International Journal Young Leadership

Number 4 July 2012

CONTENTS

Editorial

How to Evaluate Business Ideas Babis Makrynikolas

Expanding to the United States as a European startup Robert Rebholz

The NGO Urece: How eight young people changed the sports for the blind in Brazil Gabriel Mayr, Mauana Simas, Rafael Ceccon

Shop Small George Dekermenji

Modernization of Tradition: Entrepreneurship among Artisans Tapan R. Mohanty

The ethics of Business and new entrepreneurs George Michaelides

In Depth Article

An Entrepreneurial Tale: Tim Souritzidis, Creative Director at Timothy George Label Katerina Dimitratos

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Editors-in-Chief Armando M. B. de Castro Brazil Babis Makrynikolas Greece Guest Editors-in-Chief Katerina Dimitratos USA Magdalena Victoria Noga USA Associate editors George Michaelides Cyprus

Carlos Jose Marti Puerto Rico

Anna Kowalska Poland Mitar Bozic Bosnia Isabela Martins Brazil Konstantinos Tsanis UK Contact info@leadersjournal.org http://leadersjournal.org

Partners Noam Gidron

Israel

Rob Rebholz Germany Alessandro D'Amico Italy Website Developer Zacharias Kapellakis Greece Editing Advisor Nikos Milonakis Greece Business Development Dionisis Danilatos Greece

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Editorial

Four years ago, during an international gathering on a small

Mediterranean island, the International Journal of Young

Leadership was born amongst a group of young and aspiring

students who hoped to continue an international dialogue without a

regard for borders. Today, a global team produces the Journal with

contributions from around the world to present an international

perspective on new, creative ideas and analyses.

Our fourth annual issue Entrepreneurial Strategy: Leadership in the

face of obstacles includes articles that are research based and

analytical, or interviews of entrepreneurs, accounts of failure and

success, and important lessons learned during their endeavor. In

the current economic climate, we felt it integral to learn from each

other’s mistakes and share stories of success in the entrepreneurial

process. Peter Drucker once wrote “the best way to predict the

future is to create it”, we hope that our issue will inspire and

motivate our readers to create their own stories of success.

To conclude our fourth editorial, we would like to begin by thanking

our Editors-in-Chief and Founders, Babis Makrynikolas and

Armando Martins, for believing in us and allowing us the

opportunity to lead this issue to publication. Furthermore, we would

like to thank our world-wide supporters who read the journal year

after year, and also our global team of editors, collaborators,

website consultants and editing advisors for their great commitment

and hard work.

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We hope that you will enjoy the fourth issue as much as we

enjoyed creating it and become a member of our growing

community by reading, expanding our network, writing, or joining

our team.

We wish you a great experience, Katerina Dimitratos and Magdalena Noga Guest Editors-in-Chief Associate Editors, USA

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How to evaluate business ideas Many of us have ideas and try to start a new venture. But how do you evaluate a business idea? Is there an objective way or a framework that entrepreneurs can apply? There will always be outliers and unpredictable successes, but having a structured way of thinking of an idea’s potential for sure increases your venture’s chances of success. An interesting model that many professional investors use is the POCD. POCD was first introduced by HBS professor Bill Sahlman and stands for People, Opportunity, Context and Deal. People are “the individuals or groups who perform services or provide resources for the venture”. People are, for some investors, the most important aspect of the business, as many fund people rather than ideas. The past experiences of the founders and their successes or failures are an indicator of future performance. A complete team needs to combine business and technological expertise and potentially other specific knowledge or experience depending on the industry. Team motivation and commitment are crucial and many investors reject funding entrepreneurs for whom the success is not really a “win or die” game. Moreover for practical reasons, and since VCs receive hundreds of business plans every day, having a network and being known in the entrepreneurial community helps at least passing the first scan. The model and the author do not state that not having experience definitely leads to a failure, but for sure probabilities are against you. After all investments are a game of statistics, where you try to increase the success probability and decrease risk. Opportunity is “any activity requiring the investment of scarce resources in hopes of future return”. Regarding the opportunity, the main question is about the total addressable market, which ideally should to be large enough and growing (as a rule of thumb VCs expect the venture to be able to reach $50m in revenue in five

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years). That stands for the simple reason that it is easier to take a market share in a growing market, than fight incumbents for their share. Knowing the customer’s needs and having a simple financial model of how much it costs to serve him (create and sell the product) and how much you can sell the product for, is the minimum requirement for market understanding. The go to market strategy has to be realistic and able to adopt. It is a fact that most startups pivot at least once in their life until finding a viable business model. A simple way of evaluating industry attractiveness is the Porter five forces model. The five forces defining the level of competition are the bargaining power of suppliers, the bargaining power of customers, the threat of substitutes, the threat of new entrants and the rivalry among existing players. The intellectual property, patents and in general any way to create a competitive advantage are important in assessing the opportunity. Context is “all those factors that affect the outcome of the opportunity but are outside of direct management control (interest rates, regulations, economic conditions)”. We are concerned about context but maybe more importantly about context changes. For example a deregulation can open an entirely new market, creating new opportunities. Deal is “the set of implicit and explicit contractual relationships between the entity and all resource providers”. Besides the valuation of the company and the shares that each player holds, there are other important factors such as restrictions and terms about funding in next rounds. According to Sahlman, “from whom you raise capital, is often more important than the terms”. His main argument is that the connections and expertise of your investors will create opportunities and help you in ways money can’t. A good deal should be simple. Its function is to ensure that the company has enough time (money) to reach the next goal (develop technology, bring the product to market) and raise the next round of

