If there’s one thing we know for sure, it’s that entrepreneurship is an uncertain and risky journey where surprising discoveries often lead to breakthrough progress. So, how do we set ourselves up to be open to these “aha” moments and learn from them?
In our daily lives, we tend to have certain expectations about what will happen in any given situation. But it’s when actual results don’t line up with those expectations that we should learn to really pay attention. Let’s take Intuit as an example. In the video below, Scott Cook, co-founder of the accounting software maker, describes how he ignored one bit of customer feedback year after year because it didn’t make sense to him … until it finally did. And once he accepted the unexpected data, it opened the door to a whole new market.
Welcoming cognitive dissonance isn’t trivial. As we’ve now seen, for entrepreneurs, puzzling findings can lead to lucrative opportunities. And this can also hold true for the venture capitalist who invests in them. Here in Silicon Valley, where perhaps the world’s highest concentration of VCs hear pitches from an equally high number of potential founders throughout the year, it’s easy to see how startup investors eventually adopt a “seen it all before” swagger.
But it’s the ones who resist thinking that way, and remain open to letting their beliefs be challenged, that increase their chances of discovering the next big thing. Rebecca Lynn, co-founder and general partner at Canvas Venture Fund, emphasizes the importance of paying particularly close attention when something doesn’t make sense. She explains that her ability to hone in during these moments has opened her up to some of the most interesting ideas she’s ever come across.
Even opportunities for self-development come by way of opening up ourselves to contrarian views. As Mike Rothenberg of Rothenberg Ventures discusses in the video below, growing as an entrepreneur hinges on relentlessly inviting feedback from others. And beyond listening intently when we experience cognitive dissonance, Rothenberg says we should express our gratitude for the new learning.
The truth is, expectations, beliefs and worldviews are uniquely personal and, as a result, are bound to vary from one person to the next. But as entrepreneurs and growing individuals, moments of utter surprise that challenge our deeply held beliefs should be reframed as valuable opportunities to pause, listen and learn. Insights about how to grow our careers, our businesses and, most importantly, ourselves come disguised as experiences that cause cognitive dissonance. The key is to embrace the anomalies, not ignore them.
Too many of us use the terms “going to school” and “getting an education” interchangeably when, in fact, a formal education is just one part of it. The experience of classical schooling is multi-faceted and encompasses a mix of acquiring academic knowledge and softer, more abstract skills. Though fundamental knowledge serves as the foundation for any innovation, being an entrepreneur takes much more than just book smarts alone.
Once, in the midst of his own academic pursuits, Albert Einstein beautifully captured all that an education is: “Education is what remains after one has forgotten what one has learned in school.” That’s not to say school isn’t important — it is. But perhaps the biggest takeaways are retaining the thirst for knowledge beyond graduation, and building upon the life skills that helped get us there. While impressive, graduating from a prestigious college with a slew of classes aced and a degree in hand doesn’t necessarily say anything about a person’s ability to succeed professionally. In the video below, Stewart Butterfield, co-founder and CEO of Slack, dispels the notion that an elite education guarantees excellence.
So what else should we look for in an education? The true test should be that we are able to demonstrate our learning and showcase the skills we acquire. And perhaps grades alone can’t adequately capture this. Then what can? In the following clip, Sal Khan describes a new model for education from his book The One World Schoolhouse. The founder and executive director of the free learning platform Khan Academy highlights that walking out of school with a portfolio of work, projects and accomplishments says more about one’s ability — both as a student and as a member of the workforce — than grades and a degree do alone.
This is already the case at Stanford and campuses across the country, where experiential education is being emphasized just as heavily as traditional learning approaches. There is obvious value in both, but differing opinions abound on the importance of domain-specific expertise versus the development of someone who can just jump in and learn along the way. The debate is particularly fascinating when you pose that question to scholars and practitioners sitting right next to each other – as we see here:
A formal education remains incredibly important for a variety of reasons: It offers a venue for exposure to a wide breadth of topics and offers us the opportunity to make connections across disciplines. For entrepreneurs, school not only provides subject-matter knowledge, but also the frameworks necessary to remain a lifelong learner. Academic institutions are incredible places where curious minds gather to learn for the sake of learning. Ultimately, however, let’s not forget that classes, schooling and degrees are just part of the education equation.
One way to find out what makes a good entrepreneur is to, well, ask a successful entrepreneur. And if that person has done well in your chosen field, then it’s highly likely what she says will be relevant to you.
But if you want a more basic understanding, in terms of the right mindset and skills needed to succeed, it might make more sense to ask people who observe and invest in entrepreneurs on a regular basis. Through repetition and experience, these people can see patterns emerge in the traits of those who excel and those who don’t.
When you ask these experts, as we do every week in the DFJ Entrepreneurial Thought Leaders (ETL) speaker series, they don’t call an entrepreneur good or bad based solely on their net worth. Rather, they talk about the individual’s work ethic, enthusiasm and intelligence.
Pattern recognition is one sign of intelligence. But beyond the ability to see when something occurs again and again, the flip side of pattern recognition is noticing where things aren’t happening. The business-strategy term “blue ocean” refers to just that: a wide-open market that no one else has yet noticed, and so abounds with opportunities.
And in his recent ETL talk, venture capitalist Mike Rothenberg — whose seed-stage fund identifies, invests in and cultivates tech entrepreneurs — has just two words for those with serious startup aspirations: Start swimming.
As the longtime host of this seminar series, Stanford Professor of the Practice Tina Seelig has spoken to hundreds of entrepreneurs over the years and learned what traits the best ones have in common. She shares these lessons in her new book, Insight Out: How to Get Ideas Out of Your Head and Into the World, and in the classes she teaches in Stanford’s Department of Management Science and Engineering.
She also spoke about it at ETL last fall, presenting a model that lays out the knowledge, attitudes and skills that are crucial for any would-be entrepreneur. In a framework she now calls the “Invention Cycle,” Seelig says the journey from imagination to implementation begins with engagement — noticing opportunities in your everyday environment.
As co-founder and partner of one of the most prominent venture capital firms in Silicon Valley, Ben Horowitz, also knows a thing or two about what makes a good entrepreneur. He, too, wrote a book that sums up his insights, The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers. As the title implies, it aims to be a no-nonsense guide for entrepreneurs, explaining brutal truths and dispelling common myths.
It all starts with being able to build a great product, Horowitz said when he spoke at ETL last fall. If you can’t build something that consumers want, Horowitz explained, you’re not going to be able to build a great company. The co-founder of Andreessen Horowitz spent a lot of his talk describing how many of the non-technical skills that entrepreneurs need — people skills, management skills — are not intuitive. But they are absolutely essential to succeed and scale up.
The concept of “entrepreneurship education” still has its skeptics, perhaps because what immediately comes to mind are iconic entrepreneurs like Elon Musk or Oprah Winfrey. How could anyone possibly teach an individual to be remotely as influential or visionary as either of those two?
Educators, however, know that “entrepreneurship” is an umbrella term that embodies many teachable skills — such as creativity, design thinking, leadership and the basics of business and management.
Although entrepreneurship may not be as exact a science as, say, bioengineering, the associated knowledge, skills and mindsets can be taught. Just like a child can be nurtured over time to be a great writer or athlete, a person can learn to be entrepreneurial if given the right guidance and opportunities to internalize important lessons through hands-on, experiential exercises that gradually develop the required tools.
One of the latest entrepreneurship educators to demystify her field is our own Tina Seelig, executive director of the Stanford Technology Ventures Program, the entrepreneurship center in the university’s engineering school. In her new book, Insight Out: How to Get Ideas Out of Your Head and Into the World, Seelig presents a series of steps that anyone can follow to do exactly what the title states.
Time and again, Seelig says the path these entrepreneurs took followed the steps of her Invention Cycle: imagination, creativity, innovation and entrepreneurship. And she recently took to the seminar stage herself to explain how those concepts constitute the cycle, beginning with imagination.
After imagination, the next two steps in the cycle are creativity and innovation. Creativity, as Seelig defines it, is applying imagination to address a challenge or opportunity. Innovation, then, is applying creativity to generate unique solutions. That is, creative ideas are new to you, and innovative ideas are new to the world.
These two concepts are illustrated perfectly in the story shared by entrepreneur Alon Cohen, who, along with his wife, Adi Tatarko, founded the home design and remodeling website Houzz. After several frustrating rounds of trying to remodel their own home — failing at first by going with a friend’s referral, and then later taking the inefficient route of leafing through piles of books and magazines — they decided to build a website that showcases and aggregates the work of architects for the countless others in their situation.
And because it was one of the only websites of its kind at the time, word spread quickly and Houzz started offering content for homeowners in Chicago, New York and other major markets across the country. The site also grew rapidly in scope, attracting interior designers, landscapers and other professionals.
Clearly, Houzz wasn’t just a creation. It was an innovation.
The last step in the Invention Cycle, entrepreneurship, isn’t so much about starting a company, as it is about influencing others to support your innovation in order to magnify its impact and truly get your idea out “into the world.” Hence, Seelig explains, entrepreneurship requires encouraging and empowering others — whether that means they join your team, fund your work, use your products or even just spread the word.
“Great founders are amazing at getting support. They are amazing at getting support from people who can really help them,” says Mike Rothenberg, founder and CEO of Rothenberg Ventures. “That is what entrepreneurship is, is getting support outside of what you can currently control.”
Rothenberg Ventures identifies, invests in, and cultivates technology value and talent at scale, having provided early funding for such startups as Planet Labs, SpaceX and ZenPayroll. Rothenberg himself founded and bootstrapped three companies. So not only can he recognize the traits of a good entrepreneur, he is one, harnessing all the parts of the Invention Cycle — imagination, creativity, innovation and entrepreneurship.
Think back to when you were in high school. How did you do your hair? How did you dress? People generally develop a sense of personal fashion over the ensuing years into adulthood, after a few flings with different styles — and hopefully, some honest feedback from friends and family.
But Susan Koger, co-founder of the independent online retailer of women’s fashion known as ModCloth, says it’s perfectly “OK to look back and cringe.” She wasn’t talking about day-glow tops and friendship bracelets, though. She was speaking at the Entrepreneurial Thought Leaders (ETL) Seminar series, sharing advice on pursuing one’s passion, with students on the cusp of launching their own careers.
Her point: Your first attempt at anything new will likely be crude, and so you should give yourself the permission to just do it. If you stick with it and get better, yes, you will probably look back years later and wince. But next to no one crushes it the first time, anyway.
True, the stakes may seem higher if you’re an entrepreneur debuting your first rev to the world. But Koger, ModCloth’s chief creative officer, insists that getting started is better than waiting till it’s perfect.
Admitting to ourselves that we are bound to err is humbling. But in the business world, where showing confidence and competence are the norm, having humility may be what gives the entrepreneur an edge.
William Marshall, co-founder and CEO of startup satellite maker PlanetLabs, also had some wise words for those interested in entrepreneurship at another recent ETL talk. Actually, he cautioned students at Stanford — all deeply immersed in the Silicon Valley vibe — against “defaulting” to a startup the next time they have an idea that seems to have business potential.
Another non-intuitive bit of advice Marshall shared was to not get an M.B.A. Reflecting on his own career, the former NASA scientist said some of the best physicists he’s known didn’t study physics. “The same is true in business: The best business people didn’t study business,” Marshall says.
But his final bit of advice, in the video below, was to have humility. Rather than promise everyone that you’re going to create a great product, build it first and then show people how amazing it is. Marshall says they will be much more appreciative if you take that approach.
In that clip, Marshall briefly mentions hiring people smarter than you among his tips for future founders. Heidi Roizen, however, shares that same advice, but in much blunter terms. “My goal truly is to be the dumbest person in the room,” Roizen said at her ETL talk last year, titled “Adventures in Entrepreneurship.”
Roizen has spent her life immersed in the Silicon Valley ecosystem, as an entrepreneur, corporate executive, venture capitalist, educator and board member for companies public and private. She is currently is the operations partner at the venture capital firm DFJ and lectures on entrepreneurship in Stanford’s Department of Management Science & Engineering.
In short, she knows what she’s talking about.
Even for those who aim to think “outside the box,” rules and constraints aren’t always bad. They focus our thinking and remind us to be deliberate with our execution by keeping our goal in mind. So in order to thrive in a landscape characterized by unmade decisions, it’s critical to be thoughtful about what rules we create and how they might guide our choices down the road.
At her recent DFJ Entrepreneurial Thought Leaders Seminar talk, Stanford Management Science & Engineering Professor Kathleen Eisenhardt drew on the principles from her new book, Simple Rules, on how heuristics are crafted. In the video below, we see how rule formation guides a multinational company through an uncertain future in a responsible manner:
Not only do rules inform intelligent choices about the way we do business, they also provide us with constraints, which, as David Heinemeier Hansson said in his 2010 ETL talk, “are your friends.” In an overwhelmingly competitive landscape, boundaries bring us face to face with a hard truth: Sometimes, you just can’t outdo your competition. But you can think differently than your rivals and, ultimately, succeed by recognizing and operating within your own zone of expertise.
Amazon Founder and CEO Jeff Bezos once said: “One of the only ways to get out of a tight box is to invent your way out.” Teams and organizations that leverage their own operational limits to think more creatively about how they do business often reap the rewards of differentiation. This sort of creative exercise doesn’t just prompt us to think about how to do things faster, cheaper or better ‐ it makes us question our assumptions and sometimes reinvent ourselves entirely.
Hansson — creator of the popular Ruby on Rails web-development framework and founder of the collaboration program Basecamp (formerly 37signals) — talks us through just how this looks in practice:
Perhaps the most important part of developing constructive constraints in business is to first think about our own work ethic. Why do we make the choices we do? Are our own actions aptly guided by a simple set of rules? What personal limits to place on ourselves? Hemant Shah, CEO of Risk Management Solutions, underscores the seriousness of recognizing this as a means to then realizing when we should seek help from others.
Rules and limitations can seem like irritating constraints on what we can and cannot do. But think for a moment just how powerful they could be if harnessed in the right way: a simple set of guiding covenants that empower us to make informed choices, ask for help when necessary, and ultimately allow us to save our time and energy for the more important matters in our lives.
An entrepreneur, as the quintessential self-starter, naturally looks inward for inspiration when the road gets rockier and the hurdles higher. But no matter how awesome you are, people can’t always be walking nuclear reactors that generate a constant supply of motivation in a contained, self-sustaining way.
And you don’t necessarily need to max out the memory of your tablet with a bunch of the latest books by big-name motivational speakers. You need only look around you to replenish your emotional reserves when the entrepreneurial journey begins to wear you down.
Perhaps the most obvious source of motivation outside yourself are the people around you. Imagine you’re the head of a fast-growing startup, confident you’re about to receive a $50 million infusion from several large investors. Then, all of a sudden, you get a call that they’re backing out. Visions of laying off all your loyal and hardworking employees – who laid everything on the line up to this point — cause you to break out in a cold sweat.
This is precisely what happened at the biotech startup Invitae at a critical point in their pre-IPO days. But the shared determination of everyone on the team, from the founders to the bankers representing them on the phone, pulled them through, Invitae President and Chief Operating Officer Sean George says in this video clip:
Motivation can also be found in the mission of your venture — that is, if it’s lofty enough. Again, the path of entrepreneurship is riddled with adversity, and day after day, people will want to dismiss your idea and say you can’t do it. Sooner or later, you’ll wake up one day and ask yourself whether it even makes sense to keep going.
For Ron Gutman, founder and CEO of HealthTap, his startup’s mission is “to help people live healthier, longer and happier lives” through on-demand patient treatment services made possible through an app that connects paying members with a network of over 67,000 doctors. A mission as important as that, Gutman says with a smile, “never gets old.”
A less obvious, but very valuable source of inspiration is the challenge itself — but not so much in the sense of someone simply rising to the occasion. As personal-brand expert Tristan Walker described when he came to speak at Stanford last year, an obstacle is simultaneously “a blessing.”
The founder and CEO of Walker and Company Brands learned this after speaking with filmmaker Tyler Perry, and he shared the advice with Stanford Professor of the Practice Tina Seelig at the DFJ Entrepreneurial Thought Leaders Seminar series: that every challenge an entrepreneur faces yields a lesson on how to deal with it next time.
In that sense, the lesson is simply a gift, Walker goes on to explain in this final clip. And once you understand that challenges are just gifts in disguise, you’ll always be able to find motivation in the face of adversity.
For the second year in a row, Stanford Engineering Ph.D. students in the Accel Innovation Scholars (AIS) program welcomed a special guest who once filled their shoes. University President John Hennessy, who holds a Ph.D. in computer science, taught for many years and served as dean of the School of Engineering, came to the cohort’s class in late February to share his experience and wisdom.
The 12 doctoral candidates accepted into the AIS program learn the skills and possibilities of technology commercialization, opportunity evaluation and entrepreneurial leadership. And as someone who succeeded as an entrepreneur in industry, as well as a scientist and scholar, Stanford’s 10th president embodied the many possibilities for the participants in the AIS program.
“I wish I had had a program like this during my Ph.D.!” exclaimed Hennessy, who earned his doctorate from State University of New York at Stony Brook. “Doing a Ph.D. teaches you to be a problem-solver and how to work in a field that is not established.”
Making the leap from a Ph.D. to a startup, Hennessy said he “had to learn things the hard way, by making mistakes and learning from them.” In 1984, Hennessy co-founded MIPS Computer Systems, now MIPS Technologies, and then Atheros in 1998. He sits on the boards of Atheros Communications, Cisco Systems, Google and the Daniel Pearl Foundation.
When one AIS scholar asked Hennessy what was “the most innovative, disruptive thing” that he has done as president of Stanford, he said that he has concentrated most of his attention on trying to build a focus on interdisciplinary work to facilitate collaboration around large problems that wouldn’t be solved by one group of scholars — “to make the whole greater than the sum of the parts.”
He also shared his vision for Stanford: “We try to play from our own songbook. You can’t be in Silicon Valley and fail to be influenced by it — and most of that influence is for the good. Our goal is to increase our impact on the world through education and research. We are a relatively small institution and try to look for first-mover advantage in various fields. We don’t try to do everything. Our goal is to be in the top five in all our programs.”
Asked how he makes hard decisions, Hennessy first distinguished how university decisions differ from those of startups and then explained his decision-making process in his present role.
“Universities are semi-permanent structures here for the long term,” Hennessy said. “We have to project the impact of any big decision 100 years into the future.”
He added that university leaders have to think about everything — entitlements, impact on future generations and other dynamics. “We try to make sure that everyone with a stake in the decision has the opportunity to give an opinion,” he explained. “We then weigh the opinions and the impact of the decision on the various constituencies and into the future.”
Lastly, scholars asked about Stanford’s place in Silicon Valley. “Technology comes in waves of innovation,” Hennessy said. “A new insight, a new application creates an entire industry and many new companies. That’s what happened with the World Wide Web and social media. Innovation is cyclical. The key is to keep the innovation cycle going.”
