SUMMER 2011 | ISSUE NO. 2 | LAUNCH! MAGAZINE | 1
Colonel Sanders, or
LAUNCH!I S S U E T W O | S U M M E R 2 0 1 1 | BSCHOOL.PEPPERDINE.EDU/STUDENTBLOG
SUMMER 2011 | ISSUE NO. 2 | LAUNCH! MAGAZINE | 3
John DeLorean?By CHRISTOPHER GREY
Top 5 Reasons Entrepreneurs Fail
Nobody likes to talk about failure. It’s not fun or sexy. We live
in a culture that worships success, no matter how you get
there, and is disgusted by and afraid of failure, no matter what
the reason. This is especially true of entrepreneurs. We live in age
that believes in overnight success. The mythology of Mark
Zuckerberg starting a business at nineteen, immediately succeed-
ing, and becoming a billionaire by age twenty-ﬁve is now consid-
ered a template for millions of young aspiring entrepreneurs.
Of course it is a cruel myth for anyone to believe that kind of
success can be replicated. People would actually have a greater
chance of winning the lottery. Most entrepreneurs fail. Some-
times they fail many times before they ultimately succeed. Only a
few entrepreneurs have ever become billionaires before the age
of forty, and so far only one person in history has achieved what
Zuckerberg did at such an early age. That puts the odds at
hundreds of billions to one. If anybody likes those odds, we have
to play poker together some time.
4 | LAUNCH! MAGAZINE | ISSUE NO. 2 | SUMMER 2011
Here are a few more real life entrepreneurial stories. Colonel Sanders didn’t
start Kentucky Fried Chicken until he was sixty-two years old. If you don’t
believe that, check Wikipedia. Many entrepreneurs never succeed even if they
try over and over for an entire lifetime. Do you remember Jon DeLorean? His
car company was sort of like the Tesla of thirty years ago. He was arrested for
selling cocaine. Why? So he could raise money to save his dying company.
Even the enormously successful Elon Musk had run out of cash before Tesla
went public. Rupert Murdoch was out of cash in 1990. He survived because
Marvin Davis loaned him money. Stories of extremely delayed success, nearly
losing it all, or outright failure are not what people want to hear, but they’re
important. As much fun as it is, nothing is learned from easy success. Failure
and near failure is how people learn.
All of this begs to the question everybody running a business or thinking
about starting a business wants to understand: Why do some entrepreneurs
succeed while most of them fail? Here are a few key reasons.
1 Excessive optimism
Entrepreneurs have to be optimistic to succeed. However, too much
optimism is also one of the most common reasons they fail. Entrepreneurs
need to remember that only the paranoid survive. As much as you need to
believe in your own success, at the same time you must never forget all the
things that can go wrong and plan accordingly.
Entrepreneurs need to be stubborn. They are often surrounded with
people, even their loved ones, who tell them to give up and go get a job
rather than trying to build something. Nevertheless, the inability or refusal
to change and pivot kills many entrepreneurs.
3 Lack of creativity
A good entrepreneur learns from and often copies what others are
doing if it’s working. As long as you aren’t stealing anything, that’s just good
business. However, if you have none of your own ideas and are simply a
copycat of what others are doing, you aren’t creating any value. Your
business has nothing about it that is special, and your customers and
others in the market will know it. A commodity business with no unique
value proposition is much more likely to fail.
A good entrepreneur should be greedy and not just for money.
Entrepreneurs should have a big appetite for risk, glory, fame, misery, power,
and fortune among other things. However, many entrepreneurs allow their
greed to get the better of them. They allow it to blind their judgment and
make bad decisions that destroy their businesses or themselves personally.
The best entrepreneurs know how to balance their greed with discipline,
prudence, and humility.
5 Bad luck
Yes, a successful entrepreneur must be lucky. This is just a basic fact
even as it may be offensive to many people who think that you have to
make your own luck and everything that happens people deserve. As nice as
that is to believe for some people, it isn’t true. Luck is usually the single most
important factor that distinguishes the most successful entrepreneurs from
those who just do ok and survive. It is extremely rare for an entrepreneur to
achieve great success without luck, and there is no way for anyone to control
that variable. This is why many successful entrepreneurs are superstitious.