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funding. Moreover it should align the incentives of all participating parties. Overall what is important is the “fit” between these four factors. We are not looking for over performance in just one or two of the before mentioned dimensions, but more of a general alignment in order to achieve the final goal. Evaluating business ideas is not easy. There are so many factors and variables that the outcome is unknown. Whoever supports the opposite is at least naive. What entrepreneurs have to do is try to play with positive odds. Only that way they can increase the chances of success. I will close with Sahlman’s words using the Nike model (slightly less sophisticated, but almost equally valuable) to advice young entrepreneurs “Just do it! If not, just say no!”. Babis Makrynikolas References

William Sahlman, “Some thoughts on business plans” HBS 1996

Michael Porter, “Understanding industry structure” HBS 2007

Sequoia Capital Website http://www.sequoiacap.com/ideas

Marmer, Herrmann and Berman, “Startup Genome Project” May 2011

Michael Roberts and Lauren Barley, “How Venture Capitalists evaluate potential venture opportunities” HBS 2004

Paul Graham, “How to start a startup” Harvard Computer Society 2005

Bing Gordon, Partner at Kleiner Perkins “CEO 2.0”

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Expanding to the United States as a European startup We are about to do what’s highly unusual in the entrepreneurial scene: We’re going to expand to the United States as a European startup. Traditionally it’s always been the other way around for Internet-related ventures: Tech entrepreneurs would develop business models in Silicon Valley, scale firms around those, and then bring these to Europe. In the last years, this model slightly changed, as European investors increasingly funded European teams copying successful US business models. Those ventures have to a large extent been extremely successful, yet pretty unoriginal. While copying reduces risks, it also means that you can never truly surpass your role model. An important reason why Americans innovate while Europeans often rather copy is a different state of mind. The American spirit is characterized by a stronger willingness to take risks. Our team is from Germany, a country that we believe to be especially risk-averse. Failure is something that Germans fear a lot and that thus drives them to more secure careers than entrepreneurship. The state of the German economy proves that this is not necessarily a bad thing, as it means that when Germans start businesses, those are often very sustainable. It however also means that us Germans lose out in a fast-moving environment that is characterized by ambiguity. The “lean startup” movement that has taken the US entrepreneurial scene by storm thus is something that is extremely contradictory to the German spirit: The lean startup approach is basically about building a so-called “minimal viable product” as quickly as possible, testing it’s market potential and only in case of positive customer feedback continuing to further develop the business. It enables entrepreneurs to literally fail quicker and hereby iterate more often in order to find a working business model. It’s an approach that however is extremely contradictory to the German spirit of striving for perfection.

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When we launched online kids’ fashion company “kindsstoff”, we were indeed aware of the lean startup approach but decided to make sure that we didn’t go to market with something “too lean”. We are German, after all, yet tried to keep in mind the American entrepreneurship best practices. In fact, we think that our business approach combines American as well as German elements: While kindsstoff on one hand leverages the fast-moving e-commerce space, it is also characterized by the desire to provide high-quality products in a sustainable manner. To be more specific, kindsstoff lets parents return their kids’ outgrown kindsstoff-clothing in exchange for new items that they get at discounted prices. This is all done online and solves parents’ problem that kids grow and clothes don’t. It also pushes customer loyalty. Returned used clothing is then given “a second life” since it is all either donated, resold, or recycled. In Germany, kindsstoff therefore for instance recently teamed up with globally renowned social development organization SOS Children's Villages e.V., to whom kindsstoff donates every third returned item that is still in mint condition. Our hypothesis is that German (and European) startups that are built on elements that those countries have strengths in, actually have good chances of making it in America. In our case, the German virtues that kindsstoff is based on are for instance quality-focus and the sustainable use of resources. We thus don’t only sell kids’ fashion, but furthermore produce in Germany and the USA- in a very eco-friendly manner. Some of the trends we are betting on are the move away from the “Throwaway society” and an increased consideration of social responsibility. We don’t just see the US as a market, but believe that a presence in California will furthermore enable us to gain speed in our e-commerce efforts (one of the United States’ core competencies)

