To say that 2009 was a year of insecurity for finance and business is, of course, an understatement. Markets roiled, venture capital and fundraising dollars were scarce, and careers in financial services were put on hold. For five Columbia Business School graduates, however, the crisis presented another face: that of opportunity. HERMES spoke with these alumni about how they strategically navigated the downturn and found success.
Forty-one years to the day after Tarek Sherif ’91 immigrated to the United States with his family, he launched his company’s initial public offering on Wall Street. He is the cofounder, chairman and CEO of Medidata, a healthcare technology firm that provides software services to life science companies. On June 25, 2009, the 10-year-old company went public with a valuation exceeding expectations — and capped a remarkable decade of growth from $1 million in revenue and eight employees to $100 million with more than 700 employees worldwide today.
Sherif credits Medidata’s success to its survival of the dot-com era. Lessons learned early in the company’s history about staying lean, being collaborative with customers and constantly innovating have allowed it to navigate the issues of scaling growth and survive the year’s economic crisis. “You hit these barriers around scalability whether it is in personnel or technology, and we learned to navigate that very well,” he says.
Sherif says that even with the choppy market in June, the time was right for the IPO. “We wanted to have the currency to do potential acquisitions and continue to grow the business organically,” he says, “and strategically we wanted to have a public forum to discuss our successes and wins.” He says the company’s transition to a greater focus on managing the business through metrics laid the groundwork for the successful IPO.
“We have a business model that has recurring revenue. It has a lot of predictability, and investors are very interested in that,” he says.
At the other end of the start-up life cycle, entrepreneurs like Elena Bajic ’06 and Thomas Campbell ’09 also found success last year. Bajic, part of a new generation of dot-com start-ups, founded Ivy Exec in January 2007. It is an online recruiting company and job board for top-tier candidates. Since the launch, the site has helped more than 30,000 career-seekers.
Bajic says that niche job sites like hers, which uses a screening process and represents MBA graduates and other professionals, has met a growing need for recruiters, who can receive thousands of online applications for one job. “The problem today is how can employers reduce the number of résumés they have to screen and still end up with a hire?” she says.
Bajic adds that scaled-back recruiting efforts from big firms last year leveled the playing field. “We are a small company used to working on small budgets,” she says. “When you see that the budgets of big job boards are slashed, it creates an opportunity for us.”
Finding opportunity amidst a leveled playing field was key for Campbell as well. When he finished his MBA in June 2009, he made a counterintuitive decision: he turned down an offer on Wall Street in order to start his own company, Thorobird, a community real estate development venture. Last summer, he closed a $26 million deal to develop 86 residential units in Harlem. He says the shaky economy was exactly why he launched his own venture immediately after graduation rather than waiting a year or two for a more traditional market environment.
“Any time the environment is risky, the prices converge,” he says. “So why go for the safe play when even the safe play is risky?”
Roger Fortune ’01 was successful combining his career in real estate with community development this past year as well. The Brooklyn Prospect Charter School, where he is a founding board member, opened its doors on September 8, 2009, with the first class of 100 sixth graders. Operating under a new charter from the State University of New York, the school plans to expand over the next six years until it is at full capacity, educating approximately 700 children in grades 6 through 12. Fortune was instrumental in raising money for the new school and identifying — and negotiating for—a new ground-up facility, which will open in August 2011.
“Fundraising before a school is open is particularly tough because you don’t have the natural constituents,” says Fortune, who has built a career in private and public real estate development, including at the Downtown Brooklyn Partnership. He is now vice president at Stahl Real Estate Company, a privately-held real estate investment firm in Manhattan.
He says the board members’ passion for education and their ability to leverage relationships were factors in achieving their $100,000 goal in individual donations. He adds that the economy’s downturn helped underscore the new school’s mission.
“Many of the donors who gave — and gave generously — realized that times are tough and that makes it even harder to provide quality public education,” he says. The economy also opened up better real estate prospects for the school’s move in 2011. “Nonprofit organizations like charter schools are much more desirable as tenants than we were two years ago because there are fewer private sector tenants to fill available space.”
For Kate White ’09 (EMBA), the crisis presented a different kind of opportunity: the chance to try a new job. She was working in credit product sales at Bear Stearns when she walked into work early on March 17, 2008, and learned that the investment bank had dissolved. White used that opportunity to re-evaluate where she wanted her career to go.
“With the wind at my back I said to myself, ‘Okay, what do I want to do?’ This was the kick in the butt to figure that out and go and get it,” she recalls.
Through conversations with a mentor in the Executive MBA Program, White planned a new career for herself in investor relations. There was only one problem—she had never actually held a position in that field. “I had to learn how to market myself and explain that even though what I was doing at Bear was so different, my prior experience and time at Columbia Business School would make me an ideal candidate,” she says.
Her strategy worked, and in October 2008, White was named director of investor relations for the Stanley Works, a Fortune 500 company. White says the key to her successful transition in a very tight job market was her insatiable curiosity.
“It can be very uncomfortable to say ‘I don’t have a job,’” she says. “But you just have to listen and ask a lot of questions. Consider a lot of different things—a year earlier I would have never thought I would have this job or be this happy. It’s my dream job.”