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May, 2005 |
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MARK WALSH JOINS DINGMAN CENTER AS A SMITH SENIOR
FELLOW
Mark Walsh, former managing partner at Ruxton
Associates, LLC, a private equity and investment
firm, has joined the school's faculty as a senior
executive fellow. Walsh will work with the faculty
in the school's Dingman Center for Entrepreneurship
to advise graduate business school students on the
development of their businesses and to provide
expertise to regional entrepreneurs.
“Mark has earned a reputation for being a true
visionary and ahead of the curve – particularly in
recognizing the potential of the Internet in
impacting business," said Howard Frank, dean of the
Robert H. Smith School of Business. “His knowledge
and experience fit well with the Smith School's
focus on preparing leaders for the digital economy.
I am pleased to welcome Mark to the Smith School
community.”
Walsh's diverse career in interactive services and
technology includes joining AOL in early 1995 where
he created and ran AOL Enterprise, the
business-to-business division of AOL. In mid 1997,
he joined VerticalNet Inc., the internet's first
business-to-business platform, as the CEO. He took
the company public in early 1999. He became chairman
in late 2000. Walsh previously was the CEO of Air
America Radio. He also served as the chief
technology advisor for the Democratic National
Committee and was the original head of Internet
operations and strategy for John Kerry for President
in mid 2003. Walsh has an MBA from Harvard Business
School, and a BA from Union College in Schenectady,
New York, where he serves as a member of the Board
of Trustees. He also serves on a number of
venture-backed company and not-for-profit boards.
“At the Dingman Center we recognize that direct
access to experienced and successful entrepreneurs
offers a tremendous resource and advantages for a
growing business. Mark's expertise across the
business life cycle – from start up to exit – will
be invaluable for our students and the entrepreneurs
we assist,” said Asher Epstein, managing director of
the Dingman Center for Entrepreneurship.
In addition to his work with the Dingman Center
Walsh will lecture for the Smith School's MBA and
executive MBA programs.
AN E-SIDE CHAT WITH NORTHSTAR GAMES FOUNDER DOMINIC
CRAPUCHETTES
By Carol Cron
 The
creator of more than 30 board games, Dominic
Crapuchettes, owner and CEO of NorthStar Games,
talked with the Dingman Center about Cluzzle, his
first board game to get into the big leagues.
“Cluzzle is somewhat of a mixture,” says
Crapuchettes, “of the familiar game “20 questions”
and clay, where opponents are given an object that
must be sculpted out of colored clay.” Players earn
points for guessing what the object is – but not too
fast, or they can be penalized. He added, “Cluzzle
was inspired by a design that won a prestigious
European game design competition in 1988, and has
won several awards proclaiming it to be one of the
best family games in 2004.”
A veteran Dingman Center Scholar from the 2002 -
2004 academic years, Dominic grew up playing board games with his
family two to three times a week, and it naturally
turned into a fun activity in later years when
having friends over for dinner and beer. Other games
he played (and still plays) with his family and
friends include Charades, Password, Monopoly,
Scrabble, Pictionary, and Trivial Pursuit.
Always an entrepreneur at heart, Crapuchettes had
to find a new business when the fishing industry
crashed several years ago, so he racked his brains
to come up with a business where he could earn a
good living and have a great time doing it. He had
two ideas in mind when friends started asking to
borrow Cluzzle for family reunions. He took this as
a sign to go to business school, find a partner, and
start a board game company. Dominic was a Scholar
with the Dingman Center for Entrepreneurship at the
Robert H. Smith School of Business several years
ago, during which time he gained invaluable
experience and information to help him launch
NorthStar Games.
With the billions of dollars being spent on
electronic games, such as Game Boy and Nintendo and
the vast genre of computer games available, the
board game entrepreneur was asked whether he has
seen any return to
 the
more traditional, "old fashioned" and simpler board
games that used to be played by families? His
answer: The board game industry has seen tremendous
growth recently because of two factors. First of
all, board game sales always increase during
recessions because of how inexpensive they are.
