Sharon Fordham, chief executive officer of WeightWatchers.com, an online division of the weight-loss organization, put it this way to her audience of aspiring entrepreneurs: “Does your idea really fulfill a need in the marketplace that nothing else does?” Does it take advantage of trends such as increased Internet usage?
Fordham was one of several panelists speaking from experience at last week’s 24th annual Wharton Women in Business conference centered on the theme of “Conquering New Horizons. A Vision. A Goal. A Reality.” Two of the panels looked at “Selling to the Global Marketplace” and “Entrepreneurship in the Post-Bubble Period: Opportunities for Women.”
Practice Those Jump Shots
“You have to build relationships at all levels, you have to be flexible, but you have to be bossy as a woman,” said Stephanie Longworth, assistant vice president of global marketing for Ralph Lauren and responsible for marketing Ralph Lauren Parfums, a brand owned by L’Oreal. Longworth was part of the panel on global marketing which featured speakers from the cosmetics and luxury goods industries. The strategy may be paying off at L’Oreal where women received some 70% of this year’s promotions and make up about 45% of the overall workforce, Longworth said.
As a woman climbing the corporate ladder, there’s no substitute for adopting an aggressive, pro-active approach, suggested panelist Linda Zango-Haley, vice president of cosmetic marketing international for Del Laboratories Inc., a New York-based cosmetics manufacturer. “Practice your jump shots. You have to be aggressive and passionate about what you do.” For women seeking an opening in the cosmetics business, looking the part is an important determinant of your success, Zango-Haley added. “Sometimes someone comes in for an interview wearing no makeup and I say, ‘What is that?’ ”
The proactive approach is particularly important in the international department of some American corporations, which still fail to pay enough attention to the overseas markets they are trying to sell to, said Zango-Haley. “When you work for corporate America in the international department, you are marginalized.”
And despite talk of a single global marketplace, regional differences persist, requiring marketers such as cosmetics companies to recognize that Asian women, for example, will respond to different strategies than women in Europe or North America. To illustrate this point, Longworth, a British citizen working for a French company in the United States, told Zango-Haley she did not understand what a “jump shot” was.
L’Oreal’s internal decision-making process also illustrates enduring cultural differences in the global market, according to Longworth. She noted that in the company’s consensus culture, where discussion takes place “ad nauseum,” the French think the Americans don’t discuss enough, the Americans think the French – with their 35-hour work weeks – don’t produce enough, and everybody thinks the British don’t know what they’re doing.
Marketers have to contend not only with cultural differences but also with new ways of thinking about their markets, Longworth suggested. The traditional market divisions of income, age and gender have been replaced by less-tangible classifications such as optimism, energy and independence. The ageing population, however, presents an additional challenge, she noted: Within the next five years in England, for example, there will be more people over the age of 60 than under the age of 5.
Finding a Chef
While recognizing that consumers everywhere don’t want exactly the same product, cosmetics companies seek to establish a brand image that is recognizable anywhere, according to the panelists.
“Globalization is absolutely critical to our success,” said Susan Baida, Asia-Pacific regional marketing director for the skincare products manufacturer Clinique Laboratories. “If you have two divisions positioning a brand, it can get watered down. It’s critical that the communication of the brand is very consistent.”
Outside the corporate environment, those seeking to start their own ventures will need carefully thought-out goals and implementation strategies; an ability to communicate their aims to investors, customers and employees; a willingness to make financial and lifestyle sacrifices, and an appetite for risk that isn’t present in the relative security of the corporate environment, speakers said.
“You’ve got to have a very clear vision of what you want to achieve,” stated Ellen Yin, owner of the Fork restaurant and bar in Philadelphia, at the session on entrepreneurship. Yin, who previously worked as a consultant to the healthcare industry, said she had to adjust her own business plan because of a lender’s insistence that the business include a chef who was also a partner. She found a chef who was willing to take an ownership position in the business, but that person had no experience cooking the kind of food that Yin had been planning for her restaurant.
Yin also stressed the importance of communication on an entrepreneur’s list of priorities. “You have to be able to communicate that vision, and have other people in your organization understand that and run with it,” she said. And she urged aspiring entrepreneurs to be prepared to turn their hands to any task in the process of setting up and running the business. “You need a willingness to roll up your sleeves and do whatever it takes to get the job done.”
