Companies On The Spot

Colin Barton seemed to be enjoying himself. The president of Ikier Technology Inc., of Burlington, Mass., stood in front of an audience of more than 100 people, enthusiastically describing the company he and his partner, Hans Ikier, had recently set up to manufacture computer graphics equipment.

It was the sort of situation any entrepreneur about to launch a new business would relish: a chance to talk with a group of people who knew the field and to have them comment on his plans for the company. But Barton's excitement was going to be short-lived; seven men were about to shatter his illusions.

The setting was a meeting room in the Student Center of the Massachusetts Institute of Technology, and the event was a session of the MIT Enterprise Forum. The Forum taps the expertise of MIT alumni and faculty, as well as outside sources, to provide advice and exposure to small businesspeople.

At the moment, Barton was enjoying the spotlight. For 20 minutes he set forth his goals for his company. Barton, formerly of Tektronix, and Ikier, an engineer who had founded another computer graphics firm, Lexidata, wanted to produce a microcomputer for the professional market. Barton discussed the business plan, made a pitch for investments, and extolled the technological virtues of his product.

Finally, like a salesman winding up his pitch, Barton posed questions to the seven panelists, who he thought had bought his line: "How do we best attract dollars from a situation like this? What do we do to get the talent in? Where does the panel see the biggest risk?"

The first panelist's response seemed promising: "Basically, I like the idea," said Tom Hagan, the president and co-founder of Camex Inc., a small computer systems firm. "I think the best of all possible sources of money is some sympathetic, interested, and intelligent customer."

Barton smiled, and jotted down a note about the suggestion. But then the atmosphere suddenly changed."The business plan is very interesting fictional reading," Art Parthe, a Forum veteran and the head of a Nashua, N.H.-based high-tech development and management consulting firm, noted drily. "Fictional in that it's rather idealistic; everybody lives happily ever after, and quite wealthy at that.

"Your organization is somewhat topheavy with technical types," Parthe continued. "I really have the feeling that it's technology-driven at this point. There's one thing that's completely missing from your business plan, and that's an analysis of the down side, the risks. There are all kinds of risks -- technical risks, business risks."

Parthe, the past chairman of the Forum, went on with his analysis of Ikier Technology's shortcomins, reading from his notes as from a formal charge: "I went through a listing of so-called graphics terminals and I stopped counting at 50. If there are 50 names floating around out there, and now 51 when Ikier comes along, how are you ever going to differentiate yourself in the marketplace?"

Parthe questioned every aspect of Barton's plan, from the need for the product itself to the feasibility of using a third-party field service.

Douglas T. Ross, chairman of the board of SofTech Inc., a Waltham, Mass., software company, was hardly more encouraging. "Yes, I found the plan and the presentation interesting, but also...," he hesitated, "a bit naive in spots." Ikier Technology had no clearly defined head, was weak in the area of software, and faced strong competition it hadn't identified, Ross said. "In any case, good luck to you." Barton nodded his head as if he'd just been read the last rites.

The rest of the panel, an MIT professor and the heads of three other hightech companies, were equally hard on Ikier. They noted that the product was not unique, that even if it was successful it could be easily copied, and that it cost more than some of its competitors. They faulted the company's business plan, projections, and lack of leadership.

Barton quietly thanked the group for its comments before he fled to the Harvard Bookstore Cafe, where he settled down with a salad, a glass of wine, and a book on Raphael. For the next few hours he tried not to think about computers.

But though Barton was upset, many of the members of the Forum had decided that Ikier Technology was a winner. "I think that, if they listen carefully to what we have to say, they're going to be very successful," one panelist remarked to his neighbor.

"The principal benefit," says Parthe of the Forum, "is objectivity -- light being shed on a situation by people who know their industry. A lot of it can come across sounding rather negative, but it's not meant that way. It's meant to be straight from the shoulder: This is how it is, and this is how we see it."

The Forum, which is sponsored by MIT's Alumni Association, grew out of a series of special workshops that were conducted in Cambridge and New York in 1971 for alumni who were setting up or already in business. The prototype for the Forum in New York was called the MIT Venture Clinic.

In 1978, a group of MIT alumni in the Boston area realized that a similar operation could be invaluable to local companies, particularly the high-tech firms concentrated on Route 128, a belt-way around the city. MIT could provide the technical expertise, and management and financial advice could come from alumni operating their own companies and from Boston's banking and investment community.

In April 1978, the MIT Enterprise Forum held its first session, taking a close look at a firm that produced minicomputers and at a ski manufacturer. Each of the programs, which are now held 10 times a year, features one or two companies, generally ones that are starting out or are facing a serious problem such as the need to recapitalize. There are twice as many applicants as openings, so the Forum's executive committee decides which could benefit from the Forum's services and which ones are appropriate to the expertise of the Forum.

The companies selected to appear before a Forum panel pay $200 to cover the costs and are required to submit a business plan at least four weeks before the presentation. The company's chief executive officer also meets with a member of the committee beforehand to discuss the firm's needs and goals. The executive committee of the Forum then selects a panel that will best be able to advise the company. It draws on a list of over 500 people, including MIT faculty and alumni, and others. Sometimes it finds it necessary to recruit specialists. When the Forum reviewed a firm that manufactured contact lenses, for example, it asked a doctor from Harvard Medical School and an expert on the contact lens market from Arthur D. Little to serve on the panel.

Panelists serve without compensation. They like the Forum because they can assist entrepreneurs in fields related to their own, because it's a source of contacts and investment opportunities, and, perhaps most important, because it's a lot of fun. "Some people like golf," says Barry Unger, a co-founder and vice-chairman of the Forum, "others like to help a new business get going."