Instead of taking a family of 4 to the movies,
parents can buy a great board game for that price
(with $10 left over) that can be enjoyed many, many
times. Secondly, there has been a trend since 9/11
to break away from the more isolating and passive
forms of entertainment in order to spend time
interacting with friends and loved ones.
Sho wn
at toy shows for the last few years, ToysRUs.com
picked up the game after it started winning some
awards as a great family game. While this is a
tremendous accomplishment, Crapuchettes still wants
to get into the more than 1,000 “brick and mortar”
Toys “R” Us retail stores to have the most
profitable impact. NorthStar Games has recently
partnered with a large game company to get them
better access to both capital and toy buyers for
large retail chains such as Target, Toys “R” Us,
K-Mart, Barnes & Noble, Borders, Books-A-Million,
Go! The Game Store, and others. Several of the above
outlets are currently considering not only Cluzzle
but also Wits & Wagers (Trivia Casino) for their
2005 holiday product mix.
To purchase a game or learn more about Cluzzle,
Wits & Wagers, or NorthStar Games visit their
website at
http://www.northstargames.com/ or e-mail Dominic
Crapuchettes at
dominic@northstargames.com .
EVENT SUMMARIES OF DINGMAN CENTER EVENTS
BACK-2-BASICS
"How to Spot a Winning Business Plan"
Panel Discussion with Professor David
Kirsch, Smith School of Business, Professor
Brent Goldfarb, Smith School of Business, Mr.
Pete Howton (CEO of Gray Hawk Systems), Ms.
Robin Hacke (Founder, Portview Communications).
Thursday, April 21,
2005
8:00 a.m. - 10:00 a.m.
Ms. Robin Hacke, Portview
Communications Partners
►
Business plans are different depending on what
you want to do with them. Is the plan for
yourself, or for someone else?
Ask yourself first what the plan is for, venture
capital, strategic buy out or for yourself to
develop your strategy.
► Business plan is a roadmap. It should give the
reader an idea of where the business is going,
how it's going to get there
and why it's worth the ride.
► They are more of a process than a document.
Form is not as important, as long as you cover
the key issues.
-- Know the space
-- Engage in a thoughtful way with the
issues and challenges
-- Have a level of trust and honesty- don't
hide or deny things- we can tell
-- Potential for returns
► Business plan is not the one document
you need to build a business, others are:
-- Executive summary of 2-3 pages
-- Elevator pitch: 2 minute description
-- Behind the business plan--more detailed
financials, customer recommendations, etc.
► We hate business plans that say the
market is $60B and we're going to get 1%;
instead tell me how you're going to get
your first customer.
► Two recommended books:
-- MIT Enterprise Forum- Business Plans
That Win Money
-- Geoffrey Moore- Crossing the Chasm
Professor Brent Goldfarb, Smith School of
Business
► One simple point: Know thy business.
► Lesson from the dot com era: What does
your business do? How does it make money?
► Takeaways
-- What is your business?
-- Focus!
-- If you can't say it clearly in 4
sentences, you don't know what your business is.
What problem are you solving?
Professor David Kirsch, Smith School of
Business
► Consider that, maybe, you don't need to
write a business plan. It's not necessarily the
first thing you should do.
► Why do entrepreneurs write business plans?
-- Strategy/Rational Planning Logic (private)
-- Help refine business concept
-- Links to growth
-- Marketing/Legitimizing logic (public)
-- Increases likelihood of additional firm
building
-- Ask yourself if this is the best way to
legitimize. Alternatives are sales,
incorporation, patents, etc.
-- Institutional/ Taken for granted logic
(automatic)
Distributed article “Why Business Plans Don't
Get Funded”
Mr. Pete Howton, CEO, Gray Hawk Systems
► Writing it down helps clarify what you are
going to do. Key things are:
-- What do I want to do?
-- How do I want to do it?
► Started out as a manager of 25 people for a
government contractor, realized that was the
best scenario for a business.
Having people working for you is the way to go. You
have the ability to go play golf, as long as you
have good partners
and management.
► Control is the paramount issue. Never go into
a business where you don't own 51%.
► Spirit, passion and relationships are
important. Relationship with the customer is
critical.
