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Steve Massarsky: Starting small with BIG

graphic
Steve Massarsky, Business Incubation Group Inc.  
  READ THE CHAT
Steve Massarsky joined us for a CNN.com/career chat, talking about what makes a good entrepreneur, what an "incubator" can do for him or her -- and about the passion needed to make a good idea fly.
Read the transcript.

'Mentor capital'


In this story:

All through the night

He bop

She's so unusual

Money changes everything

True colors

Time after time

RELATED STORIES, SITES icon



(CNN) -- "I'm doing the same job now that I was doing when I was in the rock music industry. Only now, my stars don't call me at 4 in the morning and don't throw up on me."

This can only be progress.

In fact, Steve Massarsky's latest in a long line of gigs might be his happiest yet -- and the happiest for his "stars," too.

Massarsky and his Business Incubation Group Inc. have entered the growing field of businesses created to find, cultivate and develop other companies. The National Business Incubation Association in Athens, Ohio, estimates there are more than 800 such companies in the United States, each nurturing some 18 ventures.

For Massarsky's part, it's a matter of being in business to make more business. And he says one of the reasons he's on the board of the Entrepreneurship Program at his alma mater -- Brown University in Providence, Rhode Island -- is that he's looking for startups with intelligence.

"We're very selective. And we want the unfair advantage."

Although "BIG," as he calls his company is, itself, a startup -- still under two years old -- Massarsky, 53, is no newcomer. In past career stages, he managed artists including The Allman Brothers Band, The Wailers and Cyndi Lauper. As an entertainment lawyer, he's represented Aerosmith, Tom Chapin, The Psychedelic Furs, Willie Mays and Nintendo. And today, Massarksy says, his three criteria for good business are still topped by personality issues.

•  "We want nice, interesting, good people," Massarsky says, "Emphasis on 'nice.' We had a guy come in with the wrong business models. He started yelling at me when I offered an opinion. His partner called up and asked, 'Are we in?' We said, 'No, we can't work with your partner.'

•  "The next criterion is a chance to succeed. We want a business we develop to be a potential home run.

•  "And third, we have to see that we can offer true added value" in taking on a proposed startup for incubation.

The ability to pick and choose his projects puts Massarsky into an enviable class. BIG's output so far looks small: It has launched just one business and has only three in development at the moment. But what makes Massarsky even more a rarity is what he does for a living -- he "does" everybody else's living.

"We're very selective. And we want the unfair advantage."

All through the night

Those little dreams of hopeful entrepreneurs inspire the "BIG mission" Massarsky is leading. His company's literature waxes eloquent on the topic. Business Incubation Group, it says, seeks "to have a continuous flow of dynamic, fresh ideas from passionate entrepreneurs."

Massarsky's staffers have specialties -- high-tech, retail, marketing -- and they use them to guide an entrepreneur through overall business planning, presentation and sales strategies; pricing and packaging issues; legal, financial, office and warehousing needs.

"I call it mentor capital. That's what this business is. Neil Braun, president of NBC, gave me that phrase. Said he stole it from somewhere else."

"I didn't want the pressure of needing five businesses" to fill a shared floor of office space in New York, Massarsky says. "So I bought the floor" occupied by his outfit on Hudson Street in the Dean & Deluca-studded TriBeCa area of the city.

With a staff of eight and some 8,000 square feet, no one's feeling cramped, an anomaly in itself among New York-based businesses.

Are you hearing Gershwin? "How Long Has This Been Going On?" -- like, how on Earth do you get to such a place in life that you can buy 8,000 square feet of Manhattan, pay eight people and nurse along just four bright ideas at a time?

"I call it 'mentor capital,'" Massarksy says. "That's what this business is. Neil Braun, president of NBC, gave me that phrase. Said he stole it from somewhere else."

He bop

"This all started at Brown," Massarsky says, at which he took a BA in political science. "I started producing concerts as an undergraduate. I brought in James Taylor, Joplin, Jimi Hendrix, Diana Ross -- 10 to 12 concerts each year.

  MESSAGE BOARDS
•  What's stopping you from really going for it in your career?

•  After downsizing, are you the one left doing three jobs?

"In fact, I like to point out that I was the 1970 class president and Ira Magaziner was the 1969 class president." Magaziner has served as a Clinton administration senior policy aide specializing in Internet issues. In 1993, he worked with Hillary Rodham Clinton in the development of the White House's ill-fated health care plan.

