Entrepreneurship@BU Newsletter: November 2011
View from the Trenches
Learning to Confront Challenges – First!
BU Competition Winner, Jonathan Sieg, Shares Advice On Challenges All Start-Ups Must Confront – Written by James Newton, GSM ’2012
When Jonathan Sieg (GSM ‘04) worked as a consultant while earning his part-time evening MBA (PEMBA) at BU, a sales executive at his company was robbed and kidnapped in Sierra Leon, Africa. Without the capabilities to reach him, his co-workers and family had to wait over three days until he finally resurfaced. Thankfully, he was unharmed, but the experience left Jonathan with a bad taste in his mouth.
“I remember thinking that there had to be a way to provide people with an instant-emergency service, like 911, especially given the cellular technologies available at the time,” Jonathan recalls. As he thought more about this idea, Jonathan envisioned a private service that would aid business executives while traveling abroad. He shared this business idea with his PEMBA classmates and was surprised by their positive response.
“Some of my classmates suggested a service for students while others talked about its use for their parents. I realized that this was something that most Americans could use and need, which was a big breakthrough during my initial ideation phase.”
While this idea grew, Jonathan participated in BU’s 2004 Annual Business Plan Competition, finishing second for a business Mobi2Go. This was a service and technology that would supply commuter and passenger trains with Wifi capabilities. Jonathan and his business partners were looking to launch the product upon graduation, but while developing the prototypes for the competition and preparing to bring the product to market, they quickly realized that funding was extremely scarce. This stark realization lead Jonathan to take his first job, post-MBA, with NMS Communications. On the cutting edge of building platforms for voice services, NMS afforded him the opportunity to better understand the unique characteristics of the cell phone industry.
After a few successful years with the company, Jonathan was even more confident that he was destined to provide services that would help people. As a result, he left NMS to start a new venture based on his instant emergency-service idea, MobiWatch. Best described as “On-Star for People,” MobiWatch is a 24-hour personalized on-call emergency service. The process to get the product off the ground was prototypical of any other start-up: long nights and weekends, no pay, asking favors from friends and even sleeping on couches. Nonetheless, Jonathan was passionate about the business idea and the possibilities it could provide. In the end, his hard work paid off and Great Call Inc. bought MobiWatch in November 2009.
“I am extremely proud of the time I spent on MobiWatch. I put my head down and worked continuously for two years, and I am eternally grateful for everyone who helped make it possible, especially everyone at BU. I don’t know if this would have been possible without the lessons provided for me in BU’s MBA program.” “Prior to the 2000s, it was much easier to raise capital. But at the turn of the century, funding resources dried up, which meant that to start a company, you had to be a more versatile and well-rounded businessperson. Without a doubt, the BU experience prepared me for the rest of my career.”
Jonathan’s advice to students with an interest in starting their own business is to confront the difficulties first. Prior to MobiWatch’s launch, he held focus groups at BU, which proved to be an integral part of the development process. “These focus groups gave us the opportunity to look at the negatives of our product. In order to know whether a new business can work, it needs to be tested in the market. I have been around numerous start-ups and entrepreneurs, and one great pitfall is to work in a vacuum. It is critical to face all of the negatives head-on and to work out all of the problems as early as possible.”
Jonathan remained as a consultant on MobiWatch for 18 months after the sale. The product, now called 5Star, is available both as a smartphone application and a small keychain-like device, and will be the focus of a nationwide marketing campaign from Great Call this Holiday Season.
How to Avoid Waking Up One Day and NOT Recognizing Your Own Firm
Ian Mashiter, Executive-In-Residence, ITEC
Establish the Right Corporate Culture Early
Entrepreneurs focus on many things when they start a company including their product, customers, and business model. Unfortunately, one area that is often overlooked is their company culture. However, this is just as critical a determinate in company success as any of the other business fundamentals. A company’s culture is hard to quantify, impossible to measure and difficult to analyze. Yet we all know when we encounter a company if its culture is positive and healthy or detrimental to its success.
What Makes Culture So Important?
In a start-up organization, a company’s culture is the operating system of the entire venture. If it is full of “bugs” it is going to restrict your progress and keep you from the success you are working desperately hard to achieve. Let’s analyze the cultural DNA of a typical startup:
- Work Harder. Successful startups, especially technology companies, are often characterized as places where employees work very long hours. However this work ethic seems to be a given, appearing from nowhere while impacting everyone in the organization.
- Work Smarter. While there are smart people in companies of all sizes, startups have a relentless focus on making their product or service exceptional. There’s a solid premise that they need to outsmart the competition, almost as if they were involved in an endless video game with their enemies.
