Event summaries: 2005

Hugh Panero, Founder and CEO of XM Satellite Radio Talks to Alumni, Entrepreneurs and Students -- November 9

Mr. Panero began his speech discussing his early background in cable and satellite television, encouraging the audience to excel when given a task, take risks, be competent, and to form opinions. Equally important, Mr. Panero provided an example from his past to illustrate the importance of not burning bridges. Early in his career Mr. Panero was offered the opportunity to take on the role of CEO of a distressed Pay Per View television network in Denver. He accepted the leadership role, eventually taking the company through a merger with Liberty Media in order to better compete with DirecTV. Mr. Panero was informed during the merger that he would be let go after the deal closed. As difficult as the situation was, Mr. Panero chose to approach his exit in a professional manner to preserve the value of his relationship with the company. Mr. Panero's impressive handling of this situation proved vital to the capitalization of XM Radio when Liberty Media company purchased one million XM shares based on their confidence in the start-up lead by Mr. Panero.

XM began as American Mobile Radio Corporation. Dr. Stelios Patsiokas was hired from Motorola to help develop XM Radio's satellite technology and brought 10 of the top engineers from Motorola. Dr. Patsiokas' involvement was a critical factor in XM beating competitor Sirius to the market with a functional chip technology. Mr. Panero cited the following as key events and milestones of the company:

• Satellite radio service was to launch September 12, 2001. The September 11th terrorist attacks delayed the company's market launch, and advertisements were hastily pulled from the air and plans were reshuffled.
• The target market was initially thought to be 18-25 year old males who purchase aftermarket car stereos. The actual target customer ended up being men and women, 25-55 years of age.
• XM was the first to develop plug-and-play satellite radios.
• XM reached 4 million subscribers faster than the internet and cable television.
• XM simultaneously matched affordable technology with a wide range of unique content.
• Users could purchase both the service and hardware at retail outlets.
• XM was first to partner with automotive manufacturers such as General Motors and Honda, including a three-month trial with new vehicle purchase. Six out of ten trial users will continue service on a monthly subscription basis.

Additionally, Mr. Panero offered the following advice to the audience:

• Be selective on when to engage a competitor
• Believe in your business model
• Bring in new blood and infrastructure to support growth, and
• Don't lose sight of your family friends, and health during your career pursuits.
• Finally, don't burn your bridges behind you. Without the investment and confidence in Hugh from one of his former employers, XM might not have gotten off the ground.

Mr. Panero's speech offered a great balance between business and life perspectives and was well received by the audience. The response from those who attended was positive with many undergraduate and graduate students enjoying the opportunity to meet faculty and alumni. For part-time and full-time MBA students who infrequently cross paths, the event provided an occasion to intermingle.

Back-2-Basics ("Financing Your Business") -- October 18

About 45 students and local entrepreneurs came to the campus of the Universities at Shady Grove on October 18 for the first of our Back-2-Basics series for this academic year. The topic was "Financing Your Business", and the panel consisted of Smith Senior Fellow Mark Walsh, Silicon Valley Bank Vice President Megan Scheffel, and Oblicore CEO Yuval Boger. Asher Epstein, Managing Director of the Dingman Center was also on the panel and helped to guide the Q&A discussion. Representing the banking industry, Megan Scheffel talked about what they most want to see when a small business comes to them for financing, which is customers and revenue. Mark Walsh talked about his many experiences financing different ventures over the years, and what he currently looks for in businesses in which he now makes investments. Yuval Boger talked about the challenges he has had with a variety of start-up experiences.

The next Back-2-Basics will take place in Van Munching Hall on Thursday, December 1 from 5:00 - 7:00 p.m. Bill Cole, a Partner with Ernst and Young, Roger Hebden, CEO of Blueprint Technologies, and Associate Professor Bob Baum will talk about "Exiting Your Business". This event is open to the public, and all are welcome; light refreshments will be served. RSVP to Carol Cron.

