Passion Trumps Process: The Success of Susan Loconto Penta
By Jim Schakenbach
Susan Loconto Penta is a woman of many passions and probing intellect. An engineer, mother, business owner, aspiring chef, and board member for several non-profit organizations. Named by the Boston Business Journal as one of the best and brightest under-40 Boston businesspeople. A serial entrepreneur, she is also a paradox - a success because she has been a failure. In the entrepreneurial world, that is not a bad thing, nor a particularly puzzling one, for one of the most highly prized traits of a good entrepreneur is the ability to fail and fail often. All of this is what makes her story such an interesting one.
Penta has been an entrepreneur for as long as she can remember. A 1986 WPI graduate with a degree in electrical engineering and an MBA from The CASS Business School in London, England, she has always viewed her life as a sole proprietorship, whether she was typing papers to work her way through school, teaching aerobics, or building up a $50 million terminal division for a major computer manufacturer.
When Penta graduated from WPI she worked briefly as an engineer and hated it, moving quickly instead to product innovation and development, then to starting her first company, MODA, in 1991. Penta and her business partner, Michael Goldberger, worked to create software that would enable computers to talk to each other over the fledging wireless network, building up a company with ten employees and a list of impressive clients. However, by 1995, they realized they were too early with their ideas and the market just wasn't there.
"We had flown to Rochester (New York) for what we thought was the meeting of a lifetime with IBM," recalled Penta. "We thought IBM was going to buy our product and incorporate our software into their system, because they had a big wireless initiative going at the time. Then we realized we were in a room with thirty IBMers, there were five of us and we had more customers than they did."
Having already run through a million dollars in original funding and laid employees off, Penta and Goldberger discovered there was a lot more work left to be done before the market would be at a point where they could make money, so they thought they'd sell the company. Instead, they were only able to sell licenses to their source code, a relatively minor failure in light of the spectacular flame-outs that were occurring among such major players as Motorola, AT&T, Apple, and others. The experience, however, formed one of the tenets of their consulting firm that was to come - fail quickly, fail often, learn a lot.
But first, Penta, by now married to another WPI graduate and the mother of two young children, was determined to find a product company to buy. Convinced that the network computer market was the place to be, she began searching for a company available for purchase. Along the way, she fell into project work and in 1996 she and Goldberger began handling projects out of Penta's house in Belmont, Massachusetts. "Soon we had clients taking meetings at my dining room table, with a nanny and two kids upstairs," said Penta. "We had to move." As she put it, necessity met opportunity, and so another tenet sprang forth. "We say success is the intersection of preparation and opportunity," she stated. "I don't know how prepared I was, but I had to put food on the table and there was an opportunity (to start another company) and that was that."
Still, in her mind, her next move was to buy a product company. It took a business associate, the general manager of Lucent North America, to open her eyes. "He said, 'you know, Susan, do you think maybe you're actually doing the thing you want to be doing?' "
The "thing" that she was doing was helping companies commercialize technology and accelerate the success of products. Without quite realizing it, she and Goldberger were creating a methodology out of what they simply called "common sense". They were told that if they took some of their time and money and invested it in codifying how they approached things, they'd have a consulting company. And so, in 1997, MIDIOR was born.
According to Penta, "What we do is help companies improve their financial performance by increasing leverage and reducing the cost of technology. We cater to those industries where there is a big investment in information technology or research and development." Those industries include financial services, software, networking, telecommunications, and industrial products.
MIDIOR, located in Cambridge, is successful and profitable, providing services such as intellectual property management, organizational modeling, skills development, and product acceleration to a wide range of companies and organizations, including State Street Corporation, Intel, Albany International, and others.
The Collaborative: In on the ground floor
Penta has always been heavily involved in WPI's innovative programs to help foster entrepreneurial activities. From the start, she was instrumental in the early development of what became known as the Collaborative for Entrepreneurship & Innovation. This was perhaps the first example for Penta of how success was the intersection of preparation and opportunity. "In the early 90's there weren't enough jobs in the Data Generals, Raytheons, and DECs of the world for engineering graduates," she stated, "so a bunch of us got together, prompted by a couple of WPI administrators and faculty members, and said 'What can we do to help these students prepare themselves better?' We wanted something that would cut across the engineering disciplines. It actually wasn't even in the management department at the time."
According to Penta, it started as a for-credit course in entrepreneurship; gradually more courses were added and a minor in entrepreneurship became possible for students. Penta was instrumental in developing the business plan competition that now distributes $50,000 to the best student business plan judged by a panel of entrepreneurs (she, not surprisingly, is one of the judges). She has also been involved in the Dinner with Entrepreneurs program, which introduces high school and college students to up-and-coming entrepreneurs, giving them an opportunity to ask questions and learn about what it takes to start their own businesses. "I maintain my contact with WPI because the vision there is great," commented Penta.
Hard won words of wisdom
Penta is very clear on what it takes to be a successful entrepreneur. In the course of her consulting, she often dispenses what she calls "7 Steps to Product Enlightenment" which also serve very well as valuable advice for entrepreneurs just starting out. The following are excerpts from her presentation:
"There are no crystal balls."
You cannot predict the future and you should not trust anyone who says they can. The best you can do is to be prepared and ready to deal with reality.
"Customers are better than patents."
If you don't have any, put serious effort into getting to know a few. If you already have some - endeavor to know them better. The answers to most of your questions are not in the lab, but at your customer's office.
"If you can't give it away you can't sell it."
If you can't get people to try your product by giving it to them - you won't get them to trade money for it.
"Passion trumps process."
Great people who care a lot about what they are doing build great products.
Truer words were never spoken.