Startup Success Tips From a Business Plan Winner
These days, Will GrayLin spends much of his time in Shanghai. As founder and CEO of Medford, Massachusetts-based Way Systems Inc., GrayLin, 35, is laying the groundwork for his unique mobile transaction system slated for a September market release. Aimed at China's 100 million small merchants who have no cost-effective access to landlines, Way Systems will help merchants use cell phones to cheaply process credit card transactions.
The system, which includes both the hardware that attaches to a cell phone and a handheld printer, promises to benefit from the 500 million debit cards in circulation in China. Way Systems' exclusive patents make the solution less expensive than their competitors, a powerful selling point. The timing also seems perfect, with Chinese banks eager to ramp up nationwide mobile transaction capabilities in time for the 2008 Olympics.
But developing a revolutionary concept at just the right time is only part of the company's successful evolution. GrayLin, a seasoned startup veteran and graduate of MIT's Sloan School of Management, believes that sensitivity to market conditions has been just as important as the company's other competitive advantages. "We started out with huge amounts of enthusiasm," says GrayLin of his company's inception in 2001, "but inevitably we needed to spend time figuring out whether it was just in our minds or whether there was truly a need for our solution."
Overwhelming need for the product has since been proven, but GrayLin hasn't let his fervor blind him to market realities. "If you're not listening to the market, not being sensitive to course changes, then sometimes there's a persistence that will lead you off an edge," he says. "Inevitably you have to change course as you find out more." GrayLin's original plan underwent 100 major revisions, many related to the changing conditions of China's burgeoning market environment.
GrayLin also got some valuable advice after winning two business plan competitions in Boston. Placing first in Northeastern University's $60K Business Plan Competition in 2003 secured $60,000 for the company, but helpful counsel regarding the patent rights proved to be even more important in the long run. Business leaders and venture capitalists from the contest panel told GrayLin to finalize his intellectual property licensing as soon as possible. When the patent issue came up later in meetings with venture capitalists, GrayLin was well prepared.
|Four Ms of Startup Success|
According to William GrayLin, the following elements are essential to the success of your new business:
At Harvard Business School's student-run "Battle of the Business Plans" earlier this year, the company won an additional $4,000 before a packed crowd of 500 attendees. While the Northeastern and Harvard competitions had different formats (the Harvard competition asks for 30-second elevator pitches as part of entrants' presentations), Scott Goldthwaite, now vice president of services and support at Way Systems, says the contests forced the management team to put a good plan together. "It was a good stick and carrot to get it right," says Goldthwaite.
While winning such high-profile competitions gave the company cash and public relations exposure, GrayLin doesn't believe winning competitions necessarily leads to venture funding. "Business plan contests will get you better calibrated to what some investors want. It's certainly no guaranteed source of funding like three years ago," he says, when, according to GrayLin, somebody would throw money at you pretty quickly if you were a contest winner.
Recently, some of Way Systems' much-needed venture capital has started to roll in. The company just raised $3.6 million this summer in first-round funding, a milestone considering today's economic climate and the caution investors have shown with regard to technology startups.
For GrayLin, the growing momentum is reason enough to maintain his own strong sense of caution. Establishing offices in Shanghai and Singapore is about "getting the first one or two customers happy before we move to making this thing scale," he says. If all goes well for the company in China, operations will eventually expand to other developing economies such as Mexico, Brazil, South Africa, Egypt and locations in Central Europe.
Building his vision with feedback, flexibility and perseverance, Way Systems has sidestepped some of the hazards peculiar to tech startups such as intellectual property tangles and market miscalculations. When it comes to turning a good idea into a viable business, "the balance has to be struck between listening to yourself and driving hard at where you need to go," says GrayLin. "The opportunity is real and you can get there."
Lucy Sutherland is a Boston-based freelance writer who has written about media and investor relations.