Venture accelerator has learned its keep
by Andy Gotlieb
THE SHORT OF IT
Company: Foster Chamberlain LLC, Philadelphia
Principals: John F. Ulrich, Todd C. Peterson, Steve
1999 Sales: $1.21 million
Two-year growth rate: 1,346.55 percent
Profit range: Loss
Startup capital: $20
Small Business Development Center
F. Ulrich and Todd C. Peterson are both young enough
that they don't recall the days before touch-tone dialing,
cable television, and compact discs. But they are wise
enough to know the proper way to spin failure and misfortune.
don't make mistakes," Ulrich said. "You have
you call them, neither Ulrich, 34, nor Peterson, 30,
principals of the Foster Chamberlain venture accelerator,
have seemingly made many since founding their company
in March 1997.
the time, they had just one client and were still a
few months away from earning their MBAs from the Wharton
opening their business with $20 in a checking account,
Foster Chamberlain's grown like topsy: Its 1999 sales
were $1.2 million, compared to $83,714 in 1997. Its
two-year growth rate between 1997 and 1999 reached a
heady 1,346.55 percent, earning it the No. 5 spot on
the 2000 Philadelphia 100, a ranking of the fastest-growing
private companies in the region.
company now counts seven employees, housed in modest
digs on Fourth Street. A third principal, Steve Shoff,
32, also a Wharton classmate, joined the company more
idea behind Foster Chamberlain the name comes
from combining Ulrich's and Peterson's middle names
appears deceptively simple. The premise is that
while large companies are in the best financial position
to create new businesses, they're not always the most
willing or best qualified to do so.
amazed us that corporations weren't better at creating
new businesses," Peterson said. "We thought,
'There must be a better way of doing it.' "
what Foster Chamberlain does is help companies get those
new ventures started, providing the management skills
but not the funding to get things off
the ground. That might include establishing a gift catalogue
for a non-profit agency or a new product line for an
established business. They work from the concept phase
through business planning to startup.
basically creating services that are new," Ulrich
said. "We're good at starting new businesses."
why would a company hire Foster Chamberlain?
and Ulrich ticked off a couple reasons.
A company often fears venturing outside its comfort
zone. New businesses can be scary.
Business development departments often are thinly
staffed, because most companies don't want to divert
from their core businesses. Their range can be limited.
Despite the lip service paid to the notion, companies
often don't truly encourage employees to consider "out
of the box" thinking.
duo talks excitedly about a project they're working
on now for Prudential Fox & Roach, the real estate
brokerage, and Conectiv Energy, the Wilmington-based
utility. It's called Vital Home Services. Its 30 employees
include Ulrich, who claims the title of chief operating
officer, while Peterson ranks as vice president.
put the venture together and we're running it on an
interim basis," Peterson said. "It's basically
creating services that are new."
buyers today know the hassle of locating their various
utilities providers and making the arrangements for
those services; a lot of time is wasted on hold. With
the new service, home buyers can avoid that it's
automatically done at once for no extra charge.
sides benefit. Consumers get convenience. The utilities,
who pay a fee to Vital Home Services, still save money
because they can reduce labor costs. Real estate brokers
don't have to worry about increasingly narrow margins.
with all its ventures, Foster Chamberlain eventually
moves on. Employees want to work on the next project.
assume interim management roles until we essentially
recruit ourselves out of a position," Peterson
helping with the hiring, his company can assure the
new venture succeeds by putting the right successors
Chamberlain starts with its clients on a fee basis.
Ultimately, it hopes to take an equity position in the
successful growing companies, thereby diversifying its
intention is to have a bunch of different ventures going
and have an equity share in many of them," Ulrich
said. "We want to be a part of what we created."
people associate high tech companies, computer firms,
dot-coms and other startups of that ilk with venture
accelerators, but Ulrich and Peterson limit themselves
only to those with an entrepreneurial spirit.
helped with Internet ventures, but the focus isn't exclusively
there," Peterson said. "We've worked in some
of the least dynamnic industries imaginable."
firm hopes to double its staffing annually. Peterson
noted the labor market is tough and that prospects must
be knowledgeable and "world-class generalists."
a rare person we're able to find that fits that skill
set," he said, pointing out that some good candidates
reject job offers because of the unusual environment.
"We're looking for an entrepreneur. We're not looking
for someone who is risk averse."
two note that while they aren't experts at the fields
they step into, they find plenty of similarities in
all businesses. Often, the ventures they're hired to
conduct are a marriage of two industries never placed
is stressed at Foster Chamberlain. While the design
of Ulrich and Peterson's business cards is the same,
they couldn't agree on a color band at the top. So,
Peterson uses gray, Ulrich maroon. Employees choose
any color they want.
and Ulrich don't have huge tangible aspirations for
Foster Chamberlain aside from continued growth and developing
projects interesting to them.
would want every CEO at any big corporation to think,
when launching, 'Should I do this on our own or should
I hire Foster Chamberlain?' " Peterson said.
October, 2000 - Philadelphia Business Journal