Archive for the ‘entrepreneurship’ Category
If you’re like me, you love to come up with ideas. Inspiration strikes at any time and you immediately start to mentally construct the b-plan. What are my startup costs? What capital do I need to start this? What inventory will I need? What will be my distribution method? What will the company’s name be? What is the target demographic? How much do I need to sell in order to break even? Who do I know that would fit great on this team? If you’re not asking yourself these questions, you need to take your idea to the next level and start asking them! Not only do you have to ask all of these questions, write up your answers, run the numbers, and ask yourself whether or not you would be passionate enough about this idea, but also you have to ask yourself if this is feasible and worth your time
What Assumptions Are You Making?
After running through the planning stage and figuring out what situations would make the numbers work, I often find myself becoming too excited about the idea and wanting to immediately start the implementation. But, before you focus your attention like a laser, ask yourself whether or not your assumptions make sense. Do you really think you can sell that many cups of coffee in a day? Do you really think 10% of the people who visit your site will sign up? Did you pay yourself for the amount of time you will commit to this endeavor, the number of sleepless nights, the countless headaches? Be ruthless in your evaluation and if any of your assumptions are shaky, be willing to kill the idea. It’s better to let an idea die and move on to your next big plan than to sink hundreds of hours of your time into an idea’s implementation that ultimately fails.
What Questions Should I Ask?
- Why hasn’t it happened? This is one of the best questions to ask because good ideas are a dime a dozen. Rather, it’s the implementation, execution, and timing that have more to do with success. Everyone thought video on the internet was going to be a big thing, but it wasn’t until YouTube came around that the conditions were just right - enough people had broadband internet, people had access to video equipment, and they made it super simple to upload your video and share it.
- Is this something people will actually buy? A common sense question, but needs to be asked nonetheless. If you are targeting students and you are a student, would you buy your own service? If you aren’t part of the target demographic, ask someone who is.
- Is there IP around it? What will prevent competitors like a Microsoft or Google from entering the field and doing what you do at a lower price? Is there something you can patent, a trade secret to be developed, or a business process to leverage? In the case of internet startups, this is much harder to do and is somewhat impractical, but in a medical devices company, you don’t have a company unless a patent is present.
- How will you get distribution? In the Information Age, it is much easier to get exposure, yet also much harder. To get a website up and start marketing is simpler than ever before, yet because it’s so easy, what’s separating you from the other hundred websites competing for the same eyeballs? Distribution is key and by leveraging different marketing, publicity, and partnership streams, along with killer value, it may be just enough to gain traction in this sea of information.
Conclusion
As you can see, merely coming up with an idea and fleshing out some of the logistics isn’t enough. Sure, it all looks great on paper, but given the real-world business environment it becomes absolutely necessary to check if your assumptions are airtight. Any small hole could lead to a devastating failure. A quick story about the importance of assumptions is with my business mentor. He was in the process of starting a medical devices company. He had done all of the market research, had assembled a killer team, had worked out the numbers, and everything looked like a go. The only problem was that the patent holder had previously licensed the technology to a company that was now failing and instead of re-licensing the patent, he instead wanted to juice whatever he could from the failing company and essentially let the patent expire. As you can see in this case, setting up an agreement with the patent holder is a somewhat small but extremely critical part of starting this business, and after hundreds of hours were invested the business plan collapsed and is no longer viable. Final lesson: Check your assumptions, and if anything critical isn’t set in stone, be willing to drop the idea without looking back.
So, the moment I have been waiting for all quarter - the Entrepreneurship Week Kickoff and world premiere of the movie “Imagine It!”. The video is about entrepreneurship week last year at Stanford and did an absolutely FANTASTIC job at highlighting what entrepreneurship is all about and I highly recommend anyone interested in entrepreneurship to watch it. That said, here’s a quick overview of what’s happening throughout the week… Or check out the website.
Saturday 2/23: “Pump Up Your Creativity” Workshop
Tina Seelig, who I’ve mentioned here, here and here, is hosting this and should be absolutely fantastic. It will be a great workshop for pumping up the creative juices for the Innovation Challenge!