Back-2-Basics ("Exiting Your Business") -- December 1

On December 1st the Dingman Center held its Back-to-Basics event at the Robert H. Smith School of Business. Local entrepreneurs and investors from the DC and Maryland areas, as well as MBA students with interests spanning from entrepreneurship to finance attended the event. The topic for the day was "Exiting Your Business", the final step of a successful enterprise that entrepreneurs wish to accomplish. The panel consisted of: Bob Baum, Associate Professor in the Management and Organization Department at Smith School of Business, Tien Wong, Founder and CEO, Opus8, and Roger Hebden of Blueprint Technologies Inc. Asher Epstein, Managing Director of the Dingman Center was the moderator. The dream of every entrepreneur is to build a successful enterprise and choose the best exit strategy to capitalize on their investment and retire young and rich. Professor Baum opened the session with a short lecture on available options for entrepreneurs interested in exiting their businesses from a finance point-of-view. Professor Baum clearly and comprehensively discussed refinancing a business, selling equity, performing an IPO, and all other means entrepreneurs can use to capitalize their investment. The panel then presented some “war stories”. All panelists founded and built successful companies and were able to exit their businesses with great satisfaction. In particular, Mr. Wong sold the IT service company that he co-founded, and today is CEO of a venture capital firm that focuses on investments in technology.

Dingman Day Lunch (Overview of China Business Plan Competition)
October 14

Just after noon on October 14, a crowd of over one hundred students, faculty, and staff converged on Van Munching Hall's Executive Dining Room. The smells of ginger, garlic and soy wafted past the long line of attendees who had registered for the Dingman Day Lunch. The Topic: Lessons Learned from the China Business Plan Competition.

Managing Director, Asher Epstein, and Entrepreneurs-in-Residence Dan Goodman and John LaPides were joined by Dingman Scholars Sadia Ashgar, Derek Vlcko, and Valerio Zanini on their recent trip to Beijing. The trip was centered around the finals of the first China Business Plan Competition, sponsored by the Robert H. Smith School of Business. The winning team, which produces an arthritis treatment based on extracts from Chinese herbs, was awarded $25,000 to continue developing their business. This monetary award represents many times the average annual salary of most Chinese and was presented with great emotion from all parties. The competition itself received tremendous media exposure. A report on the event was aired several times by a Pan – Asian English language television station.

The recap of the competition was merely a backdrop for the myriad of lessons learned by the Dingman team. Sadia, Derek, and Valerio made an excellent presentation while the attendees enjoyed a large Chinese food buffet from Hunan Treasure, a local Chinese restaurant in Greenbelt.

• After several harrowing highway experiences, Sadia realized the opportunities for infrastructure improvements -particularly the roads. Sadia was also impressed by the amount of service workers in every store due to the low cost of labor.

• After lunching with a local Venture Capitalist, Derek was struck by the lack of standardized accounting regulations and credit risk management.

• Valerio, who had visited soviet Russia, was surprised by the “softer” character of China's Regime. While there are very few political freedoms, Valerio noticed, along with the other scholars, an enormous entrepreneurial spirit among those he met.

This entrepreneurial power is not going unnoticed by the Chinese authorities. One of the many highlights of the trip was a visit to a massive Technology Park on the outskirts of Beijing. The park houses 439 R&D centers and covers 90 km2. A mix of independent entrepreneurs aspiring to be the next Microsoft were housed next to researchers co-sponsored by Sony, BMW, and Ericcson.

All in all everybody was energized by what they learned during their China experience. The China Business Plan Competition was the first of what will become an annual event. The next competition will be in 2006, and the international companies of Siemens and ING Asia have expressed interest in sponsoring it.

WOMEN'S ENTREPRENEUR EVENT (September 28, 2005)
"Entrepreneurs Battling Stereotypes"

Do we look like CEOs? Do we lack negotiating skills? Can we juggle career and family? Do we help one another? On September 28, these were the questions that were dispelled when three successful local women entrepreneurs came to speak at the Smith School of Business in a joint event sponsored by the Dingman Center for Entrepreneurship and the Smith Association of Women MBAs in a program entitled “Entrepreneurs Battling Stereotypes.”

Speakers included Zoey Rawlins, a 2005 Smith graduate and former Dingman Scholar who successfully started ShopDC (http://www.shopdcmagazine.com), with the vision of creating definitive retail shopping guides, with specific, guided itineraries for upscale shopping in Washington, D.C. Mary Moslander, a former Vice President at the Washington Post, is the president and founder of an online subscription business, LiveHealthier to help individuals maintain their health goals by leveraging social connections. Mary's online company will be up in mid-November. Kathy Korman Frey, is the managing director and founder of Vision Forward, a consulting firm that has partnered with the Hot Mommas Project; she is also an adjunct professor of entrepreneurship at the George Washington University and a Harvard Business Case author.

