Larry Bohn, managing director of General Catalyst Partners, left, and Maria Cirino, managing director of .406 Ventures, spoke during a panel at the recent TiECON East Conference. Photo by Mark Connors

WALTHAM, Mass. – As chief executive officer for then-fledgling company Guardent Inc., an information technology security firm, Maria Cirino followed the advice of a company board member in 2001 and expanded rapidly to help the company establish a footing for itself in a highly competitive industry. But as the dot-com bubble began to burst, the board member’s advice changed sharply, advising the company to instead rein in its spending.

Cirino, who now works as managing director for Boston-based venture capital firm .406 Ventures, questioned the board member about the apparent contradiction. “He said, ‘I don’t care what I said five months ago,’” Cirino recalled. “’This is a different time. Everything’s changed.’”

Addressing attendees at the annual TiECON East Conference on May 21, Cirino said the advice proved prescient, helping the company survive and even thrive through the recession, a period when many competitors stumbled.

If you’re not proactive, if you don’t adjust to the market conditions and economic environment around you, it doesn’t matter how great your business plan is or how innovative your product is. In the end, you will fail,” she said.

Now in its 11th year, the TiECON East event, an annual flagship conference of The Indus Entrepreneurs focused on a recurring theme; “Sustainable Innovation: Creating Opportunity in Today’s Environment.” Organizers said the theme focused not just on the current buzz word relating to the clean energy movement, but also the literal definition of “sustainable” as something that stands the test of time. With the current bleak economic landscape, sustainability has become the ultimate test for many companies, organizers noted.

Approximately 600 people attended the conference, which ran from May 21 to May 22 at the Westin Hotel in Waltham, Mass. Though hosted by TiE-Boston every year, the event is organized by TiE members across the East Coast, including chapters in New York, Florida and Washington, D.C.

During the conference’s opening keynote panel discussion, “Sage Wisdom for Serious Times: Start-Up Superstars,” Cirino and Larry Bohn, managing director of General Catalyst Partners in Cambridge, shared advice from their many years successfully leading startup companies, focusing on management through times of economic turmoil.

For Cirino, whose startup Guardent ultimately went on to enjoy record revenues and sold for $140 million in 2003, the company suffered stumbles beyond economic downturns. The company lost employees in both the Sept. 11, 2001, terrorist attacks and the 2003 Rhode Island nightclub fire. “Our approach was always to be as open and communicative with our employees as possible,” she said. “We shared everything with our employees, and it just made us a tighter and tighter group.”

In advocating for early-stage funding, Cirino emphasized that companies need to offer clear and concise business plans. “You have no idea how many companies we go to presentations for, and we get to about slide seven in the PowerPoint presentation, and then we have to ask, ‘What exactly is it that your company does?’” Cirino said.

Both Cirino and Bohn, who currently head up venture capital firms, reminisced a bit about their times as entrepreneurs. Bohn said the career switch was a difficult one and lamented the confines of working solely on the funding side.

“It’s kind of like taking a shower with a raincoat,” he said. “You’re basically watching a movie and you know how it’s going to end, but you don’t really have any control. You’re out of the action and all the fun is gone.”

Cirino acknowledged that “going from the driver’s seat to the back seat,” requires a bit of an adjustment in thinking, but she said she embraced the move. “We hope that through our scar tissue, we can share with [young entrepreneurs] the benefit of our experience,” Cirino said. “We aspire to be the investors we always wanted to have at our board table when we were entrepreneurs.”

Both Cirino and Bohn praised the fortitude and determination of today’s startup business entrepreneurs, who battle formidable odds to acquire funding for their plans. “The odds of success are so small in this business, that most people would have to be crazy to do this,” Cirino said.

Cirino described one entrepreneur she is advising who decided on an across-the-board employee pay cut just as the global financial crisis began to take shape. All employees accepted a 5 percent pay cut, managers coped with a 10 percent reduction and the entrepreneur himself slashed his own salary by 25 percent.

“I said, “Oh no, how did that go over?’” Cirino recalled. “And he said, ‘Actually it went great. So many people came up to me afterward and said that is gave them confidence that they’ll actually be able to keep their jobs through this downturn.’”

Bohn cautioned that initial public offerings in the stock market, the ultimate goal for many entrepreneurs, are not always success stories. A former CEO for software provider NetGenesis, Bohn noted the challenge of adjusting from a close-knit group of investors to the public market. Going public during the 2001 market downturn, NetGenesis initially stumbled because early-stage software companies are considered particularly risky during recessions. “Public markets are not for the faint of heart,” Bohn said.

The two were eventually joined by three other panelists in a session entitled “The Story of the Undaunted,” which continued exploring similar themes. Panelists included Pam Randhawa, vice president of strategic development for Sermo; Vinod Sahney, chief technical officer of Blue Cross and Blue Shield of Massachusetts; and Asheesh Advani, president of Virgin Money USA.

As chief technology officer of one of the state’s largest health insurance providers, Sahney described his company’s unique dilemma where 70 percent of customers are healthy “angels” who largely don’t require the company’s services. Only about 7 percent of Blue Cross customers rely on the company heavily. Sahney described that small group as health “train wrecks” who spend about $5,000 on insurance but cost the company more than $50,000 in health expenses each year.

Our challenge is to establish a relationship with the 70 percent of people that we don’t know very well,” Sahney said. “Our challenge is to promote loyalty among people that don’t really need us.”

Cirino echoed the importance of strong customer relationships, advocating that young companies pitch their products to customers even before they are ready to go on the market. “The best time to talk to a potential customer is when you’re not trying to sell them anything,” Cirino said.