Sunday 2/24: Funding Social Enterprises: Panel & Showcase
There will be four individuals on the panel and they are all involved with social entrepreneurship in different ways. Here’s a quick list of the people.
- Jenny Shilling Stein, Executive Director of the Draper Richards Foundation
- Jessica Jackley Flannery, Co-Founder and Director of Business Development of Kiva.org
- Amy Clark, Ashoka, Global Fellows Program Leader
- Suzanne McKechnie Klahr, Ashoka Fellow and Founder of BUILD
Monday 2/25: Innovating for Health — BYOB! (Bring Your Own Brain)
Interesting looking event in which the audience will help with a brainstorming activity to help solve the problem of child obesity. A panel of experts has been invited to discuss the top five issues in this area, and after the panel there will be a kick off for a three-day competition - the Innovating for Health Challenge. The winner will be announced at the Entrepreneurship Week Closing ceremony.
Tuesday 2/26: Be Careful What You Wish For - Getting Media Attention for Your Company
To develop awareness, many entrepreneurial endeavors look for media coverage. The only problem is that it can be a minefield, and thus requires very careful planning to get the message right to prevent greater problems later on. In this information session, we will find out how to get a journalist’s attention.
Wednesday 2/27: ETL - B-Corporation
This week’s ETL involves Stanford graduates as founders of B Corporation. Jay Coen Gilbert, Bart Houlahan, and Andrew Kassoy are the founders and they’re goal is to set standards for corporate responsibility and hold companies to their promises. It should be an extremely interesting presentation and they have a super ambitious goal…
Thursday 2/28: “Startup 101″ Job Fair
Cool job opportunities from a wide range of industries from Web 2.0 to cleantech, medical devices, and biotech. Some cool Stanford startups will be there as well as some “traditional” companies like Google and Facebook.
Friday 2/29: Innovation Tournament Showcase and Closing Ceremony
This is the close of Entrepreneurship Week and we’ll be finding out who won prizes for Most Money, Most Social Value, Most Creative, Biggest Flop and more.
And the surprise item for the week… Rubberbands!
So the goal for this week in the Innovation Challenge is to create the most value - however you define value - with rubberbands. I already have a couple ideas, so it should be really interesting… For the next few days I’ll be working with a team to do what comes to mind!
For individuals interested in starting high tech companies that are related to biology, chemistry, etc., Mir Imran is your man. He has started a number of businesses focusing on the patents he has received and the application of these technologies. While I personally don’t see myself following a similar path as an entrepreneur, it just goes to show the variety and variability in being an entrepreneur. You can listen to his speech here, or read the summary below.
Background
Mir Imran founded InCube Laboratories in 1995 to focus on his passion: creating medical device solutions that change the standard of care in critical healthcare markets. Mir started out with a BS in Electrical Engineering from Rutgers and an MS in Bio-Engineering. From there he’s moved on to having over 200 patents issued in his name, starting over 20 medical device companies, and continuing to be one of the world’s most successful inventors, entrepreneurs, and investors in healthcare. Of his 20+ businesses, nine have been acquired, three went public and then were acquired, and the other eight are in development with one looking to go public.
Current Projects
Of his projects he is working on right now, 1/2 involve implantable devices. The breadth of fields include obesity, chronic pain, fibrillation, epilepsy, and the creation of an artificial colon. While on the surface it seems like he could be an expert in all thes fields, he really isn’t. When he notices a problem, Mir generally conducts his own research does and figures out what’s being done, what’s working, and what’s not working. As he digs deeper, for some of the problems he finds solutions and for some he doesn’t.
What is a project?
Each project is inspired by ideas, which come in random and multiple ways, and is the testing stages before becoming an official company. As an example for one project, at one time in his past, Mir had a couple friends affected by a specific problem. He talked to some doctors that said the problem shouldn’t be a problem with the right steps taken. As such, he did some research, found some inspiration for a solution, and created the project around it. Another key thing is to keep every project or company Mir starts separate because it prevents each project from interfering with one another. The result is that one project doesn’t hog resources because it is doing well and another doesn’t drag everything else down when it is performing poorly. When implementing an idea, it is a long and tough road. Ideas are cheap, but it’s all about implementing and executing these ideas that takes time. Another thing is that he’s willing to kill a project if it doesn’t meet the guidelines he sets up - which prevents a lot of the hardships if he pursues a bad idea into the company phase.