Why become an entrepreneur when success is so uncertain? The most
important reasons to become an entrepreneur aren’t success, money, fame,
power, or glory. The entrepreneurial life is about being your own boss, doing
what you love, and creating value. Hopefully if you create enough value, the
money, fame, and glory will follow. Regardless, nobody can take away from
you the enjoyment you derive from what you do. If you’re just in the game
for the hope of hitting it big, you shouldn’t be in the game.
Christopher Grey is CFO and Co-Founder of CapLinked. Chris was a senior executive and managing
partner in private equity, ﬁnance, and banking for 15 years. He founded two companies, Crestridge
Investments, a private equity ﬁrm that made debt and equity investments in micro cap and middle
market companies, and Third Wave Partners, which made debt and equity investments in distressed
situations, and was managing director of Emigrant Bank, the largest privately owned bank in the
country. Chris is a founder of Stanford Professionals in Real Estate and a columnist for TheStreet.
com. A version of this was originally posted on CapLinked’s blog.
SUMMER 2011 | ISSUE NO. 2 | LAUNCH! MAGAZINE | 5
“From Solo Founder to Co-founder” by Mike Lewis
Great article which illustrates that with the right people, 1+1 = 3.
“What We Look For in Founders” by Paul Graham
Important article on what skills some Angels/VCs look for in
founders. If you don’t have some of these characteristics, you may
need to add members to your team to broaden the company skill
“How to Pick a Co-founder” by Naval Ravikant
Neat VentureHacks article that preaches the importance of creating
“Underbelly: What Haughty Startup Bloggers Don’t Tell
You” by Jason Fried
Insightful article which discusses the emotional toll starting a
company can take on a solo entrepreneur.
“Build Your Management Team” by Stever Robbins
Good resource from Entrepreneur Magazine which discusses how
to go about growing your team.
“How to Assemble the Perfect Team”
Another great article about how to build a great team from my
friend, Jun Loayza, co-founder of RewardMe.
“Finding Your Co-founders” by Seth Sternberg
Another awesome article from the CEO of Meebo about how to
ﬁnd a co-founder.
Go to a FounderDating event in your area
Meet with like-minded entrepreneurs. It will help you quickly
discover what types of qualities you’re looking for in a co-founder.
Join an entrepreneurship association in your area
Network with other bright minds such as the SVASE in Silicon
“Panel Discussion: Finding a Co-founder…or Not?”
YouTube video from the Stanford GSB which talks about the
advantages/disadvantages of going solo or ﬁnding a team.
10 Tips for Choosing a Co-founder
By JUSTIN MOORE
You’ve got the next billion dollar idea. Now what? There are business
plans to write, products to craft, relationships to forge. There will be
no shortage of crucial tasks to complete in order to see your idea to fruition.
But should you go solo or ﬁnd a team?
It’s a common question and I’ve found the following articles, blog posts, and
other resources extremely valuable in helping make the decision.
Justin is a ﬁrst-year student in the Fully Employed MBA program at Pepperdine University.
He earned his undergraduate degree in computer science from UCLA. Justin is involved
in many entrepreneurial endeavors and loves all things technology.
6 | LAUNCH! MAGAZINE | ISSUE NO. 2 | SUMMER 2011
Company Name: Shark Bite Scuba
Company URL: www.sharkbitescuba.com
Location: Thousand Oaks, CA
Mission: Provide the diving community the highest
quality services and products the industry
has to offer.
Business Idea: Devise a cart that makes it easy to tote
heavy scuba tanks to and from dives.
Target Customer: Divers.
Year Founded: 2009
Avg. Annual Revenue: Conﬁdential
Number of Employees: 2
Accountant-cum-scuba diver Kimberly Isaac (MBA ’10) is exhibiting all
the signs of new parenthood: joy, excitement, pride and a penchant for
talking about her “baby” any chance she can. Never mind that her progeny
is a two-wheeled metal scuba tank dolly marketed under her Shark Bite
Scuba company name.
