Alumni Success StoriesAhmos Netanel, B.S. '86
Alumni Entrepreneur of the Year - 1996
The Massage Therapy Center, Inc.
What kind of business did the entrepreneur start?
With over twenty thousand clients and fifty-plus staff, The Massage Therapy Center, Inc. reigns as the largest massage therapy center in the United States. The Center’s therapists are fluent in the numerous techniques of massage. In order to custom tailor every session based on the individual needs of the client at the time of appointment, the therapists provide a combination of many approaches to massage including: Swedish Massage, Acu-pressure, Deep Tissue Massage, and Sports Massage.
The Center creates the ultimate environment for both the client and the therapist. Every detail is devoted to one’s comfort: from the temperature and lighting, to the serene music, to the soft flannel sheets and luxurious robes. All of this is the result of Mr. Netanel's creative vision.
What is the background of the entrepreneur?
Born the youngest of three, to two entrepreneurs, Ahmos grew up knowing that he was destined to be in business for himself. His father, owner of a construction company, often stressed that his employees had a better life than he. After all, at five o'clock they went home and "sat on their balconies and ate watermelon". He, on theother hand, put on a suit and attend business meetings. One would think this would have led Ahmos to shy away from a business of his own. Instead, Ahmos developed a strong work ethic and realized that though there were some drawbacks to heading one's own company, there were far more benefits.
Before leaving Israel, his birthplace, Ahmos served in the military as a head of an anti-terrorist unit. Serving in this capacity truly honed his leadership ability. Also, it developed a sense of tenacity in him. Forced to achieve specific objectives, Ahmos developed a "no quit" attitude and learned to "hang in with nails forever".
While receiving a therapy session at a health club, Ahmos started talking with the therapist about how one becomes a massage therapist. He was so interested in the idea of possibly developing a professional career in this practice that he enrolled in a Massage School in Santa Monica. After six months of formal training, he started practicing massage therapy for himself and through a massage company. This helped finance his education at The University of Southern California, where he was pursuing his undergraduate degree in entrepreneurship.
As he honed his skills in the practice of massage therapy, he was quickly recognized and became President of The American Massage Therapy Association (AMTA) which proved to be a very challenging position for Ahmos. He was responsible for developing basic goals, operations, and policies for the organization and, more importantly, he tried to bring a stronger sense of professionalism and business strategy to the Association’s members. At the time, a lot of therapists did not really perceive their practice as a business.
How did the entrepreneur get the idea for starting this business?
The idea for The Massage Therapy Center, Inc. came to Ahmos in an interesting, and somewhat lucky, way. As President of The American Massage Therapy Association, Ahmos was interviewed by The Los Angeles Times in 1987. Two paragraphs resulted in over four hundred inquires from consumers wanting referrals to quality massage therapists. Ahmos quickly realized this unique business opportunity. He could create a facility where customers could come and be introduced to the best massage therapists in practice.
What did the entrepreneur do to start this business?
Ahmos was involved in every aspect of developing his business, and he did it primarily by himself. In 1986, he developed a business plan at USC on such a company. He chose the topic not because he really foresaw himself opening such a business, but because he had so much experience in the industry and so he did not have to do any industry research.
After graduating, Ahmos continued to work doing massage therapy and giving seminars on the industry. In September 1987, the aforementioned interview took place and the idea developed rapidly from there. Ahmos used the business plan he had developed at USC as somewhat of a skeleton outline and modified it to fit the business objectives he had in mind. He structured the investment deal and convinced his brother to outlay the $150,000 he needed to get the project off the ground. Raising the initial capital required was not as grueling a process as it is with most start-ups, "a half-hour and a napkin, the rest is history".
Ahmos incorporated the company in November 1987 and over the next few months he pieced together all of the necessary requirements. Ahmos described the start-up as a "jump-in" process, as he learned through doing. He worked with a contractor to develop the location, he hired an Administrative Director, he obtained his DBA and developed the company's logo and trademark. Because the company was undercapitalized, Ahmos had his hands in all facets of the its development and was constantly juggling the numerous responsibilities a start-up requires. There were many days he was running on only a couple hours of sleep.
