RPM-Strategy.com CEO advises Entrepreneurship Club on starting own business

By: Jeff Sullivan

Posted: 2/26/08

02/26/08 - The University of Rhode Island's Entrepreneurship Club presented CEO of RPM-Strategy.com Bob Panoff to discuss the ups and downs of opening a new business.

While speaking to the Entrepreneurship Club at its weekly meeting, Panoff's main point was that as the founder of a company, one cannot get bogged down with their own ideas while fostering a new company.

In order to be successful, an entrepreneur must be dedicated to the success of the company, and act with the fluidity of the market in their projects, Panoff said.

"You can't be [attached] to any one particular idea," he said. "Most founders and entrepreneurs get so focused on their idea that they do not talk to anyone until its done and they are proud enough to show it.

"You have to engage and get input from as many different sources as possible."

Panoff said the speed at which ideas are produced has increased drastically in the past few years. Instead of working alone in a room all day fixing bugs and fine-tuning the idea and then submitting a business proposal, Panoff said one should instead work on rapid prototyping in order to get one's ideas out quickly and efficiently.

Panoff admitted that starting a business without any capital to start with is extremely difficult but still possible and profitable, but experience is always more important.

"If you want to be a successful entrepreneur, you have to become a subject matter expert in something," he said. "A friend of mine actually started his business in his garage next to a pizza place in Hyannis, which contributed greatly to his success.

"Little by little the company grew, and it eventually went public with $70 million in revenue and was worth $800 million when he finally sold it."

Panoff's company, RPM-Strategy, is a business consultant that originally started off helping small companies develop their strategies, but since then has built up a strong reputation, now serving big-name companies like IBM and Cisco as clients. Panoff said because of his former experience with large companies, he picked up on what he says is their inherent problem, and later began a business to deal with it.

He said once a company gets too large, it cannot pay each customer the same amount of attention, which ultimately causes it to lose touch with its clients.

"Our company soon started to diversify, I mean you can't have just one customer," Panoff said. "[But we got so big] our customers themselves became a buffer that separated us from them and kept us from understanding [their needs correctly]."

Panoff named another problem within the transition from smaller to larger businesses. He said normally the original members of the company have a great amount of trust within one another in both their character and competence because of the experiences they all shared, and this can be lacking once the company gains new employees with its growth.

"When you're in a small business, everyone does absolutely everything," he said. "Back with my first startup we actually had a contest to see who would clean each bathroom."

Panoff said when a company has to hire new staff there is a general mistrust between the old and new regimes. He said that the old members' ego and exclusive bond would isolate the new employees from their bosses, which could lead to pointless bickering and inefficiency.

Panoff also touched upon the importance of what could be called "laboratory" business practices, in which one tries an idea out in a smaller area with the hope of eventually implementing it into a larger pool of clients, which he referred to as the "big pond."

"Rhode Island is so small, that you could easily come in and do an innovation here and perfect it at some volume," he said. "Learn all the lessons you need to learn, make your mistakes and then bring it to the global market."