"Ira," says Massarsky, "was busy trying to change the education system at Brown and later the health care system of the United States. Me? I was busy running concerts."

Those concerts, he says, introduced him to Peter, Paul and Mary. And Peter Yarrow "led me to politics. I was (George) McGovern's entertainment director, and I kind of met every music-maker in the country at the time.

"In 1973, I got asked to consider moving to Macon, Georgia, to set up a foundation for Native Americans. That's how I met the Allman Brothers."

"I thought I had it made. I was managing one of the Allman Brothers, a big touring attraction. Then the Allmans broke up."

But he didn't handle their business right away. First, "I wound up back in law school." Massarsky took his degree from Rutgers University and today is a member of the California and New York bar associations.

"When I came out of Rutgers I got an offer to join a law firm in New York. I'd written a manuscript on benefit concerts. Jane Fonda had gotten hold of this manuscript. She was married to Tom Hayden at the time. When I was in California taking the bar exam there, I spent a day talking with Fonda in Los Angeles about benefit concerts. And, you know, I said to myself, 'It's a lot more fun sitting here giving Jane Fonda advice than practicing law as a young lawyer. I'd rather do this for a living.

"So I called Dickie Betts." The guitarist, vocalist and songwriter ("Revival") had joined The Allman Brothers Band in the late 1960s. He would share leadership of the group with Gregg Allman after Duane Allman's 1971 death in a road accident.

"I asked Dickey, 'Would you like help with your business at all?' And he said yes.

"So I flew from LA to Macon, signed Dickey for management, flew back to New York with my job at a law firm and as a (musician's) manager.

"I thought I had it made. I was managing one of the Allman Brothers, a big touring attraction. Then the Allmans broke up.

"I had to become a real manager. I had to find Dickey a record deal, put a band together, work with him on a million different things. Then when the Allmans got back together, they asked me to manage the whole band."

She's so unusual

"While I was managing the Allmans, I got a call from a friend of mine, someone I'd known through Peter, Paul and Mary, late one night. She said, 'My boyfriend Peter's best friend Stanley's girlfriend Linda's best friend Rose knows a girl in a group. Will you go see them play?'

"I said, 'Are they good?'

"She said, 'I have no idea.'"

"I said, 'It's 11 o'clock at night, I'm still in the office, I'm busy.'

"She said, 'As a personal favor -- I promised them you'd do this for me.'

"I thought I had it made. I was managing one of the Allman Brothers, a big touring attraction. Then the Allmans broke up."
"I always tell people my career is like driving a taxicab. I pick up a fare, it takes me to a new neighborhood. I get another fare, it takes me someplace else."

"So I went. It was Cyndi Lauper and Blue Angel," the quintet with which Lauper began her career in New York.

"We got Blue Angel a record deal on PolyGram at the time."

Eventually, Lauper and Massarsky parted ways. "I was planning on stopping managing, anyway. I took a year off and started a low-cost entertainment-law clinic tied to Jacoby & Meyers," the law firm. "This clinic turned into a real law firm pretty quickly."

As bigger and bigger names rolled through the firm -- this was Massarsky's Aerosmith era -- "one thing just kept leading to another, different angles, different things. I always tell people my career is like driving a taxicab. I get a fare, it takes me to a new neighborhood. I get another fare, it takes me someplace else."

Money changes everything

One place he has found himself in the past decade is in comic books.

While representing the then-red-hot Cabbage Patch dolls at his law firm, Massarksy says, "I became aware that there was a hole in the comic book industry. So I raised some venture money" with two partners "and formed a company. And we caught a wave. The industry just roared to life.

"From mid-'92 to '94, we couldn't do anything wrong. The books were selling in tons. We sold something called 'Turok,'" which today is represented by a successful action-adventure video game series. "We put out 'Turok' Volume No. 1 at a $3.50 cover price -- we sold 1.8 million copies of the book. In that month alone, we sold 5 million books.

"And then Acclaim (Entertainment Inc.) bought us. And the comic book industry collapsed. I'd like to think that was a stroke of genius on my part but it was mostly luck. Now Acclaim is making video games.

"What I wanted to do was form the comic-book version of the Milk Council. Promote reading. But they all just kind of blew me off on it. And then the market tanked. And at that point, instead of rock stars, I'd been managing comic book characters."

"But the comics are an industry based on collectibles. I'd tell people we had two customers -- a 40-year-old man who's a collector and an 8-year-old boy. It was the 8-year-old who was collecting for money, not the 40-year-old. Comic books are the 8-year-olds' stock market.

