Albert Chen had a big decision to make. He had built Telamon Corp. into a successful enterprise that provides technology deployment products and services for customers in a wide range of fields. But Chen wasn’t satisfied with what he had already done. He wanted more — something new, something that at first glance didn’t seem like a fit with his business model.
Chen wanted to take his company into the biofuel industry.
“Let’s promote Indiana-produced corn and Indiana-produced ethanol, kind of from our backyard first,” says Chen, the company’s founder, chairman, president and CEO. “With our reputation at Telamon in Central Indiana, maybe that makes it a little easier for us. People don’t question, ‘Who is this company?’ Chen clearly had a lot of personal enthusiasm for the venture and that was giving him a lot of hope that it could work.
The challenge for Chen was to see if it could indeed be a fit with Telamon’s business model, which generated $468 million in 2008 revenue. His passion and energy alone wouldn’t be enough to make the idea a success.
Could he make it work for his 500-employee company and drive the revenue that would be needed to support the new venture?
Chen needed to take a hard look at what he had and assess how biofuel would fit into the mix. He had to figure out whether he could afford it, and if he could, he had to determine if he could develop a team around him to help make the idea a reality.
Ultimately, he decided the best way to make his plan work was to create a new organization that would still be linked to Telamon. National Biofuels Distribution LLC launched in 2008 as a subsidiary of Telamon.
If you are going to launch a subsidiary, you need to crunch the numbers, ask tough questions and find the right leader to make it work.