“It was so exciting to see the design for the Tank Dolly in cold, hard metal,”
says Isaac, reminiscing about the ﬁrst time she saw her invention come off
the production line. “I imagine it to be like seeing your newborn child for
the ﬁrst time.”
The result of a year’s worth of development and design, the Tank Dolly
meets a universal need of scuba professionals and hobbyists: make it easier
to transport heavy scuba tanks and gear from land to boat. Simple in
context, the Tank Dolly is a pure example of an entrepreneur discovering a
need, working to meet it and harnessing the passion and belief behind the
idea to make it all work.
“I would not be where I am today if not for
Dr. Cox. He is the greatest professor I have
ever had the pleasure of taking at any
Shark Bite Scuba partners Thomas Spiegle and Kimberly Issac
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“The entire process has been inspiring, encouraging and so much fun. I truly
enjoy every hour that I devote to growing this company,” says Isaac, who has
had a life-long love of the ocean and became a certiﬁed diver in 2008.
Of course every diver knows the ﬁrst rule of safety is to never go it alone.
Isaac applied that same principle in her dive into entrepreneur-hood. She
partnered with diving buddy Thomas Spiegle, Los Angeles county sheriff’s
deputy and rescue diver. In addition, she credits “idea generator” Dr. Larry
Cox, Associate Professor of Entrepreneurship at Pepperdine, as the impetus
behind the scenes in launching Shark Bite Scuba.
“I would not be where I am today if not for Dr. Cox. He is the greatest
professor I have ever had the pleasure of taking at any university,” she says.
That encouragement was instrumental when Isaac was laid off from her job
half way through her MBA program.
“I had just started my entrepreneurship classes so it was perfect timing. I had
extra time on my hands and was no longer worried about giving up my job
to start the business; the decision had been made for me,” she says. “Dr. Cox
encouraged and built my conﬁdence so much that I decided I could do it.
And now I am!”
That encouragement was also important during the early days of the
business when the two divers were working on getting their idea from
sketch to three-dimensional format.
“Tom and I had to get up to speed quickly on how manufacturing works,
the types of materials we would need, the cost of these materials, types of
metal, different suppliers, why one is better than another and so on,” she
says. “Figuring out the manufacturing process was our biggest challenge.
Dr. Cox gave us the courage to keep moving forward.”
With the manufacturing process ironed out, Shark Bite Scuba has been
aggressively marketing the dolly at tradeshows, online and has donated
dollies to the Disabled Veterans Scuba Project. The product has garnered
positive attention from The Wall Street Journal as well as fromDiverwire.
com, ScubaBoard.com and word-of-mouth from diver to diver.
“This whole process has been euphoric,” says Isaac. “I knew that ‘someday’
I would do my own thing. Now that ‘someday’ is here, I know for sure this is
where I am supposed to be.”
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Jaime Parker and
Company Name: Shadys
Company URL: www.shadys.com
Location: Pasadena, CA
Mission: To create a brand
synonymous with unique,
high-quality shade and
sun protection products.
Business Idea: Sun protection screens
for golf cars and other
and consumer vehicles
that also deliver a unique
Problem Set Out to Solve:
Golf car occupants are at
the mercy of the sun, and
excessive sun exposure
can cause severe skin
premature aging, and
Target Customer: Golf courses, country
clubs, resorts, golfers, golf
car owners, and golf car
Year Founded: 2010
Avg. Annual Revenue: Conﬁdential
Number of Employees: 3
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For Jaime Parker (MBA, ’99), a bright future meant he had to
create some shade.
Avid golfers and others who spend time outside on low-speed
vehicles like golf cars are glad he did. Parker’s company, Shadys, offers
a variety of open-weave mesh screens that easily attach to golf cars,
provide 360-degree visibility and air circulation and effectively protect
the occupants from up to 90 percent of the sun’s harmful UV rays. The
company is now exclusively partnered with Club Car, the world’s
largest manufacturer of electric vehicles including golf cars, golf and
commercial utility vehicles, multi-passenger shuttle vehicles,
rough-terrain and off-road utility vehicles, and street legal low-speed
vehicles for commercial and consumer markets.
