.

Following high school, Alan entered college at USC, his second choice to UCLA. Despite his initial wishes, Alan is extremely glad that UCLA rejected him. He has no regrets about going to USC and will always value everything he has learned from USC, particularly the excellent education and, even more importantly, the people he has met. Upon entering USC, Alan decided to be a business major and from there, he decided to emphasize in Entrepreneurship.

Alan had a wonderful experience in the Entrepreneur program and his efforts were also recognized by the faculty as he was selected as the most outstanding student in the Entrepreneur program, and, thus, received the Marcia Israel Award for most outstanding student. Alan did not have a favorite class, but does have a few favorite professors. He truly enjoyed hearing about Dr. Allen and Professor O’Malia’s real life experiences in starting their own businesses. He also particularly enjoyed Professor Gartner and his pure genius and brilliance that Alan will never forget. Overall, Alan truly values everyone he met in the program and the quality of the education he received.

Following graduation, Alan continued to work on his business. However, Alan also understood that as a startup company, he did not have a very steady cash flow. As such, he needed to find some employment that allowed him to earn money while also working on Card Cutz and any other projects that might come along. Thus, Alan is now working at Dean Witter Reynolds, Inc. where he is an account executive specializing in managed money. In addition to Card Cutz, Alan is also working on other entrepreneurial projects.

How did the entrepreneur get the idea for starting his business?

How did Alan get the idea for Card Cutz? While the ideas for some successful products come from a well thought out process by the inventor, Alan admits that the idea for Card Cutz actually came from the work of another person. It essentially started with a girl and a cruise ship during a summer vacation.

During a summer vacation on a cruise ship, Alan began a "shipboard" romance with an Italian girl from Long Island. Unlike other "shipboard" romances, this one did not end when the ship docked and despite the long distance between Alan and the girl, the two continued to keep in touch with one another via electronic mail, phone calls, and through personal cards. She began sending Alan personalized greeting cards that she had made herself. For several months this continued until one day the entrepreneurial light bulb in Alan’s head began gleaming.

Alan soon realized the potential in the cards she sent him. He had never received a homemade card before, and thought the cards were very special, so special that he would never forget them. This is when Alan realized that if the cards meant so much to him, they would probably mean a lot to other people as well. However, unlike Alan’s girlfriend, Alan felt he did not have the artistic ability or creativeness to make a card of his own. Thus, he then recognized that a need was missing in the greeting cards market and, along with that need, there was a great opportunity for someone like himself. Thus, Card Cutz would soon become a reality.

What did the entrepreneur do to start this business?

Alan first found out what his friends and family thought about the cards in September of 1995. He then needed to learn about the greeting card and printing business and knew that if he wanted to be successful, he needed to be able to sell large volumes of his product because it would be a volume-based product. Alan also asked everyone he knew, such as his professors, family, and friends, for their input regarding the 3-d greeting card idea. Subsequently, in January of 1996, Alan hired an artist to make prototype cards.

Alan also needed to keep his costs down, and, thus, needed to find someone who would print his cards at a relatively low price. In July 1996, after several phone calls, he found a man named Ron Schwartz, who was retired but had previously been in the printing business for nearly thirty years. To say that Ron had some experience would be an understatement as he was at one time the chief printing estimator for the largest printing company in California. Alan made an offer to the man to print all of the cards in exchange for 10% ownership in the company.

After returning to school that fall, Alan actively promoted his company and every time the professors brought in guest lecturers, Alan would tell them about his company, ask them for advice, and exchange business cards. Alan’s classmates could testify to the fact that Alan was constantly talking about his product. That fall, in October of 1996, Alan received the design patent for the product.

Alan then hired a packaging company, found through a referral, and bought the supplies for and made the displays on which the cards would be placed. He then took the artist’s work, scanned it into his computer and put the scans into negatives, which were then converted to film. This process took Alan through the end of 1996 after which the film went to press and Ron Schwartz printed the die cut cards. Thus, in January of 1997, Alan had the cards printed from the prototype cards that were made by the artist. Once printed, Alan had to collate the envelopes, die-cut sheets, foam tape, and insert card so that they could be packaged by the packaging company which occurred in February of 1997.

In March of 1997, Alan visited over forty privately owned stationary and arts and crafts stores in the Los Angeles area asking all of them if he could sell his product in their stores on consignment. In the stores that accepted his offer, Alan conducted tests and surveys from May through August of 1997, thereby spending almost the entire summer following graduation at the stores asking customers their opinion of the product. He even stopped customers who did not notice or purchase his product why they were not interested. During this test market, Alan never revealed that he was the owner and creator of the product because he truly wanted people’s honest opinions. At the same time, throughout the summer, Alan went to various cards and arts and crafts trade shows promoting his product.

In September, Alan began meeting with relatively large companies that had many different business lines in the arts and crafts industry to garner their level of interest in purchasing his product. Busy with his current position as an account executive, Alan did not do a great deal more with this venture until recently (March 1998) when he decided to seek individuals or companies that might be interested in licensing the cards so that he does not have to do another production run himself, but rather, could receive royalties from the licensing.

When did the entrepreneur do these activities?

Alan’s girlfriend sent the personalized greeting cards to him in the summer of 1995 and he began showing the cards to his friends and family that September. In January of 1996, Alan hired a professional computer artist to make fifteen different cards and in July of 1996, Alan met Ron Schwartz, the printing guru. The following October, Alan received the design patent. In the months between the receipt of the patent and the end of the year, Alan processed the artist’s work so that it could be ready for printing.

In January of 1997, the cards were printed. During January and February, Alan and Ron Schwartz prepared all the produced cards for packaging and in March of 1997, Alan began contacting the various stores in the Los Angeles area. From May 1997 to August 1997, Alan conducted the test market in the stores and visited various trade shows. By September, Alan began looking for larger companies interested in purchasing the cards. However, in the recent past, Alan has been busy with his current position as an account executive and did not do as much until quite recently (March 1998) when Alan decided to find companies to whom he could license the cards.

What major problems did the entrepreneur encounter during the startup of this business?

Alan quickly learned that distribution is an extremely important aspect of a successful product; his lack of a keen understanding of this process was the first major problem that he encountered in his business. He came to realize that understanding every detail about the distribution of products before being able to think about producing the cards was essential. A second gap in his knowledge base related to the greeting card industry as a whole; in the beginning, Alan lacked a full understanding of this industry. Another major problem that Alan found difficult and crucial to success was effectively communicating with the manufacturers and distributors. More specifically, Alan found it hard to deal with people who were older than him and learned the extreme importance of good negotiating skills.

Another difficulty that Alan faced was in human resources as he needed to hire a production person, a packaging company, and an artist. As a twenty- year old college student, Alan did not have a tremendous amount of funds to spend on the best suppliers or the most qualified employees. So, Alan needed to find a way to hire people either at a relatively low price or for an interest in the company. Finding an artist was particularly difficult because many artists were not interested in equity ownership, rather they wanted a decent salary. As such, Alan had to find a way to hire artists who were not as concerned with money.

Another major problem Alan faced was the recognition of the importance of packaging for his product. In his test market, Alan learned that the packaging did not clearly identify for what the product was to be used. Greeting card companies and others indicated that the pop-up cards were an excellent idea; however, individuals did not bother to examine the product to figure out what it did. Thus, if the customers were unable to quickly tell what the product was, it would never sell and proper packaging becomes a critical element of potential sell-throughability.

How were those problems solved?

Alan solved his knowledge gap problems through an abundance of both primary and secondary research. He read business books and articles about the relevant topic so that he could become better informed. In contacting individuals to speak with, Alan not only absorbed as much information from that particular individual as possible, but he also asked for referrals of other people with whom he could contact.

It was also through these contacts and referrals that Alan was able to find reasonably priced people to produce and package his product. Artists were still more difficult to find and Alan recognized that he simply could not afford top-notch artists. Thus, he utilized USC as a resource and placed ads around USC looking for artists. As a result, he was able to hire an artist who was not as concerned with the money, but more with the opportunity to gain experience.

Alan overcame his difficulty in working with elders through his maturity and professionalism. Before every meeting, Alan was completely prepared and organized and gave off the aura that he was serious and truly meant what he was saying. Alan also maintained his confidence and always "dressed for success." In addition to carrying himself well, Alan associated himself with professionals that gave him instant credibility. He had made contacts with an individual who was related to the president of American Greeting Cards Company, and also with an individual who sold his business to Hallmark. As a result of these affiliations, Alan was able to rid himself of the handicap of being too young in the business world.

Alan has ideas about changing the packaging to solve the identity problem; however, at this point he has decided against doing another production run at this time and is focusing his efforts on seeking a potential buyer for the company.

Who did the entrepreneur use for help and guidance during the startup of this business?

As with many other entrepreneurs, Alan had a great deal of guidance and support. His family has been extremely supportive and understanding of the trials and tribulations that a new venture must undergo; thus, they welcomed their recently graduated son back into their home where he is currently living. They also initially influenced and encouraged Alan to go forward with his venture. Alan’s father has constantly given him advice and his mother even helped design the sayings for each of the cards.

Aside from his family, Alan made sure that before any decision was made, he consulted not two or three people, but five people before he made a decision. For example, he constantly talked with the professors in the Entrepreneur program and took every step slowly making sure he did not miss anything. He feels it is very important for him to get advice from as many people as possible.

What advice would the entrepreneur give to someone thinking about starting a business?

"I would rather have a little bit of a big thing, than 100% of failure." Alan Reed mentioned this as his philosophy on starting a business. His goal for any new business he starts is to sell it at the hint of success. Alan does not want to spend the rest of his life with Card Cutz because he constantly craves something new and different. For potential entrepreneurs, he stresses the importance of not being so tied down to one product that a person will not let anyone else take control. In fact, Alan has already begun working on various other new products that are completely different from Card Cutz.