"We put out a book in October '91 called 'Harbinger.' That book went in price from $1.95 to $125 in a year. It was all collectibles. I called all the publishers together in 1992. What I wanted to do was form the comic-book version of the Milk Council. Promote reading. But they all just kind of blew me off on it. And then the market tanked.

"And at that point, instead of rock stars, I'd been managing comic book characters."

True colors

Today, Massarsky's management work is devoted to characters of the entrepreneurial persuasion.

Business Incubation Group is supported by some 88 angels. "Some are people from major investment banks, all are accredited investors, everyone is someone we know. It's like a family." Their membership on the BIG roster means they have a chance to buy into companies he incubates. A minimum stake is $25,000. "I'm always the first angel," Massarsky says. "I'm taking the same risk they're taking."

The first "risk" has been on a company with the upbeat name of Jessica's Wonders. And Massarksy found it through his work with Brown University's Entrepreneur Program.

Jessica Nam, CEO/President, Jessica's Wonders  

The program was started in February 1999 -- just as Massarsky was founding BIG -- by Evan Geller and David Cohen. Like Massarksy, they're Brown alumni. But they had a rocky start with their own sportswear venture, Yellow Planet. No BIG to help them. And they decided to plow their experience into the program at Brown to help other would-be entrepreneurs.

Geller and Cohen have attracted not only Massarsky but also Nantucket Nectars co-founder Tom Scott and WebWoo.com founder Elizabeth Hamburg to the program's board of directors.

Massarsky mentored Jessica Nam of Jessica's Wonders while she was a senior at Brown. "She went to a pizza place in Providence," he says, "and asked what they had for dessert. They pointed to banana bread. She said, 'I could make better banana bread than that.' She calls it Kelly Belly Jelly Banana Bread. And while still living in a dorm room, Nam was supplying six stores."

Today, Jessica's Wonders is a growing baked-goods purveyor, being followed at BIG by three more companies in development.

•  HolVet.com is dedicated to holistic treatment for pets including acupuncture.

•  ArtisanStreet.com is a handicrafts company.

"This is what I'm talking about -- wanting to have fun. ... So I keep moving."
•  And a fourth is a bit hush-hush, a film-related project being put together by producer Dean Silvers ("Spanking the Monkey," 1994; "Flirting With Disaster," 1996). All Massarsky will say about this one for the moment is that Silvers is working on a "high-tech broadband-based product."

Time after time

And for Massarsky, there's always that chance that the next idea, the next person on the phone, the next e-mail -- or the next entrant in the Brown Entrepreneurship Program -- will be the "BIG" one.

"I took a year off after I sold the comic books to Acclaim," he says, "and I visited some people who'd been influential in my life. I just wanted to say thank you to them."

And like that taxicab, Massarsky found himself rolling around to unexpected neighborhoods of possibility. His high-school track coach led him to one new business connection. His background as an attorney-manager routed him to another.

  BAD IDEA
What about the entrepreneurial concepts that never get off the ground? Here's one. More

And a look at what's cooking at Brown may tip you off about Massarsky's next fledgling business.

•  A student named Alexis Karris is looking for students who want to work on her "Sleep Sheet" business plan. The sheet is a "rectangular-shaped sleeping bag made out of a sheet ... light, easy to pack and ideal for student travelers and hostel hopping.

•  Nick Fitzhugh is listing his idea for an "Inflatable, Efficient Tent." His goal is to market the tent to an established company, and he's recruiting a team of people to work on "various textiles, tent architecture and construction, camping, sewing, research and design, marketing and investigation."

•  Don Tulanon's idea is to create college-logo clothing that's "just a little less banal" than the norm. "Imagine," he writes, "having a choice between the Brown Bookstore and Gadzooks, Hot Topic or Abercrombie & Fitch style of clothing" but emblazoned with the Brown logo."

"This is what I'm talking about -- wanting to have fun," Massarksy says.

"I just got off the phone with a friend of mine, she's been in her career for about 30 years, known all over the world. Now, she tells me, 'I hate it. I can't do this anymore. Same thing over and over. Get me out of here, I don't care what it takes. Short order cook? If it pays me what I'm making now, I'll do it.'

"I don't want to end up like that. So I keep moving."

 

RELATED STORIES:
CEO 2000: 15 and fearless
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June 13, 2000
VCs still high on dot-coms
June 12, 2000

RELATED SITES:
Brown University Entrepreneurship Program
Business Incubation Group Inc.
National Business Incubation Association


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