Moderated by Zoey Rawlins, Mary and Kathy spoke of their experiences with battling stereotypes in building relationships and networking when first starting their businesses. Highlighting their battles with being their own cheerleader at times when there was no corporate affirmation of their small triumphs, all three cited their passion to pursue their endeavors as the goal for which they consistently put in long hours and made sacrifices.

All three women entrepreneurs also touched on the financial aspect of funding their own business. Zoey, through the help of the Dingman Center, was able to receive seed money. Through advertisements, she has recouped her investment in this upcoming second issue of ShopDC. Mary and Kathy both were self-financed, but did so in interesting ways. Kathy shared office space with her entrepreneurial husband as it was more cost-effective. She also used consultants on contracts, and paid them as her clients paid her. Mary used a variety of resources, including tapping into one of the State of Maryland's incubator centers to set up her business with office space that allowed her to gain new clients.

For many in the audience, both students and aspiring entrepreneurs, Mary offered resources that were helpful to her in starting LiveHealthier. These included a group called Ladies who Launch (www.ladieswholaunch.com), the Maryland Technology Development Center and the help available through the resources at the Dingman Center for Entrepreneurship.

The insightful thoughts and comments from these women will help aspiring entrepreneurs to channel their passions into actionable business plans and transform their small businesses or business ideas into viable, money-making companies.

DINGMAN CENTER OPEN HOUSE (September 8, 2005)

The Dingman Center of Entrepreneurship kicked off its Fall calendar with their annual Open House on Thursday, September 8. The event was attended by more than 200 people, comprised of graduate and undergraduate students, faculty members, guests from the entrepreneurial community, and Dingman Center staff. The attendees mingled while enjoying FIFTY pizzas and sodas, compliments of the Dingman Center. Various Dingman Center businesses and services were on display, such as “SHOP DC”- the magazine launched by former scholar Zoey Rawlins, Hook & Ladder Brewing Company launched by former scholar Matt Fleischer, Crooked Monkey, a t-shirt company that designs t-shirts with slogans popular for the college crowd, and CAN - the Capital Access Network currently run by scholar Susannah Campbell.

Undergraduate Dingman Center representatives Ori Zohar and Josh Norris sold fun foods to raise money for hurricane victims and to promote their new UG student club, MUSE -- Maryland Undergraduate Student Entrepreneurs. Asher Epstein, Managing Director of the Dingman Center gave an overview presentation to the attendees, covering all the entrepreneurial resources available through the Dingman Center. He started by providing an overview of the vision, introducing all the staff members and communicating the dates for key events scheduled during the fall semester. He emphasized the international relationships being pursued by the Center, and the Center's involvement in the China Business Plan Competition.

Asher talked about the Center's close relationship with the Smith Entrepreneurship clubs (at the MBA level and now at the UG level as well) and the student-run businesses. The Dingman Center helped incubate as many as 11 student-run businesses in the last academic year. The Dingman Center has invested as much as $10,000 in some of these businesses and continues to support them with its Mentor and Capital Access Networks. Asher invited the student community to take advantage of the center's innovative “Pitch Dingman” program. Students can pitch their ideas every Friday between 11 a.m. and 12 noon at the Dingman Center. Asher highlighted the $500 award given out to participants at the “Pitch Dingman Competition”, held monthly on the third Friday of the month. This program has already entertained over 90 pitches from students, faculty and staff.

Next, Asher went through the “Dingman Process”, a structured process that takes an entrepreneur through four stages: Ideation, Assessment, Implementation, Iteration. The “nuts and bolts” of Dingman Center's operations, this insightful yet simple process helps in identifying a business idea, testing it for viability, launching it as a business, and verifying the constant need to change as the business flourishes. To conclude the program, Asher announced the launch of a new service “MBAFinder.net”, a unique service that will allow interactive communication between MBA students and third parties interested in hiring them while they are in school for short-term projects.

Thursday, June 30, 2005

The Entrepreneurial Invitational

Biotechnology companies learn how to attract more venture capital

by Jeremy Bond, Staff Writer Article appeared in The Business Gazette on March 18, 2005

Venture capitalists say they look mainly for two things when considering an investment in a life sciences company: an appealing technology and a commitment by its executives to see the company through its early stages.

