'CAPITAL IS KING' SOME WELL-TESTED WORDS OF WISDOM FROM AL MANN, SOUTHLAND'S NO. 1 ENTREPRENEUR.

Byline: Barbara Correa Staff Writer

The key to turning a budding entrepreneur into a truly successful one hasn't changed much over the years, through economic boom times to the more recent recessionary state of start-ups.

It can be summed up in one phrase, according to Al Mann, arguably the most successful entrepreneur Southern California has ever produced: Capital is king.

``The most important ingredient (for entrepreneurial success) is adequate capital,'' said Mann, 77, founder of insulin pump venture MiniMed, pacemaker producer Pacesetter Systems, biopharmaceutical company MannKind Corp. and numerous other ventures in the medical device, aerospace and medical therapy sectors.

And while cash is by no means the only factor in turning an idea into an enterprise, it is the foundation.

``Unless you've got the money to spend, you can't make it,'' said Mann, also one of the region's most prolific philanthropists, giving millions to medical research institutions through the nonprofit Alfred Mann Foundation.

``He's an incredible entrepreneurial model and an innovator,'' said Roberto Barragan, president of the Valley Economic Development Center, a nonprofit organization that trains and supports entrepreneurs. ``He's a great counterbalance to the whole dot-com frenzy and miracle drug frenzy. He is more involved in real problems and real solutions.''

Barragan advises entrepreneurs starting out to ``look at what he's done and do it that way.'' In a 1997 speech to University of California, Los Angeles, students, Mann said the top three necessities for success in business are capital, capital and capital. (He rated identifying the product as the least important factor.)

At a time when the venture capital stream of the 1990s has slowed to a trickle, Mann's own experience raising money for his first real venture is instructive today.

In 1956, Mann borrowed $3,000 from an uncle and cobbled together another $18,000 from other family members and sources to launch Spectrolab. The venture, now a unit of Boeing Co. located in Sylmar, is today the world's largest manufacturer of spacecraft solar cells.

To determine capital requirements for a new venture, Mann advises entrepreneurs to heed advice he was given before leaving his job as an engineer at Technicolor to start Spectrolab: Figure out how much you need, then double that. And then, don't go into business unless you have three times more.

Other than adequate funding, Mann has lots of other opinions about what transforms a good idea into a viable, growing company. Here, he shares his wisdom:

--Money corrupts. Capital may be the grease that keeps a business alive, but it can't be the soul. If a person's primary goal in entrepreneurial endeavor is financial reward, the person is better off going out and getting a job working for someone else. Entrepreneurship is rarely a get-rich-quick proposition.

--Take sometimes irrational risks. Being comfortable with risk-taking is a necessity for entrepreneurial success. Mann's background is filled with instances when he ignored rational conclusions and went with his gut. When he sat down to list all the pros and cons of pouring $10 million into developing a more sophisticated pacemaker at PaceSetter in the 1970s, the list clearly showed it would be an extremely risky move. He did it anyway. PaceSetter prospered and was eventually acquired by Siemens Corp.

--Be excited about the idea of working 100-hour weeks. Mann, the kind of workaholic who only needed a few hours of sleep a night during the early days of Spectrolab, has said his divorce allowed him to bury himself in work. And while he says he sleeps more nowadays, he adds that long hours are imperative for success. ``It certainly makes it easier,'' he said.

--Have fun. The hard work and long hours had better be spent doing something engaging. And it's impossible to create a relentless enthusiasm for a project - either it's there or it isn't. Mann describes his experience of getting increasingly interested and involved in the pacemaker project for PaceSetter. Originally, his involvement was to be purely financial. But he found himself stopping by the research office on his way home from Spectrolab and becoming more excited about the pacemaker. He eventually resigned from Spectrolab and his other company, Heliotek, to devote his full attention to PaceSetter.

--Know when to pass on a deal. When Mann was trying to decide whether to sell Spectrolab, he ended up turning down one offer that would have lead to lucrative contracts, but he might have lost control of the company. Spectrolab eventually made a deal with Textron, and Mann stayed on for 12 years after the acquisition.

--Hire the right people, and delegate. When looking for people for a company or project, Mann looks for integrity, the willingness to make a commitment, loyalty, talent, a strong work ethic and relevant experience, in that order. ``I try to hire good people and get out of the way,'' said Mann.

--Respect the customer, even when they're wrong. It's better business. Mann learned from years observing management at Technicolor, where he worked in research and development before striking out on his own, not to be arrogant with customers because it hurts a company's competitive edge.

--Be a listener. Some of Mann's businesses have been based on his own ideas. But others have come from his staff or outside people, such as the idea for the insulin pump, now Medtronic MiniMed's main product.