Along with this, Alan stresses that entrepreneurs need to be very open to criticism. Changes and updates to products are essential to initial as well as sustained success, thus, it is important to be open to criticism. Additionally, if an entrepreneur ignores one piece of advice, it could result in a halo effect and he/she might ignore even the soundest advice which could result in disaster.

Alan also emphasized the importance of a great deal of research and knowing as much as possible about one’s area so that he/she is able to become an expert in that area. Alan also believes that it is not only important to be an expert about the relevant industry, but also to be an expert in distribution. After working on Card Cutz for nearly two years, he has come to realize the importance of distribution for nearly every product-based business, regardless of the industry.

Why was this entrepreneur successful at getting into business?

The Role of Search

The object of Alan’s search was not to find a product to fit a purpose, as many believe being a successful entrepreneur entails. Yet, Alan’s search was also not to find a purpose for a product. Unlike some entrepreneurs, Alan had a product that met a purpose. Unfortunately for Card Cutz and Alan, the problem was not that he needed a product or a purpose, but some way of making the public realize that the product existed for which they had a purpose. Card Cutz is a product trying to fill the niche market of a greeting card that can express the user’s feelings and creativity at the same time. Linking the product and the purpose is very important. While there is some initial foundation to bring the two together, Alan realizes there is still a lot to do before the two are truly tied together. He also realizes the role that chance may play in solving this problem, much like the way it helped him have the initial idea for Card Cutz.

Unlike many entrepreneurs, Alan did not have to go through a very long search to come up with the idea for Card Cutz. Although he did not spend a lot of time prior to the idea improving the product, he has spent a great deal of time since beginning to make it a truly successful one, at least in his mind. Despite the fact that the idea came about fairly quickly, the making of Card Cutz into a successful product has indeed been a long haul.

Unfortunately, Card Cutz has not been the overnight success for which Alan, and many other young entrepreneurs dream. It is eminently clear that the work following the idea is longer and more difficult than the work prior to the idea. As such, everything has not come together at once, rather it has been a step-by-step process that, taken as a whole, has been quite an extensive search.

Alan seemed to face one problem after another which he indicates has all been part of the process and every time he solved a problem, he gained valuable experience that could help him with the next problem. Thus, extensive searching for solutions throughout the process has helped Alan not only with Card Cutz, but will also help him with his future projects.

As was mentioned, Card Cutz did not come about after an incredibly long thought process. Rather, Alan took an idea that had been around ever since children started making their own greeting cards in elementary school. While he may have recognized the potential for this product in the back of his mind at an earlier age, it was not rekindled until a girl he met on a cruise ship began sending him homemade greeting cards. If Alan was not on that cruise ship and had not met that girl, Card Cutz may not have existed. To some, this would be considered chance.

While many search styles are more systematic and less a result of chance, Card Cutz did evolve from sheer chance. While Alan was and still is actively pursuing great ideas, chance did play a significant role in the founding of Card Cutz. However, it was not as if Alan was just walking along one day and suddenly the idea for Card Cutz hit him on the head. Through the important concepts and lessons he learned in school and from the people who have given him guidance, Alan was trained early on to recognize good ideas.

Alan was also taught at an early age that if he could find someone to solve a problem better and quicker, he should follow that path. He taped any and all resources to think of ways to improve his product. For example, networking and allying himself with valuable resources has helped to make the process of creating a successful product more efficient and effective.

Psychology of the Search

In addition to the role that the actual search plays in reaching that successful point, the abilities, attitudes and behavior of the entrepreneur also play a critical role. The more obvious cognitive characteristics include intelligence, ingenuity and articulateness, all of which Alan possess.

Alan also has visual imagery. One of the most important things he does is cconstantly visualize what changes should be made to the product. For example, when Alan had to solve the packaging problem he had to picture what he wanted it to look like so it would be more appealing and more apparent to customers.

While Alan did not start out as an expert in the greeting card industry, he researched and learned as much as he could before he started Card Cutz. Even when he started the business, he was constantly learning more and more, and continues to do so today. Thus, he has done all he can to become more informed about both the greeting card industry as well as about distribution in general. However, despite all of his work at becoming better informed, Alan would be the first to admit that he is not the best expert in the greeting card industry. He does not contain a certain sense of the industry, but he knows enough to keep his business going and to stay a step ahead of the competition.

Alan also possesses a quality that every entrepreneur needs to have in order to be successful. He is persistent. He did not let any of the early difficulties get him down or stop him from pursuing his goals. Until Alan reaches his goal of someone buying the company from him or someone leasing the idea from him, he will keep trying until the next problem emerges at which time he will do all he can to solve that problem and continue going forward.

Social Context of the Search

Alan has also worked very well with the social aspects of the inventive or entrepreneurial search. Alan is not the type of person who strikes one as an inventor who will spend hours in isolation trying to solve a problem. He realizes the importance of others, the benefits of good social relations and the need to be a good communicator.

Alan has also allied himself with a wonderful support group of individuals who can help him both with various aspects of his business and with any new potential ventures. He has taken advantage of various resources and other people’s expertise to help jump-start him to the stage he is at today. Alan not only had to draw from various resources to aid in the production and the distribution aspects of the company, but he also had to find people who were experts in the law and patent system. Going to a school with such an incredible network base already put Alan ahead of many others and, as a result, Alan has continued to grow his network.

As a way of giving back for what he has received from others, Alan is currently helping two other inventors who asked for Alan’s knowledge of distribution and of generally starting a new business. He realizes that it is not just about taking from others but also giving back to the business community that has helped him. By building up his network, Alan is ensuring that he will be able to find the right person to help him should he need it in the future.

- Scott Lem


 

Mike Singer, B.S. '84
Alumni Entrepreneur of the Year - 1997
Cherokee Uniforms

Mike Singer

Years before he became chairman and CEO of Strategic Partners, Inc., it could have been predicted that Michael Singer would be a successful leader. He showed leadership through all the stages of his academic career as president of the student body in junior high, his high school and then as president of the student senate at USC.

While a sophomore orientation advisor at USC in 1982, Mike started his first publishing business – Totally Awesome - The 1983 Girls of the Valley Calendar.

After graduating, Mike joined with an entrepreneur who was interested in developing a national newspaper for college students. During the next two years Mike researched the collegiate publishing market, wrote a business plan and developed the prototype of U. The National College Newspaper. The publication was launched in February 1987 – 1.4 million copies were distributed to 400 campuses nationwide.

A third partner, who had experience editing daily newspapers, was brought in as Publisher and became Mike’s new boss. A combination of differing management styles and incompatible visions led to Singer leaving the venture. The magazine is still being published today.

Mike Singer Cheeroke

Shortly thereafter, Mike became national sales administrator for an apparel and footwear manufacturer, Cherokee, Inc. A year later he took over Cherokee’s small uniform division, beginning with a half time customer service representative and a small sales force. Over the next five years, Mike built a management team and grew the uniform division more than 485% achieving a minimum of 35% growth per year. During the same period, the parent company, Cherokee Inc., saddled with tremendous debt from a late 80’s junk bond leveraged buyout, went through two Chapter 11 bankruptcies and an almost 75% reduction in sales volume.

Following the second bankruptcy, Mike made an offer to buy the uniform division. He formed a new corporation, Strategic Partners, Inc. (SPI), becoming the largest shareholder. In July 1995, he completed the $12.2 million purchase through a combination of equity and debt financing.

During SPI’s first year, Mike launched a footwear division after purchasing Cherokee’s "Rockers" footwear brand name with its unique patented out-sole. Footwear is now the fastest growing division of the company. He also launched a new school uniform line for children, capitalizing on the nationwide school uniform trend. SPI’s medical division created its own unique characters on uniforms for pediatric departments and also licensed properties such as Baby Looney Tunes and Peanuts, which have brought a new dimension to apparel for medical workers. Largely as a result of these additions, SPI doubled its volume in a mere two years.

"Being separated from U. was devastating. It was my baby. But it was the best thing that ever happened to me. First, it brought home the USC Program’s sound advice ‘Never fall in love with your product.’ I now make it a point to aggressively attack our best products and replace them before the competition does. Secondly it made me realize how much potential businesses lose because they fail to keep their best people. One of my most important functions as CEO of Strategic Partners is to create and maintain an environment that keeps people happy and challenged. SPI’s most valuable asset is our management team, who are owners of the company."

"USC’s Entrepreneur Program taught me that entrepreneurship is a discipline that can be learned and practiced. The program provides an invaluable framework, filled with a wealth of great ideas and insights, for anyone who wants to start, buy or run a business."


 

Todd Q. Smart, B.S. '87
Alumni Entrepreneur of the Year - 1998
Absolute Towing and Transporting, Inc.

What kind of business did the entrepreneur start?

Wrecked and illegally stripped automobiles deemed a "total-loss" by insurance companies are a total profit for the insurance salvage industry. This $3 billion industry comprised of companies who purchase both reparable and irreparable vehicles and sell them to the public. The buyer then repairs and sells the car or strips the car and sells the individual parts.

Absolute Towing and Transporting ("Absolute") provides the service that transports the total-loss vehicle from its current location (i.e., body shop, residence, accident scene, etc.) to the site of the public sell. Absolute, founded by Todd Q. Smart in 1987 with one tow truck, currently operates 45 trucks and earns annual revenues of $4 million.