Maryland has historically had a difficult time competing for venture capital with the nation's other big biotechnology hotbeds, California and Massachusetts. But industry insiders, speaking at a forum last week at the Robert H. Smith School of Business at the University of Maryland, College Park, said money is readily available to Maryland companies if they go about it the right way.

Wei-Wu He, general partner and co-founder of Emerging Technology Partners in Rockville and one of the original members of the team that built Rockville biotech Human Genome Sciences, largely dismissed a question on how to recreate a Maryland version of Sand Hill Road, a street in Menlo Park, Calif., famous for its concentration of venture capital firms.

"Importing money is probably not as difficult as you think," Wei-Wu said.

The Silicon Valley Bank, which began providing capital in the technology-rich center of California, has opened offices in other high-tech areas, including Vienna, Va. The bank is "looking for a company that has some [interesting] ideas," said Megan Scheffel, vice president and relationship manager for the Santa Clara, Calif., bank.

"Capital is the easiest transported commodity," Wei-Wu said. "People are more difficult to transport."

Those in the life sciences field in Maryland are just as good as those in California, he said. Maryland would benefit from more second-generation entrepreneurs who have already done the dirty work.

The state also needs more groups of entrepreneurs who can work well together, he said. Startups cannot "glue five or six people together and hope they just love each other." Luck favors those who already talk to each other, he said.

One of Wei-Wu's observations appeared to be directed to the Smith School itself. He noted that master's in business administration programs train students to work for big companies that already exist rather than for startups, which are riskier but also happen to make up a large proportion of the industry in Maryland.

More than 50 percent of innovation is taking place in small labs, he said.

"Biotech doesn't happen by itself."

Most recently, venture capital has flowed to later-stage companies, but the pendulum appears to be swinging back to those who want to start new ones, said Jeff Jones, a principal with Emerging Technology Partners. This will lead to a series of "truly novel technologies," he said. Half of Emerging Technology's two dozen portfolio companies are in this region. While the venture capital firm still seeks later-stage, established technologies, "we are always happy to talk to [startup] entrepreneurs," Jones said.

Emerging Technology Partners has about $60 million under management and is financing about 20 biotechs, some of which are doing well and some of which are struggling. "Get as much cash as you can," Scheffel suggested. "It'll always be harder than you think."

The insiders had this advice for those seeking capital: develop a novel idea, use great people committed to the industry and establish small goals.

"You want to see progress and achievement of certain milestones," said Frank Bonsal, director and co-founder of Red Abbey Venture Partners in Baltimore. In biotech, this would mean moving from the preclinical stage to Phase 1 and 2 of a clinical trial.

Key to moving forward is perseverance, he said.

"Once you get involved in a company, you better be prepared to stick with it."

Red Abbey has raised $6 billion and is looking for companies that have been in business for a while and have established a reliable timetable, Bonsal said.

Christopher Anzalone, founder and CEO of The Benet Group in Washington, D.C., said the investment group looks for promising technology over all else. Nanotechnology looks particularly promising, with the federal government putting upward of a billion dollars into nanotech research annually.

But Bonsal said using public money to finance nanotech is probably premature. He cited NanoInk, a Chicago company formerly headed by Anzalone, which issued an initial public offering only to later withdraw it due to lack of interest.

"There's capital," Anzalone said. "What's missing is good companies."

Investors should keep an eye on the next new thing, such as nanotech, at the same time that they "look for ashes in the rubble of the bubble bursting," Bonsal said.

"You have to be a good buyer and a good seller," he said. "It takes two decisions to make money in the investment world."

Wei-Wu said he has seen hundreds of business plans and thinks the industry is still underappreciated.

"We're developing more drugs now than in any time in human history," he noted. The venture capital community will soon move beyond the scare from the burst technology bubble of a few years ago, he said. Local entrepreneurs should remain committed to selling themselves and boosting the Maryland industry in the process.

"Keep trying, keep trying," Wei-Wu said. "If we're focused on it, [and] we keep trying, you never know. You never know.

"We have the right ingredients."

Tech Visionary Panel: Grid Computing
February 2, 2005, 8030 a.m. - 11:00 a.m.

