17 Jan Motorcycling entrepreneur to speak in Madison on success, failure, capital
Madison, Wis. – Dan Hanlon sees a lot of parallels between riding a motorcycle and running a business, and he’s in a position to know. He has skinned his knees attempting to do both.
Hanlon will visit the Fluno Center on Jan. 22 to speak during the Wisconsin Alumni Research Foundation’s Gilson Series, and his topic is tailored to his own experience in managing an emerging-growth company.
While he figures to be speaking to a gathering of executives in the life-science and information technology fields, his most frequently cited business illustration is not the St. Paul-based Union Hill Ventures, his new consulting firm that dispenses advice on raising capital, but a company that represents a past business life.
Among the companies he either launched or managed was Excelsior-Henderson, a capital intensive maker of motorcycles. In the late 1990s, the company was enjoying a smooth ride, reporting $30 million in annual sales. But that was before its market segment fell out of favor with investors who became enamored with the Internet sector.
“During that time period, the Internet bubble had a corresponding trough,” Hanlon recalled. “If you look at that bubble of funds, there was a corresponding trough of funds that were not going to traditional types of businesses.”
As a result, the man who was credited with the company’s rebirth, which coincided with a similar renaissance at Harley-Davidson, eventually would see his sources of capital dry up. Excelsior-Henderson did not reach the cash flow positive stage, and what Hanlon learned from its demise could fill a book – and did. The experience compelled him to write “Riding the American Dream: Surviving Road Rash & Living to Tell About It.”
As Hanlon explains, road rash in the context of entrepreneurialism is both a literal and figurative term. Anyone who has been active in motor sports and business has fallen off a moving vehicle, but the more determined riders/entrepreneurs have hopped right back on – a little older and wiser.
“Frequently in a start-up business, you’re going to encounter road rash, which I look at as falling down, making some mistakes, and being ready for some unexpected bumps in the road that might derail you or throw you down,” Hanlon said. “Hopefully, between you and the team around you, you pick yourself up and go on.”
His survival instincts led him to Union Hill Ventures, which provides a number of business services, including, ironically, business turnarounds. The business acumen Hanlon dispenses is shaped in part by his Excelsior-Henderson experience, and it includes the following bits of wisdom: businesses are living, breathing animals that change, so be prepared for transitions; many different styles of entrepreneurship can be successful, but the common ingredient is integrity; don’t be so wedded to systems and structures that you ignore innovation, which requires a certain willingness to fail.
Similarly, there is a ton of advice for those wondering where their next round of venture funding will come from, but for Hanlon, it’s a matter of showing investors – now that they have recovered from their star-crossed dotcom romance – that you can understand, map, and hit milestones. Hanlon, whose company has helped clients secure more than $200 million in equity and debt capital, said attracting venture funding boils down to a simple roadmap of doing what you said you would do, when you said you would do it, and for what you said it would cost.
“To bring life science and technology to the marketplace, you have to have certain goalposts and milestones; otherwise, investors are not going to give you a blank check,” he stated.
Is timing on your side?
When he looks across the Mississippi River at Wisconsin, Hanlon sees a state with strong emerging sectors, a nimble manufacturing base that looks prepared for global economic challenges, and great educational resources.
He says there is no time like the present to be an entrepreneur, in part because the business community has taken the Internet out for a spin and better understands what it can do, and in part because the Web has removed some of the uncertainty inherent with doing business.
Prior to the Internet, he said one of the drawbacks to being an entrepreneur was a relative lack of access to information, a situation that no longer exists. Global communication also has been transformed and now can be done with lightning speed, and the concept of the virtual business is more realistic.
While in Madison, Hanlon plans to convey a two-part entrepreneurial message. One is to be aware of market opportunities, especially when there is a chance to make a new technology commercially available, and then be prepared to capitalize on those opportunities with realistic expectations – fully cognizant that speed bumps will be encountered.
Timing, he notes, is half the battle. The same sense of investment favoritism that once fueled the dotcoms now smiles upon life science and alternative fuels, which he predicts will have more staying power.
“Try to raise money for biofuels 15 years ago – kind of hard to do,” he said. “If you tried to do that today, it’s a little different story.”
• Tom Still: Wisconsin’s high-growth economy: ’07 predictions
• Geoff Bastow: Web-centric entrepreneurs find models that attract investment
• Early-stage executives hear from investors