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while allowing us to incorporate California’s style into our products as well. A presence in Europe and the USA thus enables kindsstoff to take advantage of both worlds’ strengths and become a better company. Launching kindsstoff was not an easy step for the three of us, who worked together as management consultants for the last few years. It meant leaving behind well-paid low-risk careers for the sake of pursuing a vision. What gave us the courage to nevertheless follow this path was not only the fact that we believed in the kindsstoff business model. An important aspect was the fact that as a consulting team we had done very well in various high-pressure assignments and had become friends with complementary characteristics (supply chain management, marketing, finance, etc.). In the end, no great idea can ever become a reality without the right team. We of course still have to prove the truth of our assumptions, but feel confident that our approach of US-expansion might be an opportunity for the growing European startup scene to innovate and build upon its local strengths, hereby benefitting Europe and the USA. Robert Rebholz, Alexander Reichhuber, Sebastian Schmoeger, Lisa Wesner Note: kindsstoff will launch in the USA in September. To be among the first to know when we go live, please sign up for the newsletter on www.kindsstoff.com

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The NGO Urece: how eight young people changed the sports for the blind in Brazil Urece Sports and culture for the blind is an association based in Rio de Janeiro, Brazil, that promotes activities for blind and visually impaired people, in a wide range, from grassroots, rehabilitation or/and participation at competitive level. These activities include Dance classes, Athletics, Swimming, Goalball, Football for the blind and Rowing. The association was created to fulfill the dream of eight pioneers, young professionals and athletes with visual impairment, who felt that it would be possible to take a step ahead on the sports for the blind in Brazil and around the world. The president has a complete visual impairment and is an athlete. Anderson was also World Champion and Paralympic gold medalist on Football for the Blind, which ensures that the association is not only made for the blind, but strongly BY the blind. That is the principal quality of Urece and there is a huge empowerment process in it. Taking an entrepreneur approach to the work, Urece has achieved many goals towards the inclusion of the blind into Brazilian society, always focusing in innovative experiences and projects. In 2008, while Gabriel Mayr, one of the founders, was writing the master's thesis for the EMMAPA course, the football for the blind was started in the Czech Republic and the very first workshop of football for blind women took place in Germany. These initiatives unfolded in the first world cup of female blind football, won by Urece's team representing Brazil, and also allowed the creation of two teams in the Czech Republic. This year, Urece is working to organize the very first female blind football tournament in Brazil. Football for the blind is an official

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sport for men, but the international federation doesn’t recognize it as a sport to be played by women. Urece is trying to change this scenario of gender prejudice not only in Brazil but in the whole world, seeking partners that have the will to make an international network to fight for the official female blind football. Also, with Penalty, a brand of sports equipment from Brazil, Urece developed the first boots worldwide, specifically made for the blind football. These boots can enhance the ability of the players to control the ball and dribble, and make the shots to the goal more precise and harder. More than just boots, it is a piece of recognition that these blind players are athletes as any sighted athlete, and do deserve specific equipment for the sport that they practice. It is part of the work of Urece to get the same conditions for a blind and a sighted person. Also in 2012, Urece’s work was recognized at the Sports Relief Mile Fun Run, occurred on March 10th. At the end of the race, the two most prestigious athletes of Urece received the medals from the hands of the Prince William of England. This event underlined the excellence of the work that Urece has been doing. The perspectives are exciting to Urece, and it has now four visually impaired athletes working at the office, learning administrative jobs, and building a better condition for their future employment after they finish their sports career. They are promoting activities of accessibility for the association, like menus written in Braille for hotels and restaurants or training for employees of private companies to deal with a costumer with visual impairment. Anderson Dias, Urece’s president, explains that all this work has been accomplished with a very short budget: We are lucky to have a group of founding members who have a life goal of working with paralympic sports, and have been accepting to work just with pocket money until today, so that we invest all our resources for the athletes. We are not sustainable yet, so we need more support

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from companies and individuals; we already proved that we are able to deliver results, so I'm sure that every reader can support our work, said Dias. Gabriel Mayr, Mauana Simas, Rafael Ceccon For further information, you can visit www.urece.org.br

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Shop Small 2008’s near systemic economic collapse has brought about a complete change to our current business practices. Companies have been forced to reevaluate supply chain systems, diversify and limit investment portfolios, and reform the employment structure of both the private and public sectors. Everyone was forced to cut budgets, limit hires, cut workforces and become infinitely more efficient. This economic downturn affected everyone, but none more so than the graduating class of 2009. My class, as a whole, was competing for jobs with seasoned professionals, individuals with master's degrees and the graduates prior to us for over 2 years, putting us at a serious disadvantage in the short term - and an even worse scenario for the long term. After graduating in May of 2009, my goal was to work with a firm that would utilize my skills developed studying International Relations and International Economics. However, after submitting hundreds of applications, taking many exams and even more interviews, I was unable to find employment using the degree I had spent four years of my life working toward. I searched hundreds of databases and would search for entry level jobs, even those entry-level positions were looking for 2 years of experience! I became fed up with applications, phone calls and company websites. I had become so jaded that I nearly abandoned my search. After being laid off from one company because of lower than expected company wide sales, I spent the next month reexamining my goals and strategy to attain them. I came back focused on working for my family - and myself. I came back motivated to create a system that would work for my father's business and that I could apply when the opportunity arose to open up my own business. I focused my efforts to help him redevelop his business as there was a 40% reduction from 2008-2010. It was clear from his