“I have always had an entrepreneurial spirit,” says Parker. “Prior to
Shadys, I had participated in other entrepreneurial opportunities and
have always found it difﬁcult to conform to a typical 9-to-5 work
That spirit has helped him navigate the challenges of the early years
of enterprise, one of which is funneling enough cash into marketing
“We are big believers in the importance of marketing and promotion
efforts but often the funds that are allocated for marketing get
funneled to pay bills and other expenses,” he says.
That dearth of funding for marketing has been offset by a pleasant
surprise: a low barrier to entry into the market. “It’s been easy to
meet people and make key contacts in the golf and golf car
industries,” he says.
The ability to make the right contacts to ensure the success of the
business began early in the genesis of Shadys, when Parker met his
current Director of Marketing, Asif Ahmed, a fellow Graziadio School
“Asif and I graduated over 12 years ago, but we stayed in touch,” says
Parker. When Parker put the plans together for Shadys, he looked for a
partner he could trust and who had the same drive and vision. “I knew that
with him on the team, we’d be successful.”
Parker deﬁnes success not just by bottom-line results, but also by quality of
“Even with all the work in getting the company up and running,
entrepreneurship has allowed me to spend more time with my family
because I dictate how and where my time is spent,” he says. “In addition,
this has taught me to be patient, have faith, and become comfortable with
having to sacriﬁce in order to reach my goals.”
Parker recommends other would-be entrepreneurs take a no-holds-barred
approach to launching a business.
“Once you have been honest with yourself about the viability of the
company or idea that you wish to pursue, pursue it with vengeance,” he
says. “Even if it means some sleepless nights and stress from fear of the
unknown, entrepreneurship is a risk / reward opportunity, so make it
“Prior to Shadys,
I had participated in other
and have always found it
difficult to conform to a typical
9-to-5 work day.”
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Company Name: Webventurous
Company URL: webventurous.com
Location: Mumbai, India
Mission: Implement cutting-edge
technologies and ideas to
create superb Web
strategies for our clients’
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Business Idea: One-stop digital agency
for Web design, internet
marketing and emerging
Problem Set Out
to Solve: While most businesses
know that a web
presence is necessary,
most do not understand
how to wring every
opportunity from it
Target Customer: Any business, anywhere
Year Founded: 2010
Like surﬁng, successful entrepreneurship
requires you stay ahead of the wave in order
to have a successful run. It’s an adventure best
undertaken with courage and a passion to be in
At Webventurous, Dhaval Doshi (MBA, ’10) and
his team build and implement Web architecture
for an international client base in diverse sectors
including ﬁlm/entertainment, celebrity brand
management, education, ﬁnance /banking,
hospitality and event management. Their renown
is that once the Web presence is established,
Webventurous continues to support each client,
using the power of the Web to continually
market and drive brand recognition.
“Our focus is not only to build our client’s Web
implementation but also provide necessary
support to grow their Web presence in the long
run,” says Doshi. “In order to do that successfully,
we have to evolve and learn every day.”
Doshi both earned and learned his entrepreneur-
ial fortitude. About 10 years ago he took a course
in Web design, then took on a marketing position
with a Web solutions company. “I learned a lot
and was fascinated by the potential to use the
Internet as a marketing tool,” he says.
The entrepreneurship itch took hold about a year
into the job. “I felt more like an expense account
there. I always wanted to do something on my
own, something more meaningful,” he says.“It
was time to put in my notice and get started play-
ing by my own rules.”
He worked as a freelance consultant and then a
sole proprietor for ﬁve years, and graduated from
Pepperdine’s 12-month MBA program before
launching Webventurous in 2010.
“There’s no perfect timing for entrepreneurship,”
he says. “Just be sure you have the skills to
manage people. If you can’t manage people –
your employees and your customers – you won’t
be a success.”
