Time to Reinvent

Forbes, Inc.
David Whelan, 06.22.09

Some folks leave the corporate aerie, sail into the entrepreneurial unknown and never turn back. Not Ravinder (Rob) Chandhok, who is doing his second tour of duty at Qualcomm, the $11 billion (sales) telecom chip supplier. Why? "It's easier to see a path to influence, as I can combine my previous experience at Qualcomm with what I learned when I was gone," says Chandhok, 47.

He arrived at the San Diego company in 2000, after selling his small Pittsburgh software firm for an undisclosed sum. By then he'd already consulted on Qualcomm's Eudora e-mail program. Chandhok worked with Paul Jacobs, son of the company founder, on the Brew operating system, an application that lets mobile phone customers download ringtones, games, messages and photos. Later, as chief engineer of MediaFlo, he oversaw the $800 million effort to broadcast live TV to mobile phones (and spent a lot of time in Korea, India, Japan and China working to get MediaFlo accepted for trial). But Chandhok grew restless.

Chandhok, like many Americans--some laid off, others bored and dispirited, still others forward-looking and creative--has managed to reinvent his career. The violent churn of the recession (5.7 million jobs lost and counting) is forcing a host of changes on the U.S. workforce. "The social contract between companies and workers was broken with the recession of the early 1990s," says Susan Ascher, a Roseland, New Jersey recruiter. "It still holds true. A permanent job is a temporary job disguised with benefits."

In 2006 Chandhok left to help launch SunRocket, which aimed to use $50 million in venture funds to take on Vonage, offering phone service over the Internet. The idea was to turn a home phone into more of a fun, multitasking mobile device. That was the idea, though the new handset never got built at SunRocket before the money ran out. Chandhok spent his last month liquidating the company. He killed time with a mountain-trekking trip to India with his dad (who was born near Lahore before partition) and daughter, kicked around some ideas with potential backers on Sand Hill Road--and started meeting again with Paul Jacobs.

New challenges at Qualcomm intrigued him. For one thing, there was a family of chips called Snapdragon, designed to power netbooks, those small laptops that include cell phone features to achieve mobile Internet access. Chandhok is also thinking about how future mobile phones will add more and faster radio connections, beyond GPS and Wi-Fi.

Chandhok found the pay at Qualcomm "not worse" than what he was making as an entrepreneur. More important: Off on his own, he discovered that small companies often get crushed competing in mature industries. The next iPhone, he's now convinced, will not come from a startup. "It's weird for me to say this because I believe that individuals can be transformative," Chandhok says. "But what I like is to be part of a group that builds things and releases them."

Chemists for hire: Robert Gadwood and David Zimmermann once worked for big pharma.

When Epiphany Biosciences, a tiny San Francisco drug developer, was looking for a hepatitis C antiviral compound to test in the lab, it could have saved a few thousand bucks by hiring test tube drones from India. Instead, it turned to an outfit in Michigan--Kalexsyn, which stands for "Kalamazoo Experts in Synthesis" (these guys are scientists, not poets). Kalexsyn develops prototypes well before a drug is ready for clinical trials. Recent examples: molecules to target drug-resistant bacteria and a kinase inhibitor to zap the enzyme responsible for tumor growth.

Cofounders Robert Gadwood, 56, and David Zimmermann, 51, are chemists for hire. They didn't start that way. Gadwood, who has a Ph.D. in chemistry from the University of Wisconsin, was a chemist at Upjohn & Co. (later absorbed by Pharmacia); Zimmermann, with a B.S. from Washington State, was a chemist turned administrator at Pfizer. In 2003 after Pfizer acquired Pharmacia, it shut down a large lab in Kalamazoo, Michigan. Gadwood, like 1,200 researchers, was stranded like a shell on an empty beach. His wife, a doctor, didn't want to move her practice again; they had kids in school. Zimmermann could have relocated with Pfizer to St. Louis. The two met years earlier at Pharmacia, and realized they could turn their skills in developing basic compounds into a viable business. "Rather than being true to our big company, we were true to our vocation," says Gadwood.