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financials that he would be unable to pay me a traditional wage; therefore, I began working knowing that my wages would be commission based. I spent two months actively researching various competitors, their business models and how I could modify or adopt them to work for our business. What I learned was that the old models do not work! We, as a generation, need to rethink the old systems of financing, sales, inventory management, pricing and rents. For years, people and companies opened branches in order to facilitate an expected increase in business. The reality is that the increase in business is not to be expected but earned and developed through personal relationships. The need to develop personal relationships in order to generate new business is particularly important in the luxury jewelry market. This market is the first segment to be affected by an economic downturn because it is the most elastic, due to its dependency on disposable income. In order to improve our business there were three areas that stood out. The first area for improvement was inventory pricing. We needed to reduce our standard prices and provide an initial value pricing. This was complicated because we had been known for years as a local jeweler who provided many services and higher priced items. But in order to change the perception, we lowered prices and made our store more accessible to the masses in order to increase the number of sales. Secondly, we needed to drastically improve our clientele management system in order to generate repeat business. Lastly, we needed to diversify our bridal offerings because even in a downturn people still get engaged. The question became how to implement all of these changes quickly and efficiently while generating the traffic flow to sustain the new expenses associated with new technologies and

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marketing. Social media became the outlet as our vehicle of choice because of its cost efficiency and broad reach. We advertised using Yelp! and created a Facebook presence that is being used to showcase our products without the need to sell products online directly. Additionally, by offering financing we were able to compete with our larger competitors and build customer loyalty, an important factor as the likelihood of a second purchase increases by over 40%. Expanding our bridal line was difficult because it required large capital investment. However, we were able to shift the bridal business to customized engagement rings. This allowed us to fit our clients’ wants with their budget while creating an added value to the final sale. Most importantly, we were/are able to collect money upfront in order to create customized jewelry while incurring little out of pocket expenses in order to generate profits. I began working actively in February and by December 31st, 2011 we had generated a total increase in business of 27% percent from 2010. Generating a 27% increase in business in less than 8 months of implemented growth strategies is in line with what was projected. However, my initial template for success needs to go through longer testing, but if January and February of 2012 are any indication for the rest of the year, there will be real growth. The best part of working seven days a week and 10 hours a day is the satisfaction I get knowing that I was an integral part - if not the most integral part - of increasing my family’s business. I understand that I am fortunate to have been in a position where I am able to exploit my father for employment, and I have never taken that for granted. Nonetheless it is my drive to make his business succeed that led to the growth in our business, not chance. Nothing is more suited for highly motivated individuals who thrive in demanding situations than working in a small business. It forces the individual to “sink or swim” showing you the true measure of your abilities. If you demand responsibility and enjoy working on

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your own, success is truly limitless. I live according to two words, “SHOP SMALL.” It’s a way of life and what should be the cornerstone of local economies. We can no longer sit still waiting for companies to employ us, we must employ ourselves. George Dekermenji

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Modernization of Tradition: Entrepreneurship among Artisans The emergence of the new economic world order under the aegis of globalization and liberalization has brought the issue of economics of trade and commerce into international focus. In the context of development, the linkages between economic growth, social development and industrialization assumes paramount significance. In the aftermath of the liberalization of the Indian economy in the 1990s and its journey towards economic and political supremacy, the role of entrepreneurship cannot be undermined. Entrepreneurship is the key element in the entire gamut of the development of the Indian economy, be it venture capitalist, cyber technocrats or simply the brand Indian capitalists. The present article is a study of rural Indian entrepreneurs in an enterprising community woven in a semi-urban locality named Chanderi in the central Indian state of Madhya Pradesh. The study assumes that it is the entrepreneur and his entrepreneurial qualities which act as a catalyst in social change and development. The entrepreneur determines the logic and language of development strategy in his matrix of social situations. Entrepreneurial qualities, like ability to take calculated risk, adaptability towards change, better interpersonal and communication skills and achievement motivation play a significant role in the success of entrepreneurial venture. Theoretical Framework The dynamic notion of entrepreneurship, i.e., entrepreneurship as a force in itself for the expansion of economy was not in vogue till Schumpeter put forth his theory of innovation and economic development. Schumpeter attributes to the entrepreneur the unique quality of innovation that a mere capitalist lacks. His creative response to an economic situation is responsible for further

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expansion of economic activities. Schumpeter has clearly distinguished the managerial skills of a business leader from the creative response of an entrepreneur. In other words, the entrepreneur need not necessarily be the person who manages the day to day routine work; he is the person who brings about the necessary changes by introducing the innovative element that leads to the expansion of business. Max Weber builds up his theory on Protestant ethic which is religious fervor of rationalizing mundane activities eventually leading to the growth of capitalist order. The innovation of Weber’s entrepreneur is an outcome of thorough rationalization of every aspect of his entrepreneurship. According to Peter Kilby (1971) in both theories the energized entrepreneur appears in the traditional economy and sets in motion a revolutionary process of creative destruction. Context of Chanderi In the backdrop of the above theoretical explanation, it can be safely concluded that the position of entrepreneurship is of paramount importance in the making of a national economy. In a broader sense, the story of Chanderi is the story of modern India, the story of globalization and discourse of tradition and modernity. Chanderi is known as a textile town in the sense that the weavers of this areas produce, market and sale silk sarees of unique nature. The uniqueness lies in its design and fabric. After centuries of weaving and trading, the economic conditions of weaves remained unchanged. However, rise of entrepreneurial abilities among the younger generation of weaves had boosted their confidence and marketing ability, and retained their art thanks to the new Intellectual Property Right (IPR) regime. The decline of the traditional elite and connoisseurs of fine silk (the traditional patrons

