Young Entrepreneurs - Seizing
Opportunities and New Directions
Melodie Stewart and Kim Doherty
This case explores motivational factors of a new
entrepreneur during the early creative phases of planning and launching her networking and
training business. The events documented show how motivation needs pushed and pulled the
young woman forward in the development of her business idea, working partnership, and
working culture. The case also provides interesting testimonial to motivational factors
that are personal, as well as financial.
Precipitating Events to New Venture Creation
Suddenly in Spring 1996, Melodie Stewart found out
from her manager at Atlantic Women, that the magazine was going bankrupt. The
creditors arrived, removed all of the physical assets, and locked the doors. "Oh my
god," Melodie thought as the reality of the situation became more and more clear,
"Now what am I going to do? I just sold all of that advertising to my clients, and
now there is no magazine and no job for me. I have a mortgage payment due in two weeks. I
just charged many of the magazines costs to my personal credit card. My last
paycheque bounced and I have $12,000 debt! Yikes!!!"
After the initial shock subsided, Melodie started
calling all of her clients to let them know what had happened. She dreaded this
embarrassing task but believed that they had a right to know. In her view, what had just
happened to the magazine meant that her clients had been robbed of their money. "I
have to tell them the truth," she thought. During these phone calls, many of her
clients expressed understanding along with their disappointment and uttered statements
like, "these things happen." Interestingly, many of them also offered Melodie a
job, but she was reluctant to accept any of the positions offered. The thought of working
for someone and making herself vulnerable once again worried her deeply. The experience at
Atlantic Women was not the first time Melodie had been stung financially by her
employer. In a previous job, she was left $3000 short. Her trust had just been shattered
Melodie knew that she had to think clearly at that
moment. She was thrust into a difficult situation and had to decide what to do next. She
asked herself, "Should I accept one of these jobs or not?" The sudden job loss
had caused her to worry about how she was going to make her payments. She had been
financially independent from her family for a very long time now and, even though she had
worked in highly competitive commission jobs, she coped with the stress and managed to do
quite well. Now she had to assess her options and sort through her many emotions. As she
considered her situation she thought, "I cant rely on my family financially;
Im already emotionally dependent on them. No, thats not the answer. At the
same time, how can I go back to a state of dependence on an employer and be at risk of
another situation like this one?"
Neither question was a quick or easy one for Melodie
to answer. "Somehow," she thought, "I have to figure out a way to maintain
my economic independence and move forward." As Melodie sat in the centre of her
turmoil, she realized that the events that had just taken place put her at a turning point
in her life. She knew that she had to puzzle through the issues, the questions, and the
emotions associated with her job loss before making her decision. But she also knew that
she had to act quickly and decide how to proceed.
During the darkest part of Melodies
introspection, she remembered an idea that she had regarding information networking. She
did a lot of client "prospecting" while on the road in her previous job selling
advertising for Sobeys and the Atlantic Womens magazine, but when faced with
new environments, she felt that she had often missed opportunities to do more networking.
She recalled that during her advertisement-selling days, she thought that there might be a
market niche to provide an organized networking service to help other professionals.
Thoughts started to speed up in her mind as she mused over the networking business idea.
"Maybe I could explore networking as a possible business opportunity using my
existing circle of contacts to begin. It is so important to get out and mix with
people," she thought. "People really want to do business with those that they
know, like, and trust."
As Melodie thought more and more about the
possibility of networking, helping others mix into the network, and providing information
brokering, her excitement level climbed. It became clear that this type of enterprise
would be a natural fit with her personality. Melodie had a natural tendency to collect and
record information and then pass it on to her colleagues and friends. "I like people
and I often engage in a natural brokering of information" she thought, "why not
try and work at it as a business." As she further developed the idea, she became
convinced that it would be useful for other professionals to have this ready information
on networking events, information on services, market opportunities in different regions,
and where to meet others to "schmooze".
Melodie was still not 100% comfortable with pursuing
the business idea though. She wondered what her family would think and again reviewed the
business idea in her mind. She knew that her parents were her "biggest fans" and
that if she told them that she intended to become an astronaut next, given her track
record, they would likely believe her. But she also knew that they would be concerned with
her decision and as a result would pose excellent questions with which she could further
clarify her direction. Melodie organized her parents in the living room and went through
her pitch. Although there was some sense of concern within the discussion that followed
and, in her words, a recognition that "those who love you most are also those most
likely to talk you out of things," Melodies family encouraged her to proceed.
In fact, her parents offered her four post-dated bi-weely cheques of $200 each to help her
Melodie began to plot her next steps. Once again, she
felt the weight of the world on her shoulders. It wasnt that stress was anything new
in her life. It was quite familiar to her since all of her previous jobs were paid on
commission, but this was different. This new direction was risky in contrast to the safer
route of the employment offers she had received. Now she had to take charge and determine
how to proceed with her networking idea.
