Shareware Overload/ShartewareOverload.cdr/games/success.zip/SUCCESS

Text File | 1987-07-06 | 21KB | 457 lines

Copyright
[c] 1987 by Michael Finley Writing Services
2096 Dayton Avenue * St. Paul MN 55104 * [phone]




CAPTAIN

OF THE
ENTERPRISE

As
professor occupying the University's new Curtis L. Carlson Chair
in Entrepreneurial Studies, Richard Cardozo is sort of a sitting
duck.  There are lots of self-styled entrepreneurs in the world who
scoff at the notion that what they do can be taught in a classroom.


Entrepreneurism
is just business guts, they will say -- the fortitude required to
come up with an idea, pursue it on one's own time and at one's own
risk, and work, work, work until the idea catches fire.  And that's
just something you can't learn from a book.

Cardozo agrees -- to a point.  "Part of the problem is that you've
got this word, entrepreneur,
which everyone's got a different meaning for.  My own definition
veers away from the idea that is a single thing -- there are many
types of entrepreneurs."

An entrepreneur can be an idea generator, an inventor, a strategist,
a planner, a manager, anyone with a knack for identifying an opportunity
and pursuing it -- even an investor.

Entrepreneurs tend to start small, he says, but there is no law
that says the spirit has to die when their business reaches a certain
scale.  "Look at Curt Carlson himself -- his companies are large
now, yet he remains a consummate entrepreneur.  3M is a giant, but
it still has that entrepreneurial fire."

Cardozo, whose background includes one foot in academics as member
of the University's marketing faculty, and the other in practical
business as board member and consultant to numerous firms throughout
the region, has no illusions that entrepreneurial studies will be
cranking out a steady stream of Edisons and Fords.

"There are not many Ben Franklins in business, people who invent
a product, develop it, market and sell it, capitalize it and oversee
its growth.  Frankly, that notion has been the demise of a good many
solid entrepreneurs -- the idea that they have to do it all, that
they can't rely upon the rest of the team."

Even if an entrepreneur believes he or she can go it alone, banks
will usually indicate otherwise, and suggest, for example, that an
inventor-type entrepreneur team up with a financial-type entrepreneur,
for the good of the enterprise.  "With the emergence of the leveraged
buyout, we have the example of the entrepreneurial team -- where
existing management buys a company from its stockholders, and puts
it aright.

"Part of the lesson of entrepreneurism is that a business is more
than just one person.  One of the first questions you ask when you
begin a business is what will become of it later?  Who will buy it?
 You get to the point where the question isn't 'What should I do
for it?' but 'What is best for it?'  'Have I done all I can do?'
 'Is it time for another hand to take the helm?'

But that's the end of the road, and the beginning is a program such
as Cardozo is heading.  "A guiding principle is that there is much
that is known about why and how business ventures succeed, or fail.
 Call it institutional memory, call it culture, but the wisdom is
there,and the new entrepreneur very likely doesn't have it."

It's a tricky business, Cardozo said.  "My job isn't to stand at
the gate and tell aspiring entrepreneurs not to try something, that
it can't be done.  True entrepreneurs turn those principles upside
down all the time."

#
 #  #


NOT
CRAZY, JUST DREAMING:

Alumni
Entrepreurs Wish Entrepreneurial Studies Could Have Spared Them the
Terrors, the Errors

By
Michael Finley

#  #  #

People
weary of reading about entrepreneurs and entrepreneurism may wonder
why an otherwise adequate language like English has to borrow from
the French to describe business people who take financial risk upon
themselves in the pursuit of profit.

"Entrepreneur,"
the dictionary says, literally means "undertaker," as in "one who
undertakes to achieve something."  And that's why we use the frenchified
term -- because we think of "undertakers" as a profession with rather
more certainty than risk ventures.  And because the awkward English
word "enterprisers" makes us want to beam up, Scotty.

The word has been coming on like gangbusters lately, for lots of
reasons.  It's as American as apple pie, for one thing -- entrepreneurism
is something just about anyone can aspire to, from Lucy and her 5
cent psychiatry sessions to billion-dollar ventures.  It can happen
in any industry, with any product, service, or combination of both.
 New jobs, new wealth, innovations and risk -- it adds up to leadership,
and the University has been producing its share for many years.

