TEACHING
Feature: Between the Idea and Reality

OUTREACH
Feature: Seeking Greatness

Fourteen Students, Dozens of Questions, One Entrepreneur

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RESEARCH
Learning from China's Emerging Growth Companies by Teaching Them

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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."

  


Wharton Business Plan Competition
Seeking Greatness

Eight finalists have 20 minutes each to make the case for their businesses before a tough panel of experienced judges at the Wharton Business Plan Competition Venture Fair. Only one will walk away with the $25,000 grand prize.

It all came down to this. Wharton MBA student Onne Ganel and engineering graduate student Byron Gomberg joked nervously in the back of the reception room on the third floor of Houston Hall on the University of Pennsylvania campus. They had spent nearly a year of intensive business development in creating Envisia, Inc., a company based on a new technology to allow MRI equipment to make detailed, non-invasive images of the inside structure of bones. The technology, developed in a lab at the Hospital of the University of Pennsylvania’s Radiology Department, is a critical advance for the treatment of osteoporosis and other illnesses, offering the potential to replace expensive invasive procedures to look inside bones.

Ganel, Gomberg and partners Eileen Stephens and Matt Pickens had spent a marathon day Sunday and that Monday morning refining their presentation, and testing it on classmates. The strengths of their business plan had already lifted them above almost 163 teams to join the top eight business plans in the Wharton Business Plan Competition. This earned them the right to enter the crucible of a 20 minute presentation and cross-examination by a panel of experienced judges at the Wharton Venture Fair. Now, Ganel and Gomberg waited to hear how they stacked up among the "Great Eight" finalists in the last phase of the competition.

As they waited in the back of the room to see which team would take the $25,000 grand prize, they had only hors d’oeuvres and their own mix of confidence and insecurity to keep them company.

Making the Venture Process Visible

Every new venture faces intense competition for investor dollars. Every venture needs to make a strong case — asking for thousands or millions of dollars based on the strength of the story they can tell about their future prospects. But in a world in which business plans typically arrive in sealed envelopes and presentations are made in closed rooms, rarely is the process of examination, triumph and heartbreak so immediate and visible as at the Wharton Business Plan Competition Venture Fair.

The companies Envisia competed against included a range of business hopefuls, from a jet powered industrial hammer manufacturer to an Internet based medical equipment repair service to a developer of a resin compound for the treatment of wounds and burns. These finalists were projecting collective first-year net income on the order of minus $4 million. But what they lacked in immediate returns, they made up with strong strategies, rigorous research and energy, as they described their technology, marketing plans and financial projections. Which plans would realize their potential? Which of the glossy PowerPoint presentations and financial analyses might have fatal flaws?

In the Crucible

There was plenty of cause for doubt among the teams as they waited for the final results. After each presentation, a panel of experienced judges peppered the presenters with questions. At the end of Envisia’s presentation, David Piacquad, Vice President of Business Development at Johnson & Johnson, leaned over the microphone and asked, "Assuming you make this a big success, how likely is someone to engineer around the patents?"

"We have five patents, including a patent for the use of MRI machines for this type of imaging," explained Gomberg.

The questions from judges kept coming, probing for weaknesses:

  • Are the images identical to invasive biopsies? Is it possible to create higher-resolution images?

  • What about FDA clinical approval? What makes you confident that you’ll get through all stages for FDA approval?

  • What makes you think pharmaceutical companies will subsidize the software?

  • What is the technology relationship with the university?The Importance of the Team
    What brought them this far? Good technology, of course, but also a strong and balanced team. "The key driver that got us this far was really teamwork," Ganel said. "Each of us really had a mission and each knew his specific tasks and we had hardly any overlapping of responsibilities. A key learning for us was that there are no tradeoffs. You can’t have a good technology with a bad team and good team with bad technology. There is no point in entering a venture if you don’t have these nailed."

The Importance of the Team

What brought them this far? Good technology, of course, but also a strong and balanced team. "The key driver that got us this far was really teamwork," Ganel said. "Each of us really had a mission and each knew his specific tasks and we had hardly any overlapping of responsibilities. A key learning for us was that there are no tradeoffs. You can’t have a good technology with a bad team and good team with bad technology. There is no point in entering a venture if you don’t have these nailed."

The strength of the team also helped them juggle the complex demands of being entrepreneurs and full-time students. When the Envisia team learned they needed to make an important presentation in New York City, Ganel and his Wharton classmates realized they had an exam the same day. They arranged to make their presentation in the morning, hop on an Amtrak train back to Philadelphia for the exam, and then quickly return to New York for more company business activity.

The Moment of Truth

Ganel, Gomberg and their teammates listened as winners of the Venture Fair were announced in ascending order. No matter what happened next, they were optimistic about the prospects for the business and grateful for what they had already learned from participating. When the second prize was announced, they realized they had won the grand prize. They began exchanging smiles and handshakes.

With a $25,000 prize and the visibility of winning the competition, they took a moment to relax. But not for long. They had to prepare for their next competition the following week – and the even more demanding process of making Envisia a reality.

"We are very committed to building this business," said Ganel. "The more we developed the plan, the more committed we have become. We are not doing this for the drill."

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