One of the major players in the insurance salvage industry, Insurance Auto Auctions (IAA), is a primary customer of Absolute. IAA, an Illinois-based firm, was founded in 1982 and auctions vehicles at the 46 facilities it has acquired around the country. Capitalizing on this highly fragmented industry, IAA has purchased many of the smaller salvage companies thereby fueling its tremendous growth. In Southern California, Absolute handles 100% of IAA's transporting needs.

Todd Smart has successfully differentiated Absolute by offering superior customer service. The traditional towing companies typically show no respect for their customers and transport cars at their own convenience without consideration for the time constraints or other obligations of the customer. Todd saw his competition’s lack of professionalism as an opportunity for his company to excel by offering outstanding customer service while also remaining a fair and ethical firm. This was a primary factor in Todd’s ability to both gain and further build upon the valuable relationship with IAA.

Todd Smart is the first to admit that perception is more important than reality; therefore, he ensured that the customer perceived quality service, by the look and demeanor of the tow truck driver, before any service had even been provided. Todd replaced the traditional grungy and unkempt tow truck driver with a clean, uniformed and courteous Absolute driver.

In addition to perceptions, quality customer service actions also occur at Absolute. For example, to allow for faster and more efficient order processing, Absolute has set-up a computer network through which the customer may communicate with Absolute. Further, to guarantee the most competent service, Absolute is constantly and consistently upgrading and improving upon its equipment. Overall, Todd recognizes that Absolute does not necessarily tow better than any other company, it merely makes the customer's interaction with Absolute a much more enjoyable one.

An additional point of differentiation is Absolute's use of fair and ethical business practices. Upon entering this industry, Todd immediately discovered that engaging in illegal and unethical dealings (e.g., insurance claim scam) would result in quick, and rather large, profits. He could cite several examples of unscrupulous competitors who engaged in illegal acts and experienced rapid monetary growth. Recognizing the value of a positive reputation, Todd refused to allow his company to be involved in such dealings. Eleven years later, he is confident that his business has become more profitable and successful through building this honest relationship with his customers. Additionally, he feels satisfied knowing that those of his competitors that have failed have suffered the negative consequences of acting unethically.

What is the background of the entrepreneur?

Todd Q. Smart began his first entrepreneurial venture at the ripe old age of 10 while living in Salt Lake City, Utah. After a considerable amount of begging and pleading, Todd’s parents bought him a riding lawn mower for Christmas and off he went to mow the lawn of every neighbor on the block. However, Todd says that it was not until he was 18 years old that he truly realized who he was: one who would do anything to keep from getting a job . . . an Entrepreneur.

Before coming to this realization, Todd did take a job putting bicycles together at age 12. However, this job cannot be deemed a traditional job due to the fact that before taking the job, Todd had spent most of his free time at the shop. Thus, he was not really employed, rather, he was simply getting paid to do something he loved.

Todd believes his entrepreneurial tendencies were, curiously enough, inspired by his father who never seemed to succeed in his business ventures. Todd remembers being fully aware when his father's businesses failed particularly because it meant moving four times during his youth. As Todd reflected on his father's business ventures, he indicated that his conclusion is that their failure was due to his father’s unwillingness to face the full risk of business ownership. In other words, his father did not invest the level of resources, whether they be human or monetary, necessary for success. This knowledge helped to motivate Todd to persevere when faced with challenges so that he may prove that success is possible if one is willing to take on the risk.

Todd's father's ventures were quite varied. He tried to sell used industrial equipment, he became involved with a lube refiner distributor and finally, he worked on a business in the tire industry. As is evident, the nature of these businesses included mostly "non-glamorous" industries, which was an additional influence on Todd and kept his mind open to all types of venture options. He recognized that successful entrepreneurs and high levels of profit were not only found in Silicon Valley, but also in Grease Alley.

When deciding where to attend college, Todd knew that he wanted to physically leave the state of Utah, but also did not want to stray too far from home, both in terms of lifestyle and distance. Thus, he chose to go to the University of Boulder at Colorado and began his college career surrounded by this beautiful landscape. However, after two years at Boulder, Todd became bored and needed a true and complete change of environment.

During the Spring of 1985, an adventurous Todd rode his motorcycle from Utah to the West Coast in search of the perfect university at which he could finish his college education. As fate would have it, he rode onto the University of Southern California's campus and a friendly Admissions counselor had the answer Todd was seeking. While other universities told him he was too late for Fall 1986 admission, USC's Admission counselor assured Todd that it was not too late. Thus, at 20 years of age, Todd transferred from Boulder’s rolling hills to USC’s cityscape.

How did the entrepreneur get the idea for starting this business?

Sitting in the USC Entrepreneur classroom in 1986, Todd had no money and no intimate connection to any particular industry. Yet this young man was determined to uphold his creed to not work for anyone but himself upon graduation. He figured that the ideal path to pursue would be to identify a customer with a need and then build a business around meeting that need. Todd had always considered himself "opportunity sensitive" and this characteristic, along with his open-mind (cultivated by his father's ventures), led him to believe that when a needy customer came along, he would recognize it.

He recognized that customer when Brad Scott, founder of Insurance Auto Auctions (IAA), was a guest speaker in one of his Entrepreneur Program classes. At this time, IAA was a young company but was growing. Todd recalls that Mr. Scott identified his biggest problem as being the $600,000 per year IAA spent on towing costs. This was an issue because Mr. Scott had to contract with seven separate towing companies to handle his towing needs. Mr. Scott was certain that these companies were not servicing his needs efficiently primarily as a result of the, aforementioned, lack of professionalism, characteristic of many towing companies at that time. Upon hearing these words, Todd's opportunity sensors were immediately buzzing. He recognized that IAA was a customer in need who had over a half-million-dollars, thus, Todd's business concept was born.

One might question why Todd felt so connected to this customer's need. Clearly, there must have been other Entrepreneur Program speakers who faced challenges that could equal a profitable venture for the young aspiring entrepreneur. Todd explained the connection as initially stemming from their similar personality characteristics. Todd believes he was more attuned to this speaker because Mr. Scott's dialogue with the class revealed a desire to succeed in his business and a general fondness of life which was similar to Todd's own feelings.

Additionally, Todd was able to identify with this industry and thereby connect with this venture concept. He had gained exposure to the towing segment of the industry through some of his father’s ventures. Further, as a teenager, one of Todd's hobbies was buying and selling cars because one of his ultimate goals was to eventually own a "nice car." He figured that if he continued to buy cars, repair them and resell them at a higher price, he would, in due time, own the car of his dreams.

What did the entrepreneur do to start this business?

With a need and thus, a potential customer, Todd was ready to take the steps necessary to turn this concept into a business. At the 1986 Entrepreneur Program mixer, Todd made his official introduction to Brad Scott and informed Brad of his intention to fulfill IAA's need. Todd indicated that, at that point, he was not positive that his concept would be successful, however, his determination to be a business owner upon graduation pushed away his doubts.

In January of 1987, Todd began gathering information to write the business plan for his venture with the first step being to find industry information. He quickly discovered that business publications and market analysts did not focus heavily on towing service companies or on the insurance salvage industry as a whole. This factor, however, did not deter Todd. He transformed his task into that of writing an operational plan to answer the question of how his company will explicitly meet Mr. Scott's needs. During this time, Todd met with Mr. Scott on two occasions to gain insight into the industry and the specific transporting service desires of IAA.

A milestone in Todd's research process occurred when he attended a meeting for a state association of towers. At the meeting, Todd found that the individuals he would interact with and compete against in the industry were not especially astute. This was an important revelation because Todd now understood that, as a business degree holder dealing in an "industry with no college grads," he had an even greater chance of finding profit and success.

In May of 1987, Todd had a complete business plan and a USC business degree. Now his goal was to solidify his relationship with IAA and begin towing. When Todd showed Mr. Scott the complete business plan, Mr. Scott was quite impressed. Since their initial introduction, the two occasions Mr. Scott had met with Todd only accounted for about 3 or 4 hours of his time. Mr. Scott was awestruck when "this kid" came back to him having done his research and was ready to service his needs. From this sign of determination, Mr. Scott gained confidence in Todd's willingness and ability to succeed. By June of 1987, Mr. Scott had agreed to utilize Todd's services for his towing and transporting needs in the valley area of Southern California. So, Todd traded his car (and some cash) for a tow truck and Absolute Towing was in business.

What major problems did the entrepreneur encounter during the startup of this business?

Todd identified capital as his biggest challenge during Absolute's start-up phase. For start-up cash, which covered the preliminary items such as business licensing, insurance and additional cash for his first tow truck, Todd had $5,000 in personal savings and borrowed $10,000 from his Grandmother. However, in order for his firm to pick cars up from tow yards, he had to pay a release fee of approximately $200 per car. Though Absolute's customers reimburse the company for this expense, the length of time between paying the release fee and customer reimbursement/payment is about five days. Thus, after towing 10 cars in one day, his business had a negative cash flow of $2,000. After four days Todd's negative flow had increased to $8,000 and he still had not been reimbursed or paid for his services.

How were those problems solved?

Todd was able to overcome this challenge because the company retained all its profits. Hence, every penny that was earned went back into the business to cover the next five days of release fee payments. Further, since each truck represents its own profit center, it was not necessary for him to purchase and own a large amount of equipment in order to generate revenue. Thus, Todd was able to grow his business incrementally and the company’s earnings, during the early days, did not need to be used for additional equipment. Therefore, Absolute was able to grow at a rate that was financially comfortable.

Who did the entrepreneur use for help and guidance during the startup of this business?

Another challenge for Todd was that he did not have the benefit of being surrounded by towing industry professionals. This was primarily due to the fact that, prior to Absolute, the concept of professionalism in towing did not exist. Thus, the individuals who did have industry knowledge were not necessarily people in whom Todd felt comfortable confiding.

