Like father, like son. Kenneth Morse, managing director of the MIT Entrepreneurship Center, is a chip off the old block, in two senses: his father was also an MIT graduate as well as an entrepreneur. And his father’s story reads almost like a case study of the principles that Morse recommends for entrepreneurial success.

Morse’s father started out in a big corporation but wasn’t happy there. “He went to work for Eastman Kodak for five years,” says Morse, “but he thought Eastman Kodak was sleepy and boring, and he left.” After meandering back to Cambridge, Massachusetts, with no money, he started a business that built vacuum equipment for coating lenses, near MIT.

World War II gave the business two significant boosts. When the United States had to start making its own binoculars, a product that earlier had been purchased from Germany, manufacturers used his father’s vacuum equipment. The equipment was also used in building the atomic bomb.

After the war, his father’s equipment was converted to peaceful uses, and his laboratory was responsible for the vacuum distillation process used to make Minute Maid orange juice. Small wonder that Morse had decided by age 12 that he was interested in building a business of his own some day — which he has accomplished in a series of five successes and one dismal failure.

Morse will speak about entrepreneurship at the “Entrepreneurship in the U.S.-India Corridor” program, on Wednesday, October 8, at 5 p.m. at the Frist Campus Center at Princeton University. The event is jointly sponsored by TiE NJ-Philadelphia, the Keller Center for Innovation in Engineering Education, and the MIT Club of Princeton. Cost: $40. For more information, contact Ram Iyer at

Other speakers and special guests include Shankar Narayanan, a partner at McKinsey & Company; Yashwant Bhave, secretary to the India Ministry of Consumer Affairs, Food & Public Distribution; Rajiv Khanna, president of the U.S.-India Chamber of Commerce; Rusi Brij, vice chairman of Hexaware Technologies and a serial entrepreneur; Ravi Srinivasan co-founder of Office Tiger; Prabhu Dayal, consul general for India; and U.S. Rep. Rush Holt.

Being an entrepreneur requires both a mindset and a series of actions, and Morse offers suggestions about how to be successful:

Plan to go global. From the get-go, an entrepreneur needs to have a global plan. “If you don’t have as a goal to dominate your chosen market niche,” says Morse, “someone else in a lower-cost situation is going to come after you.”

Right now, with the U.S. dollar cheap relative to Europe and Japan, is a great time to start selling overseas, he says. And it’s easier than it used to be, with e-Bay and the Internet. “People in the heartland who may not be sure where Europe is are selling over there,” says Morse.

Develop a team. “You have to have a team and the technology to survive the tsunami of global competition,” says Morse. “Lone wolves build perpetually small companies.” The best way to build a team is to share both risk and results.

Morse was sent to the Brussels office of AspenTech to get things moving in Europe, the Middle East, and Africa. He started by telling his staff that he expected harder work and more hours, in return for better rewards — through shares in the company if things went well.

As a software company for the chemical industry, AspenTech was full of risk-averse European chemical engineers, who refused to take his bait and used their spouses as an excuse. So Morse talked to the spouses, who liked his idea and turned their husbands around. He also purchased microwave ovens and dishwashers for every office, so that people could have dinner at the lab when they worked late.

Select global corporations as business partners. “Small companies need important clients to be an example, and also to help them borrow money from the bank,” advises Morse. In North America, it is easier for entrepreneurs to establish corporate relationships than in Europe or Africa, he adds, “because large American companies understand that innovation often comes from startups.”

A123 Systems, an MIT spinoff company that makes high-performance batteries, navigated the businesses of establishing corporate relationships with panache. To start the process, an MIT professor with a breakthrough technology in the laboratory hooked up with an entrepreneur and raised money to prove the idea. But the very next step was to raise money from sources that could also help build the business, says Morse.

They connected with Motorola Ventures, Motorola’s investment arm, for money and also found their first customer — Black and Decker, which enabled them to enter the hand tools market. Black and Decker was so thrilled with the new batteries that it brought out a whole new line of tools. “With an A123 battery a hand drill has more torque than if it is plugged into a wall,” explains Morse

Black and Decker also decided to invest in A123 Systems, thereby giving the startup the leverage it needed to enter the automotive sector. This in turn gave the company the credibility to raise more money, in this case from General Electric. And of course MIT continues to support the company as a shareholder. As Morse notes, “my pension fund is in this deal.”

