Nationally Renowned Entrepreneur, Rob Ryan Speaks to Montana High School Students

Missoula SCORE http://www.missoulascore.org/ brings high-tech pioneer to Bitterroot high-schoolers at its 11th annual all day Youth Entrepreneurship Seminar (YES)

High-tech pioneer Rob Ryan http://www.entrepreneur-america.org gave business advice and told stories from his startup days to a group of high school students in Missoula on Friday.

By Robert Struckman of the Missoulian

The speech was part of a seminar sponsored by the local chapter of SCORE, an 11,500 member national volunteer association. All of the 65 students were from the Bitterroot Valley.

It was the late 1980’s, Ryan said. He was an engineer with a business plan for Ascend Communications.

After one disappointing meeting, Ryan pitched the idea to a guy in the largest capital investment firm in the United States. But the investor didn’t have much time.

“I met him while he was getting on a plane at the San Francisco airport.” Ryan said. The investor had 20 minutes. Ryan rushed to the airport. The investor heard the pitch, read the plan on the plane and raised $3 million to get the company started.

At that time, Ryan’s idea was a refrigerator-sized box that handled connections between telephone lines.

Three years later, all the money had been spent. No product had been developed. Nor did Ryan have any customers.

At a meeting with his investors, Ryan gave the bad news.

But he also had a piece of good news. He had another idea, he said.

The investors had a good laugh- and then funded the new idea.

Ryan had six months, he said, to build a product and find customers.

“We got lucky, and it worked out,” he said.

The product allowed video monitors to communicate with each other. It was a pretty good piece of work, allowing the company to grow to about 60 employees and a value of $15 million. But the total investment had been $18 million.

Ascend’s founders brainstormed about how to use the company’s core strength to develop more products.

“We started thinking about what we did well,” Ryan said. They knew how to build a computer that could dial into a phone line electronically to make connections.

“Is that hard?” he asked.

Yes, it was an art, he said. Phone lines involved switches and connections, high-speed and low-speed data flow.

This was 1990. The Internet was nothing like the business rage it would become. But Ryan thought a new product might do well to service this new medium.

The idea was to use the company’s phone connection expertise to help Internet service providers allow Web surfers to dial into the Internet easier and cheaper than they had in the past.

Ryan took the idea to the company’s board.

“The thought I’d lost my mind,” he said.

About one-third of the company’s employees quit. They thought the idea was that bad.

But Ryan had more than faith. He and two others spent three weeks traveling to every one of the 300-odd Internet service providers in the United States to ask them what they wanted and needed.

Some of them drew out plans for Ryan on napkins. Those plans became the blueprints for Ascend’s Internet access hubs.

Each hub sold for $80,000. Each cost $1,200 to build.

“That’s a pretty good profit,” Ryan said. It was also a pretty good deal for the customers, because previous products had cost $160,000.

Ascend grew fast. Within four years, its value was $1.4 billion.

“What else can we build?” Ryan said. “I like this way of thinking.”

Ryan likes it a lot. That’s why, since he retired at 42, Ryan has perused hundreds of business plans and met with a steady stream of entrepreneurs. Always, he wants to know the company’s core strengths and its customers. Who will buy the product and for how much?

If he likes an idea, he invests in it. If he really likes it, he’ll serve on the company’s board. He’s on five boards. He just left the board of Bozeman-based RightNow Technologies, Inc. http://www.rightnow.com/ because it went public.

“I get off when it goes public,” he said.

When Ryan finished, the students asked questions. One wanted to know what a person could do to make sure their business didn’t fail.

It all goes back to the product or service, Ryan said.

“If it’s got value, you’re on the right track,” he said.

Reporter Robert Struckman can be reached at 406-523-5262 or [email protected]

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Rob set the stage for the other local entrepreneurs who took turns describing their companies and then posing specific questions or challenges to the students.

SCORE would like to thank Rob Ryan and the other presenting entrepreneurs who gave the students a look into the challenges and rewards of being a successful entrepreneur.

Rob also presented copies of his book "Entrepreneur America – Lessons from Inside Rob Ryan’s High-Tech Start-up Boot Camp" to the libraries of each school that attended. This book is available in paperback as "Smartups" at http://www.cornellpress.cornell.edu/cup_detail.taf?ti_id=3934

The other presenting entrepreneurs were:

MIKE SPARR – GOOMZEE http://www.goomzee.com

CLAY MATHEWS – MONTANA CAMO http://www.montanacamo.com

AIMEE MCQUILKEN – BETTY’S DIVINE