Panelists advocate diligence, patience for entrepreneurs
In the late 1950s, attorney Jerome I. Feldman was among the co-founders of National Patent Development Corp., which aimed to seek out and develop dormant patents.
National Patent’s stock debuted at $1 in 1961. A decade later, the company’s stock traded at more than $400 after the FDA approved the first soft contact lens, which National Patent was instrumental in developing.
But Feldman, who resides in Bedford, acknowledged he experienced his share of failures as well. While CEO of National Patent, the company agreed to buy a unit “from a large corporation called WorldCom,” Feldman said at a Feb. 14 roundtable discussion hosted by the Business Journal. “What we did not know, but we should have, because our due diligence sucked, was they cooked the books.”
At the Feb. 14 roundtable, Feldman, fellow entrepreneur Neil Rosen and author Jim Muehlhausen discussed the trials, tribulations and pitfalls of starting and growing a business for more than 200 local business representatives in attendance.
The event, which centered around a discussion of Muehlhausen’s book “The 51 Fatal Business Errors and How to Avoid Them,” was hosted by the Business Journal and Wag magazine at the Renaissance Westchester Hotel in West Harrison.
From developing a business plan and hiring staff to fundraising and seeking out business partnerships, the three panelists emphasized the significance of conducting due diligence.
“Due diligence is key to any business,” said Rosen, who founded online marketing firm eWayDirect in Southport, Conn., in 2001.
His bout with failure came in the mid-1990s.
At the time, the National School Reporting Services – a company Rosen founded that provided information on school districts to relocating families – was growing “very nicely.”
But it went downhill from there, Rosen said.
“We decided a great way to expand the business would be to do some franchising, and then we got involved with the wrong franchise partner,” Rosen said. “We did not do enough due diligence and ended up with a franchisee in California that basically stole all of our data that we provided – and we spent a lot of money collecting data every year.”
National School Reporting Services was sold in 1999 to Central Newspapers.
Feldman, who retired as CEO of National Patent several years ago and who has since served as chairman of former National Patent subsidiary and software developer GSE Systems, said it’s important that entrepreneurs have short memories.
“You need an enormous amount of energy and (the ability) to forget the prior disaster, the one you just did not succeed in and just go on ahead,” he said.
Rosen said the most important characteristic of a successful entrepreneur is the ability to delegate tasks. “Being able to not have control, manage, run, oversee, micromanage, everything else, every day,” he said.
That requires business entrepreneurs to constantly evaluate whether their employees are the right people to take a business to the next level, Rosen said.
“It’s not always a question of good people versus bad people: it’s a question of … how do you get your company at its current stage of growth to get the right people who are going to help you get to the next level,” he said.