“I really enjoy working with students and sharing fundamental ideas with them. It’s as simple as that,” says Professor Kathleen Eisenhardt, one of the most cited scholars in the domain of strategy and organization studies in the last quarter century. “I don’t think about my students as the ‘next generation of influencers’ or ‘captains of industry’ — although they are likely to become just that.”
Rather, Eisenhardt explains, “I see them as young adults — and I get satisfaction out of watching them maturing, blossoming and succeeding in whatever becomes their passion and path.”
Case in point: Adam Khorakiwala, a public policy major in Stanford’s class of 2015, says he plans to take what he’s learned in Eisenhardt’s course on organizational theory and management and eventually apply it toward international development efforts in his home nations of India and the Philippines.
Selamile Dlamini, a native of Swaziland, also expects to apply the insights about effective leadership from Eisenhardt’s course toward a career in the public sector to address pressing issues in Africa. However, Dlamini is testing them already at Stanford, where she heads the International Undergraduate Community.
“I think about how to be more of an effective and impactful leader and how to design subgroups and how to communicate with people effectively,” said Dlamini, a management science and engineering major, also in Stanford’s class of 2015. “It’s something that you really use in real time.”
Now, Eisenhardt is taking her insights beyond Stanford and sharing them with anyone seeking common-sense solutions to complicated lives. Simple Rules: How to Thrive in a Complex World, which comes out April 21, distills decades of research on how individuals and organizations succeed in high-velocity and complex markets into an incredibly accessible 288 pages for the average reader.
The applications of simple rules, which she writes about with co-author Donald Sull of MIT, range from coping with insomnia and scaling ventures like Airbnb to gardening, playing poker and setting Federal Reserve interest rates.
“I wanted to write the kind of book that I particularly enjoy reading,” Eisenhardt says. “I love books about fundamental ideas like those by, for example, Malcolm Gladwell and Michael Pollan.”
Her previous book, Competing on the Edge: Strategy as Structured Chaos, focuses on businesses in the volatile and highly competitive markets that characterize technology-based industries. Along with her co-author then, MS&E Ph.D. and former Google senior vice president Shona Brown, they concluded that entrepreneurs and other executives must cast aside standard survival strategies and instead constantly reinvent themselves.
This insight gets to the heart of Eisenhardt’s scholarly focus. Working in research and consulting with executives in firms ranging from telecommunications and software, to Internet and biotech, agribusiness and solar power, she emphasizes novel theories of complexity and the realities of power that move beyond traditional approaches that assume equilibrium and favor planning.
Formative Years and Honors
Eisenhardt recalls that she first wanted to become a professor when she was a sophomore in college, studying engineering. She was drawn to the idea of a career that would let her explore novel ideas and be her own boss. Her research focus came later, while working in the software industry right after college.
“I realized that the technical problems that I faced were ‘easy,’ but the organizational issues were not,” remembers Eisenhardt, who then went on to earn a Ph.D. in organizational behavior at the Stanford’s Graduate School of Business. Even before she finished her doctoral dissertation in 1982, she had launched her faculty career and began teaching across campus at the School of Engineering.
And that’s where she’s been ever since, teaching thousands of undergraduates and master’s students over the years, authoring more than 100 papers and book chapters, penning three books and advising about two dozen Ph.D. students who have gone on to become industry leaders and faculty members at some of the most prestigious universities in the world.
Most recently, the Academy of Management’s Technology and Innovation Management division named Eisenhardt its 2014 Distinguished Scholar at the academy’s annual meeting last August. Colleagues in attendance described Eisenhardt as a pioneer in building theories from case-studies research, and credited her with developing a “world-famous” method of comparative case studies that “uniquely has performance as the dependent variable.”
This adds to previous awards that include four honorary degrees, the Global Award for Entrepreneurship Research, and selection as a fellow of the World Economic Forum, Strategic Management Society and Clinton Global Initiative.
Knowledge Organizations Need
Eisenhardt readily acknowledges that definitive research results can be elusive in her chosen field. But even if the insights take time to develop, her contributions to better understanding the importance of heuristics and other cognitive approaches, along with the strategies of entrepreneurs, have been significant.
And other findings about effective competitive strategies — such as following market bottlenecks instead of leveraging in-house capabilities – have been “personal revelations,” Eisenhardt notes.
“My work often translates well into popular articles such as for Harvard Business Review” and Sloan Management Review,” she observes. “I also find that my work appeals particularly to senior corporate executives, who tend to think in broad and fundamental ways, which is a superb fit for my approach to academic research.”
And besides holding the Stanford W. Ascherman M.D. Professorship and serving as Chair of the Ph.D. program in MS&E, Eisenhardt is also a co-director of the Stanford Technology Ventures Program, the entrepreneurship center in the School of Engineering.
“Kathy is a model modern scholar. She is very focused on doing great research that is rigorous, relevant and offers new twists,” says fellow MS&E Professor Bob Sutton, also a prolific author in organizational theory. “This is why Stanford students love her classes, and why so many senior executives have used her ideas to make better decisions and to build great companies.”
Taking time to reflect and understand what matters most to us, both professionally and personally, provides us with a strong framework for making decisions. In addition, staying clear on what matters to us often leads to a greater sense of fulfillment in life altogether. Whether implicitly or explicitly, some of our most recent speakers in the DFJ Entrepreneurial Thought Leaders Seminar series discuss how introspection keeps their efforts in line with their values.
Joshua Reeves, CEO and co-founder of ZenPayroll, raises the familiar point that professional success does not equal personal happiness, and hence, how crucial it is to choose our path carefully. In other words, take the time to understand what gives you a genuine sense of purpose and, yes, “mission.”
In college, Reeves says the academic quarter system provided built-in breaks from work to reflect on where studies were leading you. But even after launching into a career, he insists that we can structure our lives in a way that allows for periodic reflection and soul searching. That’s how Reeves realized his passion for developing technology that empowers others to do what they love.
Be it during a stroll through a neighborhood park or while commuting to work, taking the time to ask ourselves questions about why we do what we do can get us back in touch with what we consider meaningful and what our real priorities are.
Again, it comes down to choice, according to longtime venture capitalist Kathryn Gould. We can spend our time responding to the many opportunities that come to us, or we can choose to actively seek out the opportunities that truly excite us. For Gould, one of the first women venture capitalists in Silicon Valley, the choice was clearly the latter.
However, it is also important to distinguish between what we desire most deeply and when we can compromise. For John Collison, co-founder of the online payment system Stripe, it was always about creating a way for commerce to be seamless across different countries and currencies. Everything else, such as app features and design elements, become bendable means to a steadfast end.
This is especially relevant in entrepreneurship, where success depends largely on constant iteration based on customer feedback. But as Collison explains, understanding when to heed others and make adjustments, and knowing when not to budge, only comes after much self-reflection.
There are a few principles in life that keep us on track: a strong sense of what matters, our personal values and our vision. Adopting a ritual that allows for routine reflection keeps us asking the right questions of ourselves and, ultimately, allows us to lead a more fulfilling life. So think for a moment – are your actions in line with what matters to you?
Rare beasts, “thunderlizards” are companies that exit the startup phase at greater than $500 million — at least in the vernacular of venture capitalists. Each year, 4,000 to 5,000 companies are funded at the seed stage. Only 15 to 20 become true thunderlizards.
“Startups is a business of exceptionalism,” stated Ann Miura-Ko, co-founder of venture capital firm Floodgate and instructor of the STVP “Spark” titled “Giving Rise to Thunderlizards: What legendary companies look like before they make it big.”
Miura-Ko, a lecturer in Stanford’s Department of Management Science & Engineering, invited Instagram Co-Founder Mike Krieger to the extracurricular, pop-up class in late January to discuss the thunderlizard that he let loose with fellow co-founder Kevin Systrom.
“When I was seventeen, I wanted to be a crime-beat journalist,” said Krieger. That passion led him to create Instagram — an app, as stated on Instagram’s website — to “capture and share the world’s moments.”
After graduating from Stanford with a degree in symbolic systems, Krieger was working on his Crime Scene SF app when he connected with Systrom, a fellow alumnus, who was working on his own app, Burbn. The two weren’t sure they could work together, but they decided to give it a try. After a few days, they decided they made a compatible team.
Burbn was the precursor to Instagram, but the technology was “a bit janky,” said Krieger. “People were uploading videos and photos nonetheless.” This and the fact that one user — Chantel — “was completely obsessed with Burbn” proved viability. The next step was to seek investors.
Recognizing that Krieger and Systrom were doing something the digital world hadn’t seen before, investors became interested, especially because the app was mobile and local.
But right when Krieger, a native of São Paulo, Brazil, received his visa to stay in the United States and quit his job to work on Burbn full time, Systrom announced that he didn’t think Burbn would set the world on fire. “We knew what we wanted to be, we just had a lot of doubt about how to get there.”
They crystalized their vision. “We wanted a fast, beautiful and fun way for people to share their lives with friends and family. And we knew we wanted to keep it simple.” With that idea in mind, they developed a product that would allow users to snap a photo with a mobile phone, then choose a filter to transform the image into a memory to keep around forever.
Today, Krieger and Systrom enjoy Instagram’s position inside Facebook, and continue to focus on product and staying competitive.
As clashes between political parties, socioeconomic classes and ethnic factions dominate current events, it’s clear that we could all use a lesson in empathy. Taking the time to put oneself in the shoes of another and experience the problems they encounter everyday reveals unique opportunities to use our own energy and talents to help others and better connect with them.
In our personal lives, it seems intuitive that exercising empathy allows us to better bond with friends, family and acquaintances. It is, in fact, not so different in our professional lives: Approaching negotiations with the goal of helping the other person get what he or she wants, you both will be better off, according to Stanford lecturer Heidi Roizen, a recent speaker at the Entrepreneurial Thought Leaders (ETL) Seminar Series.
“The art of negotiation is finding the maximal intersection of mutual need,” said Roizen, operating partner at the venture capital firm DFJ, quoting her favorite lesson from her days as a student at the Stanford Graduate School of Business.
Often, the opportunities to practice empathy in a meaningful way exist outside of our own networks and communities. In those instances, that may mean venturing way beyond our comfort zone to truly know the pains others feel.
In her ETL talk last month, Code for America Founder Jennifer Pahlka shared the example of how her program’s fellows enrolled in California’s food-stamps program to find out why so many recipients failed to renew their claim and kept falling off the rolls.
By interacting with the time-intensive and non-intuitive online enrollment system themselves, the coders experienced the full frustration of those actually signed up for the “CalFresh” program. It inspired them to simplify the online process, and build an elegant smartphone app for the many recipients without access to broadband.
But most importantly, the coders kept low-income families from going hungry, and in the process they gained a healthy dose of personal fulfillment.
Sometimes, an entrepreneur’s challenge is recognizing what problem to address. In a world so rich in opportunities, the choice isn’t always quite as clear as we’d like.
But consider this for a moment: Might we be asking the wrong question altogether? Perhaps it’s not a matter of recognizing what problem we’re best suited to work on, but rather, just taking the plunge to help out, experience the journey and see if anything in it speaks to us.
In his ETL talk, Shah Selbe reflects on his own volunteering experiences, underscoring the profound effect they had on what he does now as a bona fide “National Geographic Explorer.” By taking the time to volunteer for what he considers worthy causes, Shah said he gained a deeper understanding of the challenges out in the world, while gaining credibility for working on problems for completely altruistic reasons.
Having empathy is, of course, critical for entrepreneurs seeking to understand and solve people’s pain points. But on a more human level, it helps form meaningful relationships with those in our network — and possibly, compels us to volunteer our time and talents in order to serve those beyond who could really use our help.
STVP’s new fellowship for master’s students in Stanford’s School of Engineering kicked off with wise words from Mike Maples, Jr., co-founder of the venture capital firm Floodgate. The Silicon Valley veteran was the featured speaker at the first class session for the DFJ Entrepreneurial Leaders Fellowship, a new nine-month program that combines courses, professional development and experiential opportunities for students interested in leading entrepreneurial ventures during their careers.
With a career in high-tech spanning more than two decades, Maples talked about how much luck can play into a startup’s success. In general, people often look at life and success through the lens of taking out risk. But when you are super early and risky, it’s more important to think about “what can go right,” Maples says.
This can involve focusing on cutting-edge technology that is timed well, and it can involve surrounding the company with the right people. Or it can involve articulating and exploiting potential “free moves,” according to Maples (more on that below). “But above all, it is a mindset of increasing the odds of luck finding you and knowing how to take advantage of it.”
In no certain order, here were a few other takeaways from his Jan. 26 talk:
In startups, it’s not enough to work hard. The first prototype must rock people’s world. “We ask ourselves: Is this the team that can pull off something very compelling for less than $1 million?”
Don’t assume rules as “givens.” Design a set of “free moves” for yourself. “When I was in school, I decided that I wanted to meet every important VC on Sand Hill Road and every important pre-IPO CEO. How did I do it? I just called up the people I wanted to meet!”
Always put yourself in situations that are exceptional. Be at an exceptional company with exceptional people. Great entrepreneurs are a magnet for great people.
Hire your boss. Only work for people who will have an impact on your life. As you spend time with them, you’ll learn counter-intuitive tools that will generate lucky breaks.
The people who make a dent in the universe are not motivated by money – and that makes them dangerous (and often lucky). “They will try all kinds of whacky stuff,” Maples said. “Embrace Stanford’s ‘Why not try it?’ mentality.”
Of course, the industry veteran tempers his inspirational advice with reality, stressing that exceptionalism in entrepreneurship is truly rare: Only 10 companies out of the 10,000 to 20,000 started each year create 97 percent of the value in the tech-business.
According to Maples, “Many entrepreneurs and VCs never truly internalize the importance of this and fall into the trap of ‘doing a startup’ rather than locking in on the opportunities that have a chance to create exponential outcomes.”
The course Engineering 145 at Stanford University examines the fundamentals of technology entrepreneurship as practiced in Silicon Valley and similar regions of innovation around the world. Often called “E145,” the course is open to all undergraduates at Stanford, of any major, and admits from 40 to 60 students per class. The course is offered three times in the autumn and winter quarters for Stanford students, and when the academic year ends, E145 is taught again as a Stanford Summer Session class that students from universities around the world take for credit.
E145 is taught by different instructors each quarter, so the course focus and activities vary. In the fall, it is taught by Stanford Engineering Prof. Tom Byers, who stresses the inclusiveness of the course and the comfortable-but-intense workload. He says what makes E145 unique among the many entrepreneurship-related courses at Stanford is that it carefully examines the entire journey of a tech venture. (See his full syllabus.)
“It fits completely with our job as educators to take students and transform them into leaders,” said Byers, faculty co-director of the Stanford Technology Ventures Program (STVP), the entrepreneurship center in the universityʼs School of Engineering.
Housed in the school’s Department of Management Science & Engineering, STVP is a lab for creating and delivering courses, performing research and developing tools and programs to accelerate entrepreneurship education at Stanford, across the country and around the world.
E145 certainly opened Wade Morgan’s eyes to a new realm of possibilities. Having grown up in what he described as a low-income environment on the East Coast, Morgan said the thought of a career in high tech used to be as remote as Silicon Valley was geographically to his home state of New Jersey.
However, Morgan actively seeks out new challenges and opportunities for growth. He applied and got into Stanford, joined the men’s basketball team as a walk on, and after completing all that’s required for his political science major, started taking courses such as E145 to learn more about Silicon Valley’s vibrant innovation ecosystem.
Morgan said that studying the entire journey of tech entrepreneurship in E145 has put the much-hyped startup success stories in the press in perspective — and even made them seem attainable.
“I was empowered to know that I don’t have to be the person who is coding away to still lead a company. I can lead it with my vision and with my passion,” said Morgan, who has accepted a sales-and-marketing position at LinkedIn that starts after he graduates this spring.
In Winter Quarter, E145 is taught by Chuck Eesley, an assistant professor in management science and engineering whose learn-by-doing approach has prepared his students well. In class, they identify a real-world entrepreneurial opportunity, recruit and assemble a team of classmates, gather resources, develop a business plan and execute on their idea.
“The way the class is structured really facilitates organic learning both in the team and from speakers,” said entrepreneur Trent Hazy, who took Eesley’s E145 course in 2011. “The classroom setting was really helpful for me because I knew I could try and fail and learn and push my limits in a safe environment.”
Hazy now occupies a suite in an industrial building in San Francisco’s chic south-of-Market area, where he serves as CEO of MindSumo, a recruiting-based startup he co-founded in 2012 that uses real-world challenges to match college students to relevant companies.
“Especially now, I’m three years into a business, and I’m thinking about scaling,” Hazy said, “and had we not done the case studies and done the deep learning in those areas in E145, I would be totally clueless right now.”
Erin Parker, another Stanford alum taught by Eesley, took his class to heart: She treated her team’s project, not simply as an assignment, but as an actual business that she would work on full time after graduating in order to be self-sufficient.
While the business she worked on in E145 was completely different from the one she now runs, Parker said the biggest takeaways from the class proved to be essential for her tech venture today — a health-and-fitness company whose first product is a strength-training app called Spitfire Athlete.
Spitfire currently has more than 50,000 registered users, and Apple has featured it on its App Store’s Health and Fitness page for months. Parker, a national-level Olympic weightlifter, said the lasting effect of E145 is that she never forgets the importance of talking to customers regularly, prototyping a product before shipping it and testing out assumptions.
“It’s really the skill set of learning how to discover opportunities, and then take those opportunities and form them so that they’re this great product or service that people really need,” said Parker, who also taught herself to code while earning her degree in economics at Stanford.
In keeping with STVP’s efforts to accelerate entrepreneurship education around the world, E145 is also taught to learners globally as a Stanford Online course by Eesley. And each summer, the course is taught by management science and engineering lecturers Tom Kosnik and Rebeca Hwang.
Occasionally, they see a Stanford student or two in their class. But mostly, they teach to a room full of international students, who also form teams and work on tech-venture projects based on entrepreneurial opportunities they see back home.
Kosnik and Hwang are well suited to teach E145 with an international slant. During the academic year, Kosnik teaches the popular, longstanding course “Global Entrepreneurial Marketing.” And Hwang — with her unique Korean-and-Argentine background — was a co-founder of YouNoodle, which grows global entrepreneurs through a network of startup competitions.
“The process of startup creation has a lot of parallels with the way you plan your own career and life journey,” said Hwang, now a lecturer in management science and engineering at Stanford. “A lot of the concepts and tools that we teach throughout the class can be applied to planning your career — and that’s pretty much universally applicable to any major, to any career orientation, to any country.”
If you’re leading an entrepreneurial venture, the new year can be an ideal time for redefining and rejuvenating. In a startup’s early days, founders can code all night, talk to customers all day, while keeping a small and devoted team on track the rest of the time. But once a business grows and becomes more complex, those sleep-deprived entrepreneurs will have to let go of some of those responsibilities to focus full time on leading the company and charting its path forward.