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of the cloth) in the event of India’s independence, and subsequent support of government through cooperation affected the very process of production and the relations of production built around the weaves, even though there was a declining preference for traditional cloth in the event of modernity. Examining Entrepreneurship The rise of second and third generations of traders armed with better education and high exposure to mass media and marketing worlds has changed the face of silk trading. Needless to add, in the process they have been helped by civil social organizations, government and other external agencies. As a result, there has been some hope amidst a general climate of despair. UNIDO has developed a cluster program ensuring credit and training to the weavers. It also has launched its website, to popularize Chanderi silk on international level besides helping in its marketization. Fab India, a popular fashion brand specializing in the sale of hand-woven kurtas, churidar and other materials has also agreed to support the weavers of Chanderi. The Contributions of UNIDO, UNESCO, One World South Asia, Basix, Entrepreneur Development Institute, National Institute of Fashion Technology, National Institute of Design, Chanderi Development Foundation, Corporate Social Responsibility department of Oil and Natural Gas Corporation have brought cheer to the weather beaten faces of weavers. The global acceptability of Chanderi sarees and their marketability is beyond doubt, as in 1995 at the International Festival in Paris, Chanderi sarees came first in terms of design and quality. The foray of local traders and cooperatives selling Chanderi sarees in various fairs organized by governmental and non-governmental organizations have also drawn favorable response. In my interaction with the leading traders (entrepreneurs) of Chanderi like

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Mr. P. K. Jain, Mr. Jaju, Mr. A. C. Jain and Allahabadi brothers revealed that the GI protection, branding and marketization- especially the publicity from the Commonwealth Games held in Delhi-has helped them in gaining a lot of confidence and trade benefits.

Conclusion To conclude it can be said that if the benefits of globalization can be tapped and its machinery can be used effectively in linking the local to the global and channelizing global resources to buttress the local cause then we can change the face of impoverished rural India. The tremendous capacity of global market and its mandarins of management can certainly help us in transforming the countryside and community by eradicating poverty, increasing employment potentials and endearing education but only with a little bit of support and human ingenuity. But this can be possible by encouraging entrepreneurship in general and community entrepreneurship in particular like Chanderi. Tapan R. Mohanty References:

Bhagwati, Jagdish (2004). In Defense of Globalization. Oxford: Oxford University Press.

George, Herberton Evens Jr. (1949). ‘The Entrepreneur and Economic Theory”, American Economic Review, 1949.

Gloria V. Javillonar and George R. Peters. (1973). ‘Sociological and Social Psychological Aspects of Indian Entrepreneurship”, British Journal of Sociology, Vol. 24, No. 3, Sep. 1973.

Kilby, Peter, (1972). Entrepreneurship and Economic Development. New York: Free Press.

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Schumpeter, Joseph. (1951). The Theory of Economic Development, Cambridge, Mass: Harvard University Press.

Weber, M. (1930). The Protestant Ethic and the Spirit of Capitalism (Trans. by T. Parsons) London: Allen and Unwin.

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The ethics of Business and new entrepreneurs “Τhe business of business is strictly business”

If the above phrase was stated a few decades ago, it would be undoubtedly bolstered by the vast majority, both from people within the business industry, as well as the wider community of financial professionals. At a first glance, this phrase states something very obvious and absolutely logical in respect of the existence of a business; it reflects a somewhat simplistic view of the economic aspect of running a business from the entrepreneur’s point of view, where of course the ultimate goal of every business activity and startup initiation, is the realization of profit: how can a business’s viability become secured without that business realizing any profits. It is therefore, expected from a company, with the autonomy that it has in the context of the contemporary economic reality, to carry out all those activities that will enable it to have the greatest possible impact on its profitability. However, events we have witnessed during the financial crisis of 2008, with consequences that were imposed to the whole humanity, regardless of country or even continent - needless to mention the damaging events that emerged from the ashes left from the 2008 financial crisis - increasingly tend to bring into question the ethical approach in the application of the above phrase by several businesses and especially by young entrepreneurs, imposing to it even moral dimensions; Is every business activity legitimized in the altar of the pursuit of profits? The time when companies were considered as machines that generate wealth, operating inside a magic box, without causing any bad consequences to the outside world, is over. The over-expansion strategies followed by those companies, with no one ever questioning them when implementing those strategies, are

