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Wednesday, May 30, 2007 

Vol. 3 No. 10

Wharton Reunion 2007
(a first….a short blog entry that has nothing to do with cars)

As the last entry, on the 2007 NAFA Conference, highlighted its 50th, “Golden Anniversary,” I thought maybe it would be fitting to mark a small anniversary of my own recently. The University of Pennsylvania’s Wharton School Reunion 2007, was held during Penn’s graduation weekend, May 10th – 13th, and this year, for the first time (as an old alumni), I was honored to be asked to on one of the panel presentations, “The Entrepreneur’s Perspective – Lessons from Wharton Alumni.”

Now, I’m not sure what lessons I could give to a very bright audience filled with students and accomplished alumni entrepreneurs, but it was very interesting listening to the other two panel members: Jerry Turner W’57, founder of American Sporting Goods (maker of Avia, Turntec and AND1 brands) and Brandon Watson, WG’97, founder of IMSafer, Inc. The moderator, Bob Chalfin, W’78; WG’78, J.D. C.P.A, a Lecturer at Wharton,and President of the Chalfin Group, an accomplished entrepreneur and author in his own right, was equally informative and fascinating to listen to, so I was very, very pleased to be included in this panel. Being an experienced teacher at Wharton, Bob had the insight to override normal panel discussion type dialogue and jumped right into asking each of us just three questions, before turning it over to audience questions. The three questions for each of the panel members were: what were our three biggest mistakes, our three biggest successes, and our three biggest regrets… Revealing enough questions, of course…

In listening to the two accomplished entrepreneurs with me on the panel, each one kind of equidistant from my age in opposite directions, Jerry older and Brandon younger, it struck me that sometimes as an entrepreneur, we tend to get isolated and myopic in our struggles, and think that we travel a unique road of experiences. In fact, though our businesses where quite different, and ages were far apart, the fundamental elements of each of our experiences were quite similar. So the essence of an entrepreneur, that is, a few things expressed by each of us in different examples on the panel, can perhaps be distilled down to a few observations:

- Security and entrepreneurialism are, to be frank, opposite endeavors, at least until you retire or die… It doesn’t matter how big or how successful your enterprise, the essence of being an entrepreneur is an educated risk, we all have our neck on the line, every day, only the size of the “bet” (and the perks) get larger and more robust. I think Jerry described this best when he recounted how Phil Knight (founder of Nike), who had been an old friend and business client of his from the time Knight began in business, (and struggled with cutting a $10k check), answered his question of how it feels be running “a $10B company as opposed to a $10M company?” Knight answered, “pretty much the same, except for more zeros…” There were, indeed, many accomplished entrepreneurs in the audience as well, and we all echoed the same thing…even when conditions, and the banks and finance types, let us take a few chips off the table it is not the nature of the beast to head for security…the spirit to create, to build, to leverage, to be active in doing something different and in a different way, contradict the “clipping coupons” mentality, which, of course always requires personal risk, both financial and other kinds…

- Entrepreneurs are survivors. What may seem contradictory to the above perspective on security is not really, as, by definition, entrepreneurs are adaptable and always have a “back door” way to stay in the game and survive, even when the “worst” happens (and it usually does, at one time or another, to most entrepreneurs - I’m reminded of reading about Rupert Murdoch & News Corp’s very close brush with financial collapse a long time ago, when an entire financial workout agreement was held up and put in jeopardy by one small Pittsburgh banking institution, with the company’s continued existence in the balance…). I don’t think entrepreneurs, even very successful ones, are smarter than anyone else, but I do think they have an uncanny ability to adapt and survive, “until the wheel comes around.” One remembers that before the Internet boom of the late nineties, AOL was nicknamed the cockroach, as it changed its business model so many times just to survive before it hit the “wave” (remember it started out as a private, non-Internet based, network for gamers…), and more recently, "Paypal" started as a software encription firm. I think what Darwin said holds true for entrepreneurs, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

- Of course, hard work, determination, endurance, planning etc., are all necessary ingredients to entrenprenurial success, however, in each case as well success (and failure for that matter), is at least half luck, no matter how you look at it. A very wise (and successful) entrepreneur once told me that, way back when I was an undergraduate student at Wharton (along with the statement, “anyone who tells you different either isn’t an entrepreneur or is intentionally telling you a lie”). I’ve found many, many examples which verify the truth in the statement. I once heard (from a reliable source) that IBM as much chose Microsoft as its vendor for DOS (its second contender) because the front runner vendor made the IBM executives who paid an onsite visit wait too long to see him…so IBM chose the second in line…and the rest, as they say, is history.