In other words, it becomes a matter of redefining the leadership role. For the final DFJ Entrepreneurial Thought Leaders talk of 2014, Ben Horowitz, of the Silicon Valley-based venture capital firm Andreessen Horowitz, pointed to Google Co-Founder Larry Page as a poignant example of someone who simply cannot take on everyday technical tasks anymore.
“He cannot work on production products. It’s a full-time job – even for somebody who can do as many things as Larry,” said Horowitz, author of The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers. “If Larry can’t do it, you can’t, either. I guarantee you.”
A new year can also be a great time to start seeing things with fresh eyes. As she discovered while researching for her book Rookie Smarts: Why Learning Beats Knowing in the New Game of Work, leadership educator and author Liz Wiseman found that experience had the ironic effect of limiting people’s ability to see things clearly – because they often made assumptions based on previous experiences instead of being open to new data points, perspectives and possibilities.
The solution, Wiseman says, is to maintain a “rookie” mindset. But what if you’re a grizzled veteran in your field who has seen and done it all before? Here, Wiseman shares how a surfer-turned-CEO, French filmmaker and accomplished scholar all found ways to return to their rookie roots and reinvigorate themselves.
Once rejuvenated, however, it’s also important to maintain perspective. A new year and a new outlook may inspire you to begin the next chapter in your venture. The challenge of building on success, whether it’s refining a product or reinventing a business altogether, is one that few in the tech sector have pulled off at scale:
In the clip above, Lewis Cirne, founder and CEO of New Relic, shows cautious optimism that his software-analytics company will be able to pull it off. And yet, entrepreneurs have always been known to fixate on that next big thing. So, if the only alternative is complacency, is there really any other choice?
It can be tempting around the holidays to tune out all the consumerism. But entrepreneurs would do well to heed customer sentiment. Whether the product being built is a free app or fresh apparel, the bottom line is that, if consumers don’t want it, you’re out of business.
Usually, a successful venture begins with identifying an unseen opportunity or a widely shared pain point that no one else has addressed yet. But once you figure out your solution to that problem, or your unique product, building it out before seeing what potential customers think of your idea would be folly.
The financial loss from a flop is the most obvious risk. But nowadays, with the average consumer wielding the megaphone of the Internet, if a company gets it wrong, that individual can — and will — let the business and the rest of the world know about it in an instant.
Especially in retail, brands no longer have the one-way advantage of dictating tastes to customers. As Tina Wells of Buzz Marketing Group says in this video clip, today, consumers dictate their desires to brands:
At the same time, it’s wise to look closely at cases where others got it wrong – because they can guide you toward success. This was how Method Products, the maker of hip and healthy household cleaners, managed to compete against established giants in the industry: by studying their missteps.
Given Method’s niche of making only non-toxic cleaning products, the company asking customers to bring their empty containers to the store for refills would be in line with its Earth-friendly stance. But Method Co-Founder and “Chief Greenskeeper” Adam Lowry saw how others failed with that approach, and in fact, inconvenienced customers more.
“You can create the most beautiful, the most sustainable product in the world,” Lowry explains. “But if nobody wants to buy it, if you don’t get a lot of people to buy it, then I would argue that it’s actually not innovative.”
And by the way, if you can’t build a great product, how can you expect to build a great company. That had a lot to do with the tremendous bust that followed the dot-com boom of the 1990s, according to Silicon Valley luminary Ben Horowitz. Investors turned to “professional CEOs” who knew nothing about building a product that customers would want and relied on these leaders to rapidly grow a company — except that it would fold just as fast because no revenue came in.
Again, it all comes back to the consumer — empowered by the digital age, and as ever, holding the power of the purse strings. So take heed:
This month, we decided to turn to our own faculty and staff for their favorite eCorner video clip from the past school year. With so many to choose from, it was interesting to discover that all the picks contained profound observations on the importance of emotional connections and focusing on what really matters in life.
There is no more basic a need than clean drinking water, and yet, diseases from unsafe water and a lack of sanitation kill more people every year than all forms of violence — including war. That’s why Scott Harrison founded the nonprofit charity: water, which has funded over 13,000 water projects in 22 countries since 2006.
Here, Harrison explains how leveraging the strengths of technological tools such as web-based templates, Google Maps and Twitter have allowed his organization to emotionally engage supporters in a way that few nonprofits have traditionally done.
For Matthew Rabinowitz, technological fixes are all well and good. But the most important thing for an entrepreneur to focus on first is a problem that needs to be solved, not some technology invented in the vacuum of a research institution.
Rabinowitz can certainly appreciate this academic lure. He completed his undergraduate, master’s and doctoral degrees at Stanford, receiving the university’s highest student honors in engineering and physics. While completing his dissertation, he co-founded an intelligent online merchandizing company, Panop.com, which later sold for $100 million.
Then in 2003, when a family member had a child born with a genetic disease who later died, Rabinowitz began to see entrepreneurship as a way to address more fundamental problems. Drawing on expertise from his seemingly unrelated background, Rabinowitz embarked on a journey with the goal of ensuring that other families need not experience similar pain wrought by the inability to have a healthy child.
He brought together a team of experts in medicine, engineering, statistics and genetics – and along with his own skills in optimization, signal processing, informatics and entrepreneurship — he founded Natera.
For entrepreneurial thought leadership, you might not think to turn to a Hollywood legend. But during Heidi Roizen’s talk at Stanford last spring, the operating partner at venture capital firm DFJ did just that — evoking the wisdom of longtime entertainer Shirley MacLaine.
Roizen, who teaches a management science and engineering course at Stanford titled “The Spirit of Entrepreneurship,” credited MacLaine with coming up with a so-called “20-40-60 rule,” which sounds like it might relate to ownership splits or stocks.
What the rule actually captures is a far more important insight that is both empowering and liberating for anyone, whether you’re an entrepreneur or not: “At 20, you are constantly worrying about what other people think of you,” Roizen explains. “At 40, you wake up and you say, ‘I’m not going to give a damn what other people think of me anymore.’”
Completing the thought, Roizen then finishes by saying, “At 60, you come to realize that no one is actually thinking of you.”
The course “Global Entrepreneurial Marketing” is designed to give students the skills needed to entice customers around the world to buy a product or service through hands-on exercises, mainly via mobile and social platforms. Taught at Stanford since 1998, the course focuses on targeting markets and customers, product marketing and management, partners and distribution, as well as sales and negotiation.
Students earn their grade through a mix of a project, case-study work done in small teams, individual writing assignments and contributing to discussions in class and online. The course is taught by Consulting Prof. Tom Kosnik, in the Department of Management Science & Engineering (MS&E), who describes entrepreneurial marketing as both an “art and science.”
The course (MS&E 271) begins with students forming small teams and coming up with a product or service that they market over the course of the quarter. Some students, such as Sophia Salim, have actual startups or business ideas that serve as their team project.
Salim, a graduate student in MS&E, has a social commerce website for moms and was drawn to the course because it answers one of the key questions entrepreneurs in engineering often overlook when starting a new venture: What is the right balance between product and marketing?
An engineer by profession, Salim knows all too well how easy it is to become obsessed with perfecting a product and getting it launched. “It’s funny. You spend so much time on developing the product. But it can be that the product is completely what the customers don’t want,” said Salim, who took MS&E 271 in Spring 2014. “It can take you months, or even years, to realize that.”
Much of the course focuses on teaching students how to market the exact kind of product or service that customers want – and the most current and proven methods for reaching precisely those customers in the mobile-social era. Throughout the quarter, students run a series of experiments, using an integrated-marketing toolkit developed in part by Kosnik, to try and drive traffic to a website of their choice.
In Salim’s case, that website was the one for her startup, Ropazi. She implemented what was presented in class, and assignments quickly became more than academic exercises. “I keep going back to those slides,” Salim said. “The things that he is teaching us have a direct impact on what we’re doing.”
Indeed, students expecting the class to consist of abstract discussions about marketing strategies will be disappointed. “I like to tell my students, ‘Eliminate strategy from your vocabulary,’ because marketers need to focus on execution,” said Kosnik, a longtime faculty member of the Stanford Technology Ventures Program, the entrepreneurship center in Stanford’s School of Engineering.
In keeping with the practical nature of the STVP-affiliated course, Kosnik invites startup founders, veteran marketers and other guests from industry to discuss recent business challenges they’ve faced and compare the decisions they made in real time against the solutions proposed by the students.
There is obviously no one solution for messy and immediate real-world problems, and that’s where the “art” comes into play in Kosnik’s summation. “Marketing is the art and science of turning total strangers into hardcore, loyal advocates for your product, your service, your company and you,” said Kosnik, who previously taught at the Harvard Business School.
Former students of MS&E 271 can attest to its power to awaken even the most diehard engineer to the prospect of entrepreneurship. Guido Appenzeller, who took the course in 1998, said it changed his perspective on what was possible professionally. Once seeing himself as a “pure technologist,” Appenzeller said the course inspired him to consider a more entrepreneurial path.
Five years after earning a Ph.D. in computer science from Stanford, Appenzeller co-founded Big Switch Networks, a company funded by Khosla Ventures and Index Ventures. He previously served as an entrepreneur-in-residence at Morgenthaler Ventures, and before that, co-founded Voltage Security, a market leader in encryption technology at the time.
“Looking back at Stanford, that was probably my number one or number two class that I took at the university,” said Appenzeller, who has taught at Stanford as a consulting assistant professor and headed its Clean Slate Lab from 2008 to 2010. “Understanding the business side of things is very, very important.”
For Ernestine Fu, who took the course in 2012, one of her fondest memories was being able to work with classmates who brought stellar credentials to the table. “Our team had experience working at Twitter, LinkedIn, Goldman Sachs and other companies,” said Fu, currently a senior associate at the venture capital firm Alsop Louie Partners. “We were debating case studies late at night. But we also tried to incorporate a little bit of fun into it.”
The course also has an emphasis on social responsibility: Students analyze whether their project will adversely impact the environment or raise any ethical issues, and then present ways to proactively address those problems. This speaks to Kosnik’s broader belief that global entrepreneurship can build trust across cultural chasms and, just maybe, bring about a more peaceful world.
Actually, Kosnik admits that’s highly unlikely. But through frequent teaching and coaching engagements around the world, he has seen entrepreneurship take root in remote parts of Asia and other corners of the globe. He envisions companies founded by entrepreneurs hailing from nations around the world and a growing appreciation for international commerce and our interconnectedness.
“He’s such a kind and awesome person,” Salim said. “Learning from him has been an honor, honestly.”
The course MS&E 178, called “The Spirit of Entrepreneurship,” allows students to get up close and have candid conversations with accomplished startup founders, venture capitalists and other thought leaders from around the country. These practitioners discuss their failures and triumphs and the lessons they now live by — sharing their experiences and insights in a way that is unique even at Stanford.
In other words, students get to be in a room with some of today’s most passionate players in the entrepreneurial ecosystem and ask them how they got to where they are, and what challenges they faced along the way. The course, offered in Stanford’s Department of Management Science & Engineering, is open to undergraduates and graduate students from across the university and has featured iconic figures such as Melinda Gates and Jack Dorsey.
Why call it “The Spirit of Entrepreneurship”? It depends on which instructor you ask. Silicon Valley veterans Heidi Roizen, Ravi Belani and Toby Corey take turns teaching the course each quarter and bring unique perspectives. But they all agree that, fundamentally, the course strives to capture and convey the essence of entrepreneurship through the real-life stories of innovators across the space.
For those students with a sincere curiosity about entrepreneurship, and a willingness to participate — and shape — class discussions, the course can literally redefine how they see the world.
“If you want to take a class that’s going to completely change the way you look at your career and your education — both in and outside of the classroom — then you want to take this course,” said Wade Morgan, a political science major who took the course as a junior in Spring 2014. “This is one of those classes that can really just fundamentally change who you are as a person, for the better.”
Each week, the instructor sends students a set of questions about the upcoming speaker. As part of their grade, each student must then write a thoughtful blog post in response to one of the questions. More importantly, the regular assignments prepare students to come up with meaningful queries for the Wednesday class.
The biggest percentage of a student’s grade (40 percent) is based on participation. The course’s impact depends largely on the quality of the in-class discussions — and whether the questions and comments extract the profound and personal insights of these uniquely accomplished professionals.
“I really believe that the student coming out of ‘The Spirit of Entrepreneurship’ is going to know if starting a company is really for them,” said Roizen, a Silicon Valley native who has spent her career as an entrepreneur, investor and now operating partner at the venture-capital firm DFJ. “And it’s really going to help that student also understand, as they leave Stanford, do they want be involved in a small company? Do they want to be involved in a large company? If a large company, how do they bring entrepreneurial thinking to it?”
The course’s guest speakers are the featured presenters in the weekly Entrepreneurial Thought Leaders Seminar, the popular series followed around the world via Stanford’s ECorner. Recently, the class has welcomed venture capitalist Tim Draper, tech sage Tim O’Reilly, Endeavor CEO and Co-Founder Linda Rottenberg and Khan Academy Founder Sal Khan.
“Something that really struck me was the degree of authenticity that these very successful and influential entrepreneurs had — and they all had really nuanced stories,” said undergraduate student Stephany Yong, a symbolic systems major who also took the course last spring. “This class definitely opened my eyes to how much entrepreneurship is a lot more than just startups. It’s about that mindset.”
Beyond a mindset, entrepreneurship is “multidimensional,” according to Toby Corey, MS&E 178’s spring quarter instructor. As he likes to put it, “entrepreneurship is a universe wide and a universe deep.” And he should know. Like Roizen, Corey has worked in all facets of tech: starting out as a software test engineer and project manager at a large company, Corey later served as a vice president at Novell.
His biggest entrepreneurial splash was co-founding and leading a web-development firm in 1995 that grew from two people to more than 5,000 employees over the course of four years. When USWeb went public, it was the largest company of its kind — with $1 billion in annualized revenues.
“There’s no greater opportunity to learn than literally sitting down and being able to ask a question,” Corey said, “and then having that successful entrepreneur answer you.”
Fall quarter instructor Ravi Belani said, back when he was an undergraduate at Stanford, there were few Indians in venture capital. He nonetheless dove into the valley’s startup scene as a venture capitalist, stressing that students now have the benefit of seeing people they can relate to because “The Spirit of Entrepreneurship” features such a diverse array of speakers.
“Seeing someone who you can reflect upon, a person who was just like you, and seeing that they’ve changed the world, can be incredibly expansive in terms of what you know is possible,” said Belani, who now runs the tech-venture accelerator Alchemist.
Stanford alumna Aditi Maliwal took MS&E 178 her senior year as a psychology major. She previously spent a summer working on Deutsch Bank’s technology-investment team. The experience set the trajectory of her career after Stanford. But at the time, it also limited her ability to understand the entrepreneurial side of the many tech companies she encountered.
Maliwal wanted to learn how these companies built themselves and know their growth strategies. Taking the course allowed her to understand startups from the perspectives of engineers and business professionals alike, which then fueled her as she continued along her career path in venture capital and freed her to see it as no less entrepreneurial than that of a startup founder.
“I will be entrepreneurial in the path that I take and continue on in venture capital,” said Maliwal, who now works at the firm Crosslink Capital. “The best part about taking this class is that it allowed you to expand the definition of what entrepreneurship is.”
That’s exactly what the course’s instructors and creators want to hear. MS&E 178 was developed by the Stanford Technology Ventures Program, the entrepreneurship center in the university’s School of Engineering. And one of STVP’s main goals is to bring the entrepreneurial mindset to every student at Stanford.
“It’s about going after something even if you don’t have the physical resources to do it; and your currency, then, is your spirit. That’s why we call it ‘The Spirit of Entrepreneurship,’” said Belani, who considers entrepreneurship no less than one’s “highest calling” in life.
“It’s about cultivating what’s unique within you to change the world,” Belani explained. “All human beings are inherently creative, inherently innovative and need to be entrepreneurs in whatever facet makes sense within the context of their life.”
What’s bad about mentorship? Nothing really. But exploring the nuances can actually reveal some less-than-obvious benefits — especially for entrepreneurs. Isolation is a reality for startup founders passionate about their venture, who commonly find themselves working day and night in the pursuit of perfection.
That sort of dedication can morph over time into an obsession that possesses a founder to hold onto control of every aspect of the business, even when help from others could take it to the next level. In his recent DFJ Entrepreneurial Thought Leaders talk, Hemant Shah of Risk Management Solutions (RMS) provided a real-life example of just this scenario.
Having successfully launched a software company in the unique space of earthquake-risk modeling, and securing about $3 million in venture funding based on early evidence of worth to customers, around that time, Shah said he was introduced to someone being considered as the company’s next CEO.
In this video clip, Shah first refers to the person as a “colleague.” But Shah said, over the years, this colleague became a mentor who showed him how to grow the company out of its “experimentation phase” into a truly strategic and scalable business.
Another wrinkle in the mentorship dynamic is that the relationship need not always take the form of a fatherly figure passing on pearls of wisdom to a wide-eyed newbie. During her Entrepreneurial Thought Leaders talk last May, Kate Mitchell of Scale Venture Partners said she had mentors who were peers, as well as those more senior and junior.
Additionally, Mitchell talked about having mentors who worked in the same field as her, and some outside of it. Hearing all those perspectives, Mitchell said, gave her a well-rounded picture of what she was doing well, and what she wasn’t.
In this video clip, Mitchell also makes a point that often goes unsaid but that is a vital element in ensuring effective chemistry between a mentor and mentee: the latter must make it easy for the mentor to share brutally honest feedback. Check out her excellent advice on how to do that:
One last distinction about mentorship is that the rewards aren’t just reaped by the one receiving advice. The benefits — emotional and physical — of helping others out of the goodness of your own heart are well known by now. And it’s no different in the particular instance of an entrepreneur helping out another.
That’s one of the main strengths of StartX, the 5-year-old nonprofit that runs an accelerator program for Stanford-affiliated entrepreneurs. In the video clip below, alumni of the program talk about its “code” — that if you can assist a fellow founder, “you stop what you’re doing and help them.”
And back to the benefits of being a mentor: For those who listen as keenly as they speak, they may just glean something that helps them with a problem they’re working through. Otherwise, simply by interacting with someone who reminds you of your younger, hope-filled self, being a mentor could very well rekindle your own passion.
Over the past academic year, the DFJ Entrepreneurial Thought Leaders Seminar has brought some of the sharpest innovators to Stanford for weekly talks. And even though school is now out, viewers around the world can still soak up all the great insights online, archived on Stanford’s eCorner, and on YouTube.
Summer is also a time to be entertained, of course. And while we can’t compete with blade-knuckled mutants or celebrities in futuristic exoskeletons, we can promise some deep perspectives from the people behind the box-office blockbusters, top-rated TV shows and chart-topping songs we just can’t get enough of.
A rat with a gourmet streak that sneaks around in a restaurant kitchen. A nonverbal, trash-picking robot roaming a junkyard planet. Neither of these sound very promising as a premise for a movie. However, Ratatouille and WALL-E both went on to achieve critical and commercial success for Pixar Animation Studios. The secret, as described by Pixar President Ed Catmull, lies in the studio’s “braintrust” of expert storytellers, along with a deep understanding of the creative process.