While it’s vital to have a clear goal, entrepreneurs must not blind themselves to input and perhaps criticism from others, added Laura Bennett, CEO and co-founder of Embrace Pet Insurance, a startup company that won the Wharton School’s annual Business Plan Competition this year. “Listen, internalize, and consider other people’s ideas,” suggested Bennett, whose company recently split from two of its four founding members. “There are so many wise people out there, and you should listen to their criticisms.”
The passion that inspires a business idea often ignores or understates the realities of the marketplace, according to Ellen Weber, vice president of Antiphony, a consulting firm that helps entrepreneurial companies create sustainable value. “Generally, there’s a gap between what they expect and what they realize,” she said, adding that entrepreneurs have become more realistic since the bursting of the stock market bubble made financing a lot harder to find.
It’s Profit, Not Revenue
One way to test the viability of a business idea is to ask yourself whether the business could survive with half the level of profit projected in the business plan. That exercise persuaded Fordham that her own idea to set up WeightWatchers.com would work, and allowed her to leave an executive position at a much larger company.
Fordham warned startups not to make the mistake of many failed dotcoms which became fixated on revenue and paid too little attention to profits and cash flow. “You’ve got to deliver on all three,” she said.
In the early stages of business development, it’s important not to spend money on people or capital equipment that do not match the stage of your evolution, she added. Bigger or better office space, for example, should only be acquired when it is clear that the cash flow is there on a sustainable basis to support it. “Don’t put yourself in a position where you have to lay people off” if the business suddenly turns down.
Becoming an entrepreneur will require financial sacrifices and lifestyle changes for those who undertake it, and without careful management it may become a life-consuming obsession, speakers pointed out. But going it alone also offers flexibility, particularly for women with families, that isn’t available in the corporate world.
Entrepreneurs who set their own hours are better able to care for elderly relatives or attend school events at times that would be in the middle of the corporate working day, leaving the entrepreneur to complete his or her business tasks when family demands subside, said Weber. “My clients don’t have to know that my 3:30 appointment is going to a soccer game.”
But aspiring entrepreneurs must be under no illusions about the financial risks they are taking and the impact such a decision will have on their lifestyles, Weber added. “You may have to downscale your life, mortgage your house, beg and borrow from every person you know who will listen to you.” And if you are in a relationship, make sure your partner understands how your home life is going to be affected by the decision to start a business, she said. In Yin’s case, for example, it’s sometimes hard to make her own partner – who has a nine-to-five job – understand why she has to be at work late into the evening. “I’m the host; I have to be there.”
Choosing the Team
One way of managing the workload is to create a schedule that contains inviolable work-free periods, said Bennett. She cited her own experience of studying to be an actuary; despite the large volume of work expected of her, she didn’t want to feel guilty when she wasn’t studying. “I knew that I needed to be refreshed,” she said. Without ensuring some time for yourself, within two years “you are going to be a babbling wreck.”
Risks aside, speakers urged aspiring entrepreneurs not to be deterred from pursuing their goals, and to remember that they can fall back on educational qualifications, professional experience or even a partner’s income if the venture fails. Consider, also, that a successful business isn’t necessarily the one that makes the most money, noted Yin, who fulfilled her dream of opening a restaurant after discovering that she was not happy in the corporate world. “For me, money isn’t the main thing.”
If an entrepreneur seeks to return to the corporate world after a few years, the experience gained and the spirit demonstrated by setting up the venture would likely recommend the candidate to a prospective employer, speakers said. “You would be highly re-employable,” suggested Fordham in answer to a question about fall-back options. “The employer would be impressed that you had taken the risk. You are going to come out with a skill set that many other people your age don’t have.”
For those entrepreneurs who seek their own employees, it’s important to look for a good level of self knowledge and a track record of achievement, Fordham added. “If you see someone who has accomplished mightily in their previous positions, the chances are they will do so for you, too. Those who are thin on accomplishments squirm at interviews.”
Give very careful thought to who you want to work with, urged Bennett, who said she and her business partner have no regrets about splitting from the two other principals of the pet-insurance company. “If you are in any doubt that they are going to come through for you, it will only get worse,” she said.
Above all, be sure you are starting your own business because you’re passionate about the idea and not because you dislike your current situation, Fordham noted. “It’s all about where you are going, not where you’re coming from.”