Panelists sometimes wind up personally involved with the companies they review: They tour plants and make suggestions on production setup, or are invited to serve on boards of directors. In one case, a panelist at the New York clinic was so impressed by a business that he invested in it, then took over the company. That, however, is not the normal course of events.
Forum presentations are open to the public and attract 100 to 150 people to each session. Like the panel members, spectators come to see what's happening in their fields, to size up promising companies, and, in some instances, to do business. Each presentation is taped so the chief executive will have a record of the panel's observations and advice. The audience also fills in a questionnaire, evaluating the comments of both company and panel. The completed questionnaires are presented to the chief executive.
For the first 20 minutes of the program, the presenter describes his company in detail, and sets forth the problems it's facing. Then each panelist, who has had about two weeks to review the business plan, has an opportunity to ask questions and offer his analysis.
Veteran panelists say they see a number of recurring problems that plague small businesses. Barry Unger notes, for example, that many high-tech companies "are technology-driven rather than market-driven -- they're obsessed with the excellence of the product rather than its marketing needs."
Other companies have difficulty deciding what they want to do. "One company that came to us had $1 million in sales, but it was manufacturing 23 different products," Unger explains. "We wound up saying, 'Focus. Focus. Focus."
Parthe, who conducted a study of the Forum's findings, says that eight problems occur most frequently: organizational weakness due to understaffing of the management team; poorly defined strategy, objectives, and goals; inadequate marketing techniques and channels of distribution; fragmented product and/or service offerings; inadequate knowledge of the market; under-financing and inadequate financial management; failure on the part of the chief executive to delegate authority and responsibility; and lack of an objective and qualified board of directors.
Companies that make presentations to the Forum are enthusiastic about the quality of the advice they receive, though some, like Colin Barton, find the way it's delivered can be quite unsettling. "If you talk to them right afterwards," says Parthe, "they're still sometimes in a state of shock or depression -- their feet are still in the fire." But after a while, they all seem to be able to sift out valuable advice.
"Six months after we started up," says Ronald Matlin, president of TriSolarCorp of Bedford, Mass., "we were beginning to have to face up to some questions of financing and sales. We wanted to know how to get involved in overseas marketing. The Forum suggested various ways to sell, and directed us on a strategic course. Now we have equipment in 20 developing countries in Africa and Asia." TriSolarCorp, which manufactures solar-powered systems for use in remote areas, had sales of $1.1 million last year.
Matlin found that the audience reaction was in some ways more important than the panel's advice. One member of the audience is now on the company's board. "There were also several bankers there," Matlin says, "and we got appointments right afterwards with three different banks. It was a very positive experience and I'm very happy we went."
Even when the Forum experience is a negative one, participants are often enthusiastic about it. Neil Herring, the former treasurer of Path Medical Systems Inc. of Portsmouth, N.H., is even grateful for the Forum advice that caused Path to decide to go out of business. Path had planned to market software for clinical laboratories, Herring explains: "We raised $880,000 from a variety of sources and began to develop the software, but after eight or nine months we began to run out of money and it was clear the product was never going to be developed.We went to the Forum to get ideas on what we were doing wrong and to see if any venture capitalists were interested. The panel said that the company didn't have a chance. We realized that there was no way in hell that we could get the software developed in any kind of cost-effective manner. So we closed the company down, two weeks after the Forum.
"If a company is just getting off the ground," Herring adds, "the Forum is great, because it brings to the table marketing and financial people with a lot of sophistication and a lot of resources. I can't think of anything else in the country like it."
There are, however, other things like it now. The Forum and its prototype, now called the MIT Enterprise Forum of New York, have proven so successful that alumni groups in other sections of the country are now following their lead. In October 1981, a group of Washington, D.C., alumni and business and government leaders staged the first program of the MIT Enterprise Forum of Washington and Baltimore. A somewhat less structured program is offered by the New Enterprise Forum, co-sponsored by the MIT Club of Northern California and the Peninsula Chapter of the Stanford Business School alumni organization. Located in the heart of Silicon Valley, the group has reviewed both high-tech companies and a few firms more obviously Californian in spirit, such as a firm tht manufactures shoes with water-cushioned soles.
Two weeks after he bared his soul and his business plan before the Forum, Colin Barton was still reeling. "It was an uncomfortable evening," he admitted. "It was a very negative atmosphere. Their approach was too aggressive. I mean, we're just starting out, and there are bound to be problems in a start-up company no mtter what you do."
But Barton conceded that many of the panel's suggestions were excellent, and were going to be implemented, including advice on cash independence and the need to have one company president, rather than two.
In short, the Forum had addressed the questions Barton had raised, and provided him with some of the answers he needed. Unfortunately, it was a painful process.
"If I had it to do over again," Barton concluded, "I don't know if I would or not." But if Barton is anything like the others who have survived, and benefited from, the Forum's baptism of fire, he may think better of it in time.