An important part of that process at Pixar, and in other organizations, involves protecting the “ugly baby” from the “hungry beast,” according to Catmull. This clip from his April 30 Entrepreneurial Thought Leaders (ETL) talk explains the concept:
Yes, Catmull runs a studio that consistently cranks out Oscar-winning films. But that doesn’t mean a less-proven filmmaker can’t break into the business as well. Gale Anne Hurd, one of Hollywood’s most respected film and television producers, gave an ETL talk the year before, saying that the entertainment industry today is ripe with opportunities in the age of YouTube.
It wasn’t so easy for Hurd, who rose through the ranks more traditionally: starting as an executive assistant to acclaimed film producer Roger Corman, ascending to head of marketing, and eventually going on to launch The Terminator saga and produce many of today’s comic-book blockbusters and sci-fi thrillers. Currently, she is among the executive producers of the AMC series The Walking Dead.
“There are at least 16 directors,” Hurd said, “who made films for under $15,000 — some of them for $400 — uploaded them on YouTube and are working in the business today, after one film.”
But before you dismiss the insights of pop-culture captains such as Catmull and Hurd, listen to pop-music singer and songwriter Nate Ruess, founder of the band fun. It is his distinctive voice that carries the pop anthems “We Are Young,” “Some Nights” and “Carry On.”
With a name like “fun,” you might expect the band to run with whatever sound is trending with tweens. But when Ruess came to Stanford in February, he spoke maturely about the influence of trends on his work, and how ignoring them can lead to irrelevance.
“I’ve become better — a better songwriter, just a better person — by acknowledging what’s happening right now,” Ruess said. “It’s been one of the biggest reasons for my success, is to acknowledge that there’s something in front of me and it’s happening.”
Wise words, whether you yearn to be a hit maker or an entrepreneur.
Accel Partners has teamed with the Stanford Technology Ventures Program (STVP) in the School of Engineering’s Department of Management Science & Engineering to launch the Accel Innovation Scholars (AIS) program – a yearlong experience for 12 Stanford engineering Ph.D. students, focusing on opportunity evaluation, technology commercialization, and entrepreneurial leadership.
The program offers case studies, guest speakers, shadowing opportunities, workshops and field trips where scholars get exposure to startup firms and industry leaders. Scholars are assigned faculty coaches and mentors from venture capital, the corporate world and the community of AIS alumni – all providing different perspectives and access to the Silicon Valley ecosystem.
“This is the type of program that I wanted as a graduate student,” said STVP Executive Director Tina Seelig. “Ph.D. students develop deep knowledge in one discipline. The AIS program allows them to see their research from a different perspective and prepares them to be entrepreneurial leaders in their respective fields.”
AIS kicked off in July 2013 at Accel’s headquarters in Palo Alto. General Partner Ping Li joined the AIS teaching team – Professors Tina Seelig and Tom Byers, Jeff Schox and Kate Rosenbluth – to welcome the scholars.
Program at a glance
Over the summer, the scholars became familiar with each other’s research, and got up to speed on the terminology and processes of technology startups. The diverse group represents the fields of aeronautics and astronautics, bioengineering, chemical engineering, civil and environmental engineering, electrical engineering, management science and engineering, materials science and engineering, and mechanical engineering.
In the fall, scholars participated in living case studies at Accel Partners, Cloudera, Cogenra, Dropbox, Fenwick & West, Google and IDEO. Company leaders presented cases on pressing strategic challenges, and the scholars brainstormed solutions. In winter, teams of scholars worked with leaders at Braintree, Couchbase, Dropcam, Facebook, Lookout and Prezi to deliver case studies at each firm, building upon what they had learned in the fall. “The scholars brought a fresh perspective and high-level problem-solving skills to our portfolio companies’ everyday challenges,” Li said.
The upcoming spring quarter will focus on entrepreneurial leadership, with a formidable roster of thought leaders to speak in the sessions: Steve Blank, Tom Byers, John Hennessy, Geoffrey Moore, Ann Miura-Ko, Heidi Roizen, Noam Wasserman, Liz Wiseman and Paul Yock. In parallel, the scholars will craft a “Personal Happiness Design” – their AIS Ph.D., so to speak – capturing their values, leadership style and goals.
Compelling stories of inaugural scholars
Thomas DiRaimondo received his Ph.D. in chemical engineering in the fall and co-founded Sitari Pharma, Inc., an Avalon Ventures-GlaxoSmithKline portfolio company focused on developing new treatments for celiac disease. He continues to participate in AIS, sharing his insights from Sitari. “AIS taught me valuable communication and leadership skills entrepreneurs need to excel in a startup environment,” DiRaimondo said.
Ryan Bloom will receive his Ph.D. in bioengineering in June and co-founded Factor 14, a Rock Health portfolio company focused on intelligent anticoagulation management. “AIS helped me to formulate my company’s strategy and think critically about our value proposition and product-market fit,” Bloom said. “AIS also helped with softer skills: how to give and receive feedback, present ideas and manage our time – skills I use everyday at Factor 14.”
Vic Miller will receive his Ph.D. in mechanical engineering in June. He and two colleagues won two internal Stanford grants to translate technology developed for propulsion and energy industries to the clinic for diagnosing gastrointestinal cancers and monitoring certain rare metabolic deficiencies. “Through AIS, I’ve learned to distill problems to their most actionable items and convey complicated thoughts in a straightforward, easy-to-understand manner,” Miller said.
Melina Mathur plans to complete her Ph.D. next year and take what she learned in AIS to an internship in a life-science startup. “I value the candid discussions with startup leaders that give us insight into how they tackle strategic challenges,” Mathur said. “AIS has helped me identify my core values and skills and how I can develop them as an entrepreneurial leader.”
In a tech-driven society that often fixates on the “next big thing,” it’s comforting to know that truth can trump trend. Rather than launching a venture that seeks to profit off whatever is popular at the moment, the message from those who have succeeded in Silicon Valley — who also speak of true fulfillment in their lives — are innovators who honor authenticity.
Below are three recent video clips from our DFJ Entrepreneurial Thought Leaders Seminar series on how authenticity keeps an immensely popular startup focused on its mission, how it remains vital even within large corporations, and most importantly, how it is the single-best guide in your own entrepreneurial pursuits.
As many already know, the free, online education platform Khan Academy began as one man’s hobby of making a math video for his 12-year-old cousin after she bombed a placement test. Ten years later, Khan Academy boasts 5,500 instructional videos, with 4 million exercises solved daily over approximately 200 countries.
That well-meaning man, Sal Khan, spoke at Stanford on April 16 and ended his talk by acknowledging the pressure to measure progress by the metrics those around him use. In Silicon Valley, that’s often data points like “unique users,” “click-through rates” and “sales conversions.”
Khan Academy’s stated mission is “to provide a free world-class education for anyone, anywhere.” And Khan, the academy’s founder and executive director, concluded his talk by saying that his not-for-profit organization’s biggest challenge is “staying true to our mission.”
Authenticity also has its place in the largest of enterprises. Corporate guideposts such as mission and identity can get complicated and evolve over time as a company grows and shifts focus, which puts the onus on its people to preserve authenticity.
In her Entrepreneurial Thought Leaders talk last October, Cisco’s chief technology and strategy officer, Padmasree Warrior, talked about how authenticity makes a “huge difference,” whether you’re trying to attract talented people, or create a work environment where people feel empowered to contribute.
But if you do plan to launch your own venture, whether tech-related or not, authenticity is critical to ingrain at the start. Entrepreneur Tristan Walker, who spoke in April, found his calling in the “ethnic aisle” at the local drugstore.
Walker is African American, and so truly knows the frustration that black men feel throughout their lives when it comes to shaving. So when it came time to launch his own product, he decided on the first end-to-end shaving system specifically designed for men of color.
“If I was going to dedicate the next 10-plus years of my life to anything,” Walker said, “I wanted to fundamentally feel like I was the best person in the world to solve that problem.”
Students, entrepreneurs and investors filled the sleek, top-floor conference room of Stanford’s Huang Engineering Center. It wasn’t another startup competition with everyone on the lookout for the next game-changing technology. However, all there did agree that there needs to be major disruption.
The event was a noontime panel featuring women in senior positions in venture capital. They represent a growing segment of the overwhelmingly male field, where just 11 percent of investing venture partners are women, and only an estimated 4 percent of senior venture partners are female.
The firms where the panelists work ranged from a newly launched fund to corporations known worldwide. The April 28 event was hosted by the Stanford Technology Ventures Program — the entrepreneurship center in the university’s School of Engineering — and moderated by STVP Executive Director Tina Seelig.
All of the panelists have achieved exceptional success in Silicon Valley and voiced strong opinions about increasing the percentage of women in senior VC partner roles. But instead of solely proposing systemic changes, much of what the panelists had to say focused on what women could do at the individual level.
The first panelist to speak was Deborah Hopkins, who chairs venture-capital initiatives for the global financial services firm Citi, which provided generous support for the event. She urged women to, above all, remain authentic.
In the business world, Hopkins explained, women have witnessed how traits such as being bossy or cruel to colleagues signaled to superiors that they have leadership potential. For the women who follow suit, however, the price they pay is losing a sense of their feminine strengths, Hopkins said.
“They’re really being put into some other kind of way of thinking about themselves,” said Hopkins, who also serves as Citi’s chief innovation officer. “At the core of this is authenticity, and it really is the secret of success.”
She added that women who rise through the ranks are obliged to support their sisters in industry achieve similar success. Fellow panelist Lisa Lambert picked up on Hopkins’ point and urged women in venture capital to get coaching, seek out mentors and focus on building a vast network of colleagues.
Lambert said having a large network ensures you’ll have others who will vouch for you when the inevitable naysayer gets in the way; and having an abundance of connections means more inroads when opportunities open up around you. It’s what helped Lambert go from being a product-marketing engineer when she first came to Intel, to her current role as vice president and managing director of Intel Capital.
“This world, especially here in Silicon Valley, operates by informal networks,” said Lambert, founder of UPWARD, a nonprofit that aims to accelerate the careers of professional women. “The reason I’m still here is because I didn’t quit.”
Meanwhile, Ann Miura-Ko, co-founding partner of the venture-capital firm Floodgate and a lecturer in Stanford’s Department of Management Science & Engineering, talked about the luck she encountered throughout her career: from a life-changing mentor relationship with a former CEO of Hewlett-Packard that began with a chance encounter when she was an undergraduate student at Yale, to being offered a founding-partner position at a new venture-capital fund while she was working on her Ph.D. at Stanford — and caring for her first child.
Members of the audience and fellow panelists pressed Miura-Ko a bit on her message that all of her success was based on pure luck. The daughter of a NASA scientist and holder of a Stanford doctoral degree in mathematical modeling of computer security, Miura-Ko acknowledged her own innate drive and strengths.
But the moral of her story returned to – once again – a message of individual action: “I maximized the opportunity I had to get lucky,” Miura-Ko said. “That’s the thing that people need to understand, is that even though it’s built on luck, you need to create that opportunity.”
The final panelists to speak were Theresia Gouw and Jennifer Fonstad, who recently made national news when both left coveted partner positions at top-tier venture-capital firms to co-found their own, Aspect Ventures. When they first made their announcement in February, the longtime colleagues said they wanted to set an example for other women who want to follow the same path.
They also said their new fund would emphasize the value that diversity brings to companies. “We need to create a welcoming environment because we know there are bright, talented young women like yourselves — and elsewhere — who want to start companies,” said Gouw, formerly a partner at Accel Partners for 15 years.
Fonstad spent 17 years as a partner and managing director at DFJ. She also co-founded Broadway Angels, a San Francisco-based angel investment group made up entirely of women. Its portfolio includes 20 startups founded by female, and male, entrepreneurs.
“We now have a community of women entrepreneurs who have been successful who can write their own checks, and are writing their own checks, and making investments in fellow entrepreneurs in their own networks,” Fonstad said. “That’s a very new trend, and it’s an important trend.”
If you’re a bold entrepreneur, your dream mentors may be Elon Musk, Richard Branson or Larry Page. While they may be amazing mentors, are they the right ones for you at this point in time?
“I talked to many people and entrepreneurs and met an owner of a Singapore public-listed company whose revenues have reached over S$400 million, and got him as my mentor. After several mentoring sessions, I realized that my business was too small for him to offer advice that I can immediately apply. Metaphorically speaking, ‘I needed advice from [a] helicopter’s point of view. What he gave was advice from God’s point of view.’ I’m thinking about how to grow my business beyond $3 million to a $10 million company sustainably without stress, while he is thinking about how to structure and sell my business for $100 million,” says Moonshi Mohsenruddin, founder of CommGate and director at Echelon Minds.
Despite his humble beginnings – dropping out of school and starting out as a toilet cleaner to support his family – Moonshi became a celebrity entrepreneur in Asia in 2010, and has since received countless requests from young entrepreneurs for mentorship. Of the 26 companies he took under his wing over a period of four years, most have achieved up to 700 percent revenue growth and broken their first million-dollar revenue mark.
Moonshi shares his advice on the best mentors for entrepreneurs:
“If you are a startup, your mentor should at least have a business that had achieved $1 million revenues, is profitable, and have at least hired 10 to 20 people in their business. We need to get a mentor who is three to five times the size of our business and someone who has ‘been there, done that’ – preferably in the same industry, or someone who is in business and can ask you high-value and thought-provoking questions. If your mentor runs a growing and large business, the mentor may not have much time to meet you regularly or his advice may not be immediately relevant.”
So, if you are an entrepreneur seeking mentorship, here’s what you should start doing instead:
Make a list of 50 people who have started companies in your industry that are three to five times the size of your business.
When your list is complete, reach out to them asking for 10 to 60 minutes of their time to ask for advice.
When asking for advice, be specific, concise and realistic.
As an entrepreneur, you may be tempted to get mentors who are successful on paper, but whose values may not fit with yours. Melody Ward, a serial entrepreneur who started her first company at the age of 18, shares her experience with getting successful mentors:
“My best mentors are not all rich or famous. I’ve been lucky enough to sit at tables with well-known and influential people who have taught me a lot, but I’m selective when I choose someone in a position of authority over my life.
“You are not looking for someone who is going to give you a handout or a magic trick. You are looking for someone who recognizes where you are in your career and is able to give you advice. A really good mentor works to know who you are and will easily give you advice that fits.
“It’s easy to mistake someone who seems to have what you are looking for as an automatic mentor. When you see someone on CNN or with a million followers online, you know they’re ambitious and have probably worked hard to get where they are, but that doesn’t tell you anything about their personality or social tactics behind the projection, and that’s really important if you are going to work with someone to mold a life you’ll feel comfortable and proud of living.
“My aim is not to inherit status-by-association. I look for someone who has a track record of success and adversity, and especially someone who has attained their notoriety through direct practice of their expertise.
“My best mentors never needed my money because they were more interested in similar goals, and that typically evolves into friendship, which is what you keep.”
Noam Kostucki and Lujie Chen are co-authors of Seek to Keep: How to Find the Best Mentors and Keep Them, which comes out in May. Chen is also a graduate student in Stanford’s Department of Management Science & Engineering.
It’s been called “20-20 hindsight,” and sometimes, “Monday morning quarterbacking” — essentially, the after-the-fact analysis of what should’ve or could’ve been done better. And it tends to contain some valid insights.
So, if you’re about to launch into a project or initiative that has some uncertainty around success or failure, why not just go ahead and imagine that it flopped, and then, figure out how that happened. In other words, put yourself in the future, visualize the failure and use that trusty 20-20 hindsight to help you anticipate and avoid the pitfalls before you even start.
They call it performing a “premortem,” and they write that teams on the cusp of making a major decision — including launching a growth initiative, the topic of the new book — should make this visualization exercise one of the final steps before proceeding with the plan.
“It is just a way of switching perspective when you are on the verge of rolling out something from the few to the many,” said Sutton, a professor in Stanford’s Department of Management Science & Engineering. “And there is pretty good evidence that simply shifting perspective from ‘what do I need to do to succeed?’ to ‘I have succeeded, what steps have I taken?’ leads to more nuanced and useful plans — and is especially useful for identifying risks.”
True to their academic credentials, Sutton and Rao back their position with sound citations. They say the premortem builds on Nobel Prize-winning psychologist Daniel Kahneman’s favorite approach for making better decisions. Kahneman, meanwhile, credited another psychologist, Gary Klein, with inventing the technique.
Here’s how it would work at a company that’s about to scale up: Before implementing the plan, team leaders would split those working on the project into two groups and assign one to imagine that the effort failed miserably, and the other to imagine that it was a spectacular success.
Then, each person would be asked to work independently and generate reasons — or even better, write a story — about why the plan succeeded or failed. People should be as detailed as possible in identifying the reasons things occurred, especially those causes they wouldn’t normally mention “for fear of being impolitic.”
Next, as the professors outline in the book, each person in the “failure” group would read his or her list or story aloud, while the reasons are recorded and collated. This process is repeated for the “success” group. Then finally, use the reasons from both groups to strengthen the original plan.
Sutton stresses that premortems are helpful for organizations, regardless of size. For instance, an individual entrepreneur might approach it this way: “If one year from now, I will have three key customers, $1 million in sales and 10 employees, what steps will I have taken?”
Conversely, for a big company, Sutton says a premortem might sound more like this: “If, three weeks from now, the rollout of this new pay policy will be a total disaster — my best people are leaving, and everyone wants me fired — what will have happened?”
The exercise is most effective when all the details are fleshed out, actual feasibility is assessed and resources are accounted for — even if the scenarios are entirely made up in the first place. And yet, Sutton says premortems are doable, and moreover, beneficial.
“We just did this for a group of 12 senior executives from a Fortune 50 company,” Sutton said recently. “They got quite detailed and the conversation shifted their attention to a pair of risks that, in essence, all seemed to know about but none felt comfortable raising.”
Since the book’s debut last month, Scaling Up Excellence has been received well in the business community, especially among entrepreneurs. In the startup space, the challenge of building and uncovering pockets of exemplary performance, and cascading that throughout an organization as it grows, is a real worry.
Put simply, Sutton says scaling is spreading more of a good thing to more people and places. But he is quick to add that no guaranteed formula for scaling up was ever identified by himself or Rao in their nearly 10 years of research for the book.
And whether you undergo a premortem or any other strategic exercise prior to implementation, Sutton stressed that nothing will make scaling easy or instant.
“Anyone who implies they have a sure-fire method or recipe is misguided, dishonest, or both,” Sutton said. “There is a lot of snake oil out there — if someone tries to sell you a scaling cure that sounds too good to be true, it probably is.”
It seems self-evident that any innovative venture or idea begins with an entrepreneurial mindset — especially here in Silicon Valley. But innovation isn’t isolated to any one region, and the concept of an “entrepreneurial mindset” deserves to be defined.
It may be helpful, though, to let veterans of the valley explain things from their perspective. For instance, Susan Siegel, a corporate officer at General Electric based in the region, identifies two components that together make up a mindset: attitude and approach.