► Don't agree with all of Drucker's ideas of how
to manage people. I don't agree with “if you're
not good, get out.”
Phenomenal people may have dry periods.
► Credo- need to have a higher purpose or
dedication. With Gray Hawk Systems it is
patriotism, dedication to the cause
of “catching the bad guys.”
► Skill, luck and perseverance- any one of these
will work. If you don't have any skill, have
luck and perseverance.
► It's important to make decisions- go for it.
Hopefully you'll make few mistakes.
► Ran all self-financed businesses- think
through the tradeoffs of taking investment or
venture capital.
Questions and Answers
► What are the technical components of the
business plan?
-- Executive summary
-- Describe company
-- Describe market- what is the problem?
-- Customers
-- Product or service
-- How to get to product or service
-- Competition- substitutes, what are people doing now
to address the problem?
-- Distribution, getting to market
-- Finance
-- Organization
-- Appendices- don't give detailed appendices out until
you know who they are and what they want.
-- Finance- only a couple of years of pro forma
-- How much capital is required to get out?
-- Don't spend any time doing valuation- just makes you
look like an idiot. Have an idea but don't write
it down.
-- Need to be detailed enough to be convincing- be
realistic.
► How do you convince a VC it is a lucrative
investment?
-- Convince them that you are solving a problem
that has a real pain.
-- Count number of pages spent on technology
versus spent on the market. If there are too
many on technology and not
enough on market, there's
a problem.
-- Don't overstate your plans or over inflate
your value.
► When you're looking at a business plan- does
everyone need to have industry knowledge? Or can
you bring in partners?
-- Depends on the business.
► To Mr. Howton: Would you have benefited from a
more formal business planning exercise?
-- Yes, it can help.
► Have you seen business plan used as tool to
keep them honest? Look back in a year to see if
we really did it? Or are
plans just put on a shelf and not updated?
-- It needs to be a living document.
-- As you collect more information, you realize
you were wrong and adjust.
-- There is some discipline in writing things
down.
► How do you make the transition from one
industry to another?
-- Don't quit your day job.
-- Learn the lessons as you go.
► What are the right criteria to select
business partner?
-- Howton- Not sure I'm that good at it. If you
have tough economic times, you should take the
hit before your employees.
I give away stock, don't
sell it.
-- Hacke- It's like selecting someone to marry.
Know them very well. Do they complement you, or
go together because
you're the same? It's
helpful to see the person in a wide variety of
situations before you commit (sales calls,
dinners,
etc.)
-- Figure out all of the contingencies before
hand.
-- Kirsch- Write it down.
-- Rudy Lamone- View it the same way you would
view a courtship.
► How do you know when to exit?
-- Howton- All gut, if you can get over $150M-
then IPO at $200-300M level
-- Hacke- Think ahead of the lifecycle- find the
key point where businesses in your industry got
bought or died.
► How to know when to fail fast?
-- Make as few mistakes as you can; admit them
when you make them.
-- Have milestones- “if, then” statements. What
are results, milestones that should be reached?
-- There are lawyers that specialize in how to
fail.
-- Kirsch- There is a lot of hesitancy to take VC
funding, but one benefit is an honest mirror.
They're not in it to keep
business on life support.
-- Most precious resource is your time- don't
lose that.
DINGMAN DAY LUNCH
An opportunity to hear from successful entrepreneurs and venture
capitalists
Friday, April 22, 2005
12:30 p.m. - 2:30 p.m.
Guests:
Mr. Jeffrey Cohen, Managing Director of Quor
Venture Advisors, LLC
Mr. Adam Lehman, Managing Director of Rock Ridge
Ventures
Mr. Ken Kratovil, 2nd year MBA student and
current Dingman Scholar
The Dingman Day lunch featured
three speakers: Adam Lehman, Jeffrey Cohen, and
Ken Kratovil who spoke to Dingman Scholars,
students, and friends of the center. The trio of
speakers addressed the lessons learned in their
past entrepreneurial ventures and their visions
for the future.
The first speaker, Adam Lehman, a Managing
Director for Rockridge Ventures, and an advisor
to 2G Ventures shared his insight on critical
areas of focus that will contribute to a
successful entrepreneurial venture. Mr. Lehman
cultivated the majority of his entrepreneurial
know-how while spending seven years immersed in
AOL's international business development unit.
