The Buzz

U of M alumni-turned-entrepreneurs keep the state's economy humming

Minnesota has a reputation, rightly earned, as a hotbed of entrepreneurism. Taking part in this buzz of activity are thousands of University of Minnesota alumni who have founded their own companies. In fact, so many of the businesses that fuel Minnesota's economy were started by University alumni or as a result of University research, that it's hard to imagine Minnesota life as we know it without them.

A classic example is TSI Inc., a manufacturer of measurement and control products. It grew out of an innovation that Mike Fingerson, now retired chairman, developed as part of his Ph.D. thesis in mechanical engineering in 1961. With the help of Lowell Nystrom, '60, and others, the company was launched. Today its eight divisions make more than 100 products, employ 500 people, and net $80 million in sales each year. "The University is continually pushing technology to the limit," says Fingerson, "and we license and commercialize a lot of it."

Helping to develop the business expertise needed to bring such

technology to the market is the Carlson School's Center for Entrepreneurial Studies, which is now beginning an expansion funded in part through a gift of $2.5 million from Robert and Gail Buuck. Bob Buuck, '70, '72 MBA, is co-founder of two Minnesota companies, American Medical Systems, and Iotek, Inc. "Our gift was made to help the University further the impact it already has in the development of technology and business in Minnesota," said Buuck.

The Center for Entrepreneurial Studies has plans to quadruple its course offerings, add faculty, and deliver professional education and outreach programs geared to business formation. It will also expand the new product field study course that joins MBA and engineering graduate students who work together at technology-based companies to take a product from idea to prototype.

With so much attention on entrepreneurism, many people wonder whether they should try launching a business themselves. To give

you some idea of what it might be like, here are the stories of six University alumni entrepreneurs. Their stories, while representing only a tiny fraction of the thousands of alumni experiences that could be included, share elements that are common to all entrepreneurs.

Pack O' Hounds

Michael Miller, '90 MBA
Founder, Hound Dog Products, Inc.

Hound Dog Products, Inc., got its start in classic entrepreneurial fashion--through a chance encounter.

An acquaintance introduced Michael Miller, who was looking for business opportunities, to an inventor who had patented what was then called a "green machine." It was a device that eliminated weeds without tearing up the lawn, without using weed killers, and without its operator having to bend over. Miller had three dozen prototypes made and took them to Lyndale Garden Center to see if they would sell. "They were all gone after one weekend," he relates. "We got a license agreement, changed the named to Weed Hound, and began marketing it."

That was four years ago. Hound Dog Products now sells five innovative backyard tools that appeal to what Miller calls "the farmer in us all"--the Weed Hound, Bulb Hound, Poop Hound, Turf Hound Aerator, and the Edge Hound. The company's target customers are young, environmentally-conscious, suburban homeowners, "people who get a lot of satisfaction from working in the yard," according to Miller.

Miller always knew he wanted to be his own boss. "Ever since I was five years old, when my goal in life was to have my own ice cream store, I've wanted to buy and sell things."

Following his stepfather's advice that you should "learn a lot in your '20s, and then do what you want to do in your '30s," Miller worked for several consumer product companies--Procter & Gamble, Michael Foods, Con Agra, and Pillsbury--before and after getting his MBA in marketing and entrepreneurial studies.

"I worked in sales, distribution, and product management. I learned a lot, but I also realized that I'm not a corporate kind of guy. I need to be my own bush pilot--right in the thick of things."

And starting Hound Dog Products has been an adventure. "It's a very exciting, active experience," Miller says. "In any one day, I may be stamping and licking envelopes and the next moment talking on the phone with a new customer."

Hound Dog Products now sells in 50 states and in Austria, Germany, Belgium, the UK, Japan, and Canada. Its sales have grown by 75 percent a year, and Miller's goal is to have 20 products by December 2000. With only four employees, his greatest challenge now is how to manage growth.

"I want to have time to hang around in the backyard myself," he says.

Selling Taste

Wanda Schackmann-Flechsig, '79, Art History/Studio Art, Morris
Founding director, Circa Gallery

Wanda Schackmann-Flechsig describes the unique nature of selling art as an entrepreneurial endeavor. "It's a business that depends entirely on an aesthetic. I am selling my taste. I have built a reputation within a certain niche of the vast world of fine art, and my clients trust my aesthetic judgment within this niche."

It's also a business that is dependent upon customers with discretionary income, and the art world is notorious for its economic volatility. "This is a difficult business," says Schackmann-Flechsig, "so you'd better love art if you want to take part in it. For me, art is an intense passion."

Schackmann-Flechsig grew up on a farm outside of St. Cloud, and went to the University's Morris campus as an undergraduate. "Attending Morris is a very personal experience," she says. "The faculty know you by name. And the campus is isolated, so you can really focus on why you're there and what you're learning about yourself."