Thoughts on FDA approval?
Mir thought is that it is an absolutely necessary part of the process. It forces you to think about the impact that will result for patients. The regulations are good because you have to document things, follow procedures, and in general keep track of what’s going on. There is a level of accountability and replicability that makes for consistent (and hopefully successful) performance.
Have any failures occurred and what have you learned?
At first glance, it appears that Mir has an amazing success rate, but that it sonly because he is willing to kill the project before it launches if it is bad. Even with his level of success though, he has had two companies fail. One was a dot-com launched in 1999, which he acknowledges as a bad idea. The other is a failed business, even though the technology is still being used in many of his businesses. A great insight Mir provides is that it is much more painful - for everyone involved - to kill a company or fix a failing one than to kill the project.
It’s all about the team (and the people)…
Mir has a history of creating successful teams - which he describes as the hardest part - and reminisces about one company he started around a specific person. In fact, he offered this individual a cubicle and $1000 a month just to brainstorm with him. After a while, this individual took a position as senior engineer, and then went to CTO. Just this last year, this company did $30 million in revenue and is getting ready to go public. Lesson learned: When you find great people, hold on to them!
What motivates you?
Mir is like most entrepreneurs in that he is not in the business of making money but rather solving problems. And to have a theoretical “could be” answer is not enough - he has to bring them to life and commercialize them if they’re that good. The idea of creating something out of nothing fascinates him.
What’s each day like?
In short, every day is different. This morning, for example, he spent in a design review. Most of his time, though, is spent in the lab. Also, he has a very hands on approach to hiring people, brainstorming session, planning studies, and developing a regulatory strategy. He is intimately involved with all of the companies at an operations level, and spends more times with the less stable companies to get them to the point where they are more stable and he can move on to other projects.
Conflict of interest?
Because Mir found the fundraising process difficult, he started his own and partnered with Draper Fisher Jurvetson. This, of course, begs the question of whether or not a conflict of interest develops. As a humorous remark, he says that if there isn’t a conflict of interest, you aren’t doing anything interesting. As a more serious follow up, though, he states that to deal with conflict of interest, you have to be incredibly transparent and have a high level of disclosure.
What do you wish you had learned earlier in your career?
Through college, Mir developed a strong technical and scientific background and wishes he had had the opportunity to take business courses. Courses in marketing, accounting, sales, etc. would have been really helpful, especially in just getting a simple understanding. Learn enough to know who to bring in, how to get things done, etc. One key to his education has been to develop a broad understanding of things and develop a depth of understanding in at least one area.
Question: What other advice would you want to give to students?
- Be a good listener. Because one person can’t have all of the right answers, you have to listen to and communicate effectively with others to find the right answers.
- Don’t fall in love with your ideas. A lot of times your first idea not necessarily right idea, and instead it is further revisions of the idea that make it successful.
- Failure is almost a necessary and humbling experience. If you haven’t failed, you aren’t stepping outside your comfort zone and trying something truly innovative.
- Surround yourself with experienced people. This works well with being a good listener because experienced people are much more likely to help develop the right answers to the problems you are facing.
- Businesses aren’t always the solution. If you make small improvements, think about licensing the technology versus starting a company.
- Learn the fundamentals. Once you have a strong foundation, in whatever the subject, you can build all kinds of things on top of it.
- View problems as opportunities. Such a reversal in perception opens the doors to solutions that wouldn’t come any other way.
Wired to be an entrepreneur and engineer
As a kid, his mother bought two toys for him - one to take apart, and one to play with. He built toys and then took them to school and sold them. Right now he has ten companies buzzing around in his head and wants to start them soon before other people start them.
Conclusion
Mir Imran is an amazing entrepreneur in his own right, and one many students thinking about an extremely technical background could learn from. The most important takeaway from Mir, to me, is the idea of developing a general background in everything and drilling down to being an expert in something. Combining this with a passion to view problems as opportunities creates a powerful force in developing innovative technologies in specific industries.