Prior to working at AOL, Mr. Lehman was a
practicing M&A attorney at a well known New York
law firm's D.C. office. Mr. Lehman holds a
Bachelor's degree from Dartmouth and a Juris
Doctor from Harvard Law School.
Mr. Lehman offered three core components as
essential to the success of an entrepreneurial
venture:
► Ownership
► Calculated risk through leverage
(financial and non-financial leverage)
► Creating new value
It was emphasized that even within a large
corporate environment significant value is
created through entrepreneurial thinking. As an
example, AOL created material value by exploring
new business models to identify other avenues to
create customer value beyond their ISP service.
Through this thinking, AOL was able to leverage
additional value from its portal and content
services.
Mr. Lehman concluded his presentation by
offering several common characteristics of
successful business implementations to help
to-be entrepreneurs remain focused on critical
value drivers:
► Leverage strong market knowledge and
relationships
► Incremental innovation as opposed to
creating entirely new markets
► Patience in starting and scaling
► Maintaining equity- avoid having 100% of
nothing or 2% of something. It is better to be
more than less generous with
your equity.
► Remaining focused on the startup despite
other job commitments outside of the venture
► Leveraging technology to enhance
productivity and efficiency to gain a
competitive advantage
► Creating the product as an experience
for the customer
The second speaker, Jeffrey Cohen, is
currently the CEO of MobileComNetworks and
Managing Director of Core Ventures. Mr. Cohen
was formerly the owner of PRM Corporation
subsequent to creating Sutton Place Gourmet
Markets. Mr. Cohen holds a Bachelor's degree
from the University of Maryland, College Park,
and a Masters in Business Administration from
the Wharton School of Business at the University
of Pennsylvania.
Mr. Cohen has an extensive background as an
entrepreneur dating back to his first wine
distribution business that he started after
graduating from the University of Maryland. He
went on to talk about the founding, growth, and
sale of Sutton Place Gourmet Markets, his role
in the acquisition and turnaround and sale of
PRN, and finally his current and future
involvement as CEO of MCN.
Mr. Cohen offered the following common factors
as contributing to the success of Sutton Place,
PRN, and MCN:
► Tenacity
► Listen to the customers needs
► Figure out who makes decisions when
targeting customers
► Build your personal brand
► Pick your skill and hire or partner with
what you don't have
► Partner with vendors in advance to
negotiate favorable trade terms to finance your
business
► Place yourself in the customer's shoes
to answer the question, “what does the customer
want?”
► Get into areas that you enjoy so that
you can relate to the customer's needs
The lunch concluded with a presentation from
current Dingman Scholar, Ken Kratovil on
alternative fuels. Mr. Kratovil began with an
overview of the Dingman Process, consisting of:
► Ideation
► Assessment
► Implementation
► Iteration
Mr. Kratovil then demonstrated how he used
the Dingman Process to arrive at the conclusion
that a viable business opportunities exists in
the Biodisel and vegetable oil fuel markets. Mr.
Kratovil framed the market beginning with a
review of unfavorable trends in the crude oil
industry which is leading consumers to seek less
expensive alternatives. He identified Biodiesel
and vegetable oil as viable alternatives and
discussed in detail the value offered, and how
the consumer can adopt the technology. Mr.
Kratovil also highlighted several business
opportunities including operating alternative
fuel manufacturer, raw material supplier,
distributor, and vehicle converter. He concluded
by expressing that he his pursuing involvement
in the industry through the Dingman Center and
after his graduation next month.
After the speakers had concluded their
presentations, they mingled with the audience
where several exchanges of contact information
took place. The lunch was a successful
educational and networking event that was well
received by all who attended.
OTHER UPCOMING DINGMAN CENTER EVENTS
Our events that are open to students and regional
entrepreneurs such as Back-2-Basics, Speaker Series
and Dingman Day Lunch have concluded for this
academic school year. Check our newsletter in
the next few months for the Event Calendar beginning
in September, 2005.