Therefore, Todd relied on his instincts when making decisions for about the first four years of business. Due to the nature of his competition and its lack of business savvy, he felt he was capable of making as good a decision as anyone else in the industry. He rationalized this belief with the thought that if he could make the right decisions 51% of the time, everyone would forget about the other 49%.

It must be noted, however, that Todd believes the year he spent in the Entrepreneur Program at USC saved him four to five years of business mistakes. Todd values highly the opportunity the program gave him in listening as new and veteran entrepreneurs told intimate stories about their successes and failures in business.

What advice would the entrepreneur give to someone thinking about starting a business?

Todd Smart's advice is to "do it while you're young." He feels that out of college one has the least to lose. Most new-grads do not have major debt (though many have student loans) or family obligations to worry about. If an individual fails before he or she has accumulated wealth, the person can only land again at zero.

Todd has no regrets after 11 years of business and truly believes he took the risk at the most opportune time in his life. Now he has accumulated financial wealth and mental wisdom that has prepared him to take on an adult life filled with family and debt!

Why was this entrepreneur successful at getting into business?

Todd Q. Smart was successful at getting into business for several reasons. One of the major reasons is that he knew he wanted to be an entrepreneur at a young age. Because of this knowledge, he was able to put himself in situations that nurtured this ambition. Of course, the key opportunity was his ability to become a member of USC's Entrepreneur Program. Through the program he not only met his customer, he also gained a wealth of information as to who entrepreneurs are and how they grow successful businesses.

Another key to Todd's success was his decision to identify his new business venture by finding a customer with a need. Only at the point at which he had a definition of what he was searching for could he truly be opportunity sensitive. This narrowed his search for an opportunity from a universe of ideas to only those that represented his criteria.

Some may consider Todd's search for and eventual discovery of this unsatisfied customer as occurring by sheer chance. However, looking closely at the steps he took, Todd’s search was more characteristic of a systematic search. This strategy finds the searcher systematically surveying a defined set of possible leads and looking for those with the desired characteristics. Todd's defined set was successful business people and their desired characteristic was to have an unmet demand. As stated earlier, by intentionally becoming a part of the Entrepreneur Program, he was introduced to business owners on a weekly basis. Further, he made it a point to listen as successful business people talk, whether it be in the classroom or in the general public. His hope, of course, was to identify a business need.

There are also psychological reasons inherent in Todd's personality and stemming from his background that allowed him to be successful in business. One of the most fundamental was his strong desire to prove that he could be a successful business owner which, possibly subconsciously, grew from his father's business failures. This need to prove himself pushed him even more than simply wanting to be an entrepreneur. This drive or persistence was reflected in Todd's 16 to 18 hour work days during the business' early years. He said that he would work as hard as was necessary to guard against the other option, failure. "If I did not give 100% and I failed, I could not live with that feeling." Thus, unlike his father, he would be happier knowing that he took on all the business risk before letting his business fail.

Another psychological reason for Todd's success, which was also influenced by his father's activities, was the aspiring entrepreneur's open-mind to a wide variety of industries in which he could start a business. Todd clearly understood that success and profitability could be found in Lo-Tech industries. In fact, Todd eventually thought of it as an advantage to be a bachelor's degree holder starting a business in an industry with "no college graduates."

Moreover, after interacting with Todd during our interview, it is clear that his sense of humor and seeming fondness for life must have assisted him during the down times of his business start-up. In general, when situations did not turn out according to plan, he had an ability to recognize his mistakes, laugh at them and move on with new insight. These characteristics surely allowed him to remain sane in many situations.

Finally, one must realize that Todd could not have been successful at getting into business if he existed in isolation. His mere drive to prove his ability to be a successful entrepreneur stems from his interactions with his father during his early years. Further, his successful identification of IAA as a customer and Absolute Towing as his business concept is obviously a result of his interaction with the Entrepreneur Program at USC. If Todd had not become a student in the program or if Mr. Scott had not spoken to the program at that particular point in 1986, it is likely that Todd would not be President of Absolute Towing and Transporting.

An additional social factor was Todd's interaction with the association of towers during the development of his business plan. By discovering their lack of professionalism and business know-how, Todd not only gained confidence in his ability to be successful, but also identified how he could differentiate his towing operation. The professionalism he brought to the towing segment of the industry continues to allow Absolute to differentiate itself from its competition. The point is that if he had not met these individuals at the early stage of business development, he may not have known to incorporate the aforementioned points of differentiation which allowed him to gain the customer’s trust.

In summary, Todd Q. Smart was successful at getting into business because he identified his goal early, surrounded himself with individuals who could assist him and continued to smile while he worked tenaciously to grow his business into a success. Now he reaps the rewards of his risk-taking endeavors and wonders why he ever considered failure an option.

- Nicole Smith


 

James Sowers, M.B.A. '84
SRS Industries

What kind of business did the entrepreneur start?

Mr. James Sowers is an entrepreneur who has combined his many talents and ambitions to build a successful business. A charismatic fellow, he is one of three co-founders of SRS Industries, which sells re-conditioned computer parts to the third party maintenance industry. Unofficially, Mr. Sowers refers to his business as a "wrecking yard full of computer parts which sells repaired pieces to large companies." SRS sells only to institutional buyers, not to the end-users and have accounts established with such large computer manufacturers as IBM, Hewlett-Packard, Sun Microsystems and Compaq. Its focus on institutional buyers is directly reflected in its mission to become a substantial player in that particular industry.

During the initial startup of SRS, Mr. Sowers and his fellow co-founders made a commitment to aim high and work as hard as possible to become the biggest in the business. Although he is a co-founder, Mr. Sowers official title is "Vice President of Operations." He jokingly admits, "this is what the banks know me as." Whatever his exact title, Mr. Sowers exemplifies the meaning of having an "entrepreneurial imagination."

What is the background of the entrepreneur?

Born and raised in Fresno California, James Sowers credits much of his internal drive and ambition to both of his parents. "They were an extremely hard act to follow," states Sowers, "I knew it would be very difficult to try and match them." Indeed, his parents were tough acts to follow. His father was a well respected surgeon and his mother a pediatrician, but what was even more amazing was that they had both graduated from medical school at the age of 22. Being a part of this talented and hard working family meant that Mr. Sowers had high expectations placed on him at an early age. As time passed, he demonstrated the same creativity and skills his parents possessed and ultimately ended up surpassing all expectations.

Mr. Sowers began his education in the Fresno public school system and believes that he received a first rate education in this system, characterizing it as a positive experience. In 1979, Mr. Sowers came to the University of Southern California to start his college career as a freshman and went on to receive his degree in business administration with an emphasis in accounting and finance. Upon completing his Bachelor’s degree in 1982, Mr. Sowers enrolled in USC’s Entrepreneur Program a few months later. After some time in the working world, he returned to academics by pursuing a law degree. Mr. Sowers attended Southwestern University Law School (while at the same time still working) and graduated with his Jurist Doctorate in 1993. He states that the combination of his business and legal education provided him with the tools needed during the startup and eventual success of his own company.

In addition to his education, James Sowers also had some key work experiences before starting SRS Industries. His first taste of being an entrepreneur came while he was an undergraduate at USC, during which time he began to get acquainted with the emerging field of computers. He states, "back then the business school only had two Apple computers that never worked properly and which nobody ever used. Today, however, there are numerous computer facilities located in the business school and they are almost always overcrowded." Mr. Sowers started a side business as a computer consultant, and helped those who were unfamiliar with the new machines. He recognizes that in contrast to his undergraduate days, his business would probably have been more profitable in today’s market. In addition to computer consulting, Mr. Sowers’ early work experiences included a venture up north in Alaska. He recalls, "in the mid 1970’s one of my friends had returned from a six week fishing expedition with a lot of money. Taking into consideration the enormous payoff in such a short amount of time, I decided to go up there and see what it was all about." It was all about the commercial salmon fishing industry, and indeed, it was very profitable. Mr. Sowers mentioned that his superiors would earn approximately $100,000 during a six week run. With this in mind, he returned to Seattle and began pursuing commercial fishing as a possible career. He even wrote an entire business plan and bought a fishing boat. However, due to the high costs and intense competition in that industry, his initial vision for the business ultimately fell through and he abandoned the idea altogether.

In the early 1980’s, James Sowers entered the real estate market, a very profitable industry at the time. However, he ultimately returned to the computer industry. He states, "I got out of real estate just in time. After I had left, the market went completely south." Mr. Sowers used his knowledge about computers to begin consulting again and also began to offer training services. During this period, Mr. Sowers had enrolled at Southwestern’s Law School and was balancing his time between work and school. He continued with computer training and consulting through the early 1990’s when he and his partners started their own company.

How did the entrepreneur get the idea for starting this business?

James Sowers’ idea for starting this business can be explained in two distinct ways. First, his idea was the result of an evolution of experiences which had accumulated over a lifetime and second, it can be viewed simply as an old friend’s suggestion. As mentioned previously, Mr. Sowers had been exposed to the computer industry for quite some time. Beginning with his consulting practice as an undergraduate and through the late 1980’s as an instructor, James Sowers was keenly aware of the computer market and its trends. As a result of this knowledge, he even considered entering the software market at one point. However, as time went on, that idea never came to fruition.

It was not until March of 1994, when two close friends (Gary Rochlin and Harry Shaeffer) suggested that they extend the current business of which they were a part (buying old computer parts and re-selling them), that Mr. Sowers began to consider this specific industry. Ironically, he had initially turned their suggestion down when it was first mentioned. He states, "at that time I asked myself, who would want to buy a bunch of old parts for an outdated machine?" In addition, Mr. Sowers turned to his business education as a means of understanding and analyzing the potential market. He added, "after I had completed the proper market analysis, I had concluded that this was a rather unattractive industry." However, his friends had not told him that one of their uncles had started a business selling re-conditioned computer parts and had done quite well. In fact, his sales in one year amounted to over $2.1 million dollars. Upon hearing this, Mr. Sowers thought that maybe this industry was worth "another look."