In June 1988, The Massage Therapy Center opened its doors. Initially, the company did not fare too well, as it was in the red for some time. However, Ahmos was able to eventually overcome this, through new marketing efforts and by adjusting his business concept to keep up with the needs of his consumers. Over the next ten years, it grew to be the noteworthy company it is today.
Currently, Ahmos is preparing to do another startup and his new company, Spa Euphoria, will absorb the current business and thus, the cycle begins anew. With his new business plan, Ahmos seeks to raise $6 million. He envisions a new 'landmark' building and envisions changing the massage therapy industry. In September 1999, this idea will come to fruition.
What major problems did the entrepreneur encounter during the startup of this business?
Perception proved to the biggest obstacle Ahmos faced. Ten years ago, most individuals equated massage therapy with "massage parlors"-places more like whorehouses than legitimate businesses. City zoning proved very tough and Ahmos was in a constant struggle with City Hall.
To obtain a conditional use permit (the permit required for a business like The Center which specifies all the conditions that must be met in the running of the business), City Zoning, the Police Commission, the County Health Department, the Office of the City Clerk, and the Department of Building and Safety all have to agree that a business like The Center is not a "detriment to society". In addition, all landowners and property owners within a 300 yard radius are entitled to come to the City Hall hearing to voice their concerns.
After filing with the City Clerk, the Vice Squad came out to issue its opinion. The sergeant would not budge on the conditions that were required to be met. For example, he wanted windows in all doors of the business, so that the police could come in and view what was occurring. This demand posed an obvious problem for Ahmos, as customers expect the right to privacy. In addition, a business owner in the community voiced opposition to the business, due to his preconceived notions of the massage business.
Similar problems arose with companies integral to advertising Ahmos' business. For example, phone companies deemed massage businesses, limousine services, and escort services as 'fly-by-night operations'. As such, they wanted the money for year ads in the Yellow Pages up front, rather than on a monthly basis. This posed a significant problem because Ahmos was forced to come up with a year's advertising at once ($16,000 for GTE), before even opening.
Although Ahmos learned a lot about business in his instruction in school, he lacked the knowledge of "how to be an employer". He was not familiar with all the intricacies of running a firm; over-time laws, severance pay, etc. His optimistic view of people resulted in his being too lenient in his business practices sometimes.
How were those problems solved?
Ahmos learned through doing. Through researching the city requirements for operating such a business, Ahmos was able to comply with the zoning laws. However, he had a tremendous struggle with City Hall in getting the business approved.
At the time, the City was redoing its ordinance and came to Ahmos, as President of the Massage Therapy Association, hoping to get an endorsement from him. Basically, Ahmos stated that he could not give any endorsement on an ordinance that was at the same time prohibiting him from setting up a business. Eventually, Ahmos was able to gain the approval from the Police Commission.
After meeting with the owner of the company who was opposed to the establishment of The Center, Ahmos was able to convince him that his business was legitimate and that it posed no unfavorable ramifications. In fact, this owner later became a client of Ahmos’. With the approval of the two sources that were initially opposed to The Center, Ahmos was now able to obtain his business permits.
To ease the burden of substantial up-front costs, many of his creditors were somewhat lax with him. His landlord let him get by with deferred rent payments. He had to carefully manage his cash flow.
Ahmos was forced to change the way he handled working with people. He had a situation with a key employee some time back that was serious to the well being of the company. Because he initially had a "let's work through it attitude" and it is easier to maintain the status quo than change, he gave the employee more leniency than was justifiable. After the problem did not remedy itself, he was forced to let the employee go. As a result, Ahmos adopted a different strategy, to not prolong situations. "No one likes to be a hard-nose, but you have to do what is in the best interest of the company". In other words, Ahmos learned to wear the many hats that come with running a business.
Who did the entrepreneur use for help and guidance during the startup of this business?