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now milestones of the past; the consequences arising from the operations/strategies a company implements, are not limited to the six sides of that magic box where the company operates in, but instead, business actions, are directed by people on the one hand and target the satisfaction of people-consumers’ needs on the other hand, directly affecting at the same time, the environment where they operate in. The importance, therefore, of both the ethical and the social responsibility of a company, as this is determined by the Business Law on the one hand but also formed and shaped by the expectations of the society where the company operates in on the other, and in conjunction with the aftermath of the financial crisis to the real economy, is significantly stressed nowadays. This is the reason which led to the emergence of the term “Business Ethics”, a term that encapsulates the principles, values, behaviors and beliefs of an enterprise and thus, eventually, of the groups of individuals who take part in the decision making in respect of the activities that the enterprise carries out on a daily basis. Among the main areas of activity of an enterprise in its efforts to achieve profits is the marketing: a key factor of the profitability of a business in the modern globalized world. As one of the most important business activities, it is reasonable that it should be governed by and be in line with the ethics of the business. Approaching the terminology of marketing from its moral perspective, it is the activity that maximizes the company's earnings by satisfying to the utmost the consumer’s desires and the interests of society in general. However, events of the modern reality prove that practices as described above do not delineate the true picture of the marketing practices implemented by enterprises in today’s business world. It is even more worrying that such cases tend to accumulate in time,

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and no signs of improvement are being witnessed, despite the turmoil caused by the financial crisis of the 21st century. Profit margins lure businesses to sacrifice everything, neglecting even the people’s real needs by promoting fake values and principles that deviate significantly from the ethics that derive from its social and corporate responsibility. The significant deviations arising from the implementation of marketing should give food for thought, especially to the young blood of entrepreneurs; those who are planning to enter the exciting world of business startups by either launching a new product or taking to a different level the provision of a current service or product. On the one hand, entrepreneurs should ensure that their promotional activities to approach new customers align with the mission of the business and the social responsibility as this is shaped by the expectations of the society where they operate in, and on the other hand, consumers should learn to trace and "punish" the socially irresponsible companies. In the light of the above, all of us, the young entrepreneurs and the general business community, need to reshuffle the furniture of our minds and bring back to the forefront, words such as corporate social responsibility and business ethics, not only to satisfy the thirst of hungry eyes of viewers and consumers, but to facilitate the procedure of redefining the mission of a company, one that forms part of the society and strengthens the foundations upon which the customer-business relationships were primarily established. George Michaelides

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An Entrepreneurial Tale: Tim Souritzidis, Creative Director at Timothy George Label

1. The Entrepreneur Before he Started the Business

Timothy Souritzidis was selected for my entrepreneurship study because he is similar to myself, and many young adults starting a new endeavor. I had the pleasure of meeting Tim on a mission trip to Mexico seven years ago, when we were in our teens, where we became friends. I remember he was constantly drawing during this trip and had a driven and ambitious personality; for these reasons, it does not surprise me that by his early twenties he developed a successful design label, Timothy George, specializing in women’s fashions.

Tim’s educational background is not one that would be expected of a typical designer. He holds a Bachelor’s degree from Montclair State University in communication with an emphasis in public relations; Tim ironically has no formal fashion or design background. When questioned about his training, he confided in me that he never even learned to sew and does not sew clothing to this day. He added that he employs the right people to construct and sew clothing as necessary for him. Learning this information prompted me to ask how he entered the fashion industry, one of the most difficult industries to break into, and have support from others in the industry and investors. Tim knew he would not have the opportunity to intern with a fashion company because he lacked the formal education and fashion background necessary so he was left with minimal options; thus, he took the initiative after class ended at Montclair State University each day to travel to New York City and literally knocked on factory doors to ask for an opportunity to learn. He explained that he simply wanted to design and credited his naivety as a factor which

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assisted him in entering the fashion industry because if he was aware of the failure rate and difficulty in becoming a fashion designer he may have hesitated and never attempted. When Tim decided to enter the fashion industry, it was his first time traveling to New York alone, for an endeavor he did not know much about. He eventually ended up traveling all the way to New York City from Montclair, New Jersey each day simply to bring the same factory owner a cup of coffee in order to have the opportunity to be around fashion and continue to learn. Prior to his fashion endeavor, Tim did not have very much work experience with other companies. He explained that at sixteen years old he worked at the Original Pancake House for minimum wage and hated waking up early and having a job where he had to physically be present each day. He also worked at a sub shop in Maryland where he made $2 an hour at 10 years old. He stated that his father made him work at this establishment in order to learn the value of a dollar; Tim credits his parents for this and states that he is glad they made him work during his summers. He later worked for a construction company in the Bronx during summers in high school and just as he turned eighteen years old he co-founded a driving school in Caldwell, New Jersey, a business he still operates. Tim’s driving school focuses on young student drivers that are learning in order to receive their permit in New Jersey; he selected Caldwell because it is a city without a driving school in the region. To this day, Tim carries two to three cellular phones and works for his multiple businesses wherever and whenever necessary. This allowed him the ability to not need a typical “9 to 5” job in college, and gave him a time frame to be able to work for free on projects that interested him and people he wanted to assist. For instance, Tim began working for free for a bakery next door to his driving school during lunch hours because the man who owned the establishment was short staffed and his business was struggling. Tim explained that after he gained this man’s trust in the business