Beyond being a top executive in one of America’s largest and most established corporations, Siegel is also CEO of healthymagination — GE’s $6 billion initiative to improve the quality, access and affordability of healthcare around the world.
Here’s what Siegel — recognized as one of “the 100 Most Influential Women in Silicon Valley” — had to say about fostering an innovative mindset at her DFJ Entrepreneurial Thought Leaders (ETL) talk in 2012.
Once you have the proper mindset, of course, the next step is putting those good intentions into action. A recent ETL talk illustrates this perfectly: Stanford math Prof. Gunnar Carlsson appeared on stage last month with Gurjeet Singh, who first stood out to the renowned mathematician while Singh was working on his doctoral degree.
But it wasn’t simply Singh’s intelligence that caught Carlsson’s eye, it was the student’s bias towards action. Singh wasn’t just a methodical mathematician, he was a maker in the truest sense. During their talk Carlsson repeatedly mentioned Singh’s penchant for “prototyping” ideas and concepts – a term normally associated with the building of more tangible objects.
“Not only do you need to be smart,” Carlsson explained, “but you need to want to do something and to carry something out and to actually solve a problem — as opposed to writing a paper or finding a pretty piece of theory.”
The professor and student went on to co-found Ayasdi, a big-data analysis startup focused on major societal problems in need of innovative solutions.
In so many words, that’s also how Stanford Prof. Bob Sutton put it during his Feb. 12 ETL talk on his new book, Scaling Up Excellence: Getting to More Without Settling for Less. Co-written with a colleague at Stanford’s Graduate School of Business, Prof. Huggy Rao, Scaling Up Excellence discusses what it takes to build and uncover pockets of exemplary performance and spread a mindset of constructive beliefs and practices as an organization grows.
A professor in the Stanford School of Engineering’s Department of Management Science & Engineering, Sutton’s actual words were, “Live a mindset, don’t just talk about it.”
Jack Fuchs, an adjunct faculty member in Stanford’s Department of Management Science & Engineering (MS&E), is leading a two-session workshop in a few weeks that is designed to help Stanford students with entrepreneurial aspirations identify the types of entrepreneurial pursuits appropriate for each person – as well as to identify Stanford resources that are best suited to those pursuits.
The sessions will be on Tuesday, Feb. 18, and Tuesday, Feb. 25, from 4:15 to 7:15 p.m. on both days, in the Spilker Engineering & Applied Sciences Building, Room 232 (a.k.a. Nano 232). Students interested in attending should email Jack Fuchs by 5:30 p.m. on Friday, Feb. 7, with their name, degree program and a brief description of their entrepreneurial interests/experiences.
“The workshop aims to help students answer the questions, ‘What kind of entrepreneur could I be, and how should I plan to get there?'” said Fuchs, a seasoned Silicon Valley business executive who also serves on the teaching team of the STVP course “Technology Venture Formation” (MS&E 273).
The goal of the two-part workshop is to have students gain an appreciation for what entrepreneurship means to them. “By having a better sense of who they are as an entrepreneur, they will be more likely to find certain pursuits fulfilling,” Fuchs said.
With Superbowl XLVIII just around the corner, expect plenty of talk in the days ahead about what makes a great team. And if our Entrepreneurial Thought Leaders (ETL) seminar series is any indication, the topic of team building is at top of mind in the high-tech field as well.
Many of our recent ETL speakers emphasized that, above all else, a business’s success begins with a great team. Cyriac Roeding, co-founder and CEO of the retail-rewards app shopkick, actually identified four distinct characteristics that lead to a great team: each member possessing “individual brilliance,” shared and inflexible values, extreme diversity and a vision that they all believe in.
Roeding, who spoke at Stanford in October 2013, explains why these are the essential ingredients for a great team, and how they fit together.
Of course, discussion around a given topic wouldn’t be very robust without some difference of opinion. In her ETL talk on Nov. 20, 2013, Sharon Vosmek cited research by Thomas Malone — a renowned professor of management at MIT — who found that the I.Q. of individual members of a group had no correlation to the group’s collective intelligence.
“So it didn’t matter how smart the people you put together, it did not then result in a smarter team,” said Vosmek, CEO of Astia, an organization that supports entrepreneurs through a global network of investors, innovators and industry leaders.
Instead, the research that Vosmek praised concluded that the factors that really increase group intelligence on teams were 1) the social perceptiveness of the team members, 2) the evenness of conversation among them and 3) the proportion of women on the team.
In his ETL talk, also last November, Mike Olson mentioned diversity and intelligence as traits that he looks for when hiring new employees at Cloudera — a powerful and integrated “big data” platform that allows customers to store, process and analyze various types and formats of data.
Olson co-founded and serves as chief strategy officer for Cloudera. And as bluntly as he could, he said all that really matters is the quality of the people in the organization. “Everything that we can claim as a success ties to the fact that we have recruited the world’s best team,” he said.
It’s also vital for companies to bring on the best and the brightest right at the start, according to Olson, because it perpetuates excellence. “If you don’t do that early, it’s impossible to change it,” he said. “The reason is, really great people gravitationally attract really great people.”
The arrival of a new year gives us a chance to think about what we want to accomplish in the months ahead. But where to start? When a student at a recent Entrepreneurial Thought Leaders (ETL) seminar asked this very question — “When is the right time to start a company?” — it sounded so basic and blunt that it made the guest speaker chuckle at first.
But the speaker then paused, collected himself and responded, “It’s a good question, and I’ll give it a serious answer.” Serial entrepreneur Steve Teig, co-founder of venture-backed semiconductor firm Tabula (and co-founder of two successful biotech companies before that) came to Stanford to talk about embracing the mysteries of entrepreneurship.
Teig, the holder of more than 260 patents, also urged students to identify opportunities by taking action, rather than be paralyzed by indecision. And here was his rather decisive answer to the student’s simple question:
In her February 2012 ETL talk, Sukhinder Singh Cassidy, founder and chair of Joyus — the Web’s first video-shopping platform — also put it simply: The act of getting started is “taking the first step.” To her, that involves telling someone and getting that person to take that first step with you, whether it’s sketching out a logo or just sitting down and to brainstorm some ideas.
“The simple act of involving someone else in something that’s inside your head is the point at which you start being an entrepreneur,” Cassidy said. “And what is such a mysterious art will become known to you very quickly.”
And if you’re afraid to start because you haven’t yet perfected every single detail in your head, Warren Packard, who spoke at ETL the week before Cassidy, believes that shouldn’t stop you. In fact, he says, “Imperfection is a great tool to have.”
Packard, CEO of the sports-programming app Thuuz, likened it to the classroom concept of getting partial credit for solving part of a test question — even if you didn’t get it 100 percent right.
“The god of partial credit works for you in spades as an entrepreneur,” Packard said. “And you have to use that as a tool to get out, get your product launched, get customer feedback, learn from your mistakes, pivot and do it again.”
With that, we hope you launch into 2014 by taking that first step.
I have been very fortunate throughout my formative years and still today to be surrounded by inspiring men and women. At the age of 34, I feel I have only scraped the surface of everything I am yet to experience and achieve both professionally and personally. My resume so far is the result of a lot of hard work, but also and mostly of the belief that only the sky is the limit.
I started no differently than any other little girl, with perhaps one major exception: I was always told by family, friends, and mentors that I could achieve anything I wanted as long as I was open, worked hard and remained helpful to others. My gender was never part of the discussion, but it seems my experience was rare.
It has become clear that we need to do more to shine a light on the ambitious, successful women who dream big and achieve their personal and professional goals while staying true to themselves. Men seem to have these kinds of role models in abundance and perhaps as a result do not struggle to imagine that they can affect change and become leaders. But many girls and young women struggle to find similarly successful, relatable role models who can inspire them to imagine everything they could achieve and believe that each of those possibilities could become a reality. Learning about the stories of these role models can help young women make educated choices about what suits them and then pursue their goals with all their energy.
At Boticca, we try to share the stories of inspiring women organically through our business. Eighty percent of our brands are led by women, all entrepreneurs fighting to build sustainable businesses. We love being their partners as they expand their businesses globally and realize what the possibilities truly are. Recently we have partnered with Women for Women International, an organization founded by a formidable woman, Zainab Salbi, one that is committed to giving women in war-torn countries the tools to rebuild their lives while sharing their stories of resilience with the world. It is critical to tell the stories in as many contexts as we can in order to help and celebrate those women who are making a difference.
Beyond “Lean In”: More Women Who Help Us Dream Big
The key is the awareness that we can design our unique path and as long as we are confident, hard working and willing to give it our all, we can make that path work.
Sheryl Sandberg, Facebook’s COO, has shined a lot of light on this subject with her book Lean In. Her arguments make a lot of sense, but to many, she may seem difficult to relate to because of her “one fourth of one percent upper class status,” as Gayle Tzemach Lemmon points out. However, she has emphasized something that applies to all of us regardless of status: we should embrace the theory of the “and.” Why limit ourselves to being either career driven or family oriented? Why not do both, if that’s what we want? Little girls will only figure out what they want by being aware of and evaluating all of the available options. There is no “one path” that works for everyone. Each person is unique and each stage of life is different. The key is the awareness that we can design our unique path and as long as we are confident, hard working and willing to give it our all, we can make that path work.
There is only one Sheryl Sandberg, but there are numerous women who gracefully embody the possibility of the “and.” All of their stories should be shared, so that girls and young women can find inspiration in their examples. That’s why I’m sharing the stories of five of the most open, giving, impressive women I know. Each is very unique in her path and identity, however they all share a few very important traits: They are passionate, positive, hard working, confident and most importantly, they are constantly learning and teaching. They promote others and are great leaders with loyal followers. And if you ask each and every one of them, they will tell you that they are no better than you. If they can design their own paths and stay true to themselves, you can, too.
Shripriya Mahesh is an incredible woman: A wife, a mother, an award-winning filmmaker and a successful Silicon Valley executive. She owes all of it to her passion, openness and determination. When I first started at eBay, she was assigned to me as my mentor and then became my boss and my friend. I’m now lucky enough to be godmother to her twins, so I know first hand how open, passionate and strong she is. Shri leads by example: She taught me how to create solutions for any problem and above all, that you can pursue your passion at any stage. She reinvented herself as a filmmaker after 15 successful years in technology while having twins and supporting her parents who were struggling with illnesses. Shri has now found a way to fulfil both passions by leading the product launch for a startup and working on her first feature. She proves that it is possible to handle any personal and professional challenge with determination and positive energy.
Gayle Tzemach Lemmon, who I mentioned above, is one of the formidable women I am lucky to call a friend. One of my business school classmates, this independent thinker doesn’t take anything for granted. A successful journalist, the New York Times best-selling author of The Dressmaker of Khair Khana and a Senior Fellow with the Council on Foreign Relations’ Women and Foreign Policy program, Gayle went to business school when she was already quite senior in her career. She simply wanted to learn more about business, knowing that the experience would help her achieve her goals. Gayle and her husband both believe nothing is impossible and Gayle manages every challenge with grace. She spent a lot of time in Afghanistan reporting on women’s efforts to be heard by their own government. It was on one of these trips when she found out she was pregnant and due just days before her book’s publishing date. Gayle is from a humble background, but was inspired by hardworking women who showed her that “only our imaginations could determine our limitations.” As a result, she constantly works to inspire and share stories of other women with the world.
Nisa Godrej, one of my dearest friends, is another inspiring woman I met at business school. Nisa is a force of nature who inspires others through her vision and drive. She could have chosen a life of leisure, but instead chose to fight to create a performance-oriented culture in the 117-year-old Godrej Group, allowing the company to excel on a global scale. Motivated by a force within, Nisa’s imagination has no limits and she will push herself and those she cares about to achieve their full potential. She is as dedicated to her professional growth as she is to her personal one. We celebrated her birthday climbing Kilimanjaro, trekked in Bhutan and Iceland on what she considers holidays relaxing for the soul and discovered the ruins of Petra in lieu of a hen party. A dedicated daughter, Nisa’s loyalty is boundless. Now, she is married to a wonderful man who shares her passion for life, they are expecting a child, and she continues to lead her company forward.
Judy Gibbons, another mentor of mine, is a truly extraordinary woman. Ranked among the top 20 most influential European businesswomen, she has held senior positions at Apple, HP and Microsoft and is now on the board of the Guardian, Michael Kors and more. The list goes on and on. Again, she owes it all to her hard work, openness and dedication. Judy took me under her wing when I started at Accel Partners and has been a guiding force ever since. She was one of the first people to believe in me when Boticca was only an idea. She has always gently pushed me and others to dream big and believe that we can make anything happen, both in our professional and personal lives, if we put our minds to it. She has been an incredible force for young people in her life including her own nieces to whom she is a surrogate mother. She is multidimensional and will not let anyone be otherwise. There is no either/or for her, it is all about the possibility of the “and.”
Sherry Coutu is yet another woman who embodies the possibility of the “and.” I met Sherry a number of years ago when I first moved to London. I remember having lunch with her and finding out that she had just climbed Kilimanjaro, which I planned to climb a few months later. I knew from that moment that she was a force to be reckoned with. A former CEO and angel investor who now serves on the boards of LinkedIn, Cancer Research UK and the University of Cambridge among others, she is a staunch promoter of entrepreneurship, for which she was awarded a CBE in 2013 from Her Majesty the Queen. She is also the founder of Founders4schools an organization that inspires young students to believe in themselves and in their ability to be entrepreneurs.
All of these women are great examples because they are not simply hard workers, but are open and looking to share their experiences and learn from others. They are the kind of people you want to work for and be friends with. I don’t believe that there is a particular way a woman should be, or that there is only one way she should be. But I believe that each woman should have the option to choose what she wants, knowing at the beginning all of the possible permutations of her dreams so that she can design her own path. Join me in sharing the stories of women like these.
With the holidays underway and our thoughts attuned to peace and goodwill, now is the perfect time to explore how entrepreneurship can fuel humanitarian efforts. For our weekly Entrepreneurial Thought Leaders (ETL) seminars, we of course focus on topics central to technology startups. But throughout the academic year, we also invite speakers who bring the entrepreneurial mindset to the nonprofit sector.
During a season when there’s no shortage of soirees, and charitable instincts are at front of mind, ETL speaker Scott Harrison offers up a strategy for turning a personal celebration into a splashy charity event that can send ripples around the world.
Founder of charity: water, a New York City-based nonprofit that brings clean water to poor villages in Africa and other parts of the world, Harrison describes in this video clip how he tapped his social network from his days as a hotshot nightclub promoter in the Big Apple to bring in big money for the cause closest to his heart.
Ashoka, another entrepreneurial nonprofit in New York City, places its social mission front and center. “Ashoka believes that there is nothing more powerful than a new idea in the hands of a social entrepreneur,” the organization’s webpage states about its approach. “Ashoka finds and fosters the most powerful emergent ideas being led by the most effective social entrepreneurs.”
Founder and CEO Bill Drayton also spoke recently at ETL, and described how Ashoka maximizes impact by selecting highly potential “changemakers” and building networks of social innovators. But in order for any solution to spread, Drayton said it must first be seen as simple, safe and easy to understand.
In terms of private entities, the humanitarian organization bringing the most resources to bear is none other than the Bill & Melinda Gates Foundation. Its massive assets, now at about $40 billion, support initiatives in education, world health and population. That the co-founder of Microsoft has dedicated his fortune to philanthropy has, in the minds of some, vaulted him past even Steve Jobs as the technology leader they’d most like to emulate.
But for all the grandness of the foundation’s aims, it is comforting to hear from Melinda Gates that she wants us to start locally, supporting causes in our own community that we’re passionate about. Most importantly, she wants us to get involved now:
Happy holidays and all the best for your entrepreneurial endeavors in 2014.
New research on entrepreneurship shows that diverse business skills are not always the secret to success in the world of tech start-ups. While different strengths matter sometimes, researchers found that a tech-focused founding team is almost always best.
The research, led by assistant professor Chuck Eesley in Stanford University’s Department of Management Science and Engineering, has been published online by the journal Strategic Management. Two other management professors, from the University of Pennsylvania and Massachusetts Institute of Technology (M.I.T.), co-authored the study.
The research revealed that a technically focused team can more quickly reach market milestones, from design and prototype completion — all the way to product launch.
The research revealed that a technically focused team can more quickly reach market milestones, from design and prototype completion — all the way to product launch. On the other hand, more diverse founding teams are better prepared to compete against mature companies, which similarly have well-established diverse skills in areas like marketing, operations, sales, engineering and other skills.
The findings are based on a survey of 2,067 ventures founded by MIT alumni across multiple industries. The professors examined each firm’s founding team, how well the venture performed, and the business environment that surrounded it. They took into account traits such as age, experience and education, but in this case, did not include traits such as gender or ethnicity.
Lead author Eesley, whose department is in the School of Engineering, researches the influence of external environments on entrepreneurship – specifically, the types of environments that encourage the founding of high-growth, technology-based firms.
“If your venture is focused on technological innovation as a key competitive edge or is operating in an industry where it is common for startups to focus on innovating — and then partner with large firms to commercialization those innovations — then it is better to have an all-technical founding team,” he said.
Two business environments that startups commonly enter can be characterized as either cooperative or competitive. In a cooperative environment, startups form partnerships with established firms in the industry to bring products and services to market — like when smaller biotech ventures get acquired by larger pharmaceutical companies. In a competitive environment, startups go head to head with established firms instead of relying on them to get to market — like in the software industry.
“If your venture is focused on technological innovation as a key competitive edge… and then partnering with large firms to commercialization those innovations — then it is better to have an all-technical founding team.”
However, if a venture’s competitive edge comes from factors other than technological innovation — serving a new market segment, for instance — and it’s more common for startups to compete with established players, Eesley says a founding team with diverse skills makes more sense.
The study’s authors gauged the success of firms in their survey by whether they reached a “favorable exit,” such as an acquisition or IPO. One of their findings was that, in a “cooperative environment,” a technically focused founding team had a 12.8 percent greater likelihood of a favorable exit.
At Stanford, Eesley teaches about technology entrepreneurship to undergraduates on campus and to students around the world via open online courses. He also lectures internationally, and is often asked by current and would-be entrepreneurs about who they should look for as co-founders. He usually advises them to build a balanced team of founders.
“However, I began to wonder if this advice was universally true for all types of startups. I suspected and worried that, in some cases, such advice may actually be harming some founders,” Eesley said. “We should be trying to help them, rather than unintentionally leading them astray.”
Eesley is also on faculty at the Stanford Technology Ventures Program, which serves as the engineering school’s entrepreneurship center, helps students develop entrepreneurial skills, and sponsors courses and research related to tech-venture formation.
He says the study’s findings are practical for those looking to launch a company now — whether in Silicon Valley or wherever.
“For prospective or current entrepreneurs,” Eesley explained, “you want to think carefully about matching the skills and backgrounds of the people you recruit as co-founders with the strategy and industry of the startup you’re passionate about pursuing.”
