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Digital Frontier 1998
at Kellogg / Northwestern University
Keynote address - Tuesday evening

by Rick Smith (January 27, 1998)

Reviews OnLine is attending the Digital Frontier Conference at the J.L Kellogg Graduate School of Management at Northwestern University located in Evanston, Illinois. This year's theme is "Entrepreneurship in Technology". The conference focuses on successful entrepreneurial ventures and the individuals who drive them and the keynote address was no exception.

Rob Ryan, currently President of the Entrepreneur America Foundation and former chairman and CEO of Ascend Communications, spoke about his past entrepreneurial efforts with several companies and most notably, Ascend Communications.

Rob started Ascend in 1989 with three other engineers from Hayes Microcomputer. He served as Ascend's President, CEO and Chairman and he took the company public on Friday the 13th, May 1994. The company grew to over 500 million in sales in seven years under his capable leadership.

Rob tends to take a contrarian perspective to business. He feels that most marketplaces are much like a herd of zebras, filled with mostly "me-to" products, where it's quite difficult to distinguish the subtle differences between the individuals in the herd. He wants his products to be the "red" zebras, with clear and distinctive differences, making it easy for customers to distinguish his products from the rest of the "herd".

To create this uniqueness, and to be sure that a new product is relevant in the marketplace, he visits his customers and potential customers. In fact, the executive staff at Ascend spend 50% of their time on the road! Including the CFO! He feels that meeting with customers is the only way to make sure that he produces a product that his customers can use and most importantly, a product that they will buy. He calls the market exploration "seeing if the dogs like the dog food". He feels that too many business plans are written with all sorts of financial spreadsheets, with no time taken out to see if any customer would buy the product.

He used this adage at Ascend from the very beginning when his initial product was 70% developed, but had used up 95% of the venture capital money and was only a few months from shutdown. He went on the road to talk to potential customers and found a new market for his products. He even came back from this road trip with a $40,000 check from a potential customer, without a product to ship or even a price for the product, once he built it! This order impressed the venture capital firm so much that they continued the funding. Ascend was on its way and began to build products for the video teleconferencing business.

And the business grew -- to about 40 million in sales. Rob had a goal to create one new market for his products each year. He feels that "market creation" is the only way to truly grow his business, since product improvements and new products only tend to cause market share erosion in older product lines and don't grow a business quickly.

So he found a new market for his products and began to concentrate on making products for the ISPs (Internet Service Providers) using dynamic bandwidth. He found that this fast change strategy caused some of his staff, content with the profitable video teleconferencing business, to question his leadership. Eventually 20% of his employees quit. He overcame these problems and the company grew to over 150 million in sales.

It continued to grow for several years, under his leadership. He left Ascend in 1995, partially because he had intense, major back trouble but mostly because he didn't know all the employee names and what projects they were working on, which he once knew. In short, "It wasn't fun anymore".

Rob then went on to start Entrepreneur America, an incubator for high technology startups. He mentors promising entrepreneurs and assists them in developing their business plans, sharpening presentations and raising venture capital. The opportunity to acquire shares is the only payment Rob receives. Entrepreneur America is located in the Rocky Mountains at the Roaring Lion Ranch in Hamilton, Montana.

Copyright 1998 Rick Smith All rights reserved.

   
Issues in this article
Rob's Contrarian Perspective
Meet with Customers
Create new markets
Entrepreneur America
 

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