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and his bakery continued to struggle, they became partners in a design label. He specifically recounted the day they shut down the bakery (where Tim continued to work for free each day) and traveled to New York to open an office for their new design label, Timothy George, with Tim as the designer. This was an opportune moment in his life and career that helped to get him where he is today. Tim’s mother was and is his role model. She was initially a nurse and later became an entrepreneur herself where she started an online brokerage company called Market America that focuses on network marketing. Tim witnessed someone grow from working twelve hour nursing shifts to someone who tripled her nursing salary and now sets her own work schedule. He explained that during his pivotal years growing up, he watched from the start to twelve years later where his mother gained more financial freedom and time freedom; two things he greatly values in his career. Tim’s father is currently a Priest; however, he holds an MBA, a degree in electrical engineering and a Masters degree in theology. Tim described his father as a brilliant person that is highly educated and a “go getter”. He initially worked with companies on sales and product development on the electrical engineering end where he was in the forefront of technology we use today, for example, on the first LCD screen. Tim explained he was on the path to become a CEO when a few life changing events and the desire to follow his heart led him to become a Priest. Once again, life changes, career changes and opportunities all appeared to be due to timing. When asked if he always wanted to be an entrepreneur, Tim explained that he was always apprehensive about a typical job. He did well in school, but he was constantly nervous he would never be able to make it with a traditional job and education. For example, at the Original Pancake House, when he was 16-17 years old he was such a nervous waiter that he made his employer allow him to

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where his badge that said trainee for approximately four months. He saw no other option in life than working for himself, and founding a driving school at a young age further solidified this. Tim again reiterated that he knew it was not necessary he be tied to one place and could maintain his time freedom.

2. The Entrepreneur At the Time He Started The Venture:

During high school, Tim did not care about fashion but was interested in creating a few dress shirts he had designed for himself; thus he approached, Rene Lautrec, an exotic handbag designer, for guidance. Rene Lautrec found Tim’s designs very interesting and asked him to create a few gowns so he could see them; Tim was very apprehensive and told Rene he was not interested in designing dresses. After being pressured, he finally created dresses for him and later continued by designing many other items. Tim credits Rene Lautrec and his perception of Tim’s potential as a designer as a main catalyst for his entrance to the fashion world. His endeavor to become a designer and venture to begin his own label was not an easy one. Tim’s drawing ability needed refinement; he explained that he was like someone going to an architect with sketches of stick figure houses asking that they build the White House. Before bringing his designs to a factory Rene Lautrec told Tim he would need funding and it would be costly. Tim began with a vast amount of knowledge but claimed he was naïve in thinking he could start a designing company so quickly without much experience. Thus, Tim began his design line, Timothy George, as a natural progression from the events already outlined. Interestingly, Tim stated “…there is no life defining moment, if you always have a dream to do something – within 5 minutes of telling someone your dream, they will discourage it. If I knew what it took to become a designer I would have quit before I began.” He further recalled one of his factory leads that told him “you shouldn’t do this, you won’t

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make it”; Tim thinks he was right at that point. However, he continued that the factory owner would not be accurate right now. When Timothy George began, Tim’s goals were, in his own words, “unrealistic”. His primary goal was to start selling the product and to generate revenue. A secondary goal was to establish an office in New York City which would motivate Tim to be present every day and create something new. Tim’s partner would then generate leads for buyers. Thus, the partners built a foundation, established a work place, created a line and began to sell the clothing line. Tim explained that thorough communication and trust are essential in partnerships. He elaborated that it is important to be aware of your partner’s priorities in the business and build upon them; for example, Tim’s priority is security and his partner’s is his passion for the business in regard to Timothy George. In respect to finances, Tim stated that few ideas can be manifested without money; however, he does not advocate entrepreneurs investing their personal assets into the business as capital. In order to create his garments, he hires contractors and subcontractors that cost as much as permanent employees; here he clarified that being grounded and valuing your employees is essential in business. For example, Tim is respected by his employees and interns alike and they go above and beyond to produce for him; specifically, Tim explained that he treats his interns differently than others in the industry where he does not send them for coffee or dry-cleaning but actually allows them to design and create. He continued by stating that micromanaging is only necessary when your employees do not have strong work, it is the entrepreneurs ultimate vision so the entrepreneur should stress it. Thus, Tim added trust and respect to his list of resources aside from his obvious financial resources and talent that allowed him to succeed.

