TEACHING
Feature: Between the Idea and Reality

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Feature: Seeking Greatness

Fourteen Students, Dozens of Questions, One Entrepreneur

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Keynote Speaker to Venture Fair Audience: $20.00 and "Guts" Can Lead to Thriving Business

Phil Friedman arrived in New York from the Soviet Union in 1976 with $500 in his pocket and no English. He needed $240 for his first month’s rent and $240 for a security deposit. He took a crash course in computer programming at NYU and in 1984 founded Computer Generated Solutions, which now has 1,600 employees in 17 countries.

"The truth of the matter is you have to have guts," said Friedman, the keynote speaker at the Wharton Business Plan Competition Venture Fair. "You have to have something inside you that you probably can’t learn in business school. It is being not afraid of failure. It is the fact that you like what you do. You also need to have knowledge. You have to be able to read a balance sheet, understand basic law, market conditions and how sales are done. You have to be able to lead and motivate. Some things you can learn in school but certain things you have to have within you."

After his remarks, a student asked whether the current economic environment is a good one in which to launch a new business. "The right time is the time you decide," Friedman said. "When you feel the fire in your belly, it is the right time for you. Funding is available but you have to work harder for it today. I would do it when I feel it is the right time for me to do it and when I feel I have a good idea."

  


Feature
Between the Idea and Reality

In seven months, Janardhan Narayanan turned his idea into a viable business — with a little help from a Wharton course on implementation and Wharton’s Venture Initiation Program.

Like many new ventures, the idea for Janardhan Narayanan’s (WG ’02) business arose from personal frustration. In the course of life, many such ideas surface like bubbles on a lake, only to fizzle or be forgotten. This was not one of them. Narayanan knew he wanted to start a business, so he grabbed onto the idea and drove it forward. With insights from the presentations by faculty and visiting entrepreneurial leaders in a Wharton course called "Implementing Entrepreneurial Businesses" and support from the complementary Wharton Venture Initiation Program (VIP), he forged his frustration into a company, InnoSurge Technology.

Though known by its unassuming course number "Management (MGMT) 806," the course is structured as a high level forum designed to help Wharton MBA students nurture their concepts into successful enterprises. "MGMT 806 provides the knowledge and support for students who have started to take their businesses beyond the business plan onto the rocky road of implementation," said Emily Cieri, Managing Director of Wharton Entrepreneurial Programs. "It is like an entrepreneurial MBA summit. It attracts an incredibly talented group of students — some of the most committed and creative entrepreneurs on campus. In addition to the insights from the program, these students build relationships with each other that last a lifetime."

Sand and Pearls

One commonality among students arriving to MGMT 806 is that each has already made the leap from thinking about building a business to actually launching one. For Narayanan, the irritating grain of sand that created the pearl of his business was a failed attempt to contact alumni through the school database. When he looked for 15 or 20 alumni addresses in the database, he found that only one or two were current. "It was a big letdown for me," he said. The problem was that alumni don’t take the time to update their information. The Wharton MBA student, with a background as a manager at GE’s Medical Systems Group, thought there should be a way to automatically share information after you graduate. There wasn’t — so he decided to create it, and InnoSurge Technology came to life.

"In the last seven months, this business has gone from concept on a piece of paper to a company that I’m pretty confident is viable," said Narayanan. He has spoken with alumni directors at nine business schools. He has set up a board of advisors and has brought on a second staff member, a product architect to help design the initial prototype for the technology. The system is designed to work with existing PC and PDA calendars to automatically exchange information between alumni and school databases. Narayanan’s plan is to do the development and pilot testing with a partner institution and then roll out a commercial product for other schools.

Strategies for Implementation

A key factor in developing the business was the knowledge and support he received, particularly in addressing the challenges of implementation. In his first-year entrepreneurial classes, Narayanan learned to write a business plan and look at plans through the eyes of a venture capitalist.

Once he came up with the idea for InnoSurge Technology, he applied and was accepted to the VIP Program, which offers selected Wharton and other Penn student entrepreneurs — free of charge, with no strings attached — office space, office equipment and valuable introductions to business advisors and the investment community. Meanwhile, the MGMT 806 course taught by Ian MacMillan, Fred R. Sullivan Professor of Management, "helped me to see the things I missed," Narayanan said. Among the insights on implementation that he gained from the process:

  • Use moles: In addition to going after the key decision makers, make contacts with other people who can help you in advancing your idea indirectly. While Narayanan was initially focusing only on alumni directors, he now tried to make broader contacts in organizations to move his project forward.
  • Understand the law: There are legal issues at every stage of the venture process and entrepreneurs need to go in with their eyes open. "At a certain point, you have to have lawyer and be able to talk intelligently about things," he said.
  • Learn how to hire and fire people: Narayanan recalls that an experienced entrepreneur who visited the class identified human resource skills as crucial to growing the business. "Most of the start up businesses are one- or two-person shops," Narayanan said. "As you get funding, you are going to expand in leaps and bounds. What are the types of people you want to work in the organization?"
  • Get the word out: With an engineering background, Narayanan didn’t give much thought to marketing and publicity. Now, he’s added this to his business plan and took a course in entrepreneurial marketing. He realized that there are low-cost ways to get publicity without expensive advertising or marketing campaigns. "It was another thing I hadn’t thought about," he said.
  • Plan an exit: Entrepreneurs may not like to think about failure, but Narayanan learned that you need to be prepared to liquidate if the business fails. "As an entrepreneur, you always have to know your exit strategy," he said.

While there may be no formal roadmap for the twists and turns of a new venture, the experience of the MGMT 806 course helped "prepare us for some of the things we will face down the road," he said. And more than that, his classmates, faculty, visiting executives and the Venture Initiation Program gave him a sense of what is possible. "People here see a lot of opportunities they never dreamed were possible," he said. "You have to know what you want to do and stick to it and figure out what resources are available."

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