Even in the face of plummeting market profiles and climbing
unemployment, it's a great time to start a business, counseled speakers
at the annual Entrepreneurship Conference at the Stanford Graduate
School of Business. Just be sure to use your GSB network connections.
Oh, and have some fun.
The day-long conference, held
February 25 as part of Entrepreneurship Week at Stanford, attracted
some 400 students and professionals to hear more than 30 speakers
invited by the student entrepreneurship club and the School’s Center
for Entrepreneurial Studies.
The conference got off to an
easy-going start with the humorous observations of keynote speaker Paul
Orfalea, founder of Kinko's Inc. Orfalea, who grew the copy chain to
1,200 shops worldwide, attributed his success to luck and observation
rather than business prowess.
I was very lucky I didn't have too many skills, he said.
graduate of the University of Southern California (near the bottom of
my class), Orfalea founded Kinko's in 1970 in Santa Barbara, Calif.,
after noticing one copy shop in town, frequented by University of
California students, always had a line out the door. He rented a space
and named the business Kinko's after his curly red hair.
sold the business in 2004 to FedEx and retired at the age of 50. Today,
he runs a foundation, invests in other businesses, and dispenses wisdom
on the speaking circuit.
One of the stories he enjoys
telling is how—lacking the ability to learn by reading, since he is
dyslexic—he learned about business from experience. I didn't like the
written word, he recalled, but looking at the students lined up he
could see a way to make money.
Too many skills and too much knowledge can get in the way of important things, he said.
advised young entrepreneurs to strive for balance in life. You'll be a
better leader if you're a more balanced person. All you workaholics,
drink some beer.
Despite a sinking economy, panelists
addressing Entrepreneurship in a Difficult Economy were bullish. Jim
Goetz, a partner with venture capital firm Sequoia Capital, urged
would-be entrepreneurs to follow their dreams. If you have the
passion, go ahead, he said. Don't let the current environment stop
you. There are plenty of folks with capital.
cautioned that in order to get venture capital, startups must focus on
capital efficiency and have a solid value proposition. Some of
Sequoia's significant investments today are in the medical device and
healthcare services industries.
Munjal Shah, cofounder and
CEO of Like.com, echoed Goetz’s advice about opportunity in a downturn.
. There is opportunity, Shah said. Get creative and figure it
out—and see me.
In 2004 Shah founded Like.com, a visual
search engine for shopping. The Stanford computer science graduate, MA
'97, advised being paranoid about having enough cash, even in good
To weather the recession and keep the company on the
path to becoming profitable, Like.com has eliminated employees even
though it raised $30 million last year. We sit on a lot of cash, but
you can't architect a business if you have to worry about cash, he
said. You have to be cheap up front.
president and CEO of Untangle, an open-source software seller, said
recessionary layoffs mean great talent is available for your business.
You can recruit the finest athletes and upgrade your team, he said.
You want to be in the strongest position when the economy turns.
said he has had to pare down staff and accelerate web development due
to the recession. The San Mateo, Calif.-based company plans to break
even next year.
Raising capital is tough for an early-stage
company, but how do you get started when you've never owned a business
before? The panel discussing Starting a Business Right Out of School
featured four GSB graduates who head their own companies, all started
in the past six years.
Darin Buxbaum, MBA '04, knew he
needed a lot of money to take his medical device company from idea
through R&D, trials, and approvals, and to market. It looked like
a very black hole, he recalled. But he said he learned to set
short-term milestones. Instead of raising $3 to $5 million at the
outset, he found $500,000 would let him build up enough of a track
record to impress subsequent investors and get a prototype in the works.
company, HourGlass Technologies Inc., is developing a device that can
be delivered orally to reduce stomach size. The incisionless
alternative to gastric bypass surgery is scheduled for market in 2012.
like the other panelists, said the Business School faculty and their
networks were helpful in connecting him to possible investors and other
serial entrepreneurs. In addition to angel investors, he is currently
seeking venture funding.
At the other end of the
fundraising spectrum was Pete Flint, MBA '05, CEO of Trulia Real Estate
Search. The three-year-old company has raised $33 million in venture
capital and now has 80 employees. Flint said the Stanford network was
not only valuable for introducing him to sources of income but also for
people to help build the business basics. He used students to do basic
coding for his website and the Business School’s Center for
Entrepreneurial Studies for office space. Of fundraising, Flint said
his first investors weren't venture capitalists but rather from his
network. I met my first investor in the entrepreneurship club at the
GSB, he recalled.
Brad Stroh, MBA '02, CEO of Freedom
Financial Network, and his partner bootstrapped the company with $1
million from their own pockets, friends, and angel investors. Today the
debt-relief company has 525 employees and three offices throughout the
West. He said his Stanford Business School connection was invaluable
when doing the groundwork for the company. A cold intro with you
saying you’re a Stanford Business School student is a very powerful
The GSB is one of the richest entrepreneurial
environments in the world, said Alyssa Rapp, MBA '05, founder and CEO
of Bottlenotes.com, a personalized internet sommelier service with wine
shopping, advice, clubs, and news.
Rapp said the Stanford
network helped introduce her to wine industry executives who were
instrumental in helping her map out the business and take the plunge.
I had a bunch of people who wanted to see me win, she said. If you
have people with obvious success stories coaching you, your risk is