In order to come up with the needed resources, Tim engaged in a few creative initiatives like the “Adopt a Dress Program”. The

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program allows an investor to invest funds in one dress to be created from design to finished product and name it after a significant other. He also used Kickstarter.com, where investors can pitch ideas online for people to invest. When asked about control and decision-making within the business, Tim explained control for a designer means creative control. A designer’s biggest fear is to lose creative control over what they initially started. Furthermore, Tim would never use his personal money in a business venture, he is somewhat conservative with finances; however; he is very risky with his time. He worked for free for approximately ten years of his life, he clarified that investing time is equal to investing money if not riskier. Tim laughed when explaining that he wrote about twenty different business plans and they kept changing. He does not believe in business plans or models, and thinks people that do believe they can anticipate the future. Furthermore, Tim explained that anyone can generate a great business plan and find investors that believe in it; however, it would prove more beneficial to create ten to twenty business plans that will fail. Researching different failures will allow an entrepreneur to be prepared in the event of such circumstances. The ultimate problem Tim sees in his venture that he has not addressed in a business plan is creating something that is easily duplicable in order to move volume and generate great revenue. Furthermore, Tim never felt prepared when he started his venture, and confided in me that he still does not feel prepared; he explained that most entrepreneurs are over achievers and added “You cannot be prepared if you think you cannot achieve perfection”. Tim thus found himself researching constantly and thinking about new ideas nonstop; as an entrepreneur, even if he was not at his office working, his mind would still constantly be thinking about the business.

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3. The Entrepreneur As He Grew The Venture:

Tim claimed his values “absolutely changed” as the business grew; he was very naïve at first and his trust in others changed. He realized not everyone is there to help you as a young entrepreneur. Furthermore, his risk orientation grew. He stated “Once you taste some success you start risking more – the more you’re in business the more you risk”. His need for control however remained the same as the business grew where he continues to do what he can to have his business survive, not necessarily to make money, yet to survive in order to buy time and be discovered. As the venture grew, Tim encountered more problems he had not anticipated; thus, his workweek began to reflect this. He added that it is important to anticipate deadlines and problems in order to remain one step ahead. Every assumption that Tim initially made was wrong. One insight that he learned was you can start a line with little money. Another insight he learned is that being a talented designer does not correlate with financial backing or connections in the industry. Tim added that a key mistake he made was to trust people and try to act like a big business man before even having a sale; humbling yourself in the beginning is important. For example, Tim had this mind set like a major corporation and had spent unnecessary money extravagantly. Now he does not buy a pencil if he does not see a reason and need for it. He explained that an entrepreneur should not focus on the logistics of the business too much because they will find themselves accruing fees to start a business when they do not actually have revenue; Tim added that it is much more important to focus on revenue first and logistics second. Given the opportunity, he would redo this portion of his venture and approach it as a young designer simply trying to sell some garments rather than incorporating a business and pretending to be more than he was at the time.

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Tim’s worst moment was wasting so much time that he did not produce his first collection. His lesson in this mistake was to learn what you need to do before actually doing it. He elaborated that if he had spent two years researching and one year doing then he would be much more successful; however, this would not have given him the learning experiences he had through failure. A critical crossroad for Timothy George was when Neiman Marcus took interest in Tim’s line and wanted a second line. Unfortunately, Tim did not have the finances to create a second line. However, he was able to put together $25,000 and proceed; this new line is soon to be reviewed by Neiman Marcus, which can potentially lead to Tim’s new “best moment” as an entrepreneur.

If Tim had the opportunity to begin Timothy George again, knowing what he knows now, he would have been more careful in trusting people, and would have raised money and used it appropriately. Ironically, Tim attributes his being naive as a key for achieving success with Timothy George. He thought the business was possible, and did not know how difficult it would be, nor what it would take to succeed. Tim illustrated this point by explaining, if you thought climbing Mount Everest would be easy and you naively climbed to the top and then looked back only to see that people train for 20 years to do it you would be standing at the top baffled by your accomplishment. If you knew climbing Mount Everest would be difficult, you would never have tried. Tim sees his design company as his future; he does not have an exit strategy and will do whatever it takes for his label to survive. Tim’s advice was to: 1. Think about your business, and understand your market and client – he clarified that these are two different things. He added, 2. For two years pretend you are a designer, find out everything you can, and then the third year execute it. Tim elaborated that interviews such as this one would be great

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gateways to gather information for free without having to spend money or fail at a business. His advice continued with 3. Find a partner, and get financing; he advised to not use your personal money. He added that you should be very strict with your finances because you will not succeed the first time and will lose the initial investment; therefore, that investor will only come back to you a second time if they were treated well before. He suggested a design book for me to read, added that it is important to do field research and gather information and lastly suggested that I reach out to him for any mentoring I may need. Finally, Tim’s last piece of advice was “Make sure that you love your business enough”. I have gained a vast amount of knowledge from Tim in regard to beginning an entrepreneurial venture and specifically, beginning a design company. I learned that it is beneficial to traditionally study and conduct field research before embarking on a new venture. In addition, it is important to humble yourself, ask questions and ask for assistance, all while keeping your guard up and remembering that not everyone is out to help you. Most importantly I learned that it is essential to be passionate about any endeavor you undertake; that passion and love for your career will carry you through failures to successes. Before studying international relations and finance, I constantly sketched and dreamed of one day becoming a designer. Tim’s story taught me that a traditional path is not always necessary for a career if the passion and dedication to succeed are present. Although I am not certain about a career change at this point in my life, I have purchased the design book Tim suggested and have been learning all that I can about a career in fashion and design. After two years of researching and studying the business, I will decide if I want to execute my plan. Katerina Dimitratos

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