Just Managing: Give Me an 'A'
James Marcus knows more than a bit about business. Though
he's just over 30, he has raised venture capital for two different
companies, is versed in the arcane language of mergers and acquisitions
financing, has endured the tough lessons of firing people and can
rattle off the relative logistical pros and cons of different point-of-purchase
promotional tactics. And what would the Harvard Business School
grad, who ran a small company before building one of his own with
a classmate, say is the biggest lesson he's learned from his career?
Always take the "A" deal. In other words, when scoping out the
entrepreneurial landscape, don't focus on ventures with merely a
logical chance of succeeding, as Marcus and his colleague did when
they built a holding company comprised of myriad small beverage
distributors that they had acquired. The two of them calculated
the opportunities available to them at the time, presented their
case to venture capitalists, raised funds and then, with a great
deal of difficulty, built their company, JMF, into a profitable
But Marcus learned the hard way that even though maniacal work
can make a flawed or weak business succeed, it makes much more sense
to launch a business that doesn't face such challenges from the
"If you have an idea that is in some ways inconsistent, you can
overcome that with an incredible amount of effort and diligence,"
he says. "But if you can find a venture that doesn't have a glaring
weakness and apply that same type of effort, then after half that
time, you can build a much larger and more satisfying company."
These days Marcus is CEO of UniversityAngels.com, which he would
most certainly call his "A" idea. The site serves as an online network
to connect angel investors with entrepreneurs from roughly 75 of
the nation's top business and academic institutions by tapping into
the natural networks that exist among the alumni of top universities.
The basic premise of the business is that while various individuals
may have great business plans, and other individuals may be willing
to back them, it's often difficult for the two to meet.
UniversityAngels bridges that gap by offering an angel registry
and enabling angels to connect with individuals at universities
who have submitted business plans. The company, which takes a small
stake in companies that launch after taking advantage of UniversityAngels'
service, has received two rounds of backing itself.
Marcus formed UniversityAngels with three fellow alumni from Harvard
Business School. At a reunion earlier this year, the four realized
the potential value of a resource that would duplicate the very
function they were attending. After careful planning and many hours
of moonlighting to build the site, they launched it full force this
spring. It already has surpassed their expectations, lining up financing
for one software company and gearing up to do the same for eight
to 12 more by the end of the year.
Though the UniversityAngels venture was launched in Internet time,
the founders actually exercised patience before throwing their entire
lives into it, heeding Marcus' warning to be thorough up front when
launching a venture.
"Wherever you go as an entrepreneur you will have your whole life
thrown into the venture," Marcus says. "And I realized before I
started UniversityAngels that I didn't want any more 'B' ideas."
Easy enough, but "A" ideas are hardly easy to come by. There is,
however, a simple test for determining whether an idea rates at
the top of the alphabet. It all goes back to the question of whether
the dogs will eat their own dog food, a common query in Silicon
The idea behind the dog-food test is to learn whether people would
actually consume the product that wild-eyed entrepreneurs are creating.
But let's take that one step further: Do the people running the
venture consume what they produce?
Perhaps the question to ask is, "How much do you care about your
product or service and how loyal a customer would you be of your
Granted, the dog-food test is not applicable to every enterprise,
but the larger point remains. Is the mission or purpose of your
venture naturally aligned with your own personal goals and values?
Do you believe in the product or service you are producing? Has
it emerged naturally from your own needs or interests?
UniversityAngels certainly fits that bill for Marcus and his colleagues.
Moreover, his venture taps naturally into the power of the Web to
build communities and to amplify the power of existing networks.
It's too early to say whether UniversityAngels will fly, but it's
a safe bet that Marcus and crew have found their "A" idea and will
have a more satisfying ride as a result.
Read or print the Intro
and Chapter 1.
Read the book reviews at Inc
Read the publisher's press
this book from Amazon.com.
the companies that Tom discusses in the book
Hear a recent lecture by Tom on the Startup Garden
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Managing – articles that Tom wrote for The Industry Standard and some
written for Inc., Fortune Small Business, Harvard Management Update, and other
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