Stanford EntrepreneurEntrepreneurship isn’t a career, it’s a way of life

Discovering Entrepreneurship - Class FourFiled Under: class, entrepreneurship

The theme for today’s class was different ways a person can engage in entrepreneurship. We had three guest speakers, all of them students, who talked about health, energy, and tech startups. The discussion wasn’t too much about tips and tricks to being an entrepreneur but rather an analysis of the industry and some insight provided by students engaged within that field. Before we did that though, we performed quick, 1 minute pitches of startups we researched as homework.

Pitches

Every student in the class had to give their pitch, and while giving the pitch, all the other students had to write notes on what to keep, what to lose, and what to start doing when giving a pitch. Doing this a couple times is a great idea because it helps develop confidence when speaking and forces you to hone your message into something that is meaningful and relevant to the audience you are pitching to.  One minute goes by in a quick hurry, and I personally didn’t do as well as I hoped because I lost focus on my message halfway through the pitch. Overall, though, it is definitely an activity to engage in regularly.

Jessica Verrilli - Healthcare

Jessica is graduated from Stanford in 2007 and is currently acting as a consultant. She is thinking about doing some kind of startup work, but decided on consulting in order to get some practical experience and understand how the process works within the healthcare industry.

Overview of Healthcare Industry

The healthcare industry is a highly regulated industry with stakeholders such as insurance companies, physicians, patients, and drug/medical technology companies. All four play a significant role in what happens and how it happens in the industry, despite disagreements made by some individuals. The market is also divided into four segments, and the first segment was labeled as Payer Provider. Individuals in this group include hospitals, HMO’s, and physicians because they get paid based on the services they provide. The second category, titled Medical Technology, includes really interesting technologies like molecular diagnostics, virus chips, DTC prognostics, and genetic testing. The third group is the biotech/pharmaceuticals and we all know that their primary role is to produce new drugs. The final segment is what Jessica considers Health 2.0. It includes developments in health IT, electronic medical records, social networks focusing on health related issues, and patient management.

The Next Big Thing

According to Jessica, the next big thing is personalized medicine. There is a term that is used by those “in the know” called theranostics. It is a combination of therapy and diagnostics, and the idea is to be able to run some diagnostic tests, combine that with your health history, genetic dispositions, etc. to develop a personalized therapeutic care program. I did a small amount of research on this idea a few years ago - mostly in high school when I was researching HIPAA - and found the intersection between health and IT to be a booming sector of the industry. There is  a lot of VC money that is flowing into this sector and if you’d like to continue research in this sector, check out the list of companies provided by Jessica below.

• 23andMe
• deCODEme
• DailyStrength
• DNA Direct
• Helix Health
• Microsoft Health Vault
• Navigenics
• PatientsLikeMe
• Revolution Health
  
• Sermo
• VetGen

Juliet Rothenberg - Energy

Juliet is a junior at Stanford this year and a current Mayfield Fellow. She is also an alum of ETL and is looking to get more involved in the energy field after she graduates.

Why Energy?

There are three main motivations for developing energy technologies. The first one is security, which we can see through developing technologies at home that lessen our dependence on oil abroad. The second is development, because as we develop a variety of technologies, there is more choice in the markets, it helps the economy, and there are more jobs available. The final reason is the environment, especially when we consider the issue of global warming and the problems that have resulted from releasing too much carbon dioxide into the atmosphere. A bonus reason that hasn’t hit the mainstream yet is greater economic reasons. There is a lot of legislation and talk suggesting a carbon cap and trade system, which I talked about here, and once that gets put into action, there will be even greater pressure politically and economically to reduce carbon dioxide emissions.

How Can It Be Improved?

There are also three aspects of which the energy industry can see improvements. Generation is the first one, and it focuses on where we get our energy and how it is generated - wind turbines, solar panels etc. The second is what currency this generated energy comes in. Some of the most common currencies is electricity and gas, but a couple newcomers are biofuels and hydrogen.The final category is the services associated with those technologies. How are they distributed? How are they utilized? Questions like these will often yield a result that falls in the service category.

What’s Happening Now?

Of all the industries to invest in, the solar industry is seeing the fastest growing stocks as a group. In the realm of VC’s, Kleiner-Perkins (one of the kingpins) is dedicating over one third to green energy. There is a lot of money and a lot of growth occurring, and it is during this time that we are learning more about the challenges involved with this investment. An example of these challenges is how to scale green tech, and what’s appearing to be a critical component - unlike many tech startups - is an amazing operations team. The example Juliet gives is Tesla in the development of their all-electric Roadster. They’ve gone through many delays in the development of the Roadster, and much of this is attributable to not having an operations team from the car industry. This is different from the tech industry, with Google for example, of having two Ph.D. students go straight to being entrepreneurs who are wildly successful. Instead, you need an operations team.

Jeff Seibert - Info-Tech Startups

Jeff Seibert is a senior majoring in computer science and is also currently a Mayfield Fellow. Jeff is co-vice president of ETL and plans to continue working with startups and his startups after graduation.

Brief History of the Industry

• 1989 - Tim Berners Lee develops CERN
• 1993 - Decided the WWW would be free to use. Also, Marc Andreessen develops Mosaic - which is the first important web browser - that ultimately becomes Netscape.
• 1996 - Tech startups such as Yahoo! AOL, Internet Explorer, and Hotmail show up on the scene. All of these businesses focused on information and communication.
• 1997 - Amazon.com stock goes from $7 to $105.06 in a period of 10 months.
• March 10, 2000 - NASDAQ crashed.

A Few Reasons

• An unusually large number of SELL orders were placed that Monday.
• Y2K fears were unrealized, and because businesses had over prepared by purchasing new equipment, there was a slump in sales.
• Online retailers had a bad Christmas because many Americans weren’t confident about using their credit card online.
• Online advertising failed to provide the returns that were promised, and investments tanked.

Don’t Panic!

Even though the stock market crashed, we have entered a relatively different age. One of the hallmarks of the internet bubble is the ridiculous types of investments made without any sustainable revenue model implemented. This, of course, is not the case in Web 2.0 and as such, we most likely won’t see the same kind of collapse as in the first bubble.

How Is IT Different From Other Industries?

• Low cost to market entrance. A small online business can be started for $45 a month for a server, and $10 a year for the domain name. This is unheard of in the realm of traditional business, and results in an industry where you can try something - anything - and have very little at risk if you fail.
• Rapid testing cycles. Websites and their source code can be changed to make the product better with very little costs involved. There is no need to change expensive manufacturing procedures or recall old products.
• Scale quickly. Speaking of manufacturing processes, as a website grows in popularity, the costs and difficulties to scale are much lower than with physical products and other industries. While there are still many difficulties involved, the point is that the timeframe for scaling is much smaller in IT than any other industry.

Conclusion

All three of the presenters were very informative, and the overviews give a great idea of what each industry entails. While there may not be any lessons, per se, I feel that this overviews gives individuals the information they need to determine whether or not they want to research more or get involved with. Also, as a final thought, go ahead and practice a 1 minute pitch about anything and everything.  Focus on honing your message and conveying 2-3 points of value. If you have any aspirations of performing a startup, this skill will prove invaluable when looking for funding.