Today, for class, we went to Plug and Play Tech Center (PnP) for a field trip. For startups in the Silicon Valley area, this is a really cool place to go and get all the resources you need to get going. I have personally enjoyed the idea of an incubator since I lived in South Dakota, but in order to fully appreciate the benefits, you have to be from a place that has a bunch of startups so that the place can be utilized (unlike South Dakota right now…) Here’s a quick run down of what we did.
What’s the Story?
The first center was opened in 2006 in Sunnyvale and is host to 130 startups. They range from one person teams all the way up to 50 person teams. In October of 2007, another center opened in Redwood City and sometime this March a Palo Alto center should open. The great thing about these places is that they offer all of the services a startup would need in terms of office space and provide the flexibility of month to month leasing that a startup would like to see. They have raised over $350 million in venture capital for their businesses and acts as the one-stop-shop for entrepreneurs and investors.
University Entrepreneurs Welcome
One of the really exciting things about this place is that they have a startup bootcamp for college entrepreneurs where they can try out their business idea with all of the resources PnP has to offer. They have connections with Stanford, UC-Berkeley, MIT, Harvard, and Cornell. In order to test your business, there is an application on the website to fill out. Very cool and something I will look at for the future… 
Midomi
While at PnP, we had a presentation done by one of the startups called Midomi. They have developed an amazing technology that allows people to sing/hum parts of a song into a microphone and then figure out the name of the song (for those who have something stuck in their head but can’t remember who sang the song, this is for you.) They have two former Stanford Ph. D. students on the team and from their graduate work they learned and developed this phenomenal speech and music recognition technology. It was so good that they even won the BASES business plan competition! If you want to check out their website and see if you can find a song yourself, go here.
Conclusion
This trip was pretty cool and I learned a lot about one particular resource available to startups. If I had a business that would benefit from an incubator, I would definitely consider a facility like PnP. The idea of putting a bunch of startups really makes sense and provides value for everyone involved. The startups have all the resources they need in terms of writing a better plan, executing their idea, IT resources, building a board, and even getting financing. For investors, having a central hub that decides which startups are worthy of incubating and having a close relationship with those startups proves invaluable to the investors because they can receive all of the necessary information to find good investment choices.
Brett Crosby, today’s speaker, was one of the most personable guys to come to ETL. Not only did he discuss his background in doing business and college stuff, but he also picked out the nuggets of wisdom he gained along the way. In a nutshell, Mr. Crosby started the web analytics company Urchin with his brother and a couple buddies from college which eventually was acquired by Google and is now known as Google Analytics. Also, here’s the full clip if you’re interested.
Background
Scott and Brett Crosby, brothers, were the co-founders of Urchin. Brett played a large role in writing the original business model, coming up with product plans and features, and developing the sales team. The idea was to create a great product that was easy to use and didn’t require a ton of support. They originally built the business around a scalable product that allowed them to target hosting companies and get a massive number of users in one deal. Brett currently works as a Group Manager of Google Analytics. He is responsible for product positioning, feature roadmap development and all external product communications. Brett also graduated from the University of Souther California with a degree in Political Science and International Relations.
The Early Years
Urchin started out as an internal tool to measure bandwidth for websites. Brett did website design and hosting from 1995-1996, and at that time bandwidth was expensive. Shortly after that, the web hosting business became Quantified Web Systems, Inc. and sold the parts of the original business that weren’t related to analytics. The reason being is that Honda was spending $6 million on their website, not getting much information, and after trying Urchin, they realized they had a product that worked amazingly well.
Change Until It Works
After that they became Urchin Software Corporation and offered a suite of products because that is what everyone else was doing at the time. The only problem is they didn’t do any one of the products well, so they dropped everything except Urchin. Then, in 1997-1998, when Earthlink was huge, Brett sent three emails to Earthlink asking them to try Urchin. The first two times he didn’t get a response, but on the third time, one gentlement asked for a demo and a whitepaper. At the time, they didn’t have either, but they developed both in a quick hurry. After having a meeting, they won Earthlink over and the revenue model them became to pay Urchin for paid customers and have banner ads for the free customers. Whe Earthlink started closing down, Cable Wireless became the next big hosting company and had major websites like Coke and American Airlines. By proving their scalability, they ended up landing their first seven figure deal. Lesson learned: go after datacenters!
