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Business Rx: He likes his employer's idea so much he'd like to use it for a start-up. Does he tell the boss?

Monday, May 3, 2010; 36

Spending a few years working for a company can spark entrepreneurial ideas. If your firm is finding success in one city, you might be curious to see if the business model might work in another.

The Entrepreneur:

Alan VanToai found himself pondering just that. He had put his love of music to work as a grass-roots marketer for the past two years with a Los Angeles-based company called FanManager, helping to spread the word on up-and-coming bands. He's learned a lot from FanManager founder Erik Koral.

Now living in the D.C. area, VanToai began tossing around the idea of doing something similar here with business partner Dan Blaemire. Like in L.A. , they have noted how the proliferation of free and cheap marketing resources -- Facebook, Twitter, blogs -- has provided useful tools for marketers, but recognize the promotions can equal information overload for consumers. FanManager positioned itself as a way to cut through the impersonal e-mail and mass event invitations that fans are likely to tune out.

The Pitch:

VanToai wants to create a D.C. version of FanManager he calls FanMobilizer. Mobilizing passionate fans to pound the pavement and generate buzz can catapult a band to the next level, he says. He also thinks the business model can be adapted to serve clients specific to the Washington-New York corridor, such as those involved with Broadway shows or political campaigns.

VanToai:

"FanMobilizer is a marketing agency for artists and bands that specializes in grass-roots marketing through fan club mobilization. On behalf of our clients, we create and manage and mobilize fan club communities via 'street teams' passing out postcards and spreading the word on upcoming shows, and managing fan pages and social networking sites. FanMobilizer does not replace our client's traditional marketing methods, but instead complements them for a well-rounded, effective promotional campaign. In short, we offer an outlet for artists, bands and other culture-brands to outsource their street team marketing efforts. We also offer a comprehensive menu of traditional and online marketing tools, so we can promise our clients the best, most effective marketing campaigns in the industry."

VanToai's question: How should he tell Koral what he's planning?

The Feedback:

Curt Grimm, dean's professor of supply chain and strategy, Robert H. Smith School of Business, University of Maryland. Grimm is a competition and strategy expert.

"My advice is to be very upfront with your mentor. There can be a lot of benefits if you can maintain a good working relationship. Take advantage of the trust you've already established working with him, and be open and honest about what you want to do with your business idea. A situation like this could be a touchy negotiation, but it could be a win-win if you can figure out a way to work together. If he is willing, you may even consider working out some kind of partnership or equity stake in your company, especially if he's willing to share his tools that are already working, like specific software. Then even if he's too busy to be very involved in FanMobilizer, you'll still have access to his insight and strategy."

Craig Dye, director of venture investments, Dingman Center for Entrepreneurship, Robert H. Smith School of Business:

"At this point, I'd say you should pitch a revenue-sharing partnership with your mentor at FanManager [rather than giving him equity in the company]. That would give both parties the opportunity to see your venture in play and test your business model. I wouldn't recommend offering an equity stake at this point -- the real goal in acquiring an equity investor is to seek a partner who not only brings substantial funding, but also a deep knowledge of the industry and access to iconic customers who can transform your business."

Reaction:

VanToai

"We quickly scheduled a meeting in Los Angeles with Erik at FanManager to discuss a strategic alliance, and received his blessing and support to develop our model. We worked out a revenue-sharing model with FanManager. That trip was a monumental milestone for us, and in many ways has shaped the steps we will be taking in the near future. Over the next month we're going to fine-tune our business model and begin the client acquisition process. Our Web development will begin in the next few weeks, and we will be registered and monetized by summer."

Looking for some advice on a new business, or need held fixing an existing one? Capital Business and the experts at the University of Maryland's Dingman Center for Entrepreneurship at the Robert H. Smith School of Business are ready to assist. Contact us as capbiznews@washpost.com.

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