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The New Economy: Welcome! Now justify your ideas
Tuesday, May 09, 2000 By Ken Zapinski
The judges sat on a raised dais at one end of the room. The audience sat hungrily at the other. In between, Astro Teller paced back and forth. "It's like a shooting gallery," he said.
The co-founder and chief executive officer of tech start-up BodyMedia was about to outline his company's business plan for a panel of business experts ready to poke and provoke and generally see how Teller's ideas stacked up. And dozens of lawyers, financiers and fellow tech heads had paid $25 apiece to nibble on chicken-on-a-stick, sip their favorite libation and watch the drama unfold.
Think of it as an oral business school examination combined with the voyeuristic pleasure of public TV's "Antiques Roadshow," with the added excitement of freely available beer and wine.
Last Thursday's event was a regular gathering of the MIT Enterprise Forum of Pittsburgh. The original forum started on the campus of the Massachusetts Institute of Technology in 1978 by a professor who liked critiquing business plans.
The program, intended to promote the growth of innovative tech businesses, has since grown to 22 chapters in the United States and six foreign countries. The Pittsburgh chapter was founded in 1986.
Since then, dozens of local entrepreneurs have subjected themselves to this very public crucible, willing to take their lumps in order to gain new insights about what they're doing right -- or wrong.
"People are looking for that kind of reality check," said Pittsburgh chapter board member Carlton Ketchum of insurance broker and consultant Morrell, Butz & Junker Inc.
Well, not everybody, perhaps, because the stakes are so high.
On more than one occasion, the money men who came to the forum to see their company on display have forced top managers out after a particularly dismal performance, according to Richard V. Westerhoff of law firm Eckert Seamans Cherin & Mellot, one of the founders of the Pittsburgh forum.
Angela C. Kennedy knows the value of the exercise. As CEO of Wisdom Technologies, which develops software to help fixed-income portfolio managers and corporate treasurers make better decisions about the bond market, she took the plunge a year ago and today is reaping the benefits.
One participant that night suggested that the "killer app" that the company needed was an international version of the software. That tool is now under development.
Another participant, a Mellon Bank executive, provided some insights on strategies for approaching partnerships with big banks. Just last week, Kennedy said, her company had reached agreement with Citibank for the financial behemoth to pitch Wisdom's software to its corporate customers.
Kennedy was back at the Enterprise Forum on Thursday. This time, though, she was on the dais to throw the spotlight on Teller, whose company plans to build and sell wearable computer monitors that would beam an individual's health information to a Web site.
Much of the discussion focused on Bodymedia's reliance -- or could it be overreliance? -- on outside contractors and consultants. The company has 15 full-time employees -- and another seven full-time outsiders working in its office. The company pays twice as much for consultants of all stripes than it does on payroll.
Teller said he had been trying for more than a year to convert two of Bodymedia's consultants into employees but they continue to resist. Panelist Evan Indianer, who owns a tech consulting firm that does some work for Bodymedia, pressed Teller on that point.
Venture capitalist Sean Sebastian, another panelist, took a dim view of Teller's model. He said he likes to see the first 20 to 40 workers at a start-up to be full-time employees who are invested spiritually in the company, people "who eat, sleep and breathe the company. They just can't help it."
Sebastian's verdict: "You just can't get that with a consultant." A company has to be careful that it doesn't outsource so much that it is "a hollow company" with "no critical mass within."
After Sebastian had his turn, audience members prepared to fire their own tough questions at Teller: How was he planning on breaking into international markets? How would he cope with complex federal Food and Drug Administration regulations? And just exactly how did he intend to store the gigabytes and gigabytes of data Bodymedia would collect on a daily basis?
"Take center stage," Carnegie Mellon University associate professor Donald Marinelli, the moderator, told Teller. "So I'm not in the line of fire."
Zapinski, an editor with post-gazette.com, writes weekly on the New Economy and can be reached at kzapinski@post-gazette.com, or 263-1614.
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