A LOOK AT DECEMBER'S MEETING

Building Your Start-up Team

by Lisa Dorward

Bob Creeden and Steve Rubin entertain Venture Fo rum members with their interactive presentation.

Robert Creeden and co-speaker Stephen Rubin, '74 gave an interactive presentation on the critical but often overlooked fundamentals of building a management team at the December 13 WPI Venture Forum meeting.

To stay ahead of 95 percent of the entrepreneurial pack, it's essential to build a "Grade A" management team. Creeden's maxim that "investors will invest in a Grade A team with a Grade B idea before they invest in a Grade B team with a Grade A idea" is drawn from his experience as a seasoned venture capitalist and from reviewing thousands of business plans. It's a particularly salient point for technology start-ups where "The Idea" is king.

The three questions that naturally follow this hard-hitting advice are:

What skills and attributes should the team members have?
Where do I find the team? and
How do I pay them?

Creeden and Rubin tackled these questions with a humor-infused presentation to a rapt audience.

How does an entrepreneur identify those who have Grade A management team qualities? Chemistry is a key element, along with decisiveness, willingness to challenge, the abilities to listen and take risks, and good old-fashioned integrity. The candidate must also be enthusiastic about the technology, focused on the company's objectives, and share value systems. Using tools like Myers - Briggs personality indicator testing, Maslow's Hierarchy of Needs, and even asking their opinions on the American League's designated hitter rule can help identify ideal candidates. Rubin emphasized that "stellar execution comes from the expertise of the team."

Investors' perspectives on the management team include assessment of management's willingness to listen, their experience, and whether they understand they can't build the business by themselves. Creeden gave a scenario on preparing the management team for investor panel examination.

Finding team members can seem daunting. Networks of other entrepreneurs, service providers, forums, advisors, and the Board of Directors can assist in identifying and contacting potential candidates. The Board of Di rectors should be considered an integral part of the management team. Include members with operating experience who will help run the company. The Board should challenge the team, contribute to good corporate governance, and offer strategic planning. Director and management compensation, equity, and term limit issues were addressed in the presentation.

An audience member asks the case presenter about the VoIP industry.

Robert Creeden, MBA, is Managing Director of the Center for Innovative Ventures at Partners Healthcare, former general partner at Egan- Managed Capital, and former VP of the Massachusetts Technology Development Corporation.

Stephen Rubin '74, is Chairman of Longwatch, Inc., a start-up venture focused on video surveillance for water treatment and other infrastructure facilities. Rubin founded Computer Control Systems, renamed Intellution, that was acquired by Emerson Electric in 1995. He is an alumnus of Harvard Business School's Owners and Presidents Management Program. He was the 1989 recipient of WPI's Ichabod Washburn Award for Professional Achievement by a young alumnus.

The meeting was ably moderated by Jerrold M. Shapiro, Ph.D., President and CEO of Fem- Medical LLC. As a member (and past chair) of the Forum's Program Committee, Shapiro recruited the speakers, case presenter and panelists and helped shape the presentations.

Case Presentation

vCentrix

Reliable, private, secure, full-feature Voice over Internet Protocol (VoIP) for half the price of what the big guys charge?

High-tech veteran and vCentrix CEO, Steve Crummey deftly presented his company's case to provide wholesale VoIP-hosted IP telecom applications to 5,000 potential partners. These partners include independent and municipal cable companies, fixed wireless companies, telecom resellers and independent telephone companies. vCentrix offers back-end infrastructure to these providers so they can easily and cost effectively offer VoIP telephony services to their existing customers. The end price for consumers is about half the going rates of the big retailers.

vCentrix is addressing a market need brought about by the paradigm shift in how we make our telephone calls. Consumers pay separately for their internet, TV, and telephone services. Broadband providers are beginning to tap into consumer frustration by offering bundled services that include VoIP (telephone) at prices that give some relief to the high cost of connectivity. Municipal and other Tier 2 broadband providers are at risk of losing out on this rapidly expanding opportunity because they lack the resources to develop their own voice solutions.

vCentrix presents an attractive suite of turnkey telephony services to their customers. They include full function calling features, provisioning, and billing. The ISP is able to offer their own brand of VoIP services to their existing customers with the added security of calls that never travel over the public internet. The Town of Norwood is a satisfied customer. vCentrix circumvents the hassle and expense of having to market directly to consumers itself.

Steve Crummey, former VP of Sales at Lotus, Tala Ali Ahmad, former Director of IP Technology at iBasis, and Don Lake, formerly of Mystis Solutions, Network Plus, and NEON Communications form the dynamic management team of vCentrix.