A123 Systems was following a carefully planned growth strategy, targeting the corporations it needed as both customers and financiers. “A lot of companies just sell to people they know down the street,” says Morse, “whereas these guys spent a good bit of time selecting their business partners, who were global corporations.”

Recognize that sales are critical. Morse advises developing a sales team that focuses on what customers really want and delivers it quickly. Having surveyed hundreds of CEOs, he found that sales are more important than technology in building a company. “It starts with understanding customer needs and matching solutions to those needs,” says Morse. “The last thing you want to do is start a meeting with a demonstration. You want to start by confirming the customer’s pain.”

A memorable example is Spitfire, a New Jersey software company that completely reoriented itself to focus on the pharmaceutical industry. Early on the company was selling different applications in different industries. But careful listening led it to a new business plan. What the company learned, says Morse, was that while many industries viewed their product as nice to have, in pharma it was a must-have.

Consequently Spitfire changed the product, the interface, and the databases to be focused entirely on pharma. It also focused its sales pitch away from the information technology department and toward the head of research and development. The reason? “Because the head of research and development has to bring new products to market faster and that’s a big pain in pharma,” says Morse.

The new strategy worked, and last year Spotfire was sold to Tibco for $195 million.

Be the innovative mover for a large corporation. Morse’s definition of innovation is “invention plus commercialization.” As a result he believes that large corporations should team up with smaller entrepreneurs, whether in-house or outside, to move products to market more quickly. “A large corporation doesn’t have the same passion as small companies, and so it takes them longer,” says Morse, “and usually they have a portfolio of projects, whereas a startup company will be totally focused on one idea and will move it further and faster.”

Morse grew up in Boston and went to college at MIT, where he received a bachelor of science in political science in 1968. After graduating, he was looking for experience overseas and got it as president of AIESEC, a student organization that arranges internships in different countries. In the process of building the organization, he traveled to 35 countries.

But after a couple of years, he had his experience and realized he needed more business education. “I wanted to get international experience and the international experience taught me I needed an MBA to build a business like I wanted to build,” he remembers. He got his MBA in 1972 from Harvard, where he majored in international marketing.

After a few years with Schroders, a merchant bank in the United Kingdom, as personal assistant to former president of the World Bank, Jim Wolfensohn, Morse got his feet wet as an entrepreneur. In 1975 he formed a trading advisory company under the aegis of Chase Manhattan Bank to assist technology-based companies in the United States to enter the China market. That required several years in Beijing during the latter half of the Cultural Revolution, which Morse admits was “a little on the gutsy side.”

His second entrepreneurial home run was put into play in 1980 when he relocated to the Silicon Valley as a founding member of 3Com Corporation with Rob Metcalfe. Morse was also president of a biotech company and a cofounder of Aspen Technologies, or AspenTech, which makes software to help reduce energy use and pollution for chemical and pharmaceutical companies.

At the end of a string of winners, Morse was also cofounder of a company that created artificial intelligence-based expert systems for the financial services industry — one that failed big. In a single afternoon it went from 88 employees to four. Says Morse, “I found out how the bug feels on the windshield.” The problem? “The CEO didn’t like customers.”

Morse’s invitation to join the MIT Enterprise Center came in 1996, when he had called MIT to donate some shares of Aspen Technology. “Entrepreneurs like to give back to the institutions that made them successful,” he notes. MIT’s response was a little unexpected. He was told, “we’d love to have your money but would rather have your body.” That was 12 years ago, and as of today the entrepreneurship program has grown from two courses with 150 students to 31 courses, 30 professors, and 1,600 students.

Besides being director of the Entrepreneurship Center, Morse is a senior lecturer at MIT’s Sloan School of Management. He also has a bit of advice for the faint of heart, the non-entrepreneurs among us. “If all of this sounds overwhelming, go back to working for the post office,” he says. “Today it is a global world.”

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