AROUND THE REGION

Some of Southern California's longtime entrepreneurs offer their secrets to success

Business: Fosselman's Ice Cream Company, Alhambra

Operating since: 1919

With the arrival of commercial refrigeration, Christian Fosselman decided to move his ice cream business from Iowa to Pasadena, opening operations on Fair Oaks Boulevard in 1921. After weathering the Depression, Fosselman passed the business to his three sons, who in turn passed it to Chris and John Fosselman, his grandsons. To keep up with the times, the Fosselman brothers have become experts in making exotic ice cream flavors, like ginger, taro root and Macapuno coconut to cater to the Asian communities they now serve.

Secret to success: ``The thing they always pounded into our heads is it's all about quality of ingredients and consistency of the product,'' said John Fosselman. ``If you don't stick to those rules, you're just another mediocre ice cream company.''

Business: Allen's Flower Market, Long Beach

Operating since: 1977

Harry Goldman's father won his first flower shop, located at the corner of Third Street and Vermont Avenue in Los Angeles, in a card game sometime in the 1950s. From there, Goldman opened a string of stores and now has 10 in Southern California. His son, Harry, got into the business early on, and now runs two shops in Long Beach with his wife and 16-year-old son. Goldman says the chains can't match his rock-bottom prices.

Secret to success: ``You've got to be tough. You have to be willing to work six, seven days a week and understand it's 2 percent inspiration and 98 percent perspiration,'' Goldman said. ``The bottom line is you've got to be very clean, very organized, well stocked and just know how to handle people properly.''

Business: Upland Feed & Fuel Retail Store, Upland

Operating since: 1896

Upland Feed & Fuel started as a supplier of chicken and horse feed. Today, its biggest sellers are dog food and pet accessories, though it still stocks horse feed. Owner Ray Stump started making deliveries for a grain mill associated with the business in 1956 and bought the store in 1975. Today, he sells finches, tropical fish and bunnies to grandchildren and great grandchildren of his original customers.

Secret to success: ``People still like to be treated as people. That's my philosophy and I refuse to change,'' said Stump, who said that attitude has enabled him to compete with big pet store chains. Also, he advises, ``if you're coming in cold, have plenty of capital.''

Business: Williams Furniture & Appliance, Pacoima

Operating since: 1921

Williams started as a combination hardware, general store and post office, but shifted to furniture during the Depression because customers buying on credit started asking for items like stoves and beds, said Sergio Chavez, a part owner who's been working there since 1973. The third generation Williams, Mel, grew the business to four stores, but lost some customers in the process. In recent years, Williams Furniture & Appliance has downsized and again made one-on-one relationships with customers its top priority.

Secret to success: Chavez said about one-third of his customers are recent immigrants who either can't open a bank account or don't want to. ``Ninety-nine percent of our sales are on credit. We're like a mini-finance company,'' he said, adding that Williams provides a check cashing service, translates documents for customers and will be more lenient in servicing debt than any large corporation could be.

Business: Bobbitt's Funeral Home, San Bernardino 

Operating since: 1923

J.D. Bobbitt moved his funeral business from Lynchburg, Ohio, to San Bernardino in 1923 for his wife's health. Bobbitt passed the business on to his son, who passed it to two sons in the 1950s, one of whom continues running it today, with his son and daughter. Gary Bobbitt said the fourth-generation funeral home is one of a handful of 80-year-old businesses left in San Bernardino. He said he offers a level of personal service that barely exists in the industry after decades of consolidation.

Secret to Success: ``You need to have a lot of capitalization. For somebody new it takes a lot of years to establish reputation,'' he said. ``For a family business, your expertise is in service.''

- Barbara Correa

Barbara Correa, [phone]

barbara.correa(at)dailynews.com

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10 photos, box

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(1 -- color) no caption (Al Mann)

(2 -- 6 -- color) Longtime Southern California entrepreneurs offer their secrets to success on Page 2. Among them (clockwise from top left) Allen's Flower Market in Long Beach, Upland Feed & Fuel Retail Store in Upland, Bobbitt's Funeral Home in San Bernardino, Williams Furniture & Appliance in Pacoima and Fosselman's Ice Cream Company in Alhambra.

Clockwise from top left: Photos by Staff Photographers Stephan Carr, Thomas R. Cordova, Brett K. Snow, Hans Gutknecht and Walt Mancini.

(7) Allen's Flower Market

(8) Upland Feed & Fuel Retail Store

(9) Bobbitt's Funeral Home

(10) Williams Furniture & Appliance

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AROUND THE REGION (see text)