Summary by Michael Grenier

The final frontier of grid computing is sometimes referred to as “ubiquitous computing”, the notion that your idle PC is crunching data for a stranger somewhere halfway around the world. This is vision is clearly a long way off, however, enterprise level grids that provide serious parallel computing are already starting to add-value today.

On February 2nd, The Dingman Center hosted a discussion on the future of grid computing for regional venture capital professionals. The panel for this event included: Michael Cummings, Alan Sussman, Dr. Henry Lucas, and Robert Cohen (bios are below).

The term grid computing is still being used to describe a variety of different computer applications and technologies. The panel was able to separate out different definitions, but generally they all defined grid computing as some type of distributed computing, memory or storage with differing degrees of abstraction for the end-user. At the extreme, the user has no knowledge of or control over where and what machines are doing the actual data processing or where the data they are using is being stored. This is somewhat analogous to the electrical grid where consumers just “flip a switch” and know almost nothing about where the electricity is made or how it gets to them.

Professor Lucas made the pointed that while the idea of using latent resources makes sense to CEO, there are several organizational hurdles to adoption of grids. The CIO may resist adoption of another complex technology, and users may resist adoption of a technology that takes their machine out of their complete control. Public distributed computing projects like SETI@Home have run into several issues of quality control. However, companies have had more success because of their ability to dictate IT practices.

Industry professional Robert Cohen explained that companies with serious parallel computing needs are using cluster computing and enterprise grids today to great benefit. Brokerage firms are using enterprise grids to help run complex multivariate financial modeling in 1/10th of the time. Pharmaceutical companies are using enterprise grids to conduct new product research via complex molecular level modeling. Auto manufacturers are using enterprise grids to accelerate new product development and to simulate crash tests. They have even extended those grids to their partners as well. Mr. Cohen's presentation is available here.

Mr. Cohen believes firms could realize 15-30% gains in annual efficiency in the next five years. His own research showed drastic increases in output, productivity, and decreases in employment and product costs.

(Moderator) Phil Garfinkle, Venture Partner at Gabriel Venture Partners Phil Garfinkle is a three-time successful entrepreneur, an experienced CEO, and an active angel investor. He is widely credited as the pioneer of online photofinishing and holds many patents in this area, as well as in the fields of communications and networking. As a Venture Partner, Phil continues to focus on emerging applications for disruptive technologies. Prior to Gabriel, he was a founder of Yazam, a global VC firm that was acquired by US Technologies. Prior to Yazam, he founded PhotoNet Japan, which went public in 2002. Phil was most notably the founder, CEO, and Chairman of PictureVision, which was sold to Kodak. At Kodak, he also served as a General Manager and in the CTO's office. His operating experience also includes having been the CTO/VP Engineering at Network Imaging, and VP for Information Technologies at ASG.

Smith Professor Hank Lucas, Professor of Information Systems Professor Lucas' research interests include the impact of information technology on organizations, IT in organization design, electronic commerce, and the value of information technology. A prolific researcher, he has authored 11 books as well as monographs and more than 70 articles in professional periodicals on the impact of technology, information technology in organization design, the return on investments in technology, implementation of information technology, expert systems, decision-making for technology, and information technology and corporate strategy. His most recent books include Information Technology and the Productivity Paradox: Assessing the Value of Investing in IT (Oxford University Press, 1999) and The T-Form Organization: Using Technology to Design Organizations for the 21st Century.

Michael Cummings, Visiting Associate Professor, Center for Bioinformatics and Computational Biology Professor Cummings' research interests are in the areas of molecular evolutionary genetics (including population genetics, systematics, comparative genomics) and computer science related to bioinformatics, computational biology, and Grid computing. He has authored or co-authored 38 publications. His research is supported by the National Science Foundation, National Aeronautics and Space Administration, Department of Energy, Alfred P. Sloan Foundation, Fujitsu Laboratories of America, and Intel Corporation.

Robert Cohen, Fellow, Economic Strategy Institute Dr. Cohen works on a number of telecommunications and Internet issues. He authored ESI's study on the impact of the Internet on the U.S. economy, and had earlier estimated the impact of a more rapid deployment of broadband communications on productivity and economic growth. He recently served as President of the Forecasters Club of New York, and has taught at the City University of New York and NYU's Stern School of Business. Cohen received a Ph.D. in economics from the New School for Social Research.