The first task on Melodies mind was to produce
a business plan. She immediately went to a friends office. She explained what had
happened, what she had decided to do, and asked to work there over the weekend. Her friend
agreed. Once inside, she took a deep breath and started writing down her thoughts.
"This is not devastating misfortune," she told herself. "This is an
opportunity to start again. The buck stops at me. If I dont generate a cash flow, I
dont get paid!" And so Pro-Net was conceived at that moment.
Melodie attacked the project with a vengeance. She
wanted to create the business plan over the course of the weekend and then on Monday
morning, pitch it to gain venture capital. She didnt have the luxury of time to do
much research on the idea, or to learn how to do a business plan, or to develop a
marketing strategy. "Oh well" she thought, "Im determined that I can
make this work. I will learn and correct as I go along. Nothing is going to stop me
Melodie asked her friend Kim Doherty to help her with
the computer to do her business plan. "Kim will help me over the rough spots,"
she thought. Melodie began to work through her idea. "How will I start this? What
will I write first?" Kim stopped by with lunch for Melodie and herself, and to check
how things were going. She found Melodie seated with papers spread out all over the place
and operating on very little sleep. Kim decided to stay and help Melodie input the first
draft of the business plan into the computer. As Melodie watched Kim, she thought,
"Wow. Kim is a great friend and she really seems to be into this idea. It must be a
really great concept! But, Kim is always around when I need her, supporting me,
anticipating my next move. Maybe I should ask her to be my business partner in this.
Hmmm.... It would be a lot more fun and her skill sets would really balance out
At the end of the weekend, Melodie and Kim had
produced a working draft of her business plan to use when visiting banks to seek new
venture funding. On Monday morning, she was up early and called upon the first bank
manager, then the second, and the third. The visits were disappointing. All of the bank
managers turned her down. They said that she didnt have a track record, and she
didnt have office space, or business cards, or a ready clientele. "Now
what?" thought Melodie.
This last bank manager that Melodie pitched her idea
to said that he would like to help her but couldnt since the business idea was
sketchy, novel, and although interesting, untried. For these reasons, he couldnt
justify a loan. Just as Melodie started to feel the life drain out of her, this last bank
manager added "if you can do something to wow me, Ill lend you some
money." At that point, Melodie decided to clear up some of the uncertainty around her
plan and prepared to "really wow" this man.
Melodie busied herself finding office space and
developing a preliminary client list. She contacted many of her ex-customers to tell them
what she was pursuing and asked for a letter of support if interested. Melodie told her
friend Kim of her activities and once again, Kim came through. Kim said "Melodie, I
want to buy the first membership." Kim then handed over a cheque for the membership
fee with a little yellow Post-it â note stuck onto it with a happy face and the words
"invoice 0001" on it. This was exactly the boost of encouragement that Melodie
needed. Armed with the faxed letters of support and a new lease for office space, Melodie
returned to the bank. She slapped her package on the bank managers desk, pitched her
idea once again, and ended with the statement, "I can get to work now. All I need to
do is get business cards and invoices with the money you lend me!"
The bank manager watched Melodie, his mouth agape in
amazement. Before him he saw a very young professional woman, polished in her approach
that she pitched non-stop. She was committed, excited, and her concept was new and
innovative. When she stopped to take a breath, he told her that he had decided to give her
a chance with a small overdraft loan of $1,500. Melodie was elated and exhausted.
"Now" she thought, "the real work must begin." Later on Pro-Net also
obtained $10,000 from the Canadian Youth Business Foundation to pay for their
incorporation, trademark, copyright, partnership agreement, and computer training. But the
initial $1,500 allowed the concept of Pro-Net to leave the idea stage and become a
The Business Plan
Melodies business idea was to provide a
matchmaking service for business, government, and non-profit organizations. In order to
accomplish this, Melodie planned to do three things. First, she would produce a newsletter
that highlighted local networking events. The newsletter would provide a schedule of the
events, the time, date, place, speaker, and cost allowing easy identification of
appropriate networking opportunities. Second, she would have each new client fill out a
detailed profile outlining their networking needs. These profiles would then be entered
into her company computer to a database so that her clients could use the information
provided to find services that they needed, to identify other companies to develop
partnerships with, or to find new business opportunities. And third, she would
provide seminars on effective networking techniques so that busy business people could
make the most out of their time. The costs of these services would range from $150
(membership fees for students and non-profit organization members) to $600 per year (fees
for government agencies). People from small businesses constitute the largest group in the
client base. Their annual membership fee was only $300.