We welcome feedback on our events and suggestions
for topics or speakers you might wish to see next
year.
The events
listed below are typically by invitation only or have a limited
audience.
CAN
Breakfast
Monday, May 9
9:30 a.m. - 11:30 a.m.
Capital Access Network Angel Breakfast at
Montgomery County Technology Development Center
Companies: Select incubator companies from the
Montgomery County incubator and pre-screened Dingman
Center-sponsored companies. For more information on
the Capital Access Network, visit the Dingman Center
website.
Pitch Dingman
Competition
Friday, May 13
12:00 - 1:30 p.m.
Have you ever earned $500 in 5 minutes? Pitch
Dingman with your new business idea in 5 minutes . .
. and you could earn $500! This is how the
monthly Pitch Dingman Competition is being promoted
to University of Maryland students, faculty and
staff. While this event is not open to the
public, it is one of the many valuable resources
available in the Smith School of Business for
launching a new venture. For more information
on the Pitch Dingman Competition, visit the
Dingman
Center website.
Please see the story below for the
winner of last month's Pitch Dingman Competition.
PITCH DINGMAN COMPETITION -- WINNER OF APRIL
15 COMPETITION
Dingman Center Awards $600 in Monthly
Pitch Competition
There were two outstanding entries -- and
two winners -- for the April Pitch Dingman
Competition. The top prize of $500
went to NanoFlex and a second prize of $100
went to Optimum Productions.
NanoFlex is led by Silvia Hou, a
chemical engineering student. The company is
pursuing a technical innovation which could
have a profound impact on the fuel cell
industry.
Optimum Productions is led by Lee
Finkel. The company is a profitable event
planning company for student organizations.
Optimum Productions offers musical
entertainment, photography with online
photohosting, and other outsourced services.
UPDATE ON STUDENT-RUN BUSINESSES
Both of the full-fledged
businesses started by current Dingman Center
Scholars are officially up and running!
ShopDC, published by Rawlins Media,
which is owned by Dingman Scholar Zoey
Rawlins, appeared publicly in April.
Twenty thousand issues are being distributed
to high-end hotels in the Washington, D.C.
area, with a second issue planned for
October, 2005. This concept was not
even on paper in September of 2004.
Zoey worked very hard during the year to
bring this upscale shopping magazine to
life, with the assistance of fellow Scholar
Aviral Singh, and $7,000 in financial
assistance from the Dingman Center. To
learn more about ShopDC, visit the website
at
http://www.shopdc.com.
Hook and Ladder Brewing Company,
owned by Dingman Scholar Matthew Fleischer,
is awaiting its official licensing to be
able to sell the award-winning Hook and
Ladder Wheat beer.
After receiving a $10,000 investment from
the Dingman Center, Fleischer started
brewing several kegs of beer with the intent
of delivering samples to local bars and
restaurants in the very near future.
Check Hook and Ladder's website regularly
for a list of the restaurants and bars that
sell this Gold Medal winning beer at
http://www.hookandladder.com .
THE DINGMAN
CENTER FOR ENTREPRENEURSHIP
Founded by Rudy Lamone in 1986, the Dingman Center was one of
the first of its kind in the country and has emerged as a
top-ranked entrepreneurship center. Thanks to initial funding
with a generous grant from Michael D. Dingman, founder of the
Signal Corporation (now part of Honeywell International), the
Dingman Center continues to grow as a regional and national
catalyst in the field of entrepreneurship. The Center is now
aggressively evolving, and in some areas, is expanding its
services to further its role as a leader in the student,
regional, and academic entrepreneurial communities.
The Dingman Center is currently led by:
Asher Epstein, Managing Director
Dr. Charles Heller, Chairman of the Board and Director Emeritus
Dr. Scott Koerwer, Associate Dean, Executive Education,
Entrepreneurship, and
Marketing, Communications
Please visit our website at
http://www.rhsmith.umd.edu/dingman .
This
newsletter is co-sponsored by
Mailer-Mailer, at
http://www.mailermailer.com/
Previous
2005 Issues of Dingman Center
Newsletters:
April, 2005
March, 2005
January, 2005
February, 2005
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