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Build the Team, Build the Company

 
2/20/2001
Beating out more than 60 other teams, Bang Networks won first place in this year's HBS Business Plan Contest. As the final step for students in the Elective Curriculum, the contest is an opportunity for them to actually apply theories and concepts gained from the classroom and get feedback from a panel of business experts. In this article from HBS New Business, the founders of Bang Networks, a group that includes three members of the HBS class of 2000, outline their formula for success.

Build the Team, Build the Company

The team that launched Bang Networks only a few months ago never dreamed of winning the Dubilier Prize for first place in the fourth annual HBS Business Plan Contest. "Having the right team made the critical difference," says Bob Rosin (MBA '00). Bang Networks, Inc., is a San Francisco-based start-up founded by Rosin and his classmates Sarah Boatman and Bob Dreyer, along with Tim Tuttle, an MIT PhD. Their fledgling company is preparing to introduce technology that will dramatically increase the Internet's performance and functionality. For competitive reasons, the team is understandably mum about the nature of its new technology. The unusual company name harks back to early Internet days when "bang" referred to an exclamation point, a symbol frequently used in Internet addresses to guide e-mail traffic before the "@" symbol was introduced. While Bang Networks' founders had put their best effort into crafting a business plan, they hadn't realized the important role that team development would also play in the contest's outcome.

Contest participation had significant pros and cons in the eyes of team members. "A real concern," says Rosin, "was that prospective customers and investors might not perceive us as a serious company." Team members knew they would be under pressure to develop a formal written plan by the contest deadline but were uncertain whether that same document might also serve other needs, including fundraising. On the positive side, they realized that committing a plan to paper would quickly force them to reach a consensus on the many issues that they faced. It would also provide an ideal opportunity to rehearse their investor pitch and to obtain helpful feedback within the relative safety of the HBS environment.

The Birth of Bang Networks
Rosin's interest in technology arose from his five years' experience at Sony Corporation in Japan and San Jose. Following a stint in global advertising, he transferred to the company's digital-media products group. Rosin soon became Sony's primary liaison with other firms that were also developing digital-media technology. He was amazed by the number of start-ups he encountered that had ready access to capital and the ability to recruit exceptional people. "I realized then that I wanted to start a media-technology company," he says, "and HBS was the next logical step."

Quotation
Having the right team made the critical difference
Quotation
— Bob Rosin (MBA '00)

While Rosin honed his management skills at Sony and HBS, Tuttle applied the knowledge of networking theory he had acquired at Lucent and MIT to the design of routing algorithms that he thought would significantly expand the Internet's functionality. Once he became confident that his efforts could pay off, he began seeking partners with strong business skills to help him build a company based on the new technology. He learned of Rosin's entrepreneurial interests and industry experience while reviewing an HBS résumé book in the office of an executive recruiter. Tuttle e-mailed Rosin, suggesting a meeting. After they discussed Tuttle's ideas, Rosin's excitement over the technology's potential grew rapidly, and he invited classmates Boatman and Dreyer to join the team. "I never seriously considered joining a start-up," says Boatman, "so it was a major change of direction." Boatman, who holds an undergraduate degree in engineering from McGill University, serves as Bang Networks director of strategic marketing. Dreyer, the firm's vice president of engineering, came to HBS after 11 years at Intel, where he had been an architect of the Pentium processor.

At the start, the team gave little thought to entering the Business Plan Contest. In fact, it was the group's faculty advisors who encouraged them to do so. "We had several debates about whether to enter," explains Rosin. "We were adamant that nothing get in the way of launching this company." Deciding that the potential for high-quality feedback and for developing important contacts warranted contest entry, time became the team's chief enemy. While most of their classmates enjoyed spring break on sand, surf, or snow, the Bang team pulled all-nighters in Rosin's room in Soldiers Field Park to meet the March 31 contest deadline. Competing with more than 60 other talented teams, some of which had already obtained funding, the Bang Networks foursome held little expectation of winning. In mid-April, the team was notified it was one of four finalists that would be presenting to judges and classmates at a School-wide awards ceremony on May 1. (See end of this story for the runners-up.) Their hopes grew, but it was still a great surprise to learn that their plan had won the Dubilier Prize, which awards the winning team $10,000 plus an equivalent amount of in-kind legal and accounting services.

Paul Maeder (MBA '84), managing general partner at Highland Capital Partners in Boston, led a team of judges charged with evaluating the plans entered in last year's contest. "We focused strongly on two things," he explains. "First, how complete was the team's expertise concerning the particular marketspace they planned to enter? Second, had they developed their business plan as much as possible short of actually raising capital? The team aspect is critical because, unlike the business plan, it is not easily changed. The Bang Networks team was outstanding on both counts."

Winning Is Beginning
With graduation only a month away, the Bang team had to decide on a location for its future home base. That was among the easier decisions, according to Rosin: "For an Internet start-up, Silicon Valley is the place to be. Having worked here previously, Bob Dreyer and I were already familiar with the advantages the Valley offers. Things move more rapidly here because investors and service providers are less skeptical and are quicker to respond because they understand the urgency." Using the Web, Bang Networks found affordable office space in the crowded San Francisco market. Yet, in the few months since the move, they have already outgrown the space and are relocating to larger quarters.

"In retrospect," Boatman says, "entering the contest was one of our best decisions. For a while after winning, we still wondered whether we'd be taken seriously and were hesitant to broadcast the news. But that fear quickly proved unfounded. In fact, on learning we had won, everyone was clearly impressed and I think even more responsive." Winning, she adds, has given Bang an edge both in recruiting and in funding, two of the most difficult challenges confronting a high tech start-up.

Networking within and beyond the HBS community was another productive tactic for Bang. Faculty advisors and classmates contributed meaningful input, feedback, and referrals. Boatman points out that the HBS alumni network was invaluable for locating fellow alumni in target companies, and many were exceptionally helpful. Christina Darwall (MBA '75), executive director of the HBS California Research Center, says Bang Networks sometimes used the Center as a home base while preparing their business plan. Adds Darwall, "They always had a serious and professional demeanor. You could really sense a winner."

The Right Team and Talent
"When launching a start-up, the most critical task, without question, is finding and assembling a compatible team that possesses the appropriate expertise," advises Rosin, echoing the words of Paul Maeder. "Ignoring this can put even the best business concept at serious risk." Bang Networks team members also urge those considering entry in future HBS Business Plan Contests to recognize the value of the high-caliber feedback and contacts that it will bring. Having won the Dubilier Prize and proven their extraordinary ability to perform as a team, Bang Networks' founders appear well-prepared to tackle the challenge of building a business.

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From HBS New Business, Winter 2001.

Peter K. Jacobs is a freelance business writer based in Wellesley, MA.

2000 HBS Business Plan Contest Runners-Up

There were three runner-up teams in the HBS Business Plan Contest of 2000, which also shared awards in cash and in-kind services. They are KNUMI, which is developing technology to enable media content providers to create a highly interactive end-user experience; Sound MicroSystems, which is commercializing technology for the development of a silicon microphone; and 3Plex.com, a B2B enterprise that links shipping companies with suppliers via the Internet.