Human Capital Pays Dividends for Entrepreneurs
Kay Koplovitz, Founder and Former Chairman and CEO, USA Networks
In today’s challenging environment, even the most ruggedly individualistic entrepreneur needs a network of support. Some turn to private circles of friends and business acquaintances; others, such as myself, also seek out peer groups.
In my case, I’m a member of two such groups, The Committee of 200, for entrepreneurial and executive women building or running companies (or units) of a certain size—revenue of $15 million for the entrepreneurs, $250 million for the corporate women—and World President’s Organization (WPO), a coed variation on the same theme. Although I’ve also joined other types of organizations, such as media trade groups usually open to all in an industry, it is in the peer-to-peer groups whose membership is selective and often by-invitation-only that I have found the support necessary to function effectively as an entrepreneur.
Indeed, in building my first company, and in subsequent nonprofit and for-profit ventures in the venture-capital-matching and director’s-search business, respectively, I’ve discovered again and again that it is human capital that pays the most lucrative dividends for me, the entrepreneur.
Back to the Future
First, some history: in 1984, anticipation filled the air that women were about to make it out of the office pools and into the entrepreneurial ranks and executive suites. It was at that time that both of these tracks for ambitious women connected in the formation of the one peer group to which I’ve belonged ever since, The Committee of 200.
Back then, three of the organization’s dozen founders—Pat Cloherty, a venture capitalist, Christie Hefner, Chairman and CEO of Playboy, and the late Jane Evans, who made her reputation as CEO of Monet Jewellers (and who died tragically, in November 2003, on a business trip)—convinced me to join. The attraction for me involved the chance to meet women from industries other than the media, where, as the founder of the nation’s first basic cable network, USA Networks, I was already connected.
In the early years, we C200 members discovered that, despite our vastly different industries, we faced many of the same challenges, and we delighted that we now had new friends with whom we could explore areas of concern. Our national meetings held twice a year in different cities provided opportunities, not only to commiserate, but also to share a bottle or two of great wine, a few songs, and—all in good fun—a mocking of the (mostly male) titans of industry.
Getting Down to Business
Cut to the present: in the ensuing years, I’ve learned that peer groups, such as C200 and WPO, are also invaluable resources for opening doors in my entrepreneurial pursuits. In 2000, when colleagues and I launched Springboard Enterprises, a nonprofit entity that helps women entrepreneurs prepare and present business plans to venture capitalists, I turned to members of both groups. Indeed, a major benefit of joining is that members are responsible—and responsive. If you get a call from a member, the courtesy is that you return it.
And they returned mine. At a time when women were nascent participants in the drive for the capital that builds companies, my peers advised that Springboard work to assure that only the right women present and that their business proposals be worthy of funding. Indeed, members were candid with me about the fact that women would be judged more harshly. In addition, they pointed out the need to take into account geographic preferences: that Silicon Valley VCs might favor tech proposals, for example, while those in Chicago would look to biotech enterprises weighted toward the agricultural industry.
In all, about a half dozen C200 members were instrumental in enabling me to launch Springboard. Since then, numerous others have supported the organization by coaching the 320 fledgling female entrepreneurs who have presented to the VC community during Springboard’s first five years. Now some of the most successful of those presenters, in turn, serve as mentors to Springboard’s next generation of company founders.
Building a Business With Peers
In 2003, my ability to draw upon the resources of my peers in groups such as C200 and WPO took a different turn, enabling me to participate in the formation of a new for-profit boutique search firm, The Directors’ Council, that endeavors to place women and minorities on corporate boards. It was a C200 member, Jane Evans, who initially approached me. She believed that the then-new Sarbanes-Oxley legislation mandating changes in financial reporting in the wake of several corporate scandals would throw open the doors for women and minorities in the boardroom.
I knew she was right, so I agreed to join, and we went about recruiting other partners with board and executive experience at Fortune 500 or New York Stock Exchange-listed companies. Again, our affiliation in our peer group proved invaluable: five of the original eight partners are C200 members.
In addition, the women we consider for board candidacies, many of them entrepreneurial, give us an opportunity to serve on the flip side of the peer experience. As an advisor, I’ve taken many calls from women who’ve built thriving companies but haven’t written a resume in decades and now need direction for composing such a document targeted at securing a board appointment.
Joining Your Peers
Giving back; receiving so much—support, advice, contacts, and even, on occasion, financial backing; forging friendships that last a lifetime and sometimes transcend business: with these as the enduring advantages of peer groups, what’s there not to like?
Not much, as it turns out, which is why I would recommend membership for today’s most ambitious entrepreneurs. If you elect to join, you may find that the groups, which routinely canvass the business landscape for likely new members, have already begun soliciting you. However, keep in mind that the process works in the reverse as well and that you can approach those that interest you.
Start by getting to know someone who is a member and expressing interest; you’ll likely need a sponsor to bring your application forward and promote your candidacy. Be sure you know what the group you’ve targeted represents and that you have determined that you fit its profile.
Once you have joined, by all means, participate. While I can’t enumerate a baseline level of activity for achieving maximum benefit, I would argue that if you aren’t attending at least one major conference as well as three or four other events a year, you should be asking whether membership is useful for you. Network. Be a valuable member to other members. Make friends.
Clearly, some of my longest and deepest relationships have developed in peer groups. Multiply that by the experiences of hundreds—indeed, thousands—of other entrepreneurs, and you’ll understand why the power of peer groups is felt everyday. It’s the human capital, after all, that proves to be the most valuable in the end.