After graduation, she worked in art supply stores, and then moved to Minneapolis and began working in art galleries. She says this experience was critical for learning the gallery business and developing a client base. "Having the right connections is absolutely essential for success in this business. It all relies on knowing the artists, knowing who is interested in buying, and what they like. Everything is based on personal relationships and trust."

In 1991, with outside financial backing, Schackmann-Flechsig opened the Circa Gallery on 4th Street in downtown Minneapolis. Four years ago she moved to her present site on Hennepin Avenue, near St. Mary's Basilica.

She now represents 31 artists. Much of the work she shows is texturally as well as visually interesting. A recent show features work by Michael Christopherson, an artist who incorporates folk art, found objects, and painting into his three-dimensional pieces. She also sells the paintings of her sister, Lorie Schackmann, another Morris graduate, and sculpture by Jennifred Nellis, an art professor from Morris whom Schackmann-Flechsig calls "a great influence."

For those who would like to begin collecting art, Schackmann-Flechsig advises, "Get to know the galleries and the gallery directors, and learn their taste. Go to openings and meet the artists. There are many talented artists in the region."

"Most importantly," she says, "buy things that you love." If you love the art and get to know the people behind it, it can be so much fun. I can imagine doing what I'm doing now for the rest of my life."

A Better Pizza

Roger Schelper, '71, Economics/History, '72 Business
Cofounder, Davanni's

Davanni's is the quintessential homegrown business, founded by three Minneapolis natives, Bob Carlson, Mick Stenson, and Roger Schelper. They have been friends since grade school and partners since 1975. Schelper also got his brother Ken involved, as director of training and human resources. Ken and Mick are also University of Minnesota graduates.

Schelper says that he's always been an entrepreneur. "Ever since I was nine, I was looking for ways to make money. I had paper routes, I shoveled snow, I did house-sitting. You name it. In college, I had more jobs than you'd ever care to know."

Davanni's began life in 1975 as Pontillo's, an offshoot of a New York family pizza restaurant, opening on Grand and Cleveland Avenues in St. Paul. "New York pizza was better than any other Twin Cities pizza back then," says Schelper. "We saw that it was a product with a niche, and that there was a vacuum here to be filled. We were the first to bring real New York pizza to town."

Other firsts, according to Schelper, were the concepts of calling ahead with your order, the open kitchen ("We had a show to put on."), the wallet-size menu for take-outs, and hot hoagie sandwiches.

In 1983, needing a name they could trademark, the partners changed the name to Davanni's. They first tested D'avanti's, meaning "the leader," but it evoked images of a high-end, formal Italian restaurant. By changing two characters, they came up with a name that worked.

Davanni's now has 16 stores, its own bakery, and 800 employees. "We've talked about expanding beyond the Twin Cities," says Schelper, "but our philosophy is to grow only as fast as we can and still keep good staff and turn out a quality product."

Schelper says, in the beginning, he worked 90 hours a week. "If you want to be an entrepreneur, you'd better know yourself and what you love to do, because it takes a lot of hard work. Fortunately, I love food and I love to cook and clean, all of which are necessary for restaurant work."

Schelper has other advice for would-be entrepreneurs. "Talk to people, read a lot, and figure out where the growth markets are. You also need to be eclectic, that is, to have an ability to take many ideas and adapt them to other situation. And finally, don't let people tell you that you're not good enough or that you can't do something; be persistent."

"Starting this business has been really satisfying," he says. "At first, it takes a lot of hands-on work. Then you learn to let go and delegate. It's a lot like raising a child."

Entrepreneurship at Ethernet Speed

Victor Tong, '93, Physics
Cofounder, TalentSoft and Talent Information Management

For Victor Tong, being a World Wide Web entrepreneur has been like the development of the Web itself. In less than four years he--and his companies, TalentSoft and Talent Information Management (TIM)--has seen the highs and lows of business. Tong, his brother, Tony, '92 (mechanical engineering), and a fellow Institute of Technology classmate, launched the companies in late 1994. Tony, whom Victor says is the "visionary" partner, recognized the need for software to create sites for what he correctly assumed would be a popular new medium.

If anything, Tony was seeing too far into the future. "We didn't have enough projects at first," Victor says. "It was really tough for a while. By the end of 1995 I was in big debt." Victor Tong left his full-time job in mid-1995 to devote himself to the new firms. Things were looking very promising--and then disaster struck. One Friday night in late December 1996, a client told Tong he couldn't pay the $180,000 due on a project. "I had to call the staff together on Monday morning--it was Christmas Eve--and tell them we couldn't meet payroll," he says. "But I told those who stuck with us that it would be made up to them."

The company soon was back on its feet, partnering with firms like Microsoft and Netscape--and experts at the University of Minnesota--to develop new and better software, including electronic commerce packages. Then, in November 1997, the jackpot came. Key Investments acquired portions of TIM's business, along with numerous employees, and became a minority investor in the remaining company. "We were able to pay all the back wages plus 20 percent interest and give everyone a very nice bonus," Tong said.

