Neel Premkumar
(WG'08) |
Welcome Wharton Community to the Alumni Chat with Dr. Ron Murayama. Dr. Ron (WG03) is the founder and CEO of Amden Corp. A dentist by training, Ron began his entrepreneurial career in his teens supplying glass novelties for Disneyland. He is famous for developing the first OTC cosmetic bleaching system for teeth, which is now part of the Smithsonian collection. His current product line at Amden includes the Cybersonic® sonic oral-care system. A past recipient of the Ernst & Young Entrepreneur of The Year Award, Dr. Ron was also among the MBA students graduating from the inaugural class of Wharton West, Wharton's San Francisco based campus. Please join me in welcoming Dr. Ron Murayama! Please type your questions for Ron in the window below and hit the "Ask" button. |
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Neel Premkumar
(WG'08) |
How did you get the inspiration to produce the first OTC cosmetic bleaching system for teeth? |
Ron Murayama |
Having whiter teeth was the most common question and request from patients but the conventional wisdom at the time was either caps or bondings, which were expensive and/or invasive. So, people ended up paying a lot of money to "fix" otherwise healthy teeth or nothing at all was done. Unlike other dentists, I started thinking of a cheaper more conservative solution. So, bottom line was really listening to the customer and trying to fulfill a "want". I say "want" rather than "need" because people are always more willing to pay for things they want as opposed to what they need. |
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Neel Premkumar
(WG'08) |
From your background as a dentist, what were the motivating factors in your decision to attend Wharton? |
Ron Murayama |
The "Natural White" bleaching company was my first start-up which sold about $50M in just 3 months on infomercials. It was a joint venture with a large media marketing company that negelected to take the product to bricks and mortar mass retail. So, we missed the boat to the industry we launched that turning into a billion dollar industry. This lack of knowledge or ingorance literally cost me hundreds of millions. I did not want to repeat such a mistake or pay the cost of ignorance a second time. |
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Neel Premkumar
(WG'08) |
Can you describe the very early days of the venture and your tactics for sourcing, marketing, and pushing the product? |
Ron Murayama |
That is a long story but in short, I was alone for several years early on in my current company with little knowledge about these things. You have to be willing to ask a lot of questions and not worry about looking dumb or naive, which you are to an extent. You beat a lot of bushes, call a lot of people and if they can't help you, don't be afraid to ask for a referral to someone they think can answer or help. |
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Neel Premkumar
(WG'08) |
What were some of your biggest challenges early on, and how did you go about overcoming them? |
Ron Murayama |
I think the biggest challenge for any start up is marketing. Letting people know what you have and why your value proposition is superior to any other. The second biggest challenge is finding competant people and really the "right" people to support your vision whole heartedly. |
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Neel Premkumar
(WG'08) |
Where did you find your initial management team? What are the most important traits you look for in employees and partners? |
Ron Murayama |
A lot of them came as referrals from people I knew which is always good because you have a reliable reference who knows the candidate. The most importatn trait to me is honesty and integrity. I feel you cannot count on or trust your co-workers otherwise. |
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Neel Premkumar
(WG'08) |
Where did your initial source of funding come from? How did you manage your cash flow in the early days? |
Ron Murayama |
My first company was started on leveraged credit cards which almost pulled me under but when you're a young entrepreneur, I think you need to be willing to believe in your vision and assume certain risks |
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Betsy Bernstein
(WG'74) |
what is the most valuable lesson you learned at Wharton? |
Ron Murayama |
I used to be a product oriented guy but I was surprised to learn in business school that people ar the most important thing which is true. Your customers, your co-workers and your suppliers make the business, period. Without all three elements, you cannot be successful |
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Hannah Zelman
(BAS'08) |
How did you do the lab work needed to show your product's efficacy and safety? Were you affiliated with a university as a practicing dentist? |
Ron Murayama |
Both universities and independent 3rd party labs are available and willing to run clinical trials for commercial concerns. I was not affiliated with a universtiy and there is really no need for such an affiliation. |
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Clare Leinweber |
You mention finding the "right" people to support your vision. How did you go about finding those people for Amden? Are those same people still with the company? |
Ron Murayama |
It is always hard to truly measure someone by their resume and an interview or two. One talent I had to learn as a dentist was being able to read people in a matter of seconds to get a sense of whether they were comfortable, apprehensive, nervous etc. During an interview, I think you need to use your gut instincts to assess the intangible and I always believe in hiring people on a "trial" basis with the up front understanding that you cannot determine the chemistry between a person and an organization without working togother for a few months. In our case, it was 3 months. |
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Bob Haarde
(C'89) |
What was your big breakthrough in launching your product? |
Ron Murayama |