Alan Sussman, Assistant professor, Computer Science Department Professor Sussman's current research emphasis is on the design and implementation of high performance database systems for multi-dimensional data sets, with many applications including analysis of remote-sensing data, medical information systems and support for processing and visualization of scientific simulation results. Previous and continuing work includes compilers and runtime support for parallelizing geometrically complex and/or adaptive scientific computations on distributed memory parallel machines.

Back-2-Basics Panel Discussion Making Decisions with Imperfect Information February 10, 2005, 8:00 a.m. - 10:00 a.m.

Write up by Elenora Vasyushina

PowerPoint presentation of Professor Bob Baum

Professors Bob Baum and Alex Triantis and Business Leaders Howard Friedman and David Lesser were the panelists for this Back-2-Basics Discussion.

Key Takeaways

Perfect information is very rare and there is never enough information to make a perfect decision. In the situation of a new venture formation, the information is extremely imperfect and asymmetrical. It is important to move fast to remove some uncertainty.

There are several categories of imperfect information:

(1) Non-existent information (2) Right information, but difficult to find, too complex to comprehend, secret or changing information (3) Wrong information

To obtain information, you need to have certain human, financial and time resources that often times are lacking in the situation of a new venture creation and entrepreneurs need to consider what resources they have at hand.

There might be different solutions to the problem of imperfect information:

(1) Giving up on seeking additional information (2) Taking incremental actions to gain necessary information (3) Risk sharing through partnerships

Sometimes the problem is having too much information that diverts you from your initial plan and harms business in the end. Entrepreneurs have to learn how to filter out irrelevant or incorrect information and trust their intuition.

There are different types of uncertainty:

(1) Technical or operational (2) Economic (3) Financial (4) Regulatory or environmental

Some types of risks can be hedged by derivatives, insurance and real options.

Different people have different levels of risk tolerance. These personal characteristics should guide people to the types of businesses they are best suited for, because different industries require different levels of risk tolerance.

Lessons Learned

This event showed a strong turnover, which indicates interest in the topic. There was also a good balance in the audience that consisted of both entrepreneurs and MBA students. The panel also showed a good balance of academia and real-world entrepreneurs that gave somewhat different perspectives on the topic. The event was helpful for those who start or own companies, because they are sure to face problems arising from having imperfect information.

Dingman Day Lunch Friday, February 11, 2005, 12:00 noon Write up by Matt Fleischer

The Dingman Center for Entrepreneurship and invited guests were able to enjoy two great talks from former Dingman scholars on Friday, February 11. Rich Harris and Mike Borek spoke to a crowd of about 50 students, faculty, and friends of the center about their professional experiences since receiving their Smith MBAs. Both discussed how to maintain a strong work/life balance while succeeding in the hectic, demanding world of entrepreneurship.

Rich Harris is currently a partner at SpaceVest, a local venture capital firm. He used his experiences and connections from being a Dingman Scholar to enter the world of venture investing. He spoke of his quick rise to partnership through making sound investments and a great exit in the late 90's. Of course, timing and a little bit of luck have helped this former scholar to a successful career.

On the other end of the spectrum, Mike Borek founded his own company after being a Dingman Scholar and graduating from Smith. Router Solutions, a hardware networking company, has kept Mike busy since graduation. He has raised venture capital and continues to move the company forward. Mike spoke of his enjoyment of the entrepreneurial side of the world of private equity and his resilience and persistence to make his latest company flourish.

Following the former scholars was current Dingman Scholar, Kara Holzer, who spoke of her involvement with the Smith Store. Kara, CEO of the Smith Store, which is one of the student-run businesses in the Dingman Center, told of their current success and posed questions to the audience to help gain insight for future success. The Smith Store was founded in 2001 by Smith's Entrepreneurship Club, and under Kara's reign has taken revenues from $5,000 for all of last year to more than $25,000 just in the first semester of the 2004-05 academic year. The audience helped Kara look at and talk about some tough issues -- such as recruitment and retaining volunteers, and passing the legacy of The Smith Store on to the next generation of Dingman Scholars.

The lunch provided current and potential Dingman Scholars with a view of life after Dingman through the eyes of two successful former Scholars. Members of the audience were able to hear from a former student who has continued his entrepreneurial spirit by forming his company right after graduation and one who took his entrepreneurial drive to help fund start-up companies.