Two graduates from the Tuck School of Business and one from the Thayer School of Engineering spoke about their experiences starting businesses fresh out of school — with varing results — at a panel discussion at Tuck Monday night.
Gregg Fairbrothers ’76, a professor at Tuck, moderated the panel, titled “The Risks and Rewards of Starting a Company After Graduation.”
According to Fairbrothers, the three recent graduates reflect the three primary outcomes for aspiring entrepreneurs.
“Shyam [Yadati Th ’01] is the example of the failure,” Fairbrothers said. On the other hand, Fairbrothers said that the company Matt Marolda Tu ’02 started signified “the success” and Lee Johnson Tu ’05 represented “‘the jury is still out’ story.”
The idea behind the product that Yadati and Jason Warren Th ’01 created — a personal mp3 player — would later take the world by storm. Unfortunately for the duo’s entrepreneurial start-up, Apple’s version of the device, not theirs, would grow to dominate the market.
“We made the iPod before the iPod,” Yadati said.
Together Yadati and Warren formed the company Mobius Audio to sell their invention. In some ways, Mobius was a victim of circumstances, Yadati said.
“As we went through this process, the iPod came out,” she said. “It was very difficult with a large competitor out there like Apple.”Moreover, Yadati and Warren tried to raise money for their company in the years 2000 and 2001, a time that was generally inhospitable to new start-up companies.
Ultimately, Yadati and Warren decided to abandon their business venture.
“Our personal runway, in terms of how much time and money we were able to spend on this, started to run dry and we had to make some very difficult decisions and so we closed shop,” Yadati said. “The only regret is that I thought I was working very hard on my business and I look back and I think I could have worked 10 times harder.”
While Yadati reported spending long hours at work, he wishes he would have been more efficient and productive.
In contrast to Yadati’s experience, Marolda experienced success in his post-graduation business efforts.
After graduating from Tuck, Marolda founded and became CEO of StratBridge, a company that helps corporations sift through data analysis. Marolda’s company has performed well since its inception.
“We were fortunate to be cash flow positive in the first quarter and we haven’t been negative since,” he said.
The company of Lee Johnson Tu ’05, Stellaris, has seen mixed success and is still developing. Johnson is the vice president of business development for the solar panel-producing company.
According to Johnson, there are two primary challenges concerning solar panels — they are expensive and they are not always aesthetically pleasing. Although Stellaris, according to Johnson, addresses both of those issues, the company’s future still remains murky.
“We’ve had some investors tell us that China would crush any American or European firm,” he said. “We have a lot of interest from secondary investors but we’re still looking for a primary investor.”
The panelists also fielded questions from audience members about the pros and cons of creating a company immediately after graduation.
Despite Mobius’ failure, Yadati said that there were certain aspects of his experience that he misses, namely the freedom he felt in running his own business.
“I think that’s the biggest reward,” he said. “Everything depends upon you. That would be the biggest thing that I miss. Getting up in the morning and saying how am I going to succeed?”
Ultimately, Johnson acknowledged that risk is an inherent part of any venture that can lead to great success.
“The only way you’re going to hit a home run, or a triple or a double is to step up to the plate.”