His co-authors include David Hsu, an associate professor of management at the University of Pennsylvania’s Wharton School, and Edward B. Roberts, a professor of management of technology at M.I.T.’s Sloan School of Management.
Now in its 25th year, Management Science & Engineering Course 273 remains one of the most highly rated courses in the School of Engineering.
Big Switch Networks, Skybox Imaging, WiFiSlam, Sourcegraph — the list of startups launched by Stanford students soon after taking the course “Technology Venture Formation” goes on. That’s because the class, formally known as Management Science & Engineering 273, is so much more than a series of lectures.
MS&E 273 is intended for graduate students with serious entrepreneurial aspirations, and there is just no way to learn the fundamental skills and processes for successfully launching an innovative and sustainable tech company simply by listening and taking notes.
The key to the course’s success begins with its teaching team: a trio of highly accomplished practitioners of entrepreneurship who teach in the Stanford School of Engineering. Together, they bring decades of experience in all aspects of high-tech entrepreneurship: from founding and investing in startups to leading companies as board members and executive officers.
The course’s founding faculty member, Mike Lyons — a veteran entrepreneur and chair of a network-security startup with offices in Silicon Valley — figures that more than 200 tech startups have been launched by alumni of MS&E 273 since it was first offered in 1988. Also a co-developer of the Stanford Technology Ventures Program, which offers MS&E 273, Lyons said the course gives students “actionable tools” that allow them to understand the startup process and the risks they must minimize in order to ensure success.
“You want to start a high-tech company? You are going to learn how to do it — by doing it.”
“We use scenario-based education,” said Lyons, a consulting associate professor in the engineering school’s Department of Management Science & Engineering. “You want to start a high-tech company? You are going to learn how to do it — by doing it.”
Specifically, students in the class form teams and then propose and assess a technology concept or service in the framework of a business opportunity. The 10-week course demands that the proposed technologies have “a critical innovative advantage that will provide sustainable differentiation.”
The class sessions are only three hours a week, with various experts invited to speak on Tuesday nights about practical strategies ranging from go-to-market techniques to building financial models and getting a company financed. Later in the course, the student teams stand before a group of Silicon Valley CFOs and explain their business model and proposed financial operations.
The 45 students in the current class are now in their final week, when they make their pitches to a panel of partners at top venture-capital firms. However, the panelists serve not as investors, but as experts in evaluating business plans and opportunities.
Stated plainly, it’s not enough to have a cool technology idea that no one has thought of before. There has to be a viable business opportunity for the technology, and MS&E 273 focuses on assessing and defending its commercial viability, according to fellow course developer and instructor Audrey MacLean.
“That whole process is something that’s valuable to students, whether they ever start a company or whether they work for a big company.”
“That whole process is something that’s valuable to students, whether they ever start a company or whether they work for a big company,” said MacLean, also a consulting associate professor in MS&E. MacLean has four decades of combined experience in the computer and communications industries, with leadership roles as a founder, CEO, seed investor and board member.
She belongs to Fortune’s Most Powerful Women group, has been named by BusinessWeek as one of the 50 most influential businesswomen in America, has made the cover of Forbes and been featured multiple times in the magazine.
To illustrate MS&E 273 as something more than a class, MacLean says that in the case of entrepreneurship, the lab is the real world: “And if you look at Stanford as a research institution,” MacLean explained, “you obviously want to have the professors who are teaching the subject to have spent time in that lab.”
Jack Fuchs, the third and newest member of the teaching team, adds that the students must prove that the technology they’re pitching has true technical differentiation. The team also demands that the venture itself takes a novel approach in its execution, and that the students present a clear vision of what their businesses would look like five years on.
“But for the people who are entrepreneurs, it is a way of opening up your life and your career that is different from anything else …”
Fuchs, an adjunct faculty member in MS&E, said he wants to see a good fit between the student and the particular business opportunity he or she wants to pursue. “The number one lesson I would like students to take away is that entrepreneurship is not for everybody,” he said. “But for the people who are entrepreneurs, it is a way of opening up your life and your career that is different from anything else that you can possibly experience in the business world.”
According to Fuchs, one of the most important things the course does is expose all the potential founders to the commercial side of entrepreneurship. “We prepare the students’ minds for the vagaries of that journey,” he said. “Even if many of the students only ever become technical leaders in the companies, their appreciation of the commercial side will serve them extremely well.”
While all three instructors have had great success in their careers, it’s clear that they continue to teach MS&E 273 because they are passionate to pass on real-world lessons to the next generation of innovators. Fuchs, who also teaches entrepreneurship at the University of California-Berkeley, says he is inspired by exposing brilliant and motivated engineers to high-powered venture formation. For her part, MacLean says MS&E 273 is the course she wishes was offered when she first started out.
And for Lyons, ultimately, his commitment to the course stems from a deep belief in the positive impact that entrepreneurship can have on the world. “One of the reasons we’re very interested in this is because we all believe — certainly in the engineering school — that the way to build a powerful economy is to increase entrepreneurial activity that’s successful, that produces economic gains for societies and improves the standard of living for the individuals and the societies connected with it.”
Before she went on to co-found venture-capital firm Floodgate, Ann Miura-Ko served as a teaching assistant in MS&E 273 for four years, lecturing in the class while also working toward a Ph.D. in the School of Engineering. She said the most successful students were the ones who saw the course, not simply as a class, but as an experience.
“They learned not just what it is to be an entrepreneur,” Miura-Ko explained. “They actually became an entrepreneur in that class.”
Management Science & Engineering 273: Technology Venture Formation is open to graduate students only, but welcomes registrations from across engineering and other Stanford schools.
Boticca, the world’s luxury bazaar of fashion accessories, just raised $4 million in a series A round from a number of high net worth individuals around the world and UK-based fund, MMC Ventures. Back in 2011, it took us just three months to raise our $2.3 million seed round, at a stage where the company was barely making any revenue.
Roughly two years on, it took us nine months to raise our series A, at a stage where unlike most e-commerce startups we had profitable user economics with a cost of acquisition recouped on the first purchase and more than four times lower than our Customer Lifetime Value. The fundamentals of our business were and still are very strong, yet the path to series A presented an array of unexpected challenges.
This sounds counterintuitive, doesn’t it? It certainly did to us. However, looking back, we’ve learned more about what happened, what we did wrong, how the environment affected us and how other companies can avoid making the same mistakes.
Don’t Waste Your Time: Engage With the Right People
When we started thinking about fundraising in December 2012, we were told by many around us, including our own investors, how terrible the fundraising climate was in the US and even more so in Europe. Thus, we decided to reach out to a lot of potential investors. Both my co-founder and I come from a venture capital and a private equity background so we have always had access to many investors. This coupled with the introductions from our existing seed investors gave us a full list of potential people to talk to.
Had we done more research prior to these meetings, we could have saved ourselves countless useless conversations.
However, we began reaching out to investors without properly considering their fit (surprising, considering how much fit comes into our hiring process). For countless reasons, our list included the wrong people: some no longer invested in series A rounds, preferring to invest either in seed rounds or later rounds (the series A crunch effect). Some were at the end of their funds while others were too long on e-commerce investments that hadn’t yet had any good outcomes. Had we done more research prior to these meetings, we could have saved ourselves countless useless conversations. It is not just about the number of investors you engage with — you need to get face time with a lot of investors — but more importantly, you need to find the right ones for your business.
Don’t Put All Your Eggs In One Basket
We made three big mistakes: we trusted too quickly, became too confident and let ourselves be wooed by one main investor. As we were sifting through the large funnel of potential investors, we opened serious discussions with one main European fund, which will remain unnamed. They started doing in depth due diligence before any signed term sheet. This required an incredible amount of time on our end and because of it we stopped or stalled conversations with most other investors. We were confident this would be a success: Our interaction with the fund was extremely positive, we were transparent about our operations and our economics were (and still are) solid.
However, we did not realize that this fund had internal operational constraints, which led them to pull out at the 11th hour. We were left with hardly anyone else to fall back on and only three months of cash left in the bank. Learn from our mistake: No matter how well things are going, keep your options open until a term sheet is signed.
The following two months were incredibly difficult. They were filled with sleepless nights and stress. However at no point in time did my co-founder or I give up. We had a very healthy business on our hands, a great team, and a huge opportunity. Knowing at all times that we were both in it together and neither one of us would rest until we made it right was a huge factor in our ultimate success.
Set Your Ego Aside
Many extremely successful entrepreneurs have had near-death experiences, though these experiences rarely come to light. What makes the papers is the final outcome, the end success. But often, the road to success is a rocky one for entrepreneurs.
When my co-founder and I were faced with three months of cash left in the bank and no tangible fallback option, one of my close friends, Rupert Shaw, co-founder of Pioneer Point Partners, impressed on me the fact that this was the time to set egos aside and reach out to as many people as possible. So that’s exactly what we did.
The amount of support that we received and the number of advocates and evangelists we discovered in them was humbling.
We started reaching out to our network of friends, family, mentors, and former colleagues, which includes successful entrepreneurs, business men and women, and investors. We shared the hard facts and were very candid about our dire funding situation. The amount of support that we received and the number of advocates and evangelists we discovered in them was humbling.
To my surprise, we weren’t alone. I sat down with numerous successful entrepreneurs who had experienced similar situations multiple times and openly shared them with me. These ended up being the people who either invested in our series A or made the introductions to our series A investors. Each of these candid conversations led to as many as three immediate introductions to great potential investors. In no time, we went from near-death to being oversubscribed in our series A.
Do Not Give Up: Create Options For Yourself
If you have a strong business, with the right fundamentals, do not give up. My co-founder and I created multiple options and also envisaged the worst. We covered all sorts of actionable scenarios to allow us to keep the team intact (some were more attractive than others). Believing in the possibilities of these alternatives is what kept us going.
One scenario involved creating a last-resort plan with our existing lead seed investor, ISAI, who was and continues to be supportive. They believed in the business, however, because of the smaller size of their fund and the amount they had already committed to the business, they could not justify bank rolling our series A with an up round. The terms we discussed with them were only ones we were going to agree to as a last resort. Another involved forgoing our own salaries and taking out personal loans to buy time. We also crafted two different plans for the business, one in which we raised $2 million, half of what we had originally planned but enough to get us to profitability with slower growth and a smaller business, and one in which we raised the original $4 million. We envisaged only raising from angels, though that would have meant a lot of coordination and would not have been the best signal for our next round.
We realized we had far more options than we’d originally considered. This enabled us to go into meetings with confidence without allowing investors to smell blood.
Make Them Dream and Call The Shots
One of my closest friends and a very successful entrepreneur, Alexander Asseily, (co-founder of Jawbone and now State.com) sat down with me early on through this process and gave me two extremely valuable pieces of advice:
Make the investors dream. Every investor wants to believe that the business they are investing in will change its industry if not the world, and will make them very rich. Therefore do not play down your dream. Share your passion and vision.
Call the shots. You have a good business, you know the environment, so don’t ask for terms and a valuation. Put a deal together and let the investors know that this is it. If they are serious you will know immediately, if they want to negotiate that’s fine. At that point they will have shown real interest.
We did both things. We changed our pitch, the deck, and how we delivered it to make it more passionate and true to our vision, explaining how Boticca is disrupting its industry and enabling brands that didn’t have access to distribution before develop very successful businesses.
As a result, we were determined, transparent about the situation and confident in the meetings we had.
We also put a term sheet together that we felt comfortable with. We priced it attractively, where we knew that anyone who believed in us or understood the industry and the growth of our business would seriously consider the investment. We could easily justify the pricing with comparable examples, while being comfortable with its valuation. As a result, we were determined, transparent about the situation and confident in the meetings we had.
It must be said that none of this would have been possible without a sound underlying business. But if your business is built on solid fundamentals, you will be able to cope with adversity. If you’ve built a strong business, yet still find yourself on the brink of near-death, know that with preparation and perseverance, you will be able to overcome even the most daunting challenges. I’ve written this post as candidly as possible in order to allow others who may find themselves in similar situations to learn from my experiences and realize that it is all part of the journey.
November is Entrepreneurship Month in the United States, and Stanford has a spot-on kickoff to this national designation in Startup Weekend, being held Nov. 1 to 3 in the skybox of the university’s football stadium.
When asked if the athletic venue was a good fit for the 54-hour entrepreneurial marathon, co-organizer Andrew Scheuermann – an associate at the Stanford venture incubator StartX and Ph.D. candidate in materials science and engineering – told The Dish Daily: “Athletics is acknowledging entrepreneurship as the ‘other’ varsity sport at Stanford.”
According to the event organizers, 135 participants will compete, and famed tech entrepreneur, executive and investor Keith Rabois will deliver the keynote address on the first night.
In some sense, the concept of “open innovation” has been with us all along. Yes, this Forbes article claims the term originated just a few years ago with a professor from the University of California, at Berkeley, who once worked as a computer-industry manager in Silicon Valley. And according to Wikipedia, the word “crowdsourcing” was coined in 2006.
But before all the business speak, the basic concept existed as the “wisdom of the masses.” Nonetheless, it is insightful to hear from those currently at the forefront of innovation how this creative process has evolved over the years, how it will look in the years ahead, and how it can deepen customer engagement in real time.
How It Used to Be
In her Entrepreneurial Thought Leaders (ETL) talk at Stanford last year, Deborah Hopkins, chief innovation officer at Citi Ventures, talked about transparency, openness and idea sharing as the pillars of her operation. But she also acknowledged that, traditionally, it was quite the opposite in the business world.
Those with the bright ideas felt like they should keep it to themselves, Hopkins explained, because business professionals back then were taught that “knowledge is power” — and that their secret insights would secure them that corner office with the view.
Where We’re Headed
Another ETL speaker deeply immersed in innovation, Padmasree Warrior, talked about how, over the past few centuries, we have gone from “the era of the solitary genius” (think Thomas Edison) through the rise of corporate labs such as Bell Labs and Xerox Parc, to more open models of innovation such as, yes, crowdsourcing.
But as she sees it, Warrior — the chief technology and strategy officer for Cisco Systems — says the next stage in innovation will deliver products that improve experience across multiple domains: hardware, software, user interface and design.
How Else It Helps
Besides allowing companies to harvest the best ideas from a broad pool of minds, allowing others to participate in the innovation process can also help a business by deepening customer engagement — especially in the startup phase.
As serial entrepreneur Matthew Rabinowitz said in another recent ETL talk, “If your customers feel they are part of that process, and they take a certain ownership, that can really lock them in emotionally.”
A Ph.D. candidate in the Stanford Technology Ventures Program recently published a new study related to open innovation — on how organizations elicit suggestions from the public. Read about it here.
A new study co-authored by a researcher in the Stanford Technology Ventures Program (STVP) finds that organizations that display a feedback button on their website to invite suggestions from customers frequently struggle to foster thriving online forums for new ideas.
The study looked at just over 23,800 organizations and found that success with the online feedback mechanism varied widely, according to co-author Henning Piezunka, a Ph.D. candidate in management science and engineering at Stanford. His research, conducted with a colleague at the European School of Management and Technology, in Berlin, has been published online by the journal Research Policy.
The types of organizations included in the study represent nearly every sector: public entities ranging from rural towns to national governments, and private companies ranging from small startups to multinational corporations. Whereas prior studies on suggestion solicitation looked at just a handful of organizations, Piezunka said that working with one of the leading software firms in the field of online feedback allowed he and his colleague to conduct a much more comprehensive study.
Why Study Suggestions
The findings have broad implications since businesses and other organizations increasingly turn to the Internet to engage customers and innovate through “crowdsourcing.”
Emboldened by the ability to tap into a global community, organizations are increasingly adopting so-called “open innovation” strategies to harvest ideas. In the first weeks of September alone, organizations ranging from NASA to the National Football League have announced ambitious open-innovation initiatives.
“… the whole topic is important because it has been shown that organizations can innovate if they interact with their customers. But we actually wanted to see how to do it successfully.”
More specifically, the study is in line with STVP’s mission of accelerating entrepreneurship education at Stanford and around the world. “When we study entrepreneurship, we are essentially examining how individuals and organizations identify and explore new ideas,” Piezunka said. “Now, how do you actually get new ideas? One crucial avenue is: You engage with customers.”
He also pointed out that “the whole topic is important because it has been shown that organizations can innovate if they interact with their customers. But we actually wanted to see how to do it successfully.”
But not all organizations have the legions of customers or instant name recognition of a company like Microsoft. And yet, smaller entrepreneurial organizations can also succeed in eliciting suggestions: Swiftkey, a London-based startup behind the popular screen-based keyboard, was successful in eliciting numerous suggestions from its customers, which ultimately guided its innovation process.
Piezunka says that one of the biggest reasons why most organizations fail to replicate those successes is that outsiders don’t see how much effort actually goes on behind the scenes to make those external-engagement campaigns take off.
“People actually fall victim to the general success of open innovation,” Piezunka said. “Organizations often feel like all they need to do is launch their campaign, and it will just take off. But that is absolutely not how it typically goes.”
Hence, in addition to pointing out the shortcomings of organizations’ outreach efforts, the researchers also present what they found to be the most effective strategies for encouraging suggestions from the public and nurturing engagement. Through their analysis, they identified several actions that organizations must take if they want external contributors to send in their suggestions:
Proactive attention:Instead of waiting for suggestions, the organization should initiate the conversation with an internally developed suggestion to stimulate debate.
Reactive attention: Organizations should actively respond to suggestions from external contributors to signal that their thoughts are being heard. The study found this was especially important for newcomers to the discussion.
Catalyzation: Organizations should focus their efforts on new users and the early stage of their open-innovation effort. In particular, organizations need to be aware of the time, effort and commitment required to nurture a fledgling forum into a thriving discussion. This includes establishing a process for retrieving, reviewing and responding to suggestions — especially those offered up at the outset.
Those may seem like common-sense rules for successful communications. But the reality is that organizations frequently underestimate the investment needed, and often fail to apply such widely understood best practices when it comes to corporate engagement, Piezunka said.
For instance, he paints this scenario: Imagine that you’re sitting in a company meeting and saying, “You know what? We just had five customers send in suggestions, and we want to act on that.”
“But the critical moment to engage is actually when you hear from those first five customers.”
“That’s kind of a hard case to make in a business meeting if you have, say, 100,000 customers. It’s much easier if you can say that all 100,000 customers want something,” Piezunka explained. “But the critical moment to engage is actually when you hear from those first five customers.”
Piezunka knows this first hand. Years ago, he founded a web-design company in his native Germany, which is still in business today. He admits that he wasn’t much of a computer programmer back in those days, but that even then he was a “very, very strong believer that you really need early customer input.”
“Most organizations don’t do enough. They tend to be product-focused when it comes to innovating, but not customer-centric,” said Piezunka, who figures he was on the road 60 to 70 percent of the time for his company. “If organizations actually adopt the strategies of proactive and reaction attention, they can unlock the enormous potential of open innovation.”