- Work Nicer. Some consumer-goods startups are known for being excessively nice to customers, treating their customers as if they were favored members of their own family. They strive to satisfy their customers’ demands in an almost maniacal way.
Where Do These Cultural Mantras Originate?
Rarely does a startup (or any company, really) have somebody with the title of Chief Culture Officer. So, where do these cultural mantras originate? The obvious answer is from the founders. To a large extent they are the originators of the culture and they then transmit their beliefs to new employees and then the company begins to develop a life of its own, irrespective of its founders’ philosophies.
The early success and the failure of a company are key factors in shaping its culture. It seems to be easier to maintain a successful company culture when things are going well. However, that may not necessarily be true since it is easy to stop paying attention to the culture of an organization when things are running at lightning speed. Nonetheless, it is still imperative to focus on creating a positive culture. On the other hand, if the venture is struggling, then it is challenging to keep the culture healthy. People become concerned with the company’s future and their own job security… oftentimes leading to opportunities of second-guessing management decisions. Tune in to any sports radio show the day after the local team has experienced a major loss and you’ll see Monday morning quarterbacking at its finest, most intense moments.
It’s also important to acknowledge that time and growth changes a culture, and not always for the better. The management team needs be paying attention to its culture on a regular basis, regardless of whether they have 10, 100 or 1000 employees.
What Can You Do?
Once a corporate culture is set in place, it is hard to change. There’s plenty of advice on the topic of how to influence change – some good, some not-so-good. A CEO friend of mine took over a struggling venture with a disenchanted workforce a few years ago. He was told by his VC to buy the staff pizza every Friday and things would improve. Now while nobody turns down free pizza, the wounds are often too deep to be treated with a large pepperoni pie.
If your culture is off the rails or you have been parachuted into an existing organization whose culture is negatively impacting the company’s growth, prepare yourself for a long war, not a single battle. Communication is critical. Include your management team in all discussions about impacting change to ensure they are aware of their role and responsibility in changing the toxic environment. Do not be afraid to use the power of symbolic gestures. For example, if you are trying to create a more collaborative structure, consider turning your office into a conference room and moving your own desk into the main office. Remember, anyone who is not with you is against you and you need to get them out immediately! We all know what negative energy does to an organization. Your employees will thank you for it.
Advice For the Founding Team
- Nurture the Culture From the Start: At the launch of your company, take the time to discuss the type of culture that you want and need to create. Be creative and don’t fall into the trap of pursuing the startup cliché where everyone is equal, no secrets are kept, every decision is discussed and everyone’s views are treated with equal weight. Many founders try to create this culture and end up being disappointed and hamstrung by the result. Getting every decision vetted by everybody in the organization can be a recipe for frustration and lead to a lack of execution.
- Establish the Right Work Ethic: While it’s critical to set a good example of your work ethic, it’s just as important to inform potential employees during the interview process what will be expected of them. It’s much better to be upfront and honest, even if you end up losing the candidate.
- Develop an Executable Structure: Remember, you are allowed to put structure into a startup. It is OK to have procedure and managers. The amount of structure is your choice, remembering that you will clearly need more as your organization grows.
- Communicate Frequently: Decide upfront how you want to communicate with employees. Frequent communication is good but you don’t have to tell everyone everything as soon as it happens. However, regular, all-hands meetings are critical for a startup. Waiting for a regularly scheduled meeting to make announcements often gives you time to think more carefully about what and how you will communicate news. Plus, holding routinely scheduled meetings gives employees a sense of security, knowing they will learn important information at the right time. There is a lot that can be accomplished during an all-hands meeting but be careful not to turn them into cheerleading sessions. People are too smart for this. Be direct and if you have bad news communicate that carefully and honestly. However, if you have particularly bad news that can’t wait for the scheduled meeting then make sure you communicate this quickly and provide a response and/or recovery plan.
- Create a Sense of Purpose: While having a sense of purpose is intangible, this is where the great founders and leaders stand out from the crowd. Fixate on your mission. Communicate this at all times. If you want to produce the best tasting smoothie of all time, enlist the support of your employees not only to get behind the message but to also share the vision. This is where your role as CEO and cheerleader is best expressed.
It’s critical that you focus on the culture of your organization from the start to ensure you make it your own. However, keep in mind that you don’t have to copy any other company’s philosophy because you think this is the way “it’s supposed to be.” A Friday beer bash is not mandatory. A Monday morning coffee and bagels meeting might work just as well or even better for your company. Pay even more attention to the culture as you grow. It’s important to never neglect it or you may wake up one morning and find yourself unable to recognize the company that you built. By focusing on the culture that you want, you can make it unique and make it real!