*
 *  *

Take
Marc Kramer, half of Kramer-Lieberman & Associates, a Minneapolis
film production house. By no stretch of the imagination was he bred
for entrepeurism.  "I wanted to be part of corporate life," the 1981
MAIR (Masters Degree in Industrial Relations) graduate says.  "I
wanted the security."

Trouble was, the economy soured as soon as Kramer graduated and
he found himself out on the street.  "I was devastated.  I'd always
worked, ever since I was 14.  I expected Social Security to call
asking where my contribution was."

Kramer papered his apartment walls with the 280 rejection letters
his resumes drew, and the terror was upon him, until a friend of
a friend suggested he work as an "extra" in commercials.  Kramer
found he loved the medium and the medium liked him OK.  And his business
acumen smoothed his way to a series of financial management jobs
with a local casting agency.  Part of his job was hiring models and
actors.

"It was a grind," he says, "auditioning thousands of beautiful women.
 But somebody had to do it."

Kramer's education came into play.  He had done a study on the decentralization
of the entertainment industry.  More and more commercial work was
being shot on location, and that meant opportunity for regional producers.
 He presented a plan to a local producer who loved the idea and hired
Kramer to set up an "industrial entertainment" production company.

Enterprises
began to fly to him now.  A public stock offering raised cash while
his company produced educational films, and yet another partnership,
underwritten with $4 million, aimed at the stars -- production of
a full-fledged Hollywood movie.

The movie was That
Was Then, This Is Now,
filmed in Minneapolis, the story of two boys who grew up as best
friends and then grew apart.  At $2.5 million it was cheap by Hollywood
standards, but a fair piece of change for Kramer.

"It was fantastic.  Hollywood stars were all over the place.  Emilio
Estevez had more of my autographs [on his checks] than I had of his.


 "We had 100 temperamental employees, all getting paid a lot of
money.  Union contracts stipulated when they could take breaks.
We had to feed 125 people, sometimes in middle of nowhere, with the
cook chasing me from place to place for grocery money.  We had huge
crowds of onlookers we had to control.  It was crazy, and it got
into my blood."

Back in reality, however, Kramer knew he needed a more reliable
cash generator than movie rentals.  He and Lieberman (a founding
member of the pop/jazz vocal group Rio Nido, and a singer-songwriter
with reams of credits) founded a company to bring Hollywood-level
creative and production values to industrial communications.

Kramer-Lieberman & Associates thinks it invented the concept of
"corporate entertainment."  A recent General Mills sales meeting
featured live corporate theater featuring zany characters, songs,
dialogue and laser effects.

"It's a way to present corporate information in a way that people
will listen to, and remember," Kramer says.   "The creative is what
drives us and gives us value, but it's the business that keeps us
in business," Kramer says.

"It's funny.  We've never gone over budget and we've never missed
a deadline.  But we have to all market, all four of us -- no prima
donnas.  It's all part of running your own enterprise.  I call it
terror."

*
 *  *

Terror
and high hopes are the daily bread of entrepreneurism, where success
spells freedom and failure is taken very, very personally.

Paul Stormo, president of Artograph, Inc., of Minneapolis, knows
all about both.  Stormo knew even as a student at the University
that the entrepreneur's life was for him.  Buy a tired company, patch
it up, make it work, sell like crazy and retire early -- that was
the plan.

The idea worked smoother in the textbooks, where Stormo first read
it.  His first move upon graduation in 1971 with an MBA was to go
to work for Graco, Inc., which sent him to Europe for several years.
 Cutting his teeth on a Graco castoff, H.G. Fischer X-Ray, Stormo
laid plans for buying the kind of company that could really take
off.  By the time he returned to Minneapolis in 1976, he had found
it -- Artograph, Inc.

"I wanted a company with existing national distribution, one that
duidn't require any particular industry knowledge or experience on
my part, one that I could afford and that needed new management."

Artograph
had existed for years as a manufacturer of enlarging and reducing
projectors for the graphic design trade, selling them to art materials
vendors nationwide.  The devices had many manufacturers, and been
around for years -- indeed the process is said to have been invented
by the painter Michaelangelo, whose camera obscura technique was
nothing more than a hole in a wall, against which the image of whatever
was outside was projected on the inside.

But Artograph had introduced no new products for years, and was
starting to fade like an old frescoe itself.  Today, Artograph keeps
28 employees busy at its Plymouth plant, and the secret of its success
has been mostly a knack for research and development, and a commitment
to introducing new product.

