Entrepalooza 2006 brings CEO of Craigslist to Ross

By: Vidhya Prakash, MBA1

Posted: 9/25/06

At Entrepalooza 2006: Dream Big!, leading entrepreneurs, venture capitalists and business executives shared their personal visions of entrepreneurial success with University of Michigan students, U-M alumni and community members, and discussed different strategies for achieving it. The annual symposium, presented by the Samuel Zell and Robert H. Lurie Institute for Entrepreneurial Studies and the student-led Entrepreneur and Venture Club at the Ross School of Business, was held Friday, Sept. 22, at the Michigan League and drew an audience of 300 attendees.

This year's day-long event featured keynote addresses by President and CEO of Autocam Corporation, John C. Kennedy (Exec MBA '05), and President and CEO of Craigslist, Jim Buckmaster. Autocam is a manufacturer of precision-machined components for the automotive and medical-instruments industries and Craigslist is a website of classifieds. Kennedy was presented with the Stephen M. Ross School of Business Alumni Entrepreneur of the Year Award by Zell Lurie Executive Director Thomas Kinnear.

Kennedy, a self-described "accidental entrepreneur," led a successful turnaround at Autocam, transforming the money-losing company that he purchased at age 29 for $13 million into a well-diversified, profitable global firm with $350 million in revenues (2004) and 3,000 employees. He attributes much of his success to a decision in the late 1990s to create a global footprint for the company through overseas acquisitions. Today less than 50 percent of Autocam's sales and manufacturing are done in North America. The firm is experiencing its fastest growth in China, where it expects to hit sales of $100 million by 2010. Kennedy underscored the importance, however, of thoroughly understanding the regulatory and competitive landscape in every market in which the company operates, and noted that the failure to do so can lead to bad acquisitions.

Autocam, which he characterizes as a "group of entrepreneurial businesses," also takes an entrepreneurial approach to growth by constantly identifying new products that the market needs and then finding ways to build its business around them. "We're always looking for things that aren't there yet," Kennedy says. In addition to Autocam, he has acquired other unrelated companies. These include the hot-tub business Emerald Spas, purchased in 1989, where he learned, the hard way, that the "highest product quality and the lowest cost was not all you needed for success."

More recently, Kennedy has become the co-founder of a private-equity firm called Bridge Street Capital, which invests in new ventures in the Midwest. "When I started my business, it was difficult finding money," he recalls. Bridge Street may help to pave the way for other entrepreneurs who aspire to follow in his footsteps.

At a panel on corporate "intrapreneurship," representatives from several large, well-established companies agreed there are numerous opportunities to exercise entrepreneurial talents in a corporate setting, provided the firm's top leadership and culture support it. Google, for example, places great emphasis on ensuring that good ideas from anyone in the company are reviewed and incubated. Mekhala Vasthare (MBA '02), senior product marketing manager at Google, said, "People (at our company) feel really empowered and able to act on their ideas." She originally entered the realm of "intrapreneurship" while searching for a job that would offer the opportunity to exercise fresh thinking and give her autonomy in decision making. "The fundamental difference between being in an early-stage startup and an established company is all the resources you can tap (in a large corporation)," Vasthare said. "I've found that entrepreneurial energy within a well-established company can make a huge difference."

The "Founding and Growing Entrepreneurships" Panel was one of the most popular among attendees. The panel consisted of Howard Cash, President and CEO of Gene Codes Corporation, Eric Jacobson, CFO of Janeeva, Inc., and Josh Linkner, CEO and Founder of ePrize. One of the key things to remember when finding a company, according to Cash, is that it will take a toll on your relationships. Most importantly, he said, "When you run out of money, people that don't share the dream will say 'Go get a job.' Asking them for support at that time will cost you the closeness of that relationship and you may still have to bear the sting of rejection." One of the most surprising bits of information came from Jacobson, who said for budding entrepreneurs to not waste too much time on creating a perfect business plan. According to his experience, most VC firms prefer to use the PowerPoint presentation as the main information source regarding a new venture and do not want to take the time do so much reading to gain an understanding of the venture. Venture capital money is not the only money available, and Angel Investors, the government, and organic growth are all options for new ventures that may need less money than $10 to $20 million. Finally, Linkner finished the presentation by bringing in the importance of corporate culture as a differentiation factor among companies. "It's important to grow culture from day one," he said. His company, ePrize, has a very distinct corporate culture, including holiday bonus rituals, a rooftop laptop lounge, and even an imaginary competitor to help keep his staff motivated. In regards to change management in the workplace, Linkner basically summed up the theme of the panel, "If you're not changing, you won't do well."

The second keynote speaker of the morning, Jim Buckmaster of Craigslist, settled into an overstuffed chair on stage to answer questions posed by members of the audience. His nonchalance reflected the counter-culture, non-monetary, socially-responsible culture that pervades the San Francisco-based online-advertising company, which, surprisingly, was organized in the beginning as a nonprofit. Although the company is now a for-profit venture and has been profitable since 1999, its core philosophy has not changed.

"We try to keep our business very simple by keeping costs low, following up on users' requests and molding the company according to what users are asking for," Buckmaster explained. "We're doing well as a business, so there is no reason to push it to the max." During the dot-com era, people made fun of Craigslist, but 99% of them went out of business, he adds.

Buckmaster spent his first year at Craigslist as its lead programmer, upgrading its systems and developing new online offerings, before being promoted to the post of CEO in November 2000. Today the company is ranked seventh among the leading Internet companies and attracts 9.8 million users per month. Yet the business is run by a staff of only 22 persons, a feat made possible through the increasing efficiency of technology, the use of free open-source software, and a reliance on end users to help drive improvements.

When asked for his advice to someone seeking to create a "Tom's" or "Bill's" list, Buckmaster replied, "Start small, keep costs low and put a prototype out in front of users so you get feedback." Right now, he said, the greatest challenge facing Craigslist is internationalizing the site. But Buckmaster is unconcerned about the future. "In this industry, things will be so different, they will be unrecognizable from what they are now," he said.