Not sure what you mean by "breakthrough" but start-ups seem to go through a developmental/build-up perioed where nothing much happens and then, if all goes well, you get to the hockey stick. In my experience, the breakthroughs were on the marketing end in finding the right combination of product, place, price, promotion and people, plus enough capital to fund the bplan. |
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Clare Leinweber |
Have you maintained a dental practice while running Amden? If so, how do you manage everything? If not, when did you decide to focus exclusively on Amden? |
Ron Murayama |
After the prior 2 companies, I was pretty comfortable economically, so I wasn't really that "hungry". The bad thing is that if your are not "hungry", it's harder to be focused and motivated so I intentially gave up my practice. There is a story about Cortez landing in the Americas and buring the boats to create an all important imperative for his soldiers. At that point, they knew there was no going back and there was no other alternative but to succeed. Some people, like myself, flourish under those kinds of imperatives. You need to motivate yourself in the way you know works best your you so, it is important to know yourself as well as your customers, and other stakeholders in the venture. |
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Neel Premkumar
(WG'08) |
How do you think Wharton helped you in career, and would you recommend we experience anything specifically while we're here? |
Ron Murayama |
Dentist know nothing about business and I had already paid a extreme price for this ignorance. So for me, Wharton was a Godsend, which opened up a whole new perspective, understanding, and way of looking at things. Most entrepreneurs don't need a business education to identify and opportunity or launch a start-up but where the MBA comes in, is when you start experiencing growth, especially rapid growth. If you make mistakes in the hockey stick, you make big mistakes and the MBA certainaly helps you negotiate and avoid trouble. You also have a better understanding of how to scale a small business into a much larger concern. My motivation was also wanting to run my own company instead of hiring an outside CEO to do it. I had done this in the past and always felt like I couldn't really tell if he was doing a good job or poor one and even if he was cheating the company somehow. Ignorance is a position of weakness. |
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Bob Haarde
(C'89) |
Were there times when you wanted to quit and get a regular job - what kept you going? |
Ron Murayama |
My naive bplan for Amden was to invest $150K and be profitable in 18 months. 7 years later, I had invested my entire life savings of $700, sold my house, my dental practice, my cars and even went through my kids college funds to keep going. That's when I thought about quitting and that's when an entrepreneur has to be able to look himself in the mirror and be 100% honest with himself, and know if the vision is real or if it's the ego talking. I think this is the hardest thing about being an entrepreneur because every successful entrepreneur I ever knew went through some hard times, albeit perhaps not as extreme. |
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Betsy Bernstein
(WG'74) |
If you were doing it all over again, what would you do differently? |
Ron Murayama |
Without my current knowledge, nothing. All the experiences, good and bad, have helped me grow and become a better businessman. There are a lot of things I could have done differently in 20/20 hindsight, but you can't think like that. All anyone can do in life is to do the best they can do knowing as much as they can know at the time. You have to think like this but you have to execute as well. Everything thing you do should always be a "business decision" which measn you take the emotional component out of the mix completely. You don't get offended, or angry and try to get even with competitors, you just do the thing that is most advantageous for the organization. Sometimes, that means firing people you like personally. It's like the godfather says when his son Santino is killed, "it's not personal, it's business." |
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Betsy Bernstein
(WG'74) |
What role does market research play in your development of new products? |
Ron Murayama |
You have to be careful about how you interpret market research. Many entrepreneurs go a lot by gut instincts which I believe in. Your "gut" is really brain telling you what to do based on all the knowledge and expererience you have collected regarding the decision at hand. People tend to answer surveys differently that how the use their wallets. The best market research are always small test markets where you actually sell the product or service. I'm surprised by how many people think they have a hit because they asked their mother or their spouse for feedback. |
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Clare Leinweber |
What have you found to be the most effective means of reaching dentists so that they will recommend your products to their patients? Your products are competitors with their in-office services so it seems that it might be difficult to influence them. |
Ron Murayama |
Every profession and industry has their respective trade shows and trade magazines, dentistry being no exception. The question is whether you want to limit yourself to the niche and parameters of the industry, or broaden you scope and market beyond. In our case, we chose to primarily target the 300million potential end users rather that 150K dentist or 85K dental offices. It is a more demanding and competitive arena but the stake and potential rewards were greater. |
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Neel Premkumar
(WG'08) |
What is your strategy for expanding the Cybersonic brand even farther in the United States? |
Ron Murayama |