What did the entrepreneur do to start this business?

The actual time it took to conceive the idea, put it all together, and then incorporate it into a successful business was not that long. In March of 1994, Harry Shaeffer had begun to consider opening his own business. Recognizing the mistakes that his company, a large San Diego based company, was making, Harry knew that he could do it differently and in a way that would generate a substantial profit. After recruiting Gary Rochlin for a management position in his new company, the next step was to find someone with both legal and technological experience. The logical choice was their friend James Sowers. It took a little over one year for Mr. Sowers to analyze the market and convince himself that this company could have a chance for success. In April of 1995, they joined together and pursued this venture.

Once Mr. Sowers had decided to give this business a chance, his first step was to continue to research and find out more about the market. Given his existing knowledge of the computer industry, much of this research was based on his own past experiences. The next, and perhaps most important, step in starting this business was the negotiations that took place between he and the other two partners. Essentially, they needed to establish working roles and identify the individual responsible for paying the bills. With his strong background in business and law, Mr. Sowers would initially be responsible for the company’s legal, technological and contractual obligations (they later hired an outside attorney for this role). Gary Rochlin assumed a management role in the business because of his prior knowledge with the existing company. The third partner (Harry Schaeffer) had an excellent reputation in sales, and most importantly, he already had an established client base. As a result, he would be responsible for bringing in the initial clients for the new company.

As a means of obtaining additional financing, Mr. Sowers spent most of his time during this period negotiating with banks for an accounts receivable line of credit. He and the other partners had also worked out a preliminary business plan for the company. They also needed to decide on the legal structure of their business. Given their desire to become a large player in the industry, they were incorporated as a corporation, rather than a partnership or an LLC.

After nearly three months of negotiating between themselves, writing various business plans and dealing with the banks, SRS Industries was finally incorporated in July of 1995. However, they were still not ready to officially open. Once the legal and structural issues were completed, Mr. Sowers then needed to use his technological background to establish a computer network in the business. This network would keep track of different accounts, sales, payroll, and any other records that could be kept on-line. For the next couple of months, Mr. Sowers began to create the large database that would be at the heart of this new business. Once that was in place and the partners were comfortable with their new roles, SRS officially opened its doors for business - it was September of 1995.

During the initial startup, Harry, the partner in charge of sales, began to hit the phone lines in an effort to bring in new accounts. "He would get in the office around 6:30 a.m., and would be on the phone all day long," says Sowers. This was the primary means of bringing in new clients and in October of 1995, it began to pay off. SRS had made its first major sale to GTE for $10,000. Later that year in December, a local bank finally granted the company an accounts receivable line of credit which gave the company an additional source of funds. With the new funds in place, SRS Industries moved into its first real office location in Marina Del Rey in the beginning of 1996 and at the close of its first fiscal year (October 1996), SRS Industries sales totaled $10 million.

What major problems did the entrepreneur encounter during the startup of this business?

As with the startup of any new business, there were many problems that Mr. Sowers, Harry, and Gary faced. The first major issue was that the partners had difficulty agreeing on various matters. Mr. Sowers indicated that it reached the point at which he had to act as an intermediary between Gary and Harry as they had decided not to speak to each other. Mr. Sowers states, "the internal conflict wasn’t doing anybody any good. It was a terrible waste of time and ended up costing a lot of money." The differences in opinion even led to one of the partners quitting at one point. (James didn’t specify who exactly it was).

Another major problem that Mr. Sowers experienced concerned the technological side of the company. First, he could not find the right software for the company’s database which resulted in a delay of opening for business a reliable system was necessary in order to keep track of all the records. The second technological problem was in the form of data entry errors. Once the database was in place, certain records were incorrectly entered, thus causing serious problems in the accuracy of the company’s on-line files which made it difficult to keep track of who bought the items, when they were shipped, and if they were received. Without this vital information, the company made several mistakes in shipping the products to their clients. This led to one of the largest problems that SRS had to deal with - the loss of its clientele. One of the most fundamental aspects of running a new business is not only getting customers, but retaining them as well. In essence, SRS lost some of its clients as a result of technological errors and poor communication. More specifically, the company failed to ship its products to customers in a timely fashion, or even not at all, which, in turn, cost those clients a great deal of time and money. As a result, some terminated their accounts with SRS.

The final problem that Mr. Sowers faced in his new business was the inability to obtain financing through lenders. He states, "the banks were concerned about loaning money to a new business because of the default risk. As a result, we were turned down many times." As grave as these problems might sound, James Sowers and his other partners were able to overcome them and eventually launch a successful business.

How were those problems solved?

Solving these problems was certainly not an easy task. It required technical ability, creativity, and a great deal of patience. In terms of technical errors, Mr. Sowers was responsible for correcting them. Relying on his computer background, he was eventually able to figure out exactly what kind of software they needed to use. Additionally, he and his partners were able to provide a solution to the different errors made in the database system. Working together and using Mr. Sowers’ technical expertise, they were able to overcome these serious errors that had cost them some of their clients. However, when it came to their internal differences they could not rely on a simple computer program. Rather, Mr. Sowers created an atmosphere in which all the partners had to talk to one another and simply refused to continue as the "middle man." With regard to the company’s inability to obtain loans, Mr. Sowers stated that he remained persistent and continued to negotiate even when the outcome looked grim. "Never give up," he states, "it is simply a matter of being persistent." That advice apparently paid off due to the fact that SRS was able to overcome all of these first time obstacles.

Who did the entrepreneur use for help and guidance during the startup?

The startup of SRS Industries was a strong collaboration of both teamwork and special skills. James Sowers and his other two partners spent many long hours brainstorming different ideas and providing solutions to complex problems. However, even the most successful of entrepreneurs have relied on external advice to get them through the early stages of their businesses, and SRS is no exception. From the very beginning, Mr. Sowers sought help from various friends and business associates and their input ranged from recommending different business strategies to simply giving encouragement when it was needed. Mr. Sowers admitted that it was indeed these individuals that made SRS Industries successful in the beginning. "They essentially gave a fresh perspective on problems that we had tried solving by ourselves," stated Sowers, "If it wasn’t for them, most of our problems could have ended up more serious than they did." Perhaps the individual who had offered the single most important help as an outsider was Mr. Sowers’ former mentor, Tom O’Malia.

Upon graduating from USC’s Entrepreneur program in 1985, Mr. Sowers went to work for Tom as a computer consultant. However, when the time came to start SRS, it was Mr. O’Malia giving the consultation on the various business and legal issues facing the new company. In essence, he helped Mr. Sowers re-write SRS’s general agreement. During the first few months of negotiations between Mr. Sowers and his other two partners, they had worked out the first draft of the company’s general agreement. This was the contract that outlined the partners role in the new business as well as the parties responsible for providing the initial funds. Although Mr. Sowers was highly educated in both business and law, he still decided that it would be in the company’s best interest for an outside person to review the agreement. He naturally chose his long time friend and former business associate, Tom O’Malia.

When Tom first reviewed the document, he told Mr. Sowers that the agreement virtually guaranteed failure. Seeing that they needed help, Tom began working with them on revising the first draft and ultimately pointing them in the right direction. Mr. Sowers states, "Tom played a very major role in developing the legal structure of our company. Having someone of his status giving us advice was invaluable." Indeed, the help and encouragement from outsiders had a significant impact on the startup and early success of SRS Industries.

What advice would the entrepreneur give to someone thinking about starting a business?

When giving entrepreneurs advice for starting their own businesses, Mr. Sowers has plenty. With all of his past experiences in working for himself, he categorized the important lessons that he has learned into three main areas which include: learning the industry, having clear goals and objectives, and finally, working with others who share complementary skills.

The first main rule Mr. Sowers stresses is to have knowledge of the specific industry before starting a business. He believes that this can best be accomplished first through working in that field in some capacity through which the entrepreneur will learn invaluable lessons. His background with computers had taught him many different trends and general knowledge about the industry - all of which would later help him during the startup of SRS. He states, "without the proper work experience, I most likely would have made some general mistakes that could have been costly."

According to James, the second way an individual can develop knowledge about a certain industry is to spend time observing and studying it. This will allow a potential entrepreneur to analyze any significant market trends and changes that might end up affecting his or her venture. Again, this can be accomplished in an environment that is virtually cost free. If, however, the individual does not spend the proper amount of time in the industry performing various market analyses, then that individual could ultimately make a very expensive mistake in the future.

The third and final piece of advice that James Sowers gave was to work with partners who share complementary skills. This is vital for creating synergy. Without synergy, it would be extremely difficult for a new company to create new innovations and solve complex problems. According to Mr. Sowers, allowing certain partners to specialize in their areas of expertise will enhance both performance and provide better results overall. In the case of SRS Industries, James Sowers was strong on the technical and legal side of the company while Gary Rochlin had prior experience in the industry and exceptional management skills and Harry was an expert in sales and already had a developed and successful client base. Each of the partners had a certain expertise that they brought to the business. As a result, they each focused on their specific roles and created the synergy that led them to be successful in the first couple of years in the industry.

Why was this entrepreneur so successful in his business?

In order to understand exactly why Mr. Sowers was successful in his business, one should analyze his ventures from the search, psychological, and social perspectives.