But success came at a price.  "Our big goof was in ignoring R&D
for a while about three years ago.  I was my fault.  I put the company
on automatic pilot for a while, and it's been catch-up ever since.
 Our big lesson has been that you can't experience growth without
the constant feeding in of new products."

But Artograph has made up the lost ground.  Its latest product could
well revolutionize the stat machine market.  Carrying a price tag
of only $1,000, the machine uses advanced miniaturization to achieve
what previous low-end statmakers costing as much as $5,000 do.

"Within a year and a half, it should be our top selling product,"
Stormo said.  "We've already gotten great advance reception in the
industry.  Though there's lots of competition, no one has a product
like ours, or our selling and distribution network."

Is Stormo protecting his rights with his new moneymaker?  No.  "The
copycats will come regardless.  Our philosophy will be to continue
to develop good products for the future, and not worry about protecting
the present or recent past.  This machine is good, but something
better will replace it, and soon."

Stormo also has few illusions about what good R&D means.  "We're
not true innovators, in the sense of creating brand new products
with new applications and principles.  That's too much for most small
companies to handle.  We're looking to take what is known or what
exists and to push it one step further, or two steps at most.  Marketing
is hard enough without having to stop people and educate them about
what a new product is and why people will need one."

Ruth Stormo, Paul's partner in both the business and marriage sense,
serves as the company's international sales and market research manager.
 They both know that their industry stands on the brink of a major
shakeout.  Computerized desktop publishing will wipe out a large
segment of the professional graphic design industry.  Artograph has
hedged its bets somewhat by diversifying in the area of value-added
computer products.  If you can't beat 'em, Stormo says, you can sometimes
meet them on their own turf.

And no
more coasting.
 "No more reaping benefits before their time.  I'm putting in the
long hours that the work needs.  When I sell this thing, I intend
to get my price."


*
 *  *


                                                       447-8629
Unlike
Paul Stormo, whose #1 rule seems to have been "Avoid Reinventing
the Wheel," that's pretty much what Dave Dornbush, president of Minneapolis'
Alternative Pioneering, has done.

Alternative Pioneering is the maker of something called the Harvest
Maid Home Food Dehydrator, a device for making thinks like beef jerky
and fruit rollups at home.  And Harvest Maid had to create its market
from scratch.  Dornbush, MBA 196?, and several partners got the idea
for Harvest Maid back in grad school.

Dornbush and company decided they wanted to manufacture and market
a home-appliance product with "veiled market potential."  The market
had to be small enough to keep big manufacturers from jumping in
after them.  But it had to be genuinely useful, so that it actually
met the market need it sought to create.

And it had to be proprietary -- they wanted to sell accessories
to cash in on repeat business.

The food dehydrator seemed to fill the bill, and Dornbush recalls
thinking he had it made.  Entrepreneur
Finds Gold in Prunes,
the headlines would say.

"It was touch and go for a long time.  We had problems with our
manufacturer, we ran out of money several times, and key people started
to leave.  I kept thinking, 'I've heard horror stories like this.'"

Just
when it seemed Dornbush himself might be hung out to dry, the darkness
passed.  Fresh capital arrived in the guise of a benevolent takeover
by Frank Griswold, himself an entrepreneur, who put Alternative Pioneering
back on its feet.  Better yet, the Harvest Maid machine was picked
up by Montgomery Ward and advertised on the inside cover of a catalog.
 Alternative Pioneering was a success.

En route to success, however, Dornbush learned many things that
might be uttered and heard in a classroom, but never quite learned.
 Still, he is enthusiastic about entrepreneurial studies.  "The heart
of good business, I am convinced, is good planning, and most entrepreneurial
types need help in that area.

"Just having a really good idea is no guarantee of success," he
said.  "If I had it to do all over, I would make sure that we gave
more time to planning.  Poor planning is the Achilles' heel of even
good businesses."

*
 *  *

The
President of InterFinance Corp. Of Minneapolis knows all about entrepreneurs.
 As publisher of reference books and periodicals directed toward
high technology startups and venture capital groups in the United
States and internationally, Dileep Rao is in touch with more entrepreneurs
than just about anybody.

And as head of his own company, which itself faces all the problems
he consults other companies on, he is one.  And it is rough sledding
all around.

"Frankly, I'm concerned these days about Minnesota as a place for
people with business ideas," Rao says.  The University's entrepreneurship
program is as good a place as any to focus on the challenge locally.