Amden is 15 years old and over that time, the power toothbrush industry has really gone through the usual growth and plateau phase. We did not win the war with the two 800 pound gorillas of Proctor & Gamble and Phillips and ultimately could not slug it out with them long term in bricks & mortar mass market retail. So, we have changed or niche strategy and how become an entirely web based business. |
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Clare Leinweber |
Are there products or trends you are watching now that might show similar growth to that of teeth whitening products? |
Ron Murayama |
That IS the question isn't it. I feel that especially now, in a world with global markets and connectivity, there are more opportunities that ever before in history. I am always looking for the next opportunity for me. I'm a little smarter now and can afford to be more selective now but I really believe whatever you chose to do in life, you should chose something you will love for 2 reasons; 1) if you love what you're doing, you will always be happy which is the bottom line in life, and 2) if you love something, that means you will truly embrace and beieve in what you are doing and therefore be more likely to succeed. |
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Betsy Bernstein
(WG'74) |
What about new product development? While the existing products may be plateauing, are there new ones in the pipeline? |
Ron Murayama |
My personal goal is to take a short sabbatical and start a new company. So, I am looking at the whole spectrum of possibilites at this point. |
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Judy Lee
(WG'08) |
What were your means of funding in the start up phase? What do you recommend for start ups that focus on consumer products? |
Ron Murayama |
I recommend you go as far as you can with your own money so you keep as much of the company as possible. For my first company, that meant leveraging credit cards. Some people go to friends and relatives but in all cases, I eventually sold shares in my companies. |
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Betsy Bernstein
(WG'74) |
So, on a short (well-earned) sabbatical, what do you do to recharge and come up with new ideas? |
Ron Murayama |
Nothing. It is good if you can be in a place without the usual distractions so mentally your in a place to "see the obvious". So many opportunites are overlooked because we are pre-occupied. That's we so often see something "obvious" and say to ourselves, "why didn't I think of that." |
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Ron Murayama |
Everyone is different, but I like to go to magazine racks which now have hundreds of magazines. I like this because it is a great way of seeing so many areas of intersest in society and what is very current in the minds of all those potential customers in all those different industries, niches, fields of interest. I also like to go to the U.S. Patent and Trademark website to see what people have patented and or applied for patents. There is a lot of serendipity in these two areas for me. |
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Bob Haarde
(C'89) |
What is the best advice you ever received? |
Ron Murayama |
The best advice was from a coach who told me always beieve in yourself, never give up, and wining is never as important as knowing that you did the best. That's all we can ever ask of ourselves. |
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Clare Leinweber |
Did you use any of the class projects (team or individual) in your Wharton courses to focus on your business? |
Ron Murayama |
Are you kidding? Of course I wanted to get "free" analysis from by fellow Wharton MBA students at every opportunity. That is a truly great resource in school and after you graduate, both in terms of friendship and business. |
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Neel Premkumar
(WG'08) |
You mentioned the success of the initial infomercials with "Natural White". Can you provide some insights into how you chose the infomercial model to launch a consumer product and what some of the pros and cons are? Did you launch with this method in mind or was their a turning point when you realized that would be the best approach to generate sales? |
Ron Murayama |
I think whenever you develop a plan, you still have to be open minded enough to change as things develop along the way. Infomercials were not the original plan but as the infomercials were just in their infancy, I realized that his was a perfect way of telling the story and visually demonstrating a product that was entirely new at the time. Before dental bleaching became mainstream, the word bleaching had a very caustic and harmful connotation. So, I needed to time explain that the procedure was a very safe and effective method that used oxygen as the active bleaching ingredient. |
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Clare Leinweber |
Have you been surprised by the growth of the teeth whitening industry? I know you were the industry leader but did you ever expect it would grow this dramatically? |
Ron Murayama |
I was more surprised that it took so long. Wanting whiter teeth was the most common request in not ony my office, but every other dentist in the United States. It just goes to show how an entire profession/industry can get locked into a conventional wisdom or tunnel vision that causes them to miss huge opportunities. The point here is learn to always think outside the box. |
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Judy Lee
(WG'08) |
How long since you started your company before you get sustainable revenue income and profit? And, do you believe there is a turning point for that to happen? |
Ron Murayama |
May 18 month plan turned into a 7 year exodus and fight for survival. One of the things that enabled me to survive that long was the lack of debt. Sometimes debt is a necessary evil, but is an evil that can bring you down before your venture has had a chance to succeed. |
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Neel Premkumar
(WG'08) |
That concludes our Alumni Webchat. Thanks everyone for participating, and thank you again to Dr. Ron Murayama! |
