As founder and CEO of a growing global technology company, Kenan Institute board member and Geomagic Chairman, President, and CEO Ping Fu knows firsthand the opportunities and challenges facing high-growth companies and the significant economic benefit those companies can offer the economy. A small subset of companies like hers, called “gazelles,” create most net new jobs.
Fu and UNC Chancellor Holden Thorp serve together on President Obama’s National Advisory Council on Innovation and Entrepreneurship. They are helping set national policy to support the growth of jobs-producing companies.
The Kenan Institute speaks one-on-one with Fu about her journey as an entrepreneur, the challenges and opportunities facing her company, and what government can do to help.Here are excerpts of the interview with Ping Fu.
Fu: My company is Geomagic. Geomagic is a 3D-software company focused on helping companies that do design and manufacturing produce the most innovative products and services. We like to think of what we do as manufacturing for the 21st century. We also call what we do mass customization versus mass production. Mass customization is a process where a productóone of a kind or one of a fewócan be created locally to fit to your body, but at the economic efficiency of mass production.
Kenan Institute: After working on university projects that led to Netscape, what led you to become an entrepreneur?
Fu: What happened is that Netscape became the Internet poster child when it got a $7 billion IPO with no revenue and nobody had ever heard about it. So, the university came to me and asked what other ideas I had. I was a reluctant entrepreneur because I really loved my job at the university. I was doing research. I didn’t have to worry about P&L and I had a daughter at the time who was three years old. So I did not think I was going to go out to start a company. But the university just kept pushing and pushing and eventually I said, “OK, I’ll try it.” I thought I would go out and transfer the technology to a commercial company that would hire someone, then I would run back to the university. But it didn’t happen that way because once you start a company, it’s like giving birth to a baby. You can’t turn back.
Kenan Institute: Tell us about your work with President Obama’s National Advisory Council on Innovation and Entrepreneurship.
Fu: The council is focused on innovation and entrepreneurship. We are really focused on policy changes that will impact the “gazelle” companiesóthe companies that we call “high impact,” “high growth.” They are the ones that actually create jobs. If creating jobs is the number one priority for this country, then those are the companies that actually create net jobs. Startups have very high failure rates. The big companies lay off more people than they hire, so the net job creation for large companies is negative. The only positive net job creation comes from gazelle companies.
But somehow we got to a point where there’s no good way for a gazelle company to grow. There is no good access to capital. The market conditions are such that there is no exit and no consolidation. There are too many gazelle companies competing with each other, suppressing the pricing so that none of them can be very profitable and none of them can grow very fast. In some markets, you have 40 or 50 companies doing the same thing.
In the last 10 years, the economic conditions have been very difficult for gazelle companies. So we have to think differently about how we run our business, and the government needs to change its policies so that it is easier to do business.
Kenan Institute: What value does the Kenan Institute bring to companies?
Fu: I see the Kenan Institute being a very unique entity. Serving on the board, I have learned a lot from them. It’s an entity that has excellent research in entrepreneurship, and they can spot the trends of what’s happening in the marketplace. They are the first ones that did the research on the gazelle companies, which is a very helpful concept.
They also do wonderful education, not only for the students that are in the university but also for entrepreneurs who are in this area. Their programs are more practical, more pragmatic, so it complements the business school’s more theoretical approach very well.
|•||National Advisory Council on Innovation and Entrepreneurship|
Frank Hawkins Kenan Institute of Private Enterprise
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