When analyzing Mr. Sowers through the search perspective, it becomes evident that there was a methodical thought process that took place during his life when it came to finding his career path. The search perspective views invention as a matter of effective search for ideas in a space of possibilities. This was true in the case of James Sowers and SRS Industries. The first crucial factor was the length of Mr. Sowers’ search. It took many years of trial and error before he found an industry in which he could begin a successful business. In short, it was a long road of both hard work and educational experiences that ultimately led him to the business he now operates today.

The second factor was the progression of certain breakthroughs. Perhaps the most pivotal breakthrough in his career came when his two partners (Harry and Gary) invited him to become a part of their new venture. Other important breakthroughs came when he had fixed the technical failures that SRS had been experiencing, and when the banks finally agreed to lend them money. All of these events combined to form a steady progression of successful turning points for the new company. The third factor in the search perspective was the element of chance. According to Perkins and Weber, Mr. Sowers’ eventual success could be characterized as systematized chance. That is, the searcher undertakes a systematic survey of a sizable number of possibilities within a defined set, looking for the ones with desired properties. In this case, Mr. Sowers had been in the computer industry for quite some time prior to starting SRS. When the time came to begin this venture, he researched the market to identify any trends that could affect his business. Therefore, his success was not merely sheer chance. Rather, it was a combination of knowledge and research. The fourth and final factor in the search perspective was the use of formal methods in solving problems. This was best demonstrated when he and the other partners worked out their technical and personal problems.

The psychological perspective characterizes what psychological attributes equip and motivate such searches which can be broken down into two main categories. First, one could analyze Mr. Sowers’ cognitive characteristics. It is clear that he possesses many traits that are commonly seen in successful individuals. For instance, he demonstrated exceptional intelligence. This was evident in his extensive educational background while attending college, an MBA program, and graduating from law school. In addition to intelligence, Mr. Sowers also exhibited a great deal of creativity. As seen in his problem solving skills, Mr. Sowers has an ability to think "outside of the box" when dealing with vague and complicated matters. Finally, James Sowers demonstrates the characteristics of a hard-working, ambitious individual. He has worked hard in the early stages of SRS to insure its success in the long run. In short, his ambitions outweighed the risks involved when starting one’s own business.

The second aspect that one could analyze under the psychological perspective is Mr. Sowers’ attitudinal characteristics. For example, he has a remarkable sense of humor. The ability to not take every issue so seriously has manifested itself as a healthy approach towards dealing with problems that might occur during the normal course of starting one’s own business. He essentially has a good attitude about work and life in general, and, as a result, he has kept himself from burning out, i.e., his sense of humor will ultimately give him longevity in the computer industry. Another attitudinal characteristic Mr. Sowers exhibits is sheer persistence. This turned out to be a crucial trait for him due to the many obstacles SRS faced in the initial phases of the business. If he was not persistent and gave up easily, then the company would most likely have failed. The final attitudinal characteristic that Mr. Sowers demonstrates is a high expectation of himself and of his colleagues. Whatever he did, he always gave a 100% effort and, in turn, demanded this same effort from his business associates. This hard-driving attitude gave Mr. Sowers a quick reputation for not only doing the job, but also doing it well.

According to Perkins and Weber, the social perspective explains the different social patterns and institutions that support inventive search. Mr. Sowers grew up in a strong family that encouraged hard work and success. Later, he used these lessons when working for himself as a computer consultant. However, it was his own company (SRS) that created the best environment for success which was accomplished by bringing together three partners who each shared complementary skills. As mentioned before, Mr. Sowers had a strong technical background in computers, and was also proficient in the law. As a complement, his two partners were strong in the areas of sales and management. Individually, they were each considered successful in their own respective fields, when they combined their skills and talents together, they created additional synergy that ultimately turned into sources of competitive advantage for their company. The success of SRS could not have happened without all three of them working together sharing their complementary skills. Likewise, Mr. Sowers could not have made SRS as successful as it was if he had started the company alone. In short, this case proves the social method as being one of collaboration and of teamwork.

As the search, psychological and social perspectives demonstrate, Mr. Sowers' success was a combination of several factors. From a hard working family, to a strong education and collaborative teamwork, each of these elements gave Mr. Sowers a key advantage in not only being a successful businessman, but also being a truly remarkable person.

- Joe Logan


 

Larry Tashjian, MBA '76
Provident Investment Counsel

What kind of business did the entrepreneur start?

Larry Tashjian, CFA, CIC, is an Executive Managing Director at Provident Investment Counsel (PIC), the third largest institutional money management firm in Los Angeles. Tashjian joined PIC in 1981 at which time it was a $115 million firm with ten employees, including the two founders who owned ninety-five percent of the Company.

In an impressive display of his entrepreneurial spirit, Tashjian along with three other junior partners managed a successful leveraged buy-out of PIC in mid-1989. They were able to put this together in one weekend and successfully quashed a yearlong acquisition attempt by United Asset Management. At that point, PIC had grown in assets to about $4 billion. Six years later, when UAM finally did acquire PIC, it had expanded its value over seven times and its assets had expanded to $15 billion while under the leadership of Tashjian and four other senior partners.

Historically, PIC has been an institutional money management firm; however, it is in the process of transitioning to have a more retail bias. It does traditional money management for large institutional pension plans and the transition over the last two to three years has been into retail mutual funds, or wrap-portfolios. PIC currently has offices in 7 different states throughout the United States.

What is the background of the entrepreneur?

The son of a pharmacist and on-the-side stock market junky, Tashjian grew up in a middle class community in Fresno, California. With his father, he studied the stock market as a hobby, while also working a paper route to make payments on his debt to brokerage houses for the stocks he bought on margin.

Tashjian received a Bachelor of Science degree in Finance as well as an MBA from USC. He completed his studies at USC in 1976 and subsequently earned the Chartered Financial Analyst and Chartered Investment Counselor designations.

In addition to being on the board of United Assets Management, Tashjian serves on the Board of Governors of Children’s Hospital of Los Angeles, and the Board of Directors for the USC Associates. He is also a member of the Advisory Council of the Entrepreneur Program at USC.

In 1981 Tashjian married and now has three children. Like his father before him, Tashjian too is teaching his children about investing.

How did the entrepreneur get the idea for starting this business?

Tashjian knew when he left USC in 1976 that he wanted to get involved in the stock market. He had been actively investing in equities since he placed his first buy (on margin) in the mid-1960’s while in junior high school. However, Tashjian’s timing for such a career was less than perfect. The 1973 and 1974 period was a Bear Market with slight movement away from that market in 1975. Thus, there was not a lot of hiring occurring in the equities industry in 1976. Many of Tashjian’s MBA counterparts were entering the more lucrative real estate business, but real estate did not interest Tashjian, the stock market did.

Tashjian had worked for Bank of America while in school and was a Bank of America student of the year for a couple of years. He was a teller for a while and also completed management training programs. Tashjian formulated a strategy for his long-term career objectives and decided to pursue an entry opportunity with B of A, figuring it was a great place to train. A debt financier, i.e., a banker, has some relation to the stock market when considering debt versus equity financing.

During his second of two years with B of A after college, Tashjian was its youngest branch manager in California. He also headed an office in Gardena and Watts, for about a year. At that point, a part-time professor of Tashjian’s from USC, Harold Davidson, introduced Tashjian to his father, the founder of Automated Retailers of America (ARA) Services. ARA is a multi-billion-dollar company out of Philadelphia with a large part of its business in nursing homes, uniform rentals and vending machines.

In 1977, Larry entered his desired business by joining Harold Davidson & Associates, a firm that primarily dealt in high net worth money. He made a fairly lateral move, economically, from being a branch manager at Bank of America into an entry position in the money management business. He did everything there, from washing cups and ordering supplies to SEC compliance, analysis, and marketing. He did it all, just so he could be in the business. Tashjian was with Harold Davidson & Associates from 1977 to 1981 at which time he joined PIC.

What did the entrepreneur do to start this business?

When UAM first tried to acquire PIC, Larry Tashjian was about 35 years of age. Had he allowed that acquisition to transpire, he would have had cashed out of the deal with a little bit of money; however, he did not want to go to work for somebody else at that point in time. Thus, despite bankers, accountants and lawyers working on this deal for almost a year he called three of his junior partners and drafted an LBO over one weekend. They called a private meeting with the 2 remaining partners and literally, in a period of about 5 minutes, ironed out the necessary terms. They called all of the UAM players to inform them that the deal was off. That occurred in 1989 when they were managing about $4 billion.

Tashjian and his partners doubled PIC, and continued to grow it until 1995 when the remaining original founder of PIC wanted to reduce his holding in the Company. PIC’s board was unable to, through proper estate planning, accommodate his desire. Therefore, it seemed an opportune time to affiliate with United Asset Management (UAM). The acquisition of PIC by UAM was, at that time, one of the largest transactions in the money management business. At the time of the deal, PIC’s assets under management were about $15 billion and it has since grown to about $20 billion in assets.

Tashjian is still an equity holder in PIC and over the last seven months has taken on the Co-CEO role along with George E. Handtmann III, another USC alumnus. Together they have plans to once again double the value of the firm over the next five years. Despite being owned by UAM, fifty percent of PIC’s earnings get reinvested back into the company directly. Tashjian remains a leader in management and an active member of the Board.

What major problems did the entrepreneur encounter during the startup of this business?

Management of the people. Tashjian knows from experience that the old cliché still holds: "You’re only as good as your people." In hiring top management for PIC, Tashjian and his colleagues are faced with a difficult strategy choice that they have historically vacillated on: (1) Hire young MBA’s right out of school and grow them in PIC’s specific money management strategy; or (2) Find people who have been in the business for five to ten years on the outside, and bring them in.