They acted fast, hoping to recruit chemists in Kalamazoo before they left town. With $200,000 in loans from an incubator built quickly on the campus of Western Michigan University, the two started Kalexsyn. They bought their old lab equipment from Pfizer for 10 cents on the dollar. Accounting and law firms volunteered a free first year in order to bolster the city's economy.

Starting with 4 chemists, and quickly expanding to 20, Kalexsyn needed work. Its first client, the French biotech firm Cytomics, hired the group for a recipe to synthesize a cancer-fighting compound. Gadwood had to dredge up an article from an 1889 German journal to figure out how to produce the molecule. The two hit the biotech conference circuit, handing out business cards. Zimmermann was much better at making connections. "There was a Fuller Brush salesman buried inside me waiting for the opportunity to come out," he says.

Nowadays a typical client hires one of Kalexsyn's 32 chemists on a weekly or monthly basis to produce a vial of organic compound--assuming the molecule can be built. Some clients have wildly unrealistic expectations, or want to pay for the finished product but not the r&d. This year Kalexsyn should eke out a profit on $4 million to $5 million in revenue, maybe 20% more than in 2008. Still not enough to pay their Ph.D. chemists much more than half the $200,000 they could earn at a big drug company. "We lived in a naive world at Pfizer," says Michael Melnick, a chemist at Kalexsyn. "We had no clue until this all happened."

Gadwood is proud of what Kalexsyn has accomplished but still not comfortable in his new role as a manager and entrepreneur. "If I could go back to being a scientist, I would do it," he says. "My first calling is the lab."

Bored and burned out. that's how Deborah Defusco felt in late 2005 after quitting her job as president of Mimi Maternity, a chain of apparel stores for expectant mothers, where she was earning $400,000 a year, not including stock options. Divorced and childless at age 47, she took off six months and reflected on her life in the ever mutable fashion industry: Seven years as a buyer for the now defunct John Wanamaker's department store, then three years at Bloomingdale's, through its bankruptcy; head of merchandising for the catalog business at Victoria's Secret; vice president of the Dana Buchman brand for Liz Claiborne, then of the Allen B. Schwartz unit at Warnaco before its demise. What a relief not to be on the road again 100 days a year--or to have to hire someone to look after her Lhasa apso. But what to do?

She got turned down for a vice presidency at Wal-Mart. Similar positions at Sears and Tesco vanished before they were filled. "Once you have 'President' on your résumé, nobody wants you to be a division manager," Defusco says. She took stock of all the connections she still had in the schmatte trade and realized she could make a fine living hiring herself on a contract basis. With a house 40 miles northwest of Philadelphia in Pottstown, Pennsylvania and a studio apartment and workspace in Manhattan, Defusco was free to take on short-term assignments, and incorporated as Retail Gal Consulting. Barry Diller's iac paid her $35,000 to boost its catalog business in San Francisco. Scoop NYC, a struggling chain of 18 stores acquired by Yucaipa, needed help with merchandising.

Her new life has given Defusco a few unexpected adventures. A "rich kid" (her words) from the University of Kentucky hired her to improve a Web site with a virtual changing room. Another gig sent her to a bonded warehouse in Newark, New Jersey, where she's trying to sell 37,000 pairs of pants to discounters; Defusco will get a 15% cut of whatever she can unload. She recently went to Dubai, where she gave seminars on merchandising for Liwa Trading Enterprise, a retail arm of the conglomerate Al Nasser Holdings. While in the Persian Gulf, Defusco picked up a dozen accounts for Jerome Jessup, a clothing designer whose luxury line she manages.

Defusco expects to earn north of $150,000 as a freelancer this year, a reflection of bad times in the fashion and retail businesses. "I still get to buy caviar and drink Dom Perignon," she shrugs. She also gets to bathe her dog herself.