Melodies ultimate goal for Pro-Net was "to
be the first company that people think of when they need information." She also
wanted to produce a service that would assist people. "Its not just about
sales. It is also about building relationships and adding value. Ultimately people want to
do business with those that they know, like, and trust. And while I want to make a profit,
I want most of all to add value. Really," thought Melodie, "the most
advantageous part about owning your own business is the fact that you can really help
other people." She became increasingly certain that she made the correct decision as
time progressed. "This is really going to be fun."
Now with all of the pieces in place, Melodie turned
her attention to getting her office set-up so that she could sell her product. As she was
getting things organized, she decided to try to convince Kim to join her as her business
partner. Kim had to think about the prospect for a while. This decision meant that she
would have to give up a lot and she was not altogether comfortable with the ambiguity
associated with that decision. Still, Melodies enthusiasm was infectious; her vision
was so clear and she really believed that this business could add a lot of value and make
money. After much introspection, Kim decided to take the risk and join Melodie in
The first decision made was that Melodie and Kim were
to be equal partners. This meant that they would make all decisions in a collaborative
manner. They placed their desks across from one another and proceeded to discuss how they
would break into existing circles to sell their product. Their first success was a
reciprocal agreement with the Halifax area Chamber of Commerce. In return for access to
the Chambers members, Pro-Net would offer their networking seminar free of charge.
They thought that this plan of action would give them the desired access they needed to
continue. However, this strategy was not without challenge.
At one of their early seminars, a cynical member from
an "Old Boys" club suggested that perhaps Pro-Nets message was really
about "having lunch at the Halifax Club." Melodie would not be put off by this
comment. She responded quickly by launching into her pitch about the importance of their
product as business needs changed. On another occasion, Kim attended a meeting where she
found herself the lone woman in a boardroom full of men. She initially "felt somewhat
out of place being the only woman in the room, particularly when the conversation turned
to sports," but Kim knew that she could not stay quiet. To sell her product she had
to find a way "to deal with the issues and get around them."
Melodie and Kim discussed their experience with this
sort of treatment. They both agreed that they needed to figure out a way to deal with it
effectively. In their minds, they knew that they could not let this kind of resistance, or
perception of their ability and product, interfere. They sat across from one another and
discussed the situation in earnest. Finally, they decided that neither one of them wanted
to spend a lot of time worrying about the gender issues. "Surely," noted
Melodie, "even the thickest-skinned walrus can see the business world is changing. We
cant get bogged down because of how we might be perceived based on our gender or
youth. A lot of new entrepreneurs experience this."
Melodie and Kim agreed that they would not be cast as
"fighting the gender thing." Instead, they decided that their focus should be on
the "the opportunities and not the barriers." They agreed that they could see
the barriers in retrospect but they "... cant be afraid to ask questions and we
must believe in ourselves. If we are going to sell networking and the value of
relationship building, we must pursue that as a value and live by it." Once again,
the tenacity of Melodies vision and refusal to wallow in defeat shone through.
"Further to this," reflected Melodie, "I dont want to focus on
whether or not we will be a long-term success. Maybe thats not practical but I guess
in my mind, failure is simply not an option. The woman that I worked for before, my
mentor, shut the door and left town. I couldnt do that with other peoples
money. If something happens and Pro-Net starts to fail, I think we will have to sell
shares to raise money, or start a trading company, or break the business apart and sell
off the different pieces of it. Each thing we do is really a separate business. So really,
failure is simply not an option, and not something that we should dwell on."
Moving Toward a Strategic Approach - The Continued
Evolution of Pro-Net
As the months passed and the business grew, Melodie
and Kim noticed that the demands on their time and logistics of their activities were
becoming more and more complex to organize. They discovered at one point that they had
taken on a great deal of work. "It is all so exciting," thought Melodie, "I
dont like to turn anything down but things are going so fast now. Something is going
to break down soon if we dont take stock and keep things under control." Both
Kim and Melodie were becoming very tired and stressed trying to keep up with the growing
demands of the business. They were both on-edge and began to experience some disagreement
regarding the new in-coming work.
Melodie and Kim both knew that they had to spend more
time discussing their future plans. Things could not continue at this pace or they would
both burn out and lose all that they had built together. So, they decided to take the time
and have that discussion. After much deliberation, the first decision made was that from
this point forward, they would take the time to discuss every new project or decision in
front of them. They worked out a process for dealing with potential future disagreement as
well. Both agreed that Melodie would have the last word on decisions surrounding
marketing, sales and promotion, and that Kim would have the last word on decisions
surrounding logistics and finances. Both women would continue to be "equal in the
creative process." Finally, they decided to protect their relationship and to give
each other the needed personal space. "It is not that we have issues right now,"
suggested Kim, "but lets make sure that we take care of things before we
do." They also decided that one or the other may need some "time out" at
times to recover and how they would handle that.