With plenty of people skills in his entrepreneur-
ial toolkit, Doshi’s ﬁrst step was to hire recent
college graduates who had the same passion and
vision for Internet marketing as he has. He
believed that a young employee base with a
knack for social media and the web would bring
to the table the insights critical to the success of
any web campaign.
“I have loved hiring and training graduates right
out of college to learn and implement awesome
marketing campaigns for our clients,” he says.
“I’m proud to say that they have done a
commendable job and have played a critical role
in the growth of the company. Being their mentor
and seeing them grow is a delightful experience.”
Also key to Doshi’s success is his passion for
networking. “If you want to be an entrepreneur,
spend more time meeting people,” he advises.
“But after you meet them, follow up and see how
they can help you with your business. Contacts
can be mentors, ﬁnanciers, or even business
partners,” he says.
It’s also important to carefully manage
relationships and time, he says. “It’s fun being an
entrepreneur but life gets busier than one can
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Company Name: KM-X Youth Self Defense
Company URL: kravmaga-kids.com
Location: Los Angeles and
Sherman Oaks, CA
Mission: Train children in practical
Business Idea: Teach children to defend
themselves with the gross
motor skills they
and in realistic situations.
Target Customer: Children ages 5-13
Year Founded: 2005
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A conﬂict of form over function made the
entrepreneurial light bulb go off for Matt
Romond (MBA ’12). As a professional realistic
self-defense trainer, Romond saw ﬁrst-hand how
the Krav Maga system – the techniques employed
by the Israeli defense forces – served adult civilians,
military, and law enforcement personnel around
the world. What was
missing was a similar training program for children.
“To truly be able to defend yourself, you need a functional skill set. Learning
the form is just not enough to be effective,” he says. Romond became
determined to bring realistic self-defense training to children.
“Outsiders thought the idea was crazy. The asked ‘You mean you’re going to
teach children the same moves you teach to soldiers?’ Our answer was ‘Why
Kid-sized Krav Maga (called km-X) is based on the gross motor skills of
children and their natural instinctive responses under stress. “We teach
children the very basic self-defense moves and then apply stress in
increments so they can safely feel what their body and mind will go through
if they ever have to use the stuff in real life,” he says.
For example, after a student learns how to defend against a basic choke
attack, they are instructed to close their eyes until the choke hold is applied.
The simple act of closing their eyes and waiting builds anticipation about the
impending attack, which causes their bodies to release adrenaline – the
actual physiological response that will happen if they ever experience such
an attack in real life. Once they learn how to handle the adrenaline rush,
other stressors are added to the training, like dim light and loud music or
spinning them around in circles so they get disoriented.
“When a child realizes he or she can be in these conditions and perform the
techniques without hesitation, it gives them an amazing sense of
accomplishment,” says Romond.
With 1,500 children trained or participating in the program now, Romond
receives calls almost weekly from parents of graduates and the graduates
themselves, telling him the difference the training has made in their lives,
from successfully standing up to a bully to becoming a true defender of
those who can’t defend themselves.
The program has also given Romond a sense of accomplishment as an
entrepreneur. “I get to see what works and what doesn’t and have the
ultimate say as to how we are going to improve and evolve, not just as a
business, but more importantly as a martial art,” he says. “Over the last ﬁve
years I have learned that growing a successful business, especially in the
service industry, can only come about by making a bunch of small, calculated
decisions over a relatively long period of time. By growing slowly, I can
reﬂect on and learn from past mistakes or actions.”
Romond also has learned and has been inspired by his professors in the
Pepperdine Fully Employed MBA program. “All my professors, and especially
L. Wayne Gertmenian and Max Ellzey, have been incredibly open about the
lessons that they have learned along the way to success. They also all present
the technical material within the context of their own experiences,” he says.
