The SCORE on startups: John Walsh
by Glenn RittOver a quarter-century, John Walsh has become a global expert on the very specialized skill of measuring water flow at hydroelectric dams such as Hoover and Cooley. He has worked in China, India, Europe and South America.
Now, entering his 50s, he’s decided to strike out on his own, trading a 25-year career with a corporation to establish his own world headquarters in Falmouth. Those headquarters are in his home, and in a broadband age, he can traverse the globe from anywhere he wishes.
Like many peers, Walsh was watching his company reduce staff to remain competitive in a global economy. After one set of severe layoffs, the company moved from Falmouth Heights to West Wareham. While he did not feel personally threatened, he began to consider his long-term future, and determined that it was better to be in control of a smaller world than continue to manage a division with diminished certainty about tomorrow.
“I wasn’t seeing real investment in my division. My philosophy was increasingly different from the parent company. So rather than get confrontational, I decided it would be best if I were to leave.”
So he left – cold turkey. No golden parachute.
“It was a very comfortable and lucrative position, but for the long term, I did not see chance for a personal future,” Walsh explained. Once he was responsible for $4 million in revenues; shortly thereafter he was living on Cape Cod with no job or income.
“I had nothing but a lot of chutzpah and contacts from former customers.”
His wife watched with a combination of pride and anxiety. “I was apprehensive at first,” she recalled. “Then, I accompanied John when he led an international conference in Oregon after he left. I could not believe how many people from all over the world approached him and asked for his business card. That gave me peace of mind.”
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Ed McDonald is a generation older than Walsh. But in his late 60s, he is anything but retired on Cape Cod.
Seven years removed from his job at Hewlett-Packard – where he directed international business development in emerging countries for its medical products group – McDonald operates his own home-based business, Healthcare Industry Consulting. He also actively participates in SCORE, an organization of retired executives that counsels small businesses.
Like so many of his SCORE colleagues, McDonald’s resume belies his modest, understated demeanor. He holds degrees in electrical engineering and industrial technology. He has attended Harvard’s Graduate School of Business and worked as a researcher at the Massachusetts Institute of Technology. Overlaying this technical background, the Chatham resident devoted a significant chunk of his career to marketing and sales.
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It was that combination of technology and marketing experience that connected McDonald to Walsh, when he approached SCORE for help getting his nascent business, RennaSonic, off the ground.
“Retirement just doesn’t compute for me,” explained McDonald. “I consult with SCORE year-round, I have my own consulting business that I can operate at my own pace, and I work closely with the American Heart Association as chairman of its Emergency Cardiac Care Committee, a role that requires frequent travel.”
As is the case with most SCORE clients, they get connected to a two-person team. McDonald’s partner is Thomas Kennedy of North Falmouth, a financial manager and controller who has worked for John Hancock Mutual Life Insurance Company and Bank Boston Investor Services, as well as the TLK Group on Cape Cod.
“I had been in contact with SCORE for at least the last two years on and off,” said Walsh. “I met Ed early in 2005. We developed a connection because our backgrounds are similar. Tom brings financial management to the relationship; Ed technology and marketing.”
“When a client reaches out to us, we assess their needs and put together a team with the skill sets that can best address the particular startup,” said McDonald. “If someone starts with a client, but he or she needs other resources, we are able to internally connect to that expertise.”
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The essence of Walsh’s past, present and future is his unusual expertise in measuring water flow through large pipes and projects such as hydroelectric dams. The devices and programs he uses and develops determine how well the turbine converts water power to electrical energy. It is critical that flow is measured to the minutest level. A couple of tenths of a percent could represent hundreds of thousands of dollars, he explained.
Not only can Walsh provide his skill set as a consultant, but he is intent on developing new equipment to do the job better.
“I teamed with a colleague to develop software that optimizes power plant production,” he said. His entrepreneurial appetite was whetted when he sold the program to the Sacramento Municipal Utilities District last year.
With growing populations in the West demanding more water and government incentives to develop renewable energy sources such as hydroelectric power, Walsh is convinced he is on the cusp of a very bullish industry.
Yet, while virtually all of Walsh’s new business will be in the western United States or abroad, he is intent on building RennaSonic right on the Cape, where he has lived for most of his life. It’s testimony to a flattened world where international business can be conducted instantaneously and collaboratively from any computer, any time.
SCORE’s McDonald, though, had a significant impact on locating RennaSonic, based on his international career in marketing.
Because Walsh will have clients abroad and on the West Coast, the best place to be located is the East Coast, McDonald explained. “You can talk to anyone in the world on the same day. I ran teleconferencing sessions worldwide from Boston. It was 11 ½ hours difference to India, 12 hours to China, four hours from California and six to seven hours to Europe.”
It’s that kind of knowledge and experience that Walsh needs from SCORE, despite his extensive knowledge of his industry. It’s one thing to manage a corporation’s resources; it’s entirely something else when building your own business from the ground up.
“It is always good to seek outside advice from an objective point of view. It is too easy to run your own business on passion and emotion,” said Walsh. “That’s necessary; but so is making sure the numbers make sense; the plan is strategically sound. That requires bouncing off people who have been in similar situations. I would be crazy not to avail myself of Ed’s and Tom’s knowledge. It has given me confidence to make the change personally, plus constant feedback – both positive and constructively critical.”
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McDonald recalls that Walsh had “a good skill set.” But he had to document that as part of a business plan. He signed up at the University of Massachusetts for an online course on writing just such a plan. Then he earned an MBA.
“The Web is changing completely the way we are doing business. My first course was on information technology. Because of that, I was able to put my Web site up much faster and proficiently than I would have been able to. I designed and built it.”
What impressed McDonald was Walsh’s ability to generate cash flow as a consultant immediately while he took the necessary time to develop programs he could sell to the industry – with much higher payback.
“When you start up a business, you often don’t know where the revenue will come from for the first two years,” said McDonald. And lending institutions are reluctant to let you borrow if you don’t have a cash stream.
What Walsh learned from his SCORE relationship is how much a business plan is an “organic document” to be constantly reviewed and massaged in response to a changing environment. “It’s good to have a place to start and maybe go to, but it comes with detours,” he said with a smile.
With hopes of a healthy consulting portfolio, Walsh and SCORE have been developing presentations to banks so he can develop actual products that require capital. He’s looking at a full spectrum of institutions, from gargantuan Bank of America – which has international reach – to Cape Cod Five Cents Savings Bank and Cape Cod Cooperative – because of their affinity to local businesses.
RennaSonic has another strategic advantage. If efforts to raise capital fall short, Walsh still can fall back on consulting.
“I am passionate about this industry,” said Walsh, reciting a veritable travelogue of past assignments – from Quebec and James Bay to Pakistan. As he looks ahead to develop his new business, he plans to target China, Brazil and India for new clients – all from the comfort of his long-time Cape Cod home.
Published in Cape Business July/August 2007
Glenn Ritt Glenn Ritt is editor and co-publisher of Cape Business Publishing LLC. He is the former publisher of Cape Cod Community Newspapers and editor of The Bergen Record in New Jersey. 
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