Challenging the status quo is a fight entrepreneurs often like to pick. And with tech startups successfully changing the game practically overnight across industries — Airbnb in travel, Spotify in music, Square in the retail space, Uber and Lyft in the transportation business — an entrepreneur might think it’s as easy as, “Code it, and they will come.”
But in reality, bucking the trend is no trivial matter. When you see a business opportunity no one else does, your big idea is inevitably for a product or service that no one is demanding. Knowing what people will want before they actually do is a sweet spot to be in, and realizing how difficult it will be in the beginning will only brace you for the tough — but worthwhile — road ahead.
Changing the World is Hard
In this eCorner video clip, venture capitalist John Lilly of Greylock Partners quotes longtime STVP faculty member Tom Kosnik in urging aspiring entrepreneurs to “do what makes your soul sing.” That, Lilly says, will give you the strength to persevere in the constant struggle against the status quo.
“Because it’s hard, and because it’s constantly hard, and because people are telling you ‘you’re a moron’ and why things won’t work — over and over and over again,” Lilly explained, “it’s important to do things that speak to you and really feed your soul and help you grow over time.”
The Rock Star Myth
But if you’re an entrepreneur in Silicon Valley, a statistic presented by Entrepreneurial Thought Leaders (ETL) speaker David Friedberg serves as a sobering status quo for anyone with dreams of becoming the next Jack Dorsey. According to Friedberg – who launched his own entrepreneurial journey after earning a degree in astrophysics and leading several projects as a mathematical programmer at Lawrence Berkeley National Laboratory — the odds of starting a company and it being worth over $1 billion is .0006 percent.
“There’s a culture of taking leaps and doing big, exciting things here. And you’re an important person if you do that,” said Friedberg, founder of The Climate Corporation. “But just being an entrepreneur does not make one a rock star.”
The Danger of Protecting the Status Quo
Some say the status quo is upheld at the highest levels. In his ETL talk last spring, author Nassim Taleb mentioned how U.S. monetary policy aimed to preserve the fragile and dysfunctional parts of our economy in the wake of the most recent financial crisis. To Taleb, that sort of intervention runs contrary to the premise of his book Antifragile.
Luckily, today’s entrepreneurial culture recognizes the constructive value of failure and embraces the forces of creative destruction — especially in Silicon Valley, where reinvention is a constant.
On a Saturday night, a student sits motionless in front of a laptop, except for his fingers frantically tapping out code in the basement of a building at Stanford. A hemisphere away, students who were complete strangers just a few days before gasp in unison as they approach a massive glacier in an inflatable boat.
Though the two images are literally a world apart, both are glimpses into just the kind of deeply immersive experiential-learning activities that have become an increasingly essential part of entrepreneurship education at Stanford.
The first scene is from a two-day event known as Startup Weekend, in which student teams have 52 hours to turn an idea into a startup. The second was a highlight from a five-day ocean adventure in which students from Stanford and South America came together last March on a vessel known as the EntrepreneurSHIP.
[quote_right]“The best learning is experiential.”[/quote_right]“The best learning is experiential,” said Tina Seelig, executive director of the Stanford Technology Ventures Program (STVP), who first floated the idea for the ship. “As the entrepreneurship center at Stanford University’s School of Engineering, our role is to deliver engaging courses and perform scholarly research, as well as create one-of-a-kind learning experiences that enhance entrepreneurial skills.”
This is especially true when teaching entrepreneurship – where rapid prototyping, overcoming obstacles and responding to critical feedback are inevitable. Education needs to include equal parts coursework and exercises outside the classroom that allow students to apply what they’ve learned in real time.
For Startup Weekend, an annual event hosted by several entrepreneurship programs at Stanford, students have from 5 p.m. Friday to 5 p.m. Sunday to form teams, bring a business idea to life and compete for top honors. Most students have never worked with each other before and must subject their projects to the scrutiny of entrepreneurs, investors and other Silicon Valley professionals who volunteer their time.
The event – presented last year by StartX, STVP and the Entrepreneurship Club at Stanford’s Graduate School of Business – is a blur of an experience from the get-go. Students warm up with improvisational exercises and ice breakers, then form teams, set up workspaces, develop pitches, meet with mentors and hone presentations – breaking only for meals.
All the while, they sharpen their interpersonal skills and refine their ideas on deadline. “Experiential learning allows students to be bold, but in a relatively safe environment,” said Angela Hayward, who has managed the Stanford Entrepreneurship Network. “It lets them get used to failure and the iterative process, and lets them get used to working with people they’ve never even met before.”
Startup Weekend returns this autumn and will welcome any Stanford student to apply. Last year, more than 500 students applied for 115 slots, resulting in 16 teams that turned the basement of the Huang Engineering Center into a beehive of activity.
“When you’re used to sitting in class and taking notes, it can be difficult to appreciate the real-world application of entrepreneurship,” Hayward said. “But when you’re in a group, and you’re working on something real, students get the opportunity to apply what they’re learning.”
Entrepreneurial Thinking at Sea
Now, take Startup Weekend and put it on a 64-cabin cruise ship bound for the southern tip of South America, and you begin to get a sense of a one-of-a-kind, experiential-learning adventure offered to students over their 2013 spring break.
About 20 students from Stanford took part in the EntrepreneurSHIP voyage, which brought them together with close to 60 students from Chile for five days of inspiring talks, hands-on activities and, naturally, excursions into the icy waters of Patagonia.
STVP, in collaboration with two of its Global Partners (Universidad del Desarrollo and Pontifica Universidad Católica de Chile) organized the trip. Seelig and other Stanford faculty – from STVP, the d.school and the School of Engineering’s Department of Management Science and Engineering – led exercises in team building, design thinking, prototyping and storytelling.
Educators and experts from Chile discussed social issues confronting their nation: from environmental protection and economic development to challenges in K-12 education. Students were then tasked with having to come up with solutions, overcoming language barriers (and occasional bouts of seasickness).
“The projects that the student teams took on provided them with a framework to challenge themselves,” said Forrest Glick, one of STVP’s associate directors. “Working within teams, developing a point of view, leading a project, pivoting an idea and getting feedback – those are the kinds of entrepreneurial skills we wanted them to learn by doing.”
Granted, experiential learning has long been recognized as an effective way to supplement and solidify in-class curriculum. And entrepreneurship educators at Stanford emphatically say such activities are downright essential for their students.
Just ask Lauryn Isford, who enters her junior year this fall as co-president of the Stanford Women in Business. She is majoring in management science and engineering in the School of Engineering and got involved in entrepreneurship at Stanford after going on a field trip to Google with her computer-science class.
Being in Google’s offices and seeing all the employees at work was one thing. But ending the day by being able to sit down with co-founder Larry Page for 45 minutes of question and answer impacted her in a way that few lessons can. Then a freshman, Isford asked Page what he wish he had known when he first entered college.
“As a freshman,” Isford recalled Page saying, “he wish he had known that it’s OK to take risks and not to be afraid to fail – because when you take those risks, even if things don’t go perfectly, you learn from those mistakes. And you can move forward with that experience.”
Branding is often seen as a fluffy subject. It’s de-prioritized because it is neither tangible, nor easily measurable and belongs more to the creative types than left-brain entrepreneurs. But dismissing the importance of branding is a big mistake, especially for consumer facing companies. Branding is critical to the success of any business, both externally and internally and creating a solid brand platform will make it easier to execute all your other tasks with clarity.
Understanding Branding Is Vital
Last summer, my cofounder and I realized we had to do a proper brand review. At two years old we had evolved in our direction, in the understanding of who we were and we had doubled the size of our team. Everything had happened organically, but we had never taken a step back to communicate the changes to the team or even between each other. We were lacking a clearly defined vision, a common language and an authentic identity. Though we knew branding mattered, we didn’t fully grasp the importance of developing a strong brand platform.
What We Did Wrong
“What we hadn’t realized is that real branding also requires a certain set of tools, a framework to work with and a third party to act as the conductor.”
We de-prioritized our branding review. We thought we did not have the time or resources and ultimately, it took us a year to complete. We then had a failed attempt when we thought we could do it ourselves without any proper tools and outside help. We gathered the team together and did two sessions, one full day and one half day. Though these sessions sparked great discussions, we’ve since learned that we didn’t know which questions and exercises could help us reach a successful conclusion. Furthermore, we didn’t know how to proceed with the results of these sessions. What we hadn’t realized is that real branding also requires a certain set of tools, a framework to work with and a third party to act as the conductor.
Getting It Right
This summer, we finally did it correctly. We enlisted the help of Alexandra Sprung and Kevin Meade, two of the founders of a great European branding agency, L’Agence Simone. They’ve worked with clients like Diptyque, Champagne Perrier-Jouet and more, and provided invaluable guidance throughout this process. Here, I’ve detailed what we learned from this experience, including some of the process and tools we used, to give you an idea of what needs to be done.
Conduct a customer survey to make sure you understand your customer.
Spend time upfront with the agency to walk them through the internal and external questions as well as challenges to address.
Ask your team to send you specific questions they want to discuss.
Buy multiple copies of magazines in your industry or aimed at your target audience.
Dedicate one full day to the brand discussion — all calendars must be cleared (no exceptions!)
During the branding session:
Share the results of the customer survey.
The agency introduces itself and its expertise.
The agency then walks the team through their framework. In the case of Simone, it is what they call their Global Mindscape, which is a two-by-two matrix of the world of brands split into brands whose essence is based in recognition, progress, status and entertainment.
Each of the quadrants is explained with examples of brands. The team is asked to give examples of competitors and indicate where they would fall on that matrix.
The team must then discuss where the brand is today and where it wants to be tomorrow and place it on the matrix. This is a challenging and enlightening discussion.
Once this is decided, the teams split into groups of roughly five to six people who are given the task to illustrate, through a collage of images taken from magazines, what they think the brand is today and what they want it to be tomorrow.
The completed collages are taped to a wall, side by side. Each team then presents their two collages. This is a great way to visualize the team’s ideas and their common trends.
Finally, the agency records the words expressed when discussing the collages that illustrate Boticca’s future.
After the branding session:
The agency sends its summary and recommendations.
Based on these documented recommendations, the founders must work with the agency to translate the results into the brand platform, which should include: vision, mission, brand statement, values, style/aesthetics, and a lifestyle statement. Limit the number of people in this session to no more than four. This session should unify all opinions.
Share the brand platform with a few additional people on the team (perhaps one person in each department) for any final inputs. If you have an editor or writer on your team, have this person work with your platform to make it more engaging.
In addition to the brand platform, for each department, create a second document (we called this the brand springboard) that indicates how they can apply the recommendations to their daily execution. Include some ideas, but the main purpose is for each sub team to use it as a springboard to develop their own strategy.
Call a meeting to share the agency’s recommendations, the new brand platform and the brand springboard with the entire team. Be open to any comments where the team feels strongly. It is important for everyone to be aligned and believe in the common vision at the end of this session.
Ask the sub teams to work on the springboard documents and give them a week to develop their new strategies.
“The process allowed the various team members to better understand each other and move forward with a common understanding and willingness.”
Though we are still implementing our findings, the results of this process have already been tremendously beneficial. The process allowed the various team members to better understand each other and move forward with a common understanding and willingness. This team dynamic and buy-in is invaluable. We now all know what we want Boticca to be. Therefore, each team can take the results of this branding exercise and incorporate them into their own daily work. Because we all share the same vision, mission and values, we are also able to communicate externally in a stronger way, thus making our USP much stronger and differentiating ourselves to our audience.
Yes, it took some time, effort, resources and coordination, but the results are already worth it. All that remains to be done is what we do every day, to execute, but this time we can do it with clarity and in unison.
The six academic teams came from across the globe: some from universities in South America, others from former republics of the Soviet Union. But regardless of their homeland, each delegation saw potential in their engineering students and flew all the way to Stanford to learn how to seed an entrepreneurial ecosystem on their native soil.
The six teams comprised the first cohort of a new offering by the Stanford Technology Ventures Program (STVP) called the Faculty Fellows Program. Over their two-week visit, STVP-affiliated faculty advised the teams on how to implement entrepreneurship studies in class, create extracurricular educational experiences and address practical issues such as navigating their universities’ bureaucracies.
The new program, one of STVP’s global-outreach efforts, welcomed faculty from universities in Armenia, China, Colombia, Lithuania, Mexico and Uruguay – as well as academic professionals and industry partners also interested in spurring entrepreneurship in the aforementioned countries.
From July 29 to Aug. 9, they took part in a rich array of activities, including mentor sessions with consulting professors in the Stanford School of Engineering’s Department of Management Science and Engineering (MS&E). They also visited startups in Silicon Valley and San Francisco.
During opening presentations on day one, the group from Armenia – a relatively small nation that has seen slow growth in entrepreneurship since the fall of Communism – began by describing how conditions are now ripe in their country to create a culture of innovation. For instance, Armenia currently boasts 360 companies in the information and communications technology sector, with almost two-thirds specializing in software development.
“The idea of coming to Stanford was how can we better implement [a] tech-ventures program,” said Rafael Lorenzo, director of innovation and entrepreneurship at a business park in Mexico operated by the Monterrey Institute of Technology and Higher Education.
The teams also attended workshops in design thinking and creativity, as well as a presentation on Stanford’s approach to entrepreneurship education by MS&E Professor Tom Byers. The teams worked together on entrepreneurship-education projects that they planned to implement upon their return home, and throughout the visit, they gathered feedback and insights to incorporate into their work.
[quote_right]“The Faculty Fellows Program works within an important part of STVP’s mission, to support entrepreneurship education at a global level.”[/quote_right]Rebecca Edwards, STVP’s manager of global programs, said the Faculty Fellows Program aims to provide professors and administrators in other countries with a forum to think deeply about cultivating an entrepreneurial ecosystem within their universities – while learning from peers from around the world.
“The Faculty Fellows Program works within an important part of STVP’s mission, to support entrepreneurship education at a global level,” Edwards said. “Our students come from all over the world and graduate into a global community, and so it’s our responsibility to participate in the conversation with our colleagues from around the world.”
STVP Faculty Fellows meeting at Stanford
The team from Lithuania was led by Professor Monika Petraite, dean of the social sciences faculty at Kaunas University of Technology. The campus has about 12,000 students – many coming from Kazakhstan and countries in the Middle East – and a teaching staff of just over 1,000. During her team’s opening presentation on July 29, she discussed the need for entrepreneurship education in the university’s engineering curriculum.
Actually, an entrepreneurial ecosystem appears to be taking root in Lithuania. Kaunas has an “entrepreneurial development center” that it has established in partnership with Aalto University in Finland; and in 2010, Kaunas began work on an integrated technology, science and education center.
But despite these and other efforts, Petraite said the university has failed to build up a “constant flow” of entrepreneurial activities. The challenge, she explained, was figuring out how to implement entrepreneurship education and related activities broadly across the curriculum.
“There is a lot of movement, and there is a lot of hope and energy towards entrepreneurship and innovation,” Petraite said of the current business climate in Lithuania. “Our 21st century economy requires much more entrepreneurial leadership from our engineering students.”
Two weeks later, Petraite and her teammates began the cohort’s closing-presentations session with a five-point outline for implementing their plan. It included enlisting 10 instructors, leveraging their university’s 130,000-member alumni community and launching a visiting-lecture program that will help students sharpen their English. They also listed blogging as a way to generate interest among potential students.
Other teams also expressed optimism after two weeks of being immersed in Stanford’s entrepreneurial culture and engaging with its faculty and peers from the other campuses. This included the team from Armenia, which consisted of a top administrator from the American University of Armenia and two representatives from the local business community.
“The STVP program has helped us better understand how we should establish our entrepreneurship center, the aspects of focus and where we should start,” said Sona Martirosyan, an education-projects coordinator at the Microsoft Innovation Center in Armenia. “We’re more than convinced that this project is going to be a success thanks to the joint efforts, time and resources invested in the Faculty Fellows Program.”
Stanford’s School of Engineering graduates more than 250 Ph.D. students each academic year. Some go on to academic careers doing scholarly research, many join or launch companies using the knowledge they gained in school, and some eventually do both. As a result, a significant number of engineering doctoral students are eager to learn how to evaluate the commercial viability of new technology and how to bring those ideas to life.
There is a new program that does just that.
The Stanford Technology Ventures Program (STVP), in the School of Engineering’s Department of Management Science and Engineering, has just launched the Accel Innovation Scholars program (AIS). The inaugural group includes a dozen Ph.D. students from across the engineering school, including aeronautics and astronautics, bioengineering, chemical engineering, civil and environmental engineering, electrical engineering, materials science and engineering, mechanical engineering, and management science and engineering (MS&E).
From July 2013 through June 2014, the Accel Innovation Scholars will meet once each week to focus on opportunity evaluation, technology commercialization and entrepreneurial leadership. The program includes case studies with guest speakers, workshops, field trips, mentors and group projects – all designed to prepare them to take on leadership roles within an entrepreneurial ecosystem.
[quote_right]“As a Ph.D. student with entrepreneurial leanings, it’s difficult to figure out how to get your ideas out of the lab and into the world.”[/quote_right]“This is the type of program that I wanted when I was a graduate student,” said STVP Executive Director Tina Seelig. “As a Ph.D. student with entrepreneurial leanings, it’s difficult to figure out how to get your ideas out of the lab and into the world.”
Anshuman Sahoo, who expects to earn a Ph.D. in MS&E next spring, was drawn to the program by his passion for combining technology and finance to deliver wide-scale social benefits. This passion can be traced back to a night when he was just 5 years old, lying on the roof of his grandfather’s house in rural India. As a breeze rustled nearby coconut palms, the tranquility was interrupted by shouts of “The power’s out!”
Contrast that innocent memory with his experience upon visiting India again as a college freshman. It was then that Sahoo realized that the blackouts he remembered from childhood are the same ones that force village children to study by the deadly, pollutant-laced glow of wood-burning stoves.
Scholar Anshuman Sahoo with Anaïs Saint-Jude, special projects designer at the Stanford Technology Ventures Program.
Sahoo has since developed a very nuanced understanding of investment-assessment methodologies, both as a student at Stanford and through professional consulting. And whether for a venture capital firm or as an entrepreneur, he says he’s building the expertise to assess different investment opportunities – especially ones that could result in widespread deployment of cost-effective, low-carbon energy technologies in rural India and other impoverished regions of the world.
So, in his remaining time at Stanford, Sahoo hopes to gain a deeper awareness of new and emerging energy technologies, and then learn from his fellow scholars if and how they’ve grappled with challenges of gaining market acceptance.
Eventually, though, Sahoo says he would like to be the person who deploys the innovation that will bring electricity to those who have never had it. “I believe my life experiences and connection to rural India will allow me to not only pursue the unique opportunities in that market,” he says, “but also contribute to the legacy of the Accel Innovation Scholars program.”
The teaching team for the scholars program includes MS&E Professors Tom Byers and Seelig, as well as Jeffrey Schox and Kate Rosenbluth. Schox is an experienced patent attorney with years of experience teaching students how to evaluate the commercial potential of their ideas. Rosenbluth – a former Stanford Mayfield Fellow and BioDesign Fellow at the university this past year – earned a Ph.D. in neuroscience from the University of California, San Francisco.