Perhaps the greatest lesson about entrepreneurship is the one Romond has
already applied to his business. “Contrary to popular belief, entrepreneurial
skills are actually learned rather than inherited. If you don’t feel that you
have enough skills to jump out on your own yet, use your current job as a
springboard,” he says. “Seek out training and experience by starting
something new at the company that you currently work for. It worked for
14 | LAUNCH! MAGAZINE | ISSUE NO. 2 | SUMMER 2011
By GRAY DEFEVERE
1 Thou shalt focus, focus, focus thy plan.
Make sure that our strategy is a riﬂe shot, not a shotgun blast. And
always keep in mind the problem that you’re trying to solve. Proprietary,
protectable, and sustainable technology is a necessity, but it’s not a sufﬁcient
condition for success. Identify the collective IP to commercialize. Carve up
target markets ﬁnely and restrict yourself to two or three well-deﬁned
2 Thou shalt weave a story.
Remember, all potential investors are looking for a reason to believe.
Create excitement around our plan and show energy, enthusiasm, and
Commitment when we present it. We detail both the mystic and the
mundane. Cover our long-term vision, and then spell out short-term
practicalities of its implementation.
SUMMER 2011 | ISSUE NO. 2 | LAUNCH! MAGAZINE | 15
3 Thou shalt understand thy audience.
Research and understand our target audience — both for our plan and
our pitch. Understand our prospective investor’s history, areas of expertise,
rolodex, prior areas of investment, any obvious predictable conﬂicts and so
Forth. Don’t forget that you’re in the selling mode, and you need to
understand your Prospect’s hot buttons. Knowing as much, or more about
them than they due about us is A show of respect and professionalism.
4 Thou shalt arrive via referral.
Nothing turns off a prospective investor more than something
coming in over the transom, regardless of the medium. An industry expert or
an insider friend of the investor, a reference will instantly give you credibility,
visibility, and the investor’s attention.
5 Thou shalt be crisp in thy plan.
Keep your plan succinct, and remember a picture is often worth a
thousand words. Although graphics can be overdone, they convey
information efﬁciently and add impact. Your plan should be no more than 25
pages and the executive summary no more than 2 pages.
6 Thou shalt ﬁne-tune thy presentation.
Your presentation is not a ﬁreside chat. Plan your pitch and pitch your
plan, preferably a half hour but no more than an hour. Have backup for all
claims, slides for common questions, and prepare a reference list in Advance.
Efﬁciency in both plan and presentation will create a good impression that
often is taken as a proxy for how you will run your business. You get one
shot in front of your prospective investor. There are no dress rehearsals.
7 Thou shalt thoroughly research and evaluate current
and prospective competition.
All startups have competition of one sort or another. Thoroughly map out
the competition, and honestly assess our relative status. Openly disclose the
management team’s background strengths and weaknesses. Today,
marketing and sales execution is more important than ever.
8 Thou shalt get real about ﬁnancial projections.
Investors understand that ﬁnancials for new businesses in undeﬁned
markets are very hard to estimate, much less verify, but be realistic. Even if
you believe that you can build a $500 million business in ﬁve years,
understand that this kind of growth would make you one of the fastest-
growing companies in American history. To the extent possible, build
projections from the ground up, not the top down.
There is no substitute for showing investors direct prospect/customer
contacts who are willing to vouch for the product and company.
9 Thou shalt not obsess on valuation.
Valuation is clearly very important, but don’t be penny-wise and
pound-foolish. The entrepreneur must give credit to the value-add of the
angel or professional investor. By understanding this, hopefully everyone
gets a piece of a much larger pie than would otherwise be the case.
10 Thou shalt understand potential exit strategies.
Although the investor’s ﬁrst thought is the excitement of getting
into an investment, his next priority is how he’s going to get out of it. An IPO
is one obvious path, but today, strategic buyers are acquiring more and more
companies. Be explicit about potential buyers or licensees and the rationale
for their interest in your company.
Gray Defevere started his ﬁrst company 37 years ago, and thinks of himself as a
‘recovering entrepreneur’ who has had successes founding and growing businesses
using proﬁt and debt as ﬁnancial accelerators. Defevere Advisory Group (DAG) focuses
on the representation of emerging growth and technology companies, middle market
public companies, large technology companies, investors, private equity funds,
investment bankers and underwriters, and clients in the entertainment industry.
Gray originally posted this on his blog at defevere.com.