Hitting the Mark
Advice from John Alexander '74, MBA '76
2012 Entrepreneur of the Year
With the right idea and strategy, entrepreneurs can flourish in any market environment.
An entrepreneur is someone who can look at a tough situation
and see a challenge, find an opportunity, and capitalize upon it.
Today's economy, rather than daunting budding entrepreneurs, should be inspiring their creativity, says John Alexander '74, MBA '76, Cornell Entrepreneur of the Year 2012 and founder of Ithaca-based CBORD Group Inc., the leading provider of campus cashless and security solutions, food service and nutrition management software, and related services.
“The tough economy creates as many opportunities as it does roadblocks,” he says. “It creates new problems that must be solved by enterprising young entrepreneurs. There is no bad time in the economic cycle to get started.”
To illustrate, Alexander cites two economic meltdowns of recent memory: the 2001 dot-com debacle and the 2008 bursting of the housing bubble. Following both events, investors become more cautious. And, although venture capital became scarcer following the downturns, “the money came back, and the venture capitalists and private-equity firms were applying new filters and new metrics to qualify the investments they would make,” says Alexander.
So, if you can allay potential investors’ qualms by addressing their specific fears — configuring and positioning your company and your products to be stronger in the changed environment - you have an advantage over would-be competitors. “Your investment actually stands out by virtue that the market has changed and investors are pickier about where and how they will invest.”
Know what you’ve gotAlexander points out that, before you can truly fit your product to the market landscape, you must know exactly what you’re offering. “Do you have an idea, a product, or a company?” he asks. “Some ideas are just that — ideas. They haven’t been fleshed out to the point where a rational investor — a non-family-and-friends-type person — would want to place a bet on them.”
Traditionally, the automatic response to a promising idea used to be, “Let’s start a company!” But taking that route prematurely can lead to empty pockets and heartbreak. “Good ideas or individual products need to be advanced, taken to a stage where they can either be fully developed, or can be sold to a company that can take them to the next level,” Alexander says.
Be true to yourselfDo you have the time and motivation to work 80-100 hours a week and back burner your personal relationships? “If you think you have a great idea, believe you can line up financing, can handle the risk, and aren’t newly married with kids, then, go for it. Be sure to weigh the pros and cons with great care,” says Alexander. For young people with limited business experience, however, he suggests first gaining experience as an employee in a firm: “You can learn on someone else’s nickel, and save up capital to build on your idea.” Alexander advises assessing your own strengths and weaknesses, and seeing how these fit into your company’s SWOT analysis (strengths, weaknesses, opportunities, and threats). Then, he says, choose a management team that complements your skills and style.
“A good management team should be extremely bright, flexible, proud, and excited about their great idea, but not so full of themselves as to believe they are God’s gift to the industry,” says Alexander. The management team must also know how to listen — to the market, to customers, and to constructive criticism. “Companies that don’t work hard to stay close to their customers are usually doomed to failure, no matter how great the idea or product appears.”
By a similar token, corporate fairness and responsibility are essential to long-term success. “If it’s only about making money for yourself, then you probably won’t be able to grow a small business into a bigger one,” says Alexander. “At my company, The CBORD Group, we spent a lot of time figuring out how to ‘make it right,’ rather than crafting excuses. We had a very deep-seated need to please and refused to accept failure in any client account — which turned out to be a great marketing strategy.”
Define your focus and stick with itDeciding how to differentiate your company is crucial, too. Decide if you will compete on service, low price, or technology, advises Alexander; a company that tries to compete on more than one platform will fail. Choosing one platform doesn’t preclude doing well on the others, however. “If you decide to differentiate on great client service, this doesn’t mean that you can’t be affordable, nor that you can’t have industry-leading technologies to offer; but it does mean that you cannot dilute your efforts to deliver excellent service by over-investing in these other areas.”
Focusing on one platform means staying true to your charter, which can confer benefits. Alexander illustrates this using his own startup, the CBORD Group, which provides IT solutions for food service, security, and other systems on institutional campuses. From the beginning, Alexander focused on customer service. As a result, the company couldn’t always stay at the cutting edge of technology, so missed the Internet bandwagon the first time around; instead they focused on developing CBORD’s popular client-serverbased product.
The loyal client base sustained the company while the Internet was in its infancy, allowing CBORD to monitor the gestating technology, seeing what worked and what didn’t. “If you’re on the bleeding edge, chances are you’re going to hitch your cart to a lot of expensive technologies that never make it,” says Alexander. “By being a little behind the curve, we were able to see where others had been successful and to adopt technology that made the most sense and that our market cared about.”
CBORD’s investments in customer relationships yielded huge dividends. For instance, it reaped great benefit from annual user-group conferences it had instituted early on, during which the company solicited feedback and suggestions for their products. When Alexander asked customers for a list of three items that they wanted the company to address, he found that they addressed the charge with responsibility and accountability. Within their own ranks, customers reached a consensus on items that were reasonable and viable. “Our customers were out-front, literally defending the company’s strategic plan, and helping to make sure that other customers understood why we could only do certain things, in a certain timeframe,” says Alexander.
Give backA final bit of advice that Alexander imparts to entrepreneurs: Actively give back to your community. He suggests finding creative ways to support initiatives that are related to your business. The CBORD Group, for example, found initiatives that dealt with hunger locally. “It seemed logical, inasmuch as our profits were made in the food service business,” says Alexander, whose marketing professionals helped community-based organizations produce documents to support their capital campaigns. “It made people feel so much better about the company — they saw that we were not there just to make money, but were trying to be good members of the community,” he says.
Watch the keynote speech by 2012 Entrepreneur of the Year John Alexander ’74, MBA ’76 here