Dot Com Bubble Bursts
Throughout their period of growth, Urchin was focusing on getting more revenue, but they were still operating at a loss. They were going through rounds of funding, and it was at that time the bubble burst and they realized the problem of little or not profits. To keep the company afloat, they cut salaries, closed their Tokyo office, and changed their business strategy yet again. They went from making deals in six months with all kinds of clauses to one sheet of paper. The deal was to pay $5,000 per day, and you could use Urchin’s software as much as you want. The goal was to become the most widespread and dominant analytics tool.
Developing a Strong Brand
The next business move was to switch from installed software to a web based system. They started to mature the brand by getting a good copywriter and graphics guy to create a strong image for the company. The idea was to look bigger than you are - which is important for people to take you seriously - by elevating the look of the company as well as creating decent booths when getting involved with the circuits.
Google’s Acquisition
At Search Engine Strategies in San Jose of 2004, Wesley Channon (Google Adwords Product Manager at the time) came up to Urchin’s booth and asked what Urchin was all about. Mr. Channon initially lied about who he was and it was only until Brett went to a party hosted by Google that he found out who he was. It was also during this party that Brett suggested that they should be acquired by Google. At the time, Urchin had $1 million in the bank after a 2-3 year turnaround. The company had turned extremely conservative due to the dot-com bust and never wanted to have the problem of laying off people again, and as such, they had a lot of money and looked very good from a revenue/profit generating perspective. They were in talks for nine months longer than they thought they would, and it wasn’t until April 20th of 2005 that the deal was closed.
Lessons Learned
- Go big (biz models, acquisitions). Make the product as easy to use as possible and do whatever you can with the product you have.
- Keep it legal. There were many dot-coms that did deals that made revenues and balance sheets look much better than they were. Because Urchin didn’t partake in these deals, he feels they stayed out of some unnecessary trouble.
- Build a great team. One story to elucidate this point was when Brett asked their main engineer if they could make Urchin’s software work on Windows. The engineer said it was impossible, but then Brett said a $1 million deal hinged on this development. That said, the Windows based product was made over the weekend.
- Act big, stay humble. Three of them were sharing a room at Ramada to cut expenses. They also carried their stuff onto a plane vs getting a private plane. Instead of hiring people, they would also set up and take down the booth by themselves.
- Try new business models. As discussed above, they went through many different business models until they hit the one that resulted in the best results for them and their customers.
- Celebrate the crazy moments. Sharing these times with friends makes life more enjoyable and shows that you are having fun while doing the work.
- Don’t give up. Even when times are tough, it is usually by getting through these times that the huge payoffs occur.
- Be flexible (work on your business not in your business). One of things Brett did was to learn how to do one job, such as web development, and then hire someone to do that and move on to another system. This is great in the respect that you understand how each system works within your business and you continue to grow it as you move on to different systems.
- Use what you’ve got. For some reason, a lot of country music stars were using Urchin on their websites, and by working with stars such as Faith Hill, Urchin was able to develop ads for their software.
- Work with people you like. When asked how Brett manages personal and business relationships, he said that he didn’t want anything to do with the business personal and instead wanted people he could connect with and were real to him. As such, most of the people he went into business with were friends and this has allowed him to have fun doing what he wanted to do.
Conclusion
Brett was a great example of showing that you can and should be yourself when getting involved with business. While there are certain aspects of your life that should be kept out, your personality shouldn’t change. I also had the incredible opportunity of going to dinner with him and his brother. While most of the discussion was chitchat, one thing I did learn is that both of them failed at a couple of businesses before starting on Urchin. They also both felt that the failure was immensely useful later on in their business careers. Overall, great speaker and someone I feel I could learn a lot from if I met with him on a regular basis.