Additionally, PIC is faced with the issue of rewarding people fairly and according to their added value to the firm. It is a challenge to create new career paths for young entrepreneurial people who want to stay but do not see the home run: liquidation. These are very important issues to resolve if a company is committed to the development and advancement of its human resources.

How were these problems solved?

Creating the proper incentives for their people is an ongoing process for Tashjian and his counterparts. They have been working on accountability, incentive, and other types of compensation programs so that people at PIC have somewhat similar opportunities to what Tashjian himself had 15 years ago. Tashjian’s view is that they really did not sell their business, rather, they re- capitalized it, as if doing another LBO. He believes that if they can double the business again, all of the owners of this new business will do very well for themselves because the pool of assets will continue to grow, but only "if we run it right." That is what Tashjian sees as the upside, the opportunity for success.

Who did the entrepreneur use for help and guidance during the startup of this business?

As a member of Young Presidents Organization (YPO), one of the resources that Tashjian is exposed to is Management Action Plans (MAP). PIC brought MAP into the organization in the middle of last year to address a number of different issues in the business. Originally, it was used to assist with senior level management disagreements. As most consulting projects do, it started to expand and take on a life of its own.

MAP interviewed the four members of senior management, then the seventeen junior members and tried to reconcile the concerns between the two groups. The outcome included new company-wide accountability/incentive programs and changes in management responsibility. A mentor program was also instituted about two to three months ago. Everyone has a mentor, preferably someone outside the business and a decade older than himself. With endearment, Tashjian describes his mentor, Jerry, as "a tough-old-SOB," acknowledging the fact that Jerry is "challenging the heck out of" Tashjian.

What advice would the entrepreneur give to someone thinking about starting a business?

Larry Tashjian’s parting message for budding entrepreneurs is best delivered in its original phrasing:

"I think the true entrepreneur doesn’t give up; I mean he just figures out a way to make it happen. And that’s easy to say and I don’t want to bore you with all of my frustrations, but there have been a lot of them over the years; there have been a lot of them here at this firm. I have a passion for where I want to be; I need to control that enthusiasm when dealing with others. I’ve had a lot of disappointments along the way; but I think the true entrepreneur handles adversity. There are days I come home and I am just so beat up and my wife says, ‘I don’t know how you get up in the morning and all of a sudden you’re enthusiastic again’, and I don’t know how that happens either. Historically around here a lot of us have athletic backgrounds. When you do that I think it gives you a desire to just want to win, to win at all costs. I don’t want to be a jerk about this, but I want to win; I want to beat everybody in the world, and I want to be #1."

Why was this entrepreneur successful at getting into business?

Although Tashjian attributes a great deal of his success to luck, it is clear that he has been training for his role as managing director of a major money management company since childhood. Spurred by his father’s belief in the growth of corporate profitability and enthusiasm for learning about, and investing in the market, as well as his own confidence in being able to beat the market over time, Tashjian began his stock market career in the sixth or seventh grade. Since that time he has remained true to his conviction that the stock market is a place where one can excel in the long run and risk is merely part of the process. His level of commitment to, and faith in what he does is apparent in the realization that he is a man who has lost client money to the tune of a billion dollars in a day, once or twice in his life.

What became eminently clear during his tenure at B of A was that he did not want to work with: "The frustrations of a bureaucracy." As an entrepreneur, Tashjian wants to "address an issue, talk about it, make a decision, and go on." That is what he does consistently. Tashjian made a series of career choices that allowed him the opportunity to acquire his own firm. Even the move to relinquish a percentage of his equity in PIC was part of his strategy, i.e., promoting growth of the company towards eventual re-accumulation of individual holdings. He knew at a young age that he did not want to work for someone else. This was his goal and he would not accept anything less.

Family and community must be mentioned when describing Larry Tashjian. His passion for giving back is as powerful as his passion for winning. About seven or eight years ago he and his partners funded a quarter of a million dollar program at both USC and UCLA. This led to the formation of the advanced portfolio management classes, giving students in the MBA programs real live portfolios to manage. Tashjian started the same program at the high school level in his home town. Through his enthusiasm and the stories he tells, it is clear that Tashjian is involved at the personal level as well as on a financial basis with these programs.

Tashjian has been married for seventeen years and is very active with his wife and children; he makes games out of teaching them the stock market, which is quite consistent with the close relationship he described between himself and his father while growing up. His father’s influence has led Tashjian to be the man he is today. In business and in entrepreneurship, Tashjian’s accomplishments are quantifiably remarkable. As a father, husband, son, and community leader, Larry D. Tashjian epitomizes success.

- Sabrina Cohen


 

Scott Wilbur, M.B.A. '98
Golf America

What kind of business did the entrepreneur start?

Scott Wilbur started GolfAmerica, a company he loosely defines as a "database company." The original product GolfAmerica intended to distribute was a CD-ROM containing listings and information about golf courses located across the United States. The intent was that a traveler could access this CD-ROM and find the location, course details, green fees and other relevant information for the various golf courses in the desired area. Ultimately, Scott realized that the CD-ROM was not necessarily the business’ best source of revenue and pursued licensing agreements with companies interested in book publishing, on-line services, and mailing lists.

What is the background of the entrepreneur?

Scott Wilbur graduated from Chapman University with a Bachelor of Science Degree in both Accounting and Finance and a minor in economics. He is currently pursuing his MBA at the University of Southern California and will graduate in the summer of 1998. He cites his father’s business, an accounting firm, as the likely motivation behind his pursuit of accounting. Scott tried to parlay his accounting education into his first job, a position as a staff accountant at Imperial Bank. He quickly recognized that he was not meant to work within the confines of a corporation with a rigid hierarchy and overly formalized work procedures. He was fired after working for only a single week when he attempted to streamline much of the accounting work by automating the process. Any time he met with resistance, Scott was entirely willing to "go over people’s heads" and complain to help accomplish something he thought was in the company’s best interest. His methods, however, were unacceptable to his superiors and his short tenure in the traditional corporate world ended.

Following his stint at Imperial Bank, Scott began his first true entrepreneurial venture, Artistic Illuminations. Scott used neon and mirrors to create unique wall hangings, tables, and other pieces of art. Scott soon found that the only source of revenue that would make this business viable was to sell his pieces in high-end art galleries with very large mark-ups. Scott was successful in having his pieces displayed in several major galleries, including locations on Rodeo Drive, but the economic downturn of the early nineties caused the market and his business to stagnate.

It was then that Scott began work on what would ultimately become his most successful venture to date, GolfAmerica.

How did the entrepreneur get the idea for starting this business?

The genesis for Scott Wilbur’s business was really his father. An avid golfer, and an entrepreneur in his own right, Scott’s father was often disappointed to find that during his travels he had missed the opportunity to play on many excellent golf courses simply because he did not know of their existence. He and his father decided to leverage their combined business expertise, Scott’s technical knowledge and his father’s golf knowledge and GolfAmerica had been "born."

What did the entrepreneur do to start this business?

After the initial idea had been generated, Scott began by doing a feasibility analysis of his business while at USC. Scott included in his research the various sources of revenue available for the fledgling product along with the potential costs and other concerns associated with starting a business, ranging from simple office logistics to the complexities of legal issues involved with licensing arrangements.

Having completed the feasibility analysis, Scott then wrote a formal business plan also while at USC. The idea, however, seemed too pressing and GolfAmerica was formally brought into existence in February of 1994 before the business plan had been completed. What followed was a very intense period of information gathering and organization. GolfAmerica hired a programmer to assemble the technical infrastructure of the database they were compiling. The programmer was granted a percentage of GolfAmerica’s ownership in lieu of a cash payment for his services. Scott also hired a staff of data entry and telephone operators to help collect information about America’s many golf courses.

Through a sometimes tedious process of trial and error, Scott and his staff found the most reliable method of gathering this information was through simple person-to-person phone calls. They had tried methods such as faxing requests for information, however, they found that faxes often required as many as four to five follow-up calls in order to collect the required information.

The original cost estimates for accumulating this information and producing their CD-ROM product had been estimated in Scott’s feasibility analysis and business plan at between $70,000 and $100,000, which they later found to be an underestimate. Scott’s father was a major proponent of the fledgling company and provided the initial round of financing, the full $100,000, as well as the cost overruns accumulated before reaching a marketable product.

Roughly a year later, the database had been completed, and GolfAmerica created the product it had initially envisioned, a CD-ROM with a database of roughly 15,000 golf courses throughout the United States. Although this had originally been intended as the main product and source of GolfAmerica’s revenues, neither Scott nor his father had foreseen the difficulties ahead of them in distributing through the traditional retail channels. While Scott had been busily building his product, the retail software market had gone through a dramatic shift. By 1995, when Scott’s product was ready for the market, getting retail shelf space for a software product required the negotiating clout of a major firm such as Microsoft or Intuit, a proven sales potential, or a willingness to "pay top dollar" for visibility.

Rather than abandoning the product, GolfAmerica made a logical leap and began to search for other sources of revenue for the database. One of the options considered was on-line services such as America On-Line, Prodigy and CompuServe. The Internet had not yet experienced the commercial explosion that is accepted as fact now. The company also considered licensing its information in book publishing deals and selling the information to direct marketers of golf products interested in reaching golf course pro shops.

Perhaps one of the best moves GolfAmerica made in these early stages was to partner with larger software companies to leverage their clout by getting GolfAmerica’s product included in bundles and as part of Original End Manufacturer (OEM) deals with computer hardware manufacturers. As a result, the company managed to get software distribution as part of a bundle with Interplay’s golf game "The Skins," and through an OEM deal with a hand-held computer manufacturer.