I immensely enjoyed the panel and the experience, and was fortunate enough to take in some of the other presentations and receptions while I was there; it was, as expected, quite an event. I’ve always been kind of in awe of the whole “Pennstitution” thing itself, from the first time I set foot on the large city center campus, through the seven years I spent in two schools, and now way after I left it all. The people, of course, make the over 200 year old institution and it still contains the most talented group (students, alumni, affiliates, etc.) I’ve ever met, although I may be a bit biased in that regard. It’s no mystery why I’ve been in business with many of my former classmates and other alumni, why I look for Penn interns, and have kept an office in the “Science Center” just outside Penn’s “University City” for many years. The environment and its community have always managed to keep even my poor brain active, which is quite an accomplishment…

** A FOOTNOTE: when I was leaving from the presentation, a gentleman came up and said that he liked what I said, and that he had seen me before in a former talk I did at Wharton. We started talking and it turns out he is the co-founder of one of the hottest new start-up properties in Silicon Valley-- Spock (a company on which I had just read great detail in the Wall Street Journal), funded by big VC names like Clearstone Venture Partners and Opus Capital Ventures. Spock is a company that is destined to revolutionize “personal search” in a way untouched by search services like Google. Currently in “invitation only” launch, it already has over 100 million peoples’ information indexed, with millions more added every day. With the caliber of people like that in audience, I can’t help but feel that maybe our places should have been reversed. In any event, I ask, how can one’s brain or enthusiasm not be charged in the company of such folks?


I've read your blog for several months now and have found it to be well written, informative, and interesting. My only complaint would be that you don't post frequently enough. But, I had a question about this post. From your experience in the auto industry, do you feel that it fosters an entrepreneurial environment?

More specifically, it seems like the search industry, i.e., Google, Yahoo et al, seems to spur a new startup a week, for example, Spock. The auto industry seems to have only one new company enter the market every six months.

Any thoughts on why that might be, or even if that's true, and is it something beyond the lack of desire of VCs to fund companies related to the auto industry and few exit strategies?


Thank you for the kind words…its good to know someone is reading and actually likes what I write… As to not writing enough, point well taken, I seem to only be able to find the time to write these days when I’m not traveling, which makes my desired goal of writing something once a week unachievable lately, I hope to get back on a more regular schedule soon.

As you your question on the auto industry fostering entrepreneurship, well, that, in my view is worthy of an entire blog post or two. Having a little experience in both worlds, it’s a question I have thought about for a while now, and although the answer is clear, as you indicted, the reasons behind the answer offer plenty of discussion and controversy.

In short, I think you are very correct that the auto industry, for all of its size and impact, does not foster entrepreneurship, the reverse actually, the secular environment fosters the antithesis of new venture growth. This, in turn, causes most new innovation, when it does spring forth, to come almost completely from the “outside” non “car guy” world, which, without a firm grounding from the “inside” also tends not to work (take a look at most of the “bubble” Internet car related companies, they were funded with high dollars but not an experienced “car guy” in management to be found - most crashed and burned). This feeds in on itself, as the past experience creates the lack of desire for VC’s and sophisticated capital sources to fund new auto ventures (despite the large market, prospects for growth etc.).

So that’s the summary version of my views on your very perceptive observation, but I have more detailed thoughts and would really like to expand on this a bit, as a full blown blog topic, with the idea that, perhaps, there are others who might want to read and share views on the issue. So after the Car Rental Show & NVLA Convention blog entries, I’ll write more on the subject as a blog topic, and invite you to evaluate my observations.



I just saw your response to my original comment after reading your latest post. Once again, thank you for inviting us into the conferences you attend with your posts.

After leaving a comment on your blog, I started a blog of my own to cover startups in the Auto Industry. I am hoping that eventually new companies in the industry will contact me directly, until then I am using press release announcements, conversations, and a little sleuthing to find new companies.

A company in particular I have been thinking about covering is Carliquidators.com, though I have yet to do it. I would definitely be interested in reading any thoughts you have on innovation in the car industry or carliquidators.com.

My blog is http://autoventures.wordpress.com

-Keep writing and I will keep reading!



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