What Business Would You Start?

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"I've been heavily involved for the past 30 years in businesses that are based on intellectual property -- that is to say, on know-how and patents. In today's world I think that's the area to explore if you want to create large value and large benefit. Specifically, I believe that the greatest opportunities lie in science or technology. I've concentrated mostly on biotech as it applies to human health and to catalysts for the chemical industry. So I would really squeeze the tomatoes in those areas.

"I think you start a business when it can be done cost-effectively regardless of the market cycle. Remember, the bench chemist doesn't stop working. In general the United States is a capital-surplus society, which means that when the economy is suffering, like now, you may have to make 100 calls to get your financing rather than 10. But if the potential power of the implemented know-how is attractive, there are responsible people with enough capital to take the risk to invest. Personally, I tend to be a bit contrarian. I generally invest in areas that are reasonably cool, like telecom is now -- there's overbuilt capacity everywhere -- and I try to sell when things are hot. I take a long-term view. I frankly think you have to do that with any value building."

Name: Howard H. Stevenson
Location: Cambridge, Mass.
Background: Sarofim-Rock Professor of Business Administration, senior associate dean, and director of external relations at Harvard Business School; angel investor who's made more than 80 investments; and coauthor of Winning Angels: The Seven Fundamentals of Early Stage Investing

"I think we've learned a lesson that we ought to take to heart from the events of 9-11. We've got to find ways to create redundancies without extra cost. I think that more people are figuring out that in a world where you can't count on everything happening exactly as you think, you need redundancy -- you need multiple sources -- whereas the trend over the last few years has been to get one supplier and beat him up. Even if 9-11 hadn't happened, I think I would have been saying the same thing because redundancy is necessary whenever you have a hiccup.

"Another area that I think will be an interesting one is, somebody's going to invent a concept called a bank. They will take money from people and they will lend it to people without going through the securitization process. They'll make credit judgments based on the old character and collateral instead of saying, 'We don't do any loans except those things we can sell through Solomon or Merrill."

Name: Susan Davis
Age: 60
Location: Elkhorn, Wis.
Background: Founder and president of Capital Missions Co., a social-venture consulting firm that creates networks of investors who invest for both market returns and social impact

"I'd start a business creating strategic alliances between investment-management firms and social-investment firms. There's been a 10-year record of outperformance of social investments over traditional investments, and for more than 5 years social investments have been the fastest-growing segment of finance. So you have two strong trends coming together that create a terrific market opportunity -- outperformance on the one hand and people's desire to invest around their values on the other.

"The big firms need the expertise that the small social-investment firms have, and they can't get it overnight. And those small firms need access to the customers that the big firms have. Only one in eight dollars is now invested socially -- $2.1 trillion.

"The market is poised for an explosion in social investing because pensions are going to be adopting it. If pension managers find that social investments are matching the financial benchmark, and they have all these goodies like clean air and water, then it starts to put them under scrutiny. That's why there's going to be a huge swing in the next five years. So a business that created those alliances would be very profitable."

Thea Singer is an associate editor at Inc. Additional interviewing was provided by deputy editor Karen Dillon and staff writer Ilan Mochari.

Please E-mail your comments to editors@inc.com.

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