It became increasingly apparent, however, that the most natural market for GolfAmerica’s collected intellectual capital, its exhaustive database, was the on-line market. It was at this time that GolfAmerica licensed access to part of its database to the on-line content provider, America On-Line. The burgeoning Internet also provided them with several potential licensing customers, such as GolfWeb, iGolf, Golf.Com and Golf Magazine. Ultimately iGolf was granted a semi-exclusive licensing arrangement.

About the time of the deal with iGolf, Scott was becoming increasingly aware that GolfAmerica would not provide him with the continual revenue stream for which he had initially been hoping. Scott began looking for a company willing to buy GolfAmerica. Among potential buyers were the various on-line golf-related services such as i-Golf, and golfing publications such as Golf Magazine. Scott thought he had found a buyer in Golf Travel On-Line, and they signed a letter of intent, formalizing its desire to buy GolfAmerica.

Almost simultaneously, Scott learned that Interzine, the publishers of the iGolf Internet service had just acquired their second round of financing and had raised $7.5 million. Scott now had a potential buyer with far better resources than Golf Travel On-Line. Luckily for Scott, Golf Travel On-Line allowed the letter of intent’s thirty day time period to expire. Scott was now free to approach Interzine as well. Scott proved to be a proficient negotiator and successfully played Interzine and Golf Travel On-Line against each other to strengthen his bargaining position. Golf Travel On-Line threatened law suits for reneging on the letter of intent, but when Scott threatened a counter-suit for jeopardizing his deal with Interzine, Golf Travel On-Line quickly backed down.

Scott finalized a deal for the sale of GolfAmerica’s database information to Interzine in September 1996 and included in the deal a provision that enabled him to keep his job as head of GolfAmerica within the Interzine organization. Interzine has since been sold to the Times-Mirror media conglomerate, the owner of Golf Magazine.

When did the entrepreneur do these activities?

Scott and his father had the idea for GolfAmerica in late 1993. By October of the same year the feasibility analysis was done and he had begun the business plan. The company "went live" in February of 1994 and produced their first product by mid 1995. His sale to Interzine occurred in late 1996 and by March 1998, Interzine had been sold to the Times-Mirror Corporation.

What major problems did the entrepreneur encounter during the startup of this business?

One major problem that Scott encountered during the early stages of starting GolfAmerica was the hiring of the programmer who did the original database design. Scott made what he felt was a classic entrepreneurial mistake and gave the programmer a share in the company. Granting the programmer a share of the company may not have been a mistake given the fact that talented programmers are expensive and it was a way to complete technical work with no up front cost to the company. Where it began to be a problem was when Scott realized that he had overestimated the ability of the programmer and that the quality of his work was not satisfactory. He also experienced difficulty in availability with the programmer since he was in some ways "working for free." Scott actually ended up cutting him out of the deal by paying him off in the amount of $10,000.

A second major stumbling block during the start-up phase occurred when GolfAmerica met with difficulty getting retail distribution for their product through traditional software marketing channels. It was virtually impossible for a small software company with limited capital to attain desirable shelf space.

How were those problems solved?

In order to remedy the design problems that the original programmer had created, GolfAmerica contracted a consultant to come in and "clean-up" the database. The consultant moved the database from a dBase IV platform with a DOS interface, to a much more user-friendly and adaptable Microsoft Access platform that operated within a Windows user-interface. Scott utilized the consultants knowledge to become more technically skilled, learning the Microsoft Access database application in the process, and has since been able to perform the vast majority of technical work and feature enhancements himself.

To deal with their distribution problems, GolfAmerica pursued a number of different paths to capture other sources of revenue. GolfAmerica licensed portions of their database to on-line services, book publishers, and direct marketers. The company also pursued bundling and OEM deals with larger computer hardware and software firms and even attempted licensing the technology to makers of Global Positioning System devices.

In trying to capture these various alternative sources of revenue, GolfAmerica found that the growing field of on-line services was the most natural fit for their product, and ultimately became its biggest source of revenue.

Who did the entrepreneur use for help and guidance during the startup of this business?

Scott had a definite mentor and source of guidance in his father. Scott cited his father’s own entrepreneurial experience as the owner of an accounting firm, and a party to several syndication and real estate ventures as being wonderful learning experiences. His father was able to work with him through difficult strategic decisions, as well as provide practical advice about the product from a golfer’s perspective. His father also provided the original financing for the company. Scott was lucky in that he had an investor, business consultant, and typical customer in one complete package who was able to help him through the many ups and downs associated with starting and running an entrepreneurial venture.

Scott also relied on consultants and experts in various fields when necessary. Through the course of managing GolfAmerica, Scott hired a marketing expert with sales background in the golf industry who was familiar with the various trade shows and marketing channels to help gain market penetration for the product. Scott also, as was mentioned earlier, contracted a database consultant to help resolve several technical problems.

What advice would the entrepreneur give to someone thinking about starting a business?

Scott Wilbur is now a truly seasoned entrepreneur, and, as such, has several valuable pieces of advice garnered from his own personal experiences. The first bit of advice was that it is very easy to underestimate the costs associated with major projects. There are often unforeseen circumstances that are difficult to anticipate. One such instance in Scott’s experience with GolfAmerica was the turnover and associated retraining costs of his data entry staff. He found that it was necessary to develop a training manual and pay higher wages to help reduce employee turnover.

Another piece of advice Scott volunteered was the need to understand the distribution channels and marketing practices associated with your product or service. Scott stressed the fact that a good idea or great product can fail if you can not reach your target market. One solution to this problem according to Scott is the Internet. He considers it in many ways "a great leveler" that can dramatically reduce the barriers to entry for a fledgling entrepreneur.

One final bit of wisdom that Scott imparted is the necessity of exploring all your options. Had Scott simply focused on marketing the original CD-ROM product, GolfAmerica probably would have been another statistic among many failed start up businesses. Instead, Scott pursued any and every option available that would leverage the strengths of his business, and made GolfAmerica a success story.

Why was this entrepreneur successful at getting into business?

In looking at Scott Wilbur’s methodology and actions in starting and building GolfAmerica, it may not be much of a surprise that he was ultimately successful. David N. Perkins and Robert J. Weber in their article "Effable Invention" identify several behaviors and mannerisms that are common to many stories of successful inventors and entrepreneurs in a wide array of fields. They develop a metaphor for the "search" that an "aspiring" entrepreneur undertakes in developing his product or service.

Of the various search methodologies outlined by Perkins and Weber, at one extreme is "sheer chance," the possibility that an active searcher may "stumble onto" something out of pure luck. At the other end of the spectrum is the "safe bet," where a searcher uses formal methods that are almost guaranteed to result in success. Scott Wilbur, like most successful entrepreneurs falls squarely between these two extremes. Using Perkins’ and Webber’s terms, Scott’s undertaking of GolfAmerica would easily be categorized as a "fair bet" in which the searcher prototypes a possibility (or two or three) with reasonable expectations that it will serve with modifications. If it does not, other possibilities are explored.

This metaphor is almost an exact fit for the manner in which Scott built GolfAmerica. After doing the research necessary to build a feasibility analysis and start a business plan, Scott built his first prototype. Although he had to hammer out several technical details and had to modify his end product to fit the distribution methods that eventually proved optimal, he was working with reasonable assurance that he would hit upon a viable product.

Perkins and Webber also detail the actions of both compressing and expanding a search. Compressing the search involves reducing the amount of work necessary for the search to succeed, while expanding the search involves making sure that viable solutions "actually lie within the range being searched." Scott Wilbur achieved this by limiting his initial product to a simple but comprehensive database that would be functional but easy to build. At the same time, Scott was expanding his search by actively pursuing any and every potential revenue stream available to him.

In addition to the search methodologies that Perkins and Webber detail, they also include several other elements that are relevant to an inventor or entrepreneur’s success, the first is the psychological characteristics of the searcher. Perkins and Webber, on the psychology of inventors, state that, "Of inventors, one would certainly expect intelligence, ingenuity, and articulateness." These are all characteristics that describe Scott Wilbur almost perfectly. He is a pleasant and amiable person who communicates the intricacies of his business and industry with an obvious intelligence and enthusiasm. He also demonstrates a keen ability for making a connection between somewhat unrelated fields. The linking of technology and the hobby of golf into a viable business is just such the "making (of) fertile connections between one domain and another."

Even Scott’s general attitude fits the prototype Perkins and Webber found common to many inventors. He has a laid back sense of humor and a practical way of communicating his business without relying on technical jargon. He clearly has an "aesthetic sensibility," most clearly demonstrated by his first venture which saw his art find its way into several expensive art galleries.

Scott is definitely a creative soul who enjoys building concepts into real working entities. He has become a master at recognizing his strengths and utilizing them while understanding his weaknesses and finding ways to downplay or even eliminate them.

But, perhaps beyond his individual characteristics that have come into play in making GolfAmerica a success, are Scott’s well-polished social skills. Perkins and Webber make the point that "as technology has become more complex, invention is inherently a highly social enterprise."

This statement finds complete validation in Scott Wilbur’s story as an entrepreneur. He has managed to take what may be the world’s greatest social game and merge that with technology. That in and of itself is somewhat remarkable, but in this world of technological innovation, it is likely that had Scott not been the one to start GolfAmerica, someone much like him would have. What made Scott and GolfAmerica a success is that he was able to communicate his vision in a social context. Although much of the original development for his database did not include a need for social interaction, when he had a marketable product, the social aspect of his business became the single most important element. With the revenue stream from his CD-ROM product not what he had anticipated it to be, Scott was forced to find other markets that would support his business. By engaging the on-line services, book publishers, and other software companies, Scott turned what had been a failing product into a successful one.

- Paul Zimny