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IPO Veterans Share Insights with Business Students
See No Evil, Hear No Evil, Speak No Evil
"No options. No lawsuits. Everything else is on the table," declared Sam Bloom (UT MBA 95) as he opened the panel of Broadcast.com veterans who were about to share their battle stories of the largest IPO in history. The panel included three UT graduates: Bloom, former Director of Business Development at Broadcast.com, now at ichoose.com; Belinda Johnson (UT JD 92), now in-house counsel at Yahoo!; and Sherry Manno (UT MBA 92), now Senior Public Relations manager at Yahoo!. Also on the panel was Stan Woodward, now VP of Business Services at Yahoo!.
The discussion at first focused on one of the major challenges that start-ups encounter: finding the right people. According to Woodward, his most critical hires were the three regional directors of sales. Only by finding the right people quickly could he make sales ramp up to meet their explosive growth rate. "You hire in your own image. A lot of the sales people who work for us are just out of prison, or in some form of rehab," he joked.
In a freewheeling Q&A session, the panel gave insightful answers about the start-up lifestyle. In response to a question about the best personality type for an entrepreneur, Woodward spoke first, "Manic depressive. A lot of these people are deeply twisted...Mark Cuban's (Broadcast.com founder) house was like something out of Silence of the Lambs. He had a bed, a Bloomberg terminal, a grand piano and my routers. That's it." But apparently, soul-wrenching angst isn't a prerequisite, as the panel also stressed the contributions of Cuban's well-balanced co-founder, Todd Wagner, a lawyer who built the business systems behind the vision.
Another key issue in the world of an Internet start-up is the need for legal review. In an environment where intellectual capital and exclusive access are key assets, comprehensive and enforceable contracts are critical.
Word of mouth marketing is also essential. Since most of Broadcast's funding was going into network infrastructure, Manno was forced to use the company's newsletter as its primary marketing tool. The newsletter made its way to journalists, who helped to build the buzz around the company.
Bloom's advice on selecting a start-up opportunity was deceptively simple: "Find the outlier." He observed that business schools do an inadequate job of teaching students the importance of viewing a start-up or similar opportunity as what it will be, not what it is.
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