"I
am especially concerned about our state as a place for high technology.
 There was a time very recently when the state was billed as a leader
in this area.  But that is not how we are regarded by others.  Even
a casual look at the literature shows that Minnesota firms are seldom
mentioned in high technology.  Is that because we don't get good
publicity, or is it because it is true?  It's a very important question."

Entrepreneurs
carry risk, Rao says, but they can't even begin to do that without
proper capitalization and support.  In California, New York, and
Massachussetts, the capitals of capital and of high tech, venture
capital groups very commonly incubate their own enterprises, creating
the concepts and providing management, helping to assure success.
 Money actually creates leadership, and not vice versa.  Apart from
some similar work done by Control Data, and that on the decline,
Minnesota is not competitive in that area.

Rao is in most matters a contrarian.  His philosophy of risk for
example, is that entrepreneurs achieve the most when they expose
themselves the least.

"When I began my own business, publishing directories, I was terribly
ignorant of the high cost of publishing.  If I had known of the risk,
I wouldn't have tried.  By the time I published, I really had
to publish, to recoup my investments.  Fortunately, I acquired some
good up front account contracts, and that saved me."

He is likewise contrary in his vision of entrepreneurial success.
 "Most venture capitalists will say that good management is more
important than a good product, but I disagree.  To me, nothing beats
good demand for a product.  A good product with a good market pulls
along mediocre management routinely.

"I always like when a product has an excellent track record.  Then
you can always bring good people in to maximize profit."

Contray to his contrarianism, Rao is excited about entrepreneurial
studies.  "Why not?  What reason is there to think that the principles
and experiences and philosophies of those with entrepreneurial experience
can't be transferred to people without it?   My only caution would
be about meeting the expectations of students.  Learning the process
of entrepreneurism will not transform them into entrepreneurs."

Minnesota gravely needs new entrepreneurial blood, Rao says, particularly
in high technology.

"We can't afford to be complacent.  I myself am dependent upon the
changing trends in high technology.  If it pulls away from Minnesota,
I would find it difficult to stay here.

"I grew up on the western coast of a country," he said, referring
to India.  "I could see seeing sunset on the ocean again."

#
 #  #

Bob
Buuck, MBA '71, certainly deserves to be on even the shortest list
of U of M alums.  As president and co-founder of American Medical
Systems, a $42 million manufacturer of urological devices, he took
a company a very long way in a relatively short time.  But what makes
his case especially interesting is his delight in having been acquired
this year by pharmaceutical company Pfizer, Inc.

"We started AMS in 1972.  There  were four of us -- the others had
the medical and engineering backgrounds, I was the business fellow.
 I swallowed hard and ventured out into the cold."

Why take on the danger and uncertainty?  "You have to have the entrepreneurial
philosophy," Buuck says.  "It holds that opportunities don't come
by every day -- when one does, it's a window that must be opened.
 This was my window."

AMS didn't even have a product during its first months, just a concept.
 "It was a classic shoestring operation.  By the third year we were
still undercapitalized, and that by a $500,000 loan against my personal
collateral -- which amounted to maybe $20,000.  But the bank was
smart -- they knew how to motivate me."

With the first crumbs of venture capital came unfavorable intrusion
into the business -- that "angel" enjoyed rights of first refusal
and a strong stock position, and should have turned Buuck and company
off to the idea of allying itself with another company again.

"I'm still not an 'enthusiast' for being a takeover target," Buuck
says.  "Our acquisition just happens to have worked out very well
for us.  No jobs have been lost, some have been enhanced, while a
few have been 'un-enhanced', as financial controls have reverted
to the parent company.  And we finally have the financial strength
to do what needs doing."

Buuck claims he feels more entrepreneurial than ever, as he sits
on the boards of several small startups, and keeps an eye out for
promising new enterprises.  And getting that "great idea" through
to a market is still the greatest high in business.  "When I was
first called an entrepreneur, I felt insulted.  You wanted to fill
out the phrase, 'entrepreneur indicted for ...'

"Today I'm more comfortable with it.  As Dick Cardozo says, it's
not one thing, but a range of behaviors.  You ought to be a bit of
a scrapper, you need to have a high energy drive, and maybe it helps
not to come from a pampered environment.

"You don't want to be crazy.  But you ought to have a dream."

#  #  #