The Tong brothers, who acquired their business savvy helping out in the family company while growing up in Hong Kong, have since built their firm back up to about 15 full-time staff, with sales and service representatives around the world. Playing on their background, they have pushed for a strong presence in Asia, especially China. "In China, the more gray hair you have, the more you are trusted and respected," he says. "This is maybe the only business in which I can have people 20 and 30 years older than me listening to what I have to say and asking for my advice."

"At the University I learned all the basics," Tong says. "I can explain everything that goes into a computer, starting with quantum mechanics and moving through to computer chips and on to software development and how the Web works. Of course, I want to build a big empire, but I'll always owe a lot to the U."

Accidental Entrepreneur

Rondi Erickson, '69, English
Founder, Bay West

Her entry into entrepreneurship was entirely "serendipitous," says Rondi Erickson. But it got into her blood. So much so that she soon plans to dive back into business ownership after more than a year of "deciding whether I'm retired or on sabbatical."

"I've spent a lot of time volunteering, but it's not a replacement for a career," she explains. "I miss the collegiality of business, the problem solving, and the power to see things through and get things done."

Erickson was an accidental pioneer of sorts, opening an environmental cleanup company in Duluth that worked largely with the heavy industries in Northern Minnesota. It began in the mid-'70s, a time when few women-owned businesses served areas like construction, mining, and transportation. "There were certainly disadvantages to being a woman in business, but I refused to focus on those," she says. "You can't run a business that way. Instead I focused on doing the job and doing it well. If I did that I actually had the advantage because I was memorable."

After working for the Minnesota Department of Transportation and for her father's sewer and water construction company, Erickson started her company, Bay West, as a supplier of a new oil-spill cleanup product. As environmental laws were being enacted and toughened at the time, the product was wildly successful and she quickly secured rights to distribute other cleanup material and equipment, eventually providing trained workers for emergency clean up and for cleaning long-time contamination.

Later, a subsidiary opened in the Twin Cities to supply laboratory services to major companies. She sold her share of Bay West to her brother a few years ago and focused on the laboratory business, which she closed last year. "Part of growing up in a small-business family is learning to weather the cycles," she said. "But the other part was learning when to let something go."

Erickson believes her English degree was a big advantage in making Bay West successful. "By not being strictly trained in any one scientific discipline, and in being able to pick up vocabulary and express ideas, I was able to get scientists to speak with each other at a time when interdisciplinary work was not really happening," she explains. "My University education taught me where to go for answers, how to ask the questions, and then how to evaluate the responses and drop them into the big picture."

Hard work beats fairy dust

Linda Mona, '67 Home Economics Education
Founder, Creative Environments;
Cofounder, Field of Dreams, Minnesota Ball Cards

Linda Mona bristles at the suggestion that she and her husband, Dave, '65 (journalism), have been lucky. "People sometimes say, 'Oh, everything you and Dave touch turns to gold,'" she says. "But that's not it at all. It's hard work and enjoying the hard work. It's having meetings in the car, in the evening, on weekends. Nobody comes and sprinkles fairy dust on us at night."

It might be understandable why people have a different impression, however. The Monas have a string of past and present businesses that are hard even for Linda to keep straight. There is her interior design firm, Creative Environments, which she started in her home more than 25 years ago and that has since expanded and moved out. After Dave was laid off from a corporate communications job, they opened David L. Mona and Associates. "I was the associate," Linda admits.

That public relations firm soon grew into Mona, Meyer, McGrath, and Gavin, one of the area's biggest and most-respected PR firms until it was purchased by a British company and became the Minneapolis office of Shandwick USA. Dave is still chairman of that 170-person office. Also mixed in are the couple's four Field of Dreams retail sports collectible stores, which Linda Mona manages; Minnesota Ball Cards, a company that grew out of Dave's long-time hobby of collecting sports trading cards; and Dave's sports media work, which includes public-address and statistical work for the Minnesota Vikings and its television broadcasters, his new job as commentator for Gopher football radio broadcasts, and cohosting Sports Huddle with Sid and Dave on WCCO-Radio.

Part of the reason they can do it all, in addition to lots of volunteer work, is that so much of it overlaps. Creative Environments, for example, has designed several new Field of Dreams stores. The card company sells to Field of Dreams. Football and radio work often overlap with buying for the sports stores.

"Dave and I both had parents who were teachers," Linda says. "Because of that we're always learning, reading, seeking new areas to go into. In some ways we do it for the pursuit of the game, but at the same time we're very pragmatic. We always weigh the pros and cons."

And the learning keeps on happening. "One thing you can't learn from econ class is the reality of profit and loss," she says. "You understand it in a very different way when it's your own money coming into and going out of your own pocket."

Not all of the learning is easy. "We had to close three of our Field of Dreams stores because they were in locations that just didn't make sense," she says. "But that was OK, because the stores we have now are better for it. A lot of the wildly successful entrepreneurs have several failures behind them. They just learn and move on."