Out of Business

A top-notch CEO discovered that some innovation could only happen after he left the company he founded.

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As Rob Ryan discovered, some innovation happens only after you leave your company

Lowell Gray has flown nearly 3,000 miles from Boston to get his hide tanned, so to speak, in a log cabin in western Montana. Gray, founder and CEO of a midsize regional Internet service provider (ISP) called Shore.Net, scribbles his company's business plan on a whiteboard. Meanwhile, Rob Ryan, the man who invited him here, leans back in his chair.

"If you want to be a great company, find a new solution," says Ryan, who is pushing Gray to find a way to distinguish four-year-old Shore.Net from all the other ISPs out there. "If you want to be a pissant company, don't find a solution."

Gray argues that Shore.Net's strength comes from running a better service, not from offering an innovative product. "If you do it better than anybody, you have a great business," he says.

"That's not going to hack it," insists Ryan, the founder and former chairman and CEO of Ascend Communications Inc., in Alameda, Calif. "You have to be a zebra with red spots instead of black-and-white stripes."

Clutching his marker and pacing in tight circles, Gray looks excited--or like someone who wants to throw up. "This is good," says the 37-year-old graduate of Harvard University. "It's making my head hurt. Which is why I came here."

Gray is one of more than 25 entrepreneurs who have met with Ryan in the past year to submit to the free, no-holds-barred coaching that is the cornerstone of Ryan's new foundation: Entrepreneur America. The program, run out of Ryan's sprawling Roaring Lion Ranch as a sort of boot camp for entrepreneurs, aims to help people turn their ideas into successful companies. Ryan's pupils range from professionals like Gray, who want advice about making their businesses grow, to kids fresh out of engineering school who don't know what a CEO is.

"I see them all make the same mistakes," 49-year-old Ryan remarks. "They put an incoherent business plan together, run around and talk to whoever they can in the venture-capital community, burn all their bridges, and then wonder why nobody returns their calls."

Ryan--born in the Bronx, N.Y., the son of a man who held down three jobs, including milkman and night watchman--knows a thing or two about being an entrepreneur. In 1989 he founded Ascend with three coworkers and an initial $2.5 million in venture-capital financing. The maker of remote-networking equipment, which went public in 1994, today has a market value of roughly $6 billion. In June 1995, 13 months after the initial public offering, Ryan stepped down as Ascend's CEO and chairman, following serious back surgery. He found himself a rich man with lots of time on his hands, and he decided to devote himself to helping young entrepreneurs.

So far, Ryan has helped two start-ups--NetCentric Corp . and Silicon Spice Inc.--get venture-capital funding, and he's working on a third, ChannelVision. Ryan has stayed closely involved with NetCentric and Silicon Spice, sitting on each company's board, helping with strategy, and owning a small chunk of stock. Ryan realizes he can't continue that level of involvement with every company that he hopes to get off the ground through Entrepreneur America. He wants to expand the program to get other successful company founders involved as mentors.

"If I could grow one great company a year, a really great company, that would be a great contribution to mankind," Ryan says.

The day before Ryan put Gray through the paces, he spent the whole day with an even less experienced entrepreneur. Twenty-five-year-old Randy Thomae doesn't have a company--or even a job. What the intense Massachusetts Institute of Technology graduate does have is ambition to burn and a laptop computer loaded with a plan for an Internet business called Agent Audio.

This morning in late January, Thomae has risen at his customary 5 a.m. and is tinkering with his plan in the living room of the four-bedroom guest house at the Roaring Lion Ranch, located on the outskirts of Hamilton, Mont. Free, comfortable lodging on this 1,200-acre spread is just part of what Ryan offers at Entrepreneur America. Visitors must pay their way to Montana, but once they're here Ryan houses them, feeds them, and may even saddle up some of his horses and guide them into the nearby wilderness of the Bitterroot Mountains.

The surroundings may be rugged, but the accommodations aren't. Like Ryan's office and home, a few thousand feet away, the guest house was constructed by Alpine Log Homes Inc., a high-priced log-home builder popular with CEOs and celebrities like Hank Williams Jr. and H. Ross Perot. At mealtimes, visitors sit down with Ryan and his wife, Terry, and enjoy tasty spa cuisine prepared by a local caterer.

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