But, Melodie had started to realise first hand, the
importance health and well-being. She was experiencing a lot of overload and stress and
realised that she couldnt continue in super-human fashion. "Even though I was
somewhat prepared for the demands and magnitude of starting a new business, I was not
fully prepared, especially for the personal costs," said Melodie. "The
impossible schedule, irregular meals, and sleep deprivation was taking its toll on me. We
had to start saying no," she stated. "We learned a lot already to get this
business off the ground. We needed to adjust to be ready now for the next phases.
Weve had a wonderful opportunity to do something really important and make money
So, Melodie and Kim sat down once again to have a
heart-to-heart discussion over this issue. They both agreed that things were becoming more
difficult and decided to take steps to regain control. After a lengthy discussion, they
concluded that training was their greatest strength. Melodie enjoyed conducting the
training seminars very much and Kim pointed out that training was also their greatest
source of revenue. With this in mind, they went on to examine all other aspects of how
they spent their time to see where they could make some changes. "Lets just put
the projects that do not emphasize the core competency on the back burner for now,"
suggested Kim. "I think we also need to consider our personal and common business
values and goals, and make sure that we shape this business now to satisfy both of
"OK" thought Melodie. She started her part
of the discussion by giving her interpretation of Pro-Nets stage of development. She
said, " I see us as adolescent flipping back to infancy on one day, and on another
day flipping forward into maturity. For example, one day we are dealing with high-end
clients and the next day we are back to stealing toilet paper from the building. This
business is still quite unpredictable and I think that we need to move to a more
deliberate plan for our next steps." Kim agreed and added, "then lets
start with what is most important for success personally and professionally to get things
rolling." They had already decided that training was their chief competency and they
wanted to keep their business small. So, they asked each other about personal life-long
goals. They both listed their goals and values and then compared the lists. Both Melodie
and Kim wanted to travel, to work smarter not harder, and to continue to learn. They also
wanted to cease over-extending themselves and focus their future efforts around their
critical competencies in the future.
The first new project selected to pursue their new
alignment of personal and organizational values and goals was the "Team Canada"
project with Industry Canada. This project was to build a pilot training program to
teach potential exporters in Atlantic Canada how to network effectively with those in
target countries. This opportunity would move Melodie and Kim forward into the global
marketplace and provide then with a chance to travel. The idea came out of work that
Melodie did with the Metropolitan Immigrant Settlement Association. Her experience was one
of not only teaching networking skills, but also coaching people on how to work successfully
in the Canadian business world. "This is where I think we should focus our
energy" stated Melodie. "I agree," said Kim, "Lets move
forward." And, so they did.
The culture of Pro-Net continues to be one reflective
of a creative, innovative, and flexible organization. They provide an electronic
networking service that keeps pace with the business needs of today. These two young women
demonstrate a true human interest, a strong business ethic, and a passion for the values
they hold. They recognize the importance of health and well-being, and balance between
work and personal life. They share a relentless belief in their product, their ability,
and that no barrier is insurmountable. Melodie and Kims goal is to provide something
useful, needed, and timely, and hold fast to the desire to help their business
colleagues progress within their chosen careers.
Upon reflection, Pro-Net is much more than something
that "happened by accident." There is hardly anything accidental about Melodie
Stewart and her partner, Kim Doherty. Their experiences in establishing Pro-Net, their
partnership, and development along the way, provide an excellent testimonial for students,
as well as potential and practicing entrepreneurs. The organization and its leadership
embody many important values held by the workforce of the 90s. In fact, Pro-Net has
recently won the Royal Bank Service Excellence Award and Melodie Stewart was nominated for
the Entrepreneur of the Year award.
However, the questions remain. Will their new
strategy to keep the business small and focus on their key competency of training allow
for continued success? Will their approach have to change with time because of changes in
the demand for their product or competition from other providers? Will their reluctance to
acknowledge gender-based barriers continue? Will their endeavours to break into a global
market bring these issues to the fore? Or is this another part of their impression
management product? It is really hard to predict at this point but if we asked such
questions of Melodie and Kim, their reply would likely be simple-- something like
"Absolutely, just watch us!" comes to mind.
Issues to be Resolved
- What motivational factors are evident in this case?
- Is Pro-Net likely to continue fulfilling Kim and
Melodies motivational needs?
- How have Melodie and Kim avoided typical gender-based
barriers in their business development and dealings? Will this continue to be the case?
- How have Melodie and Kim used their values around the
importance of building relationships to launch their business, continue to develop
relationship building as their key competency, and reinforce it into their operating