Four successful alumni in ventures that range from the silver screen to microbrews touch on the unlikely benefits that an economic slowdown can offer — and some advantages that never lose their luster.
Tom Potter MBA ’83
Founder of the Brooklyn Brewery, which was established during the recession of the late 1980s, capitalizing on the nationwide interest in microbrews
“When you’re a small-business entrepreneur, the overall economy doesn’t mean as much as your particular niche economy. A recession can be an interesting time to start your company. You have access to more smart, ambitious people who do not have the traditional job opportunities and are more willing to take the risk of working in a small company.”
Potter points out, though, that good business ideas always make the difference: “If you do not have a specific, good idea for a start-up, don’t force it. Put yourself in a work environment where you will gain appropriate skills and meet potential business partners.”
LuLu Wang MBA ’83
Philanthropist; CEO and founder of Tupelo Capital Management, a New York-based investment fund
When asked if she started developing her business plan while at the School, Wang replies, “School was part of my business plan.” Her response underscores her number-one key to entrepreneurial success in any economy and any organization: the ability to focus.
“The back-to-basics of business has meant the same to me both before and after the dot-com era,” comments Wang. “Every entrepreneur must be focused on his or her core competencies and core mission. During the bubble years, money came too easily and too quickly, leading many entrepreneurs to lose focus on their long-term goals.”
In the philanthropic arena, Wang observes a similar focus: Many philanthropists are reestablishing their priorities and only making donations in the areas where they will have the most impact. “This is why it is so important for a not-for-profit to have a strong core mission and a strong sense of the organization's core competencies to communicate to potential donors,” she says. “The organizations that lack a strong business plan, focus, core mission and a strategy for implementation will not survive in a tough economy.”
Jim Stern MBA ’84
Producer of Stomp, The Sound of Music, The Diary of Anne Frank, The Producers, and the new sensation Hairspray; founder of Endgame Entertainment, which will finance a portfolio of entertainment investments in motion pictures as well as live stage, television and video productions
“My new company is predicated on the idea that capital is scarce and that the scarcity creates opportunities for the people who have capital. So in fact it works [in] exactly the opposite [way]: The next 18 to 24 months will be unbelievably positive for investing in what I'm doing.”
He admits, though, that being an entrepreneur in the entertainment business, in particular, is not for the faint of heart. “At the end of the day you have to be okay with the ‘what if.’ You have to know what your threshold is for risk. For me, the opportunity to employ a lot of people and not have to be employed myself outweighs the risks.”
Brett Prager MBA ’92
Founder of Collegiate Health Care, one of the largest providers of college health services in the country; Gotham Practice Management, a primary care-physician management company in Manhattan; and CPA2Biz, a purveyor of products and services to the accounting industry
Prager defines entrepreneurial survival in the current economy as “making whatever cash you have last twice as long as you think you'll need” — advice that serves entrepreneurs well in any economic climate or field.
When asked about the difference between starting a company in 2003 and in 1993, he says, “There is more money available in higher increments than there was in the past, but it is more difficult to access. Ten years ago people were willing to accept a high degree of business risk in new venture investing, whereas today people spend a lot of time trying to mitigate risks that cannot be mitigated.”