Mike Moyer, Adjunct Professor of Entrepreneurship at Booth, started his relationship with the school as a student and winner of the 10th Annual New Venture Challenge. Since then his path to joining the faculty has taken him from the roles of start-up CEO to investor to start-up consultant and investor—from industries ranging from vacuum cleaners to fine wine—Moyer has enjoyed the rollercoaster of entrepreneurship from all sides. At Booth, Moyer has coached winning NVC teams and is currently the mastermind behind the New Venture and Small Enterprise Lab.
Moyer’s roots in entrepreneurship run deep, starting with his first venture in rabbit breeding of all things. “I loved animals and wanted to be a veterinarian when I was a kid. I tried breeding rabbits, but it didn’t work at first. When it finally did work, it worked way too well! The next thing I knew, I had 25 baby rabbits and nowhere to keep them. My aunt told me to take the rabbits to the park, put them in people’s hands and charge $25 per rabbit. I sold them all in less than two hours. I fell in love with the whole process of producing something that people really wanted.” This entrepreneurial spirit led him to start a clothing manufacturing company during his years in college. He grew the business throughout college, eventually selling it. Reflecting on what it was like to start a start-up almost 25 years ago compared to now, he notes “the cost of starting a start-up is much less. Capital aside, basic costs such as the costs of having to rent an office space, buy office equipment, etc. are almost non-existent. Now there are so many more resources available, especially as entrepreneurship has boomed in the tech industry.”
How has entrepreneurship at Booth changed? “It has expanded tremendously. It’s a well-developed, well-managed program. When I was a student at Booth (2002-2004), I thought the Polsky Center was great, but today it offers so much more to a broader audience.” On whether the MBA experience is a good training ground for entrepreneurs, Moyer puts a strong stake in the ground: “learning to be good at something requires both structured education and hands-on experience. Being an entrepreneur can be very isolating and mistakes can be fatal for a company. In school you are surrounded by people who can teach you how to deal with common issues, and mistakes are simply part of the learning process. Programs like Booth’s allow students to receive a wonderful mix of education and plenty of opportunities for practical experience. “
While formally learning entrepreneurship can minimize hardship, Moyer makes it clear that the start-up experience is not a walk in the park. “In fact,” he says, “difficult clients are a great learning experiencing for students in the New Venture and Small Enterprise class.” He considers the exposure students get to the more challenging clients to be one of the most valuable aspects of the class.
“I learned early on that to be an entrepreneur I had to learn to get comfortable with the volatility of the start-up. When I was running my start-up in college, I would go from wondering if I should just bail out and get a job at a pizza parlor to having more orders than I could handle,” Moyer remembers, “None of my friends were going through anything like that. I sold my company from college and made a little money, but I lost it all after investing in a new business that failed. I made it all back and then some less than a year later. I’m lucky I married someone willing to go along for the ride!”
Moyer’s entrepreneurial journey helped him develop a keen interest in management and team dynamics especially in the area of creating partnerships in bootstrapped start-ups. Moyer’s current “Slicing Pie” project has made him renowned both inside and outside of the Booth community. Slicing Pie is a model for creating a perfectly fair partnership by ensuring each person on the team gets the right amount of equity. “Most start-ups dole out equity at the outset of the venture based on what they think each person will contribute. Things never go the way people think, so traditional splits must be constantly renegotiated which takes a toll on founder relationships.” Explains Moyer, “Slicing Pie solves this problem by applying a formula that self-adjusts so it stays fair in spite of changes to the team or individual commitment levels.”
Moyer compares the philosophy behind his approach to start-up equity to a game of blackjack: “imagine you and a friend decide to play blackjack and split the winnings 50/50. You each bet $1 on the same hand. The dealer deals two Aces. You can now split the Aces into two hands and bet again. Your partner is broke, so you contribute $2 more and your partner contributes nothing. Now you’ve bet $3 and your partner only bet $1. A 50/50 split is no longer fair, even though you agreed to it. Logically, you should get 75% and your partner should get 25%. Start-ups are exactly the same. When people contribute to a start-up they are, in effect, betting on the future profits or proceeds of a sale. The amount of the bet is equal to the fair market value of the time, money, ideas, relationships, facilities, supplies, equipment or anything else contributed. A person’s share of the winnings should always be based on their share of the bets.”
Today, Slicing Pie is used all over the world. Moyer’s book, Slicing Pie, has steady sales and has been translated into eight languages. Getting the Slicing the Pie project off the ground, Moyer leveraged his background in marketing, a function that he believes many entrepreneurs undervalue: “Marketing is everything. Nothing else matters if you can’t successfully market your product” Sticking to his bootstrapping roots, Moyer started marketing Slicing Pie by developing an Excel spreadsheet for calculating equity splits, disseminating the product and idea to potential customers both online and offline, then investing time and money into developing a software only after he felt that the need for the product was validated. “If I had launched Slicing Pie software before I developed the market nobody would have understood it. Now I have thousands of users who see the value in the model,” says Moyer.
What else is he up to? Moyer has moved toward start-up investing, an activity that he sees to be part and parcel of starting a business. “As you get older, you become more risk averse, and investing is a natural way of spreading out your bets.” Moyer’s current investments range from tech start-ups to real estate to a company that has created a promising fuel catalyst. The sheer range of activities Moyer is involved with points to the fact that the entrepreneur is not a lone wolf. Related to this, Moyer’s parting words to Booth students are “network, network, network. Go on all of the trips and attend all the parties. Taking a trip is a fantastic way to get to know someone by sharing non-business experiences. Also, take advantage of being a student. Reach out to VCs and entrepreneurs. Build a Rolodex of people who you really know. Now is the best time to do it.”
Araba is a second year MBA student, who enjoys her coffees on the third floor!