Ahmos' investor significantly helped in the start-up. Not only did he provide the necessary capital, but he also had previous experience in creating a company. Ahmos was able to apply some of the investor's knowledge to his own situation. The investor was able to refer Ahmos to an architect, helped him with the creation of contracts, and helped develop the initial advertising campaign.
The Administrative Director played a significant role as well. The AD helped set up the office, implemented the operations of the company, and aided in the accounting. Basically, the AD helped Ahmos take care of the day-to-day operations.
What advice would the entrepreneur give to someone thinking about starting a business?
Steven Jobs said it best, "Use your head to follow your heart, and not the other way around". As the most important thing one brings to the business is energy, Ahmos stresses that one must find something he/she is truly passionate about. He/she must be driven and ambitious, willing to put forward the work. "If you are not driven, you're dead".
One must learn to motivate his employees, instilling his vision on the company. Because a business has limited resources, an entrepreneur must learn to maximize what he/she has. "The trick is learning to make a dollar work as ten". Only through constant energy and dedication can one's vision become reality.
Why was this entrepreneur successful at getting into business?
Ahmos Netanel has been extremely successful in his development of The Center. This success can be attributed to his strong correlation with the description given in Perkins and Weber’s "Effable Invention". Specifically, it can be viewed from three perspectives: the search perspective, invention as an effective search for ideas among the possibilities; the social perspective, the social trends and establishments that support these searches; and the psychological perspective, what mental faculties enable and compel these searches (Perkins and Weber, 318).
Ahmos was successful from the search perspective because he was able to find a field in which he had an interest and could flourish. The social trends that enabled him to successfully start his own firm were educational institutions, the need for a service that was at that time unavailable, and the networking opportunities he possessed. From the psychological perspective, his success was aided by his business knowledge, his tenacious attitude, his passion, and leadership ability.
Ahmos could have pursued a career in numerous fields when he graduated from the University of Southern California. However, because he had been practicing massage therapy for some time, it seemed to be a natural fit to focus on this business practice. Since he considered himself to be "unemployable", he definitely needed to be in business for himself. However, he was not sure in what capacity he would serve. He faced many options, he could continue providing massage therapy himself, continue familiarizing the public with massage therapy as President of the AMTA, or create a business where he matched therapists with clients.
The social trends substantially contributed to Ahmos’ idea in starting the company. If so many individuals had not demonstrated an interest in the placement service The Center now provides, it is highly unlikely such a company would ever have come to realization. Ahmos, like the majority of other successful entrepreneurs, quickly recognized a business need and worked to meet that need.
His education at USC played a significant role in his understanding of social trends. His course work enabled him to formulate a business concept to meet consumer needs. He was familiar with business planning and knew where to go to create a business.
Further, because Ahmos knew the best massage therapists in practice, he had the ability to bring them in on the start-up. That is, Ahmos did not need to take the time to go search for individuals to staff his company. They were lining up for the opportunity.
Ahmos possesses many of the personality traits common to successful entrepreneurs. He is extremely passionate. He is able to pass his vision on to those around him and to instill a sense of direction in his employees.
He is remarkably tenacious. When he commits to something, he follows through. This sets himself apart from most individuals. However, he does not feel this attribute is necessarily a great thing. He has had to work on "letting the small things go". Entrepreneurs cannot control every aspect of their lives. So, it is paramount that the entrepreneur identifies the important things and work on those.
Ahmos possesses great leadership ability, as do most entrepreneurs. This ability has developed from his experiences with others throughout life. One has to "test the waters" to determine the best approach to dealing with people.
Because he is authentic and does not posture, Ahmos is able to make firm business decisions. Some entrepreneurs do not think their business ideas through enough, and, consequently, make unsound judgment calls. An entrepreneur who does this cannot be successful.
It is extremely difficult to reduce the qualities of a successful entrepreneur into a concise writing. How can one communicate the essence of an individual in an essay? But, by talking to Ahmos, it is apparent that he embodies all of the characteristics of a successful entrepreneur.
- J. Ryan Mummert