STVP Special Projects Designer Anaïs Saint-Jude runs the Accel Innovation Scholars program. Saint-Jude previously directed BiblioTech, a Stanford program that connected humanities Ph.D. students with the entrepreneurship community. “In many ways, the programs have much in common,” Saint-Jude said. “Each one of these first Accel Innovation Scholars brings an amazing set of experiences and ideas to the table. We’re truly excited to watch their progress over the next year – and in the years ahead.”
[quote_right]”…it is core to our mission to create programs that open students to the promise of entrepreneurship and prepare them to be innovative and entrepreneurial leaders.”[/quote_right]Byers, the Entrepreneurship Professor in Stanford’s School of Engineering and one of STVP’s faculty directors, summed it up this way: “Especially in the School of Engineering, where a large percentage of the Ph.D. students will go into industry, it is core to our mission to create programs that open students to the promise of entrepreneurship and prepare them to be innovative and entrepreneurial leaders.”
The program is supported by Accel Partners, a leading global venture capital firm headquartered in Palo Alto. Seelig said the idea for the program grew out of a conversation with Accel Partner Ping Li about how the firm might help Stanford students gain the knowledge, skills and mindset needed to pursue their entrepreneurial aspirations.
“My partners and I are delighted to support this exciting new effort,” Li said. “It is clear that the participants are going to make huge contributions to the world.”
‘Being a Part of It’
“The ability to connect what I’m doing as a Ph.D. student to the entrepreneurial landscape is huge,” said Theresa Lynn Johnson, in the Department of Aeronautics and Astronautics. She is entering the final year of her Ph.D. National Science Foundation Fellowship program.
Accel Innovation Scholar Theresa Johnson
Johnson focuses on plasmas and radio frequency wireless engineering. She earned her undergraduate degree at Stanford as well, in the specialty major of Science, Technology and Society. But soon after, she succumbed to the lure of the startup culture around her and joined Apture, a web-enhancement company that has since been acquired by Google.
After less than a year, though, Johnson said she had already gotten restless. So she returned to Stanford and attended graduate school, earning a master’s degree in aeronautics and astronautics in 2010. Now heading into the final year of her Ph.D. program, Johnson is at the spot when many aspiring professors seek out faculty openings.
But she’s also excited about the opportunities presented by entrepreneurship. For years, she has been a teaching assistant in the MS&E course “Technology Venture Formation” and attended STVP’s Entrepreneurial Thought Leaders lectures.
“As a Ph.D. student, I am excited to explore the ways that I can apply my skills to startup ventures,” Johnson said. “I believe that entrepreneurship is the key to impacting widespread societal change, and I know that I want to be a part of it.”
Entrepreneurs eager to win funding for their big idea might be tempted to spend most of their initial presentation to investors discussing their new product, service or feature. But ask any seasoned venture capitalist, and you’ll start to hear a pattern in regards to what else they want to hear: How will the money be spent? What’s the market opportunity and your competitive edge? And perhaps most importantly, why they should believe in your core team members.
Covering the Basics
In the video clip below, Kate Mitchell, co-founder of Scale Venture Partners, puts it bluntly: She wants to hear if the market opportunity is big enough, and whether the team is “relevant” — do its members bring the right skills, experiences and passions.
Her firm sees about 5,000 business plans come in annually. But its partners only spend time on about 150 of them, and in the end, fund somewhere between six to 10, Mitchell said during her Entrepreneurial Thought Leaders talk last May. So her advice speaks volumes.
Heidi Roizen, a venture partner at DFJ, says the pitch needs to get right to the “value proposition.” And when introducing key team members, Roizen says that specifying past successes — particularly on projects with brand-name recognition — establishes credibility.
And while this video is from 2002, it offers a timeless tip. Roizen says that the most important goal of any first meeting with investors is not to convince them to fund your venture, but solely to secure that next meeting.
From the Heart
This final clip captures a one-minute pitch by a speaker with a unique history: Heracio Harts developed a plan for bringing healthier foods and activities to underserved communities while he was in prison.
Harts is a recent graduate of The Last Mile, a program that teaches incarcerated men and women fundamental business and entrepreneurship skills.The program was co-founded by Chris Redlitz and his wife, Beverly Parenti, both of whom also spoke last May as part of the ETL seminar series.
Summer is perfect for catching up on the many things we miss out on from day to day, especially in the world of academia. Yes, it’s true we’re busy preparing for the 2013-14 Entrepreneurial Thought Leaders (ETL) seminar series. But we also think now would be an ideal time to present some of the most popular video clips from the past academic year.
First up is acclaimed charisma coach and author Olivia Fox Cabane, who delivered the most-viewed ETL talk of the fall quarter. Here, she describes how being present plays a crucial role in exuding charisma and explains how humans can perceive a facial expression even over a fraction of a second that signals non-presence — such as your eyes glazing over.
“Presence is the single most requested aspect of charisma when I’m coaching executives,” Fox Cabane said. “They want to increase their boardroom presence or their executive presence, and they’re right to focus on it.”
Now, when technology sage Tim O’Reilly told his audience to think about doing less, he wasn’t suggesting they go out to the backyard and nod off in a hammock. The phrase “do less” summed up a trend he sees in technology whereby we no longer need to actively input data — like location — into our devices because so much “implicit context” is already contained in them.
In this clip from his March 2013 talk, the renowned technology investor conveys this concept through the app Square, which lets businesses using the app know when someone who also has it running on their smartphone is in the vicinity. No introductions needed (although, as O’Reilly points out, some sort of greeting would still be nice).
Solutions Over Ideas
When the co-founders of the news app Pulse spoke at Stanford last spring, a pearl of wisdom they imparted was that entrepreneurs should first focus on solving a problem that matters to users. Ankit Gupta, who earned a master’s degree in computer science from Stanford, speaks from experience in the clip below about how pursuing one’s own idea just because it’s clever — but devoid of any real-world demand — may be all for naught.
The Stanford Technology Ventures Program thanks DFJ for supporting the Entrepreneurial Thought Leaders seminar series. ETL talks will resume in the fall, with the first one scheduled on Oct. 2.
Researchers at Stanford have found that making bankruptcy laws less punitive motivates the most promising entrepreneurs to start successful businesses. The new study introduces the concept of a “failure barrier” and how lowering it can yield powerful and positive economic results.
Experts in Stanford’s Department of Management Science and Engineering (MS&E) studied entrepreneurial activity in Japan before and after the nation reformed its bankruptcy laws in 2003. The laws went from being a mechanism for punishing poor managers and forcing debt recovery, to a more forgiving set of policies that allowed executives to keep their jobs and reorganize their failed firms.
The study’s authors found that the rate of firms launched by “elite” entrepreneurs more than doubled after the overhaul. They also reported that firms launched a year after the policy change grew 44 percent faster than similarly aged firms founded prior to the overhaul — and that the highest-performing firms were founded post-reform.
The study’s insights into the mechanisms of new-firm growth represent a unique contribution in the area of entrepreneurship research. The findings also have implications for government policy: showing that bankruptcy reform can spur economic activity, as well as motivate the “best” — not just the most — individuals to become entrepreneurs.
“We found that the regulations and beliefs that only directly affect firms at the end of their lives, profoundly affect how new companies form, who forms them, and increased their early performance,” said Robert Eberhart, a research scholar in MS&E, a department in Stanford’s School of Engineering.
Co-authors of the study include Chuck Eesley, an assistant professor in MS&E, and Kathleen Eisenhardt, the Stanford Warren Ascherman M.D. Professor in MS&E. Both Eesley and Eisenhardt are on faculty at the Stanford Technology Ventures Program (STVP).
Eberhart leads the Stanford Project on Japanese Entrepreneurship, which aims to better understand the global implications of a new entrepreneurial dynamic in the world’s third largest economy. The project is based at STVP and Stanford’s Graduate School of Business.
“We found that the regulations and beliefs that only directly affect firms at the end of their lives, profoundly affect how new companies form, who forms them, and increased their early performance.”
Previous studies have shown how lowering the barriers to entry for entrepreneurs — providing subsidies and streamlining procedures, for instance — results in more people across the board starting their own businesses. This latest research looks at a different aspect by focusing on “failure barriers,” such as making bankruptcy laws less punitive.
The Stanford researchers say that lowering such barriers can be particularly effective for motivating more educated and experienced individuals to start their own companies. As other studies have shown, this group of entrepreneurs is more likely to launch high-performing ventures — and so, policies that support those entrepreneurs should be a high priority.
In their study, the authors say the rate of firms formed by elite entrepreneurs — those who graduated from one of Japan’s top universities and were over the age of 40 — more than doubled after bankruptcy laws were reformed.
The study is also unique in that it encompasses the more complex and realistic ecosystem that encompasses business failures, the founding of new firms, types of entrepreneurs and other factors. For instance, making bankruptcy less punishing can prompt elite entrepreneurs to leave marginal firms and start new ones — even leveraging the assets of failed businesses to strengthen theirs.
“… bankruptcy law is a powerful policy lever available to governments because it motivates the best qualified individuals who are most likely to succeed to become entrepreneurs.”
Indeed, the study’s authors say that lawmakers looking to spur entrepreneurial activity would do well to make failure less daunting for elite individuals — as they risk the most, and are the ones more likely to launch successful, job-creating companies that are the darlings of public policy.
“We found that bankruptcy law is a powerful policy lever available to governments because it motivates the best qualified individuals who are most likely to succeed to become entrepreneurs,” the authors conclude. “Lowering failure barriers is thus the ‘other side of the coin’ from lowering the growth barriers that ‘pull’ elite individuals into starting firms.”
Understandably, just as the rate of companies founded by elite entrepreneurs increased after Japan reformed its bankruptcy laws, the likelihood of them declaring bankruptcy also rose, the authors reported.
But they also assert that, if entrepreneurship is part of the “perennial gale of creative destruction” that propels an economy forward, governments can “strengthen” that gale by adopting laws that reasonably minimize penalties when entrepreneurs fail.
The study was funded and supported by The Miner Foundation, Michael Alfant, Cisco Systems, and Best Buy, Inc.
In the world of academia, a sabbatical is a time to reflect on the past and plan for the future, take on a major project, and explore new directions in one’s career. In 2011, Joseph Tranquillo – an associate professor of biomedical and electrical engineering at Bucknell University – was searching for a place where he could immerse himself in a culture that would challenge him on all three accounts.
Tranquillo found exactly what he needed this past year at the National Center for Engineering Pathways to Innovation. Also known as the Epicenter, the national initiative’s office at Stanford University served as his academic home-away-from-home during his sabbatical.
As a member of the engineering faculty at Bucknell, Tranquillo was already attuned to the importance of instilling an entrepreneurial mindset in his students. So, as a visiting scholar in Stanford’s Department of Management Science and Engineering, Tranquillo conducted research at the Epicenter in which he interviewed leaders in entrepreneurship education to collect best practices and help develop a framework for diffusing them out to engineering faculty.
The Epicenter was fortunate to have such an enthusiastic educator do research that supports its mission to unleash the entrepreneurial potential of undergraduate engineering students across the United States. With his 10 months at the Epicenter and STVP recently ended, we asked Tranquillo to discuss what insights he gained during his 10 months at the Epicenter and STVP – and what his plans are for fostering entrepreneurial education back at Bucknell.
STVP: What compelled you to want to spend your sabbatical as a visiting scholar at the Epicenter?
JT: I first met Tina Seelig [Executive Director of STVP] at the 2011 NCIIA OPEN conference. The following year, I met the STVP team at the 2012 OPEN conference. The 2012 conference was also where the Epicenter was unveiled. I immediately saw the culture I wanted to be a part of and a way to contribute to the faculty development initiative of the Epicenter.
STVP: What were some of the findings from your Epicenter work?
JT: My primary project with the Epicenter was to interview leaders in entrepreneurship education to collect successful practices and tools and to help develop a framework for diffusing them out to engineering faculty.
One of the most important themes that arose from the interviews was that engineering faculty members will need both inspirational stories and concrete resources and tools to move them to integrate entrepreneurship into their engineering curricula.
A second interesting finding was the mapping of faculty “archetypes” to the traditional adopter types used by marketers – for example, what a faculty early adopter might look like. It has changed my view of how to motivate faculty.
STVP: What was the most valuable lesson you learned?
[quote_right]”The simple idea that I’m an academic entrepreneur has changed the way I think about my job as a professor. Where as before I was not consciously approaching new initiatives as an entrepreneur, I now have a series of tools and a mindset.”[/quote_right]JT: There are too many lessons to communicate here, so I will focus on only three. First, I began thinking of myself as an entrepreneur. In one of my first STVP meetings, I did not self-identify as an entrepreneur. I was quickly corrected and reminded that I have created a number of academic prototypes, ranging from simple lesson plans to entirely new programs, such as the Bucknell Biomedical Engineering Department and KEEN Winter Interdisciplinary Design Experience.
The simple idea that I’m an academic entrepreneur has changed the way I think about my job as a professor. Where as before I was not consciously approaching new initiatives as an entrepreneur, I now have a series of tools and a mindset.
Second, I was able to see up-close the power of a “yes, and …” culture. I had read a lot about the idea and had used it in my classes and committees, but I have never been in a place where everyone has a “yes, and …” attitude. I found that this really fostered a “try it” attitude, and I was amazed how often an idea was expanded from a silly initial seed to a profoundly important contribution.
Third, I learned how fruitful it can be to recombine hobbies and interests with professional activities. I have always had multiple interests, but typically my private and professional lives have remained separate from one another. STVP, and Stanford in general, has such permeable boundaries that it inspired me to break down the walls between my interests. For example, I started to write a book called Moving Analogies on the combination of my love of dance and teaching engineering concepts.
STVP: What was the most surprising?
JT: There were so many surprises, that again, I cannot possibly list them all. Perhaps the most profound surprise was how generous members of the Stanford community were with their time. Tina, as well as Stanford faculty and Epicenter leaders Tom Byers and Sheri Sheppard listened to my wild ideas, encouraged me to take risks and invest in new approaches. I was able to meet some of my heroes – from Terry Winograd, a pioneer in artificial intelligence, to having regular lunches with Ron Schafer, whose classic textbook in digital-signal processing I waded through as an undergraduate.
A second surprise was my contact with groups from Aalto University in Finland and Universidad del Desarrollo and Pontificia Universidad Católica in Chile. I first met with faculty from these three universities at Stanford but later had the opportunity to visit their campuses. It was an unexpected treat to see how other universities and countries are fostering innovation ecosystems.
Third was how I was able to bring out one of my passions – dance. I did not expect to lead a contact improvisation class at Google, or consult for the Capacitor Dance Company on one of their latest projects, Synaptic Motion, or have the thrill of working with Aleta Hayes and the Chocolate Heads. Aleta and I later teamed up to teach one of the inaugural pop-up classes at the Stanford d.school, “How to Be a Cyborg.”
STVP: What’s your plan for fostering entrepreneurial education at Bucknell University?
JT: I am excited to return to Bucknell for a few very big professional reasons. First, Bucknell like many other schools, is incorporating entrepreneurship throughout the curriculum. And that extends far beyond engineering. For example, Bucknell has introduced a new minor in “arts entrepreneurship,” which will help students weave marketing and business principles – along with other skills – into their artistic efforts.
There is also energy and a great deal of work that has already gone into building a Medical Innovation Ecosystem centered at Geisinger Health Center and Bucknell. With my experience in the STVP, I am well positioned to contribute to these new initiatives in important ways.
I have also taken on the co-directorship of Bucknell’s Institute for Leadership in Technology and Management (ILTM). The program has been very successful for the past 20 years, and I have taken on the role at a particularly interesting time. Several other similar programs are forming and ILTM will serve as a template. Again, I know I will use a lot of what I learned at STVP in helping these new groups get off to a good start.
STVP: How successful do you think you’ll be?
JT: The most important mindset I took away from my sabbatical is to measure success by the metrics of impact and learning. I spent a good portion of my life with a fixed mindset – having static goals that were often defined by someone else. Before my sabbatical I was inching toward a growth mindset, one where goals are not as black and white. I was able to fully embrace this mindset at STVP and the Epicenter.
I don’t know yet if my efforts at Bucknell will be successful by fixed measures, but I am very confident that I, and Bucknell, will learn a great deal in the process, and that our efforts will be impactful.
Advances across all fields – from communications and manufacturing, to health and defense – have been fueled by America’s engineering workforce in recent decades. But beyond technical expertise, today’s engineers must possess an entrepreneurial mindset in order to be the innovators of tomorrow. While this philosophy is core to the legacy and practice of innovation at Stanford, demand for entrepreneurship education is also growing rapidly among engineering students and faculty around the country.
That’s why we’re part of the National Center for Engineering Pathways to Innovation – also known as the Epicenter. Managed by the Stanford Technology Ventures Program and the National Collegiate Inventors and Innovators Alliance (NCIIA), the Epicenter was established in 2011 to expand the infusion of entrepreneurship into undergraduate engineering education.
[quote_right]But beyond technical expertise, today’s engineers must possess an entrepreneurial mindset in order to be the innovators of tomorrow.[/quote_right]Along with Stanford mechanical engineering Professor Sheri Sheppard, a principal investigator at the Epicenter, and Phil Weilerstein, executive director of NCIIA, we examined the importance of entrepreneurship efforts in engineering education in a new article featured in the summer issue of The Bridge – a quarterly journal of the National Academy of Engineering.
In the article, we touch on the growing body of research that shows entrepreneurship education gives engineering graduates solid experience in product design and development, prototyping, technology trend-spotting and market analysis. Other studies have shown that students who take part in entrepreneurship programs as undergraduates gain insights not available from traditional engineering education – such as understanding business basics and solving open-ended problems.
We also point out that support for entrepreneurship is expanding beyond business schools on campuses around the country – and is specifically being identified as a high priority at the national level. Two examples include the National Science Foundation’s funding of programs such as Innovation Corps and the Epicenter.
[quote_right]One study of engineering students found that two-thirds of them “agreed that entrepreneurship education would broaden their career prospects and choices.”[/quote_right]Another factor in play is the evolving attitudes of students and faculty toward entrepreneurship education. One study of engineering students found that two-thirds of them “agreed that entrepreneurship education would broaden their career prospects and choices.” Meanwhile, according to a recent survey by the American Society for Engineering Education, about half of faculty and administrators responded that access to entrepreneurship programs is important for their engineering undergraduates.
Essential to increasing entrepreneurship education, of course, is engaging faculty and getting their buy in. To that end, we found that devoting resources and providing incentives encourage implementation. And on the student side, one strategy that has worked quite well takes after the NCIIA’s Invention to Venture workshop: where “student ambassadors” are trained to hold events, run competitions and exemplify the path toward becoming an innovator.
[quote_right]We and others have called for an expansion of teaching entrepreneurship from a process-based approach – with known inputs and outputs – to a methods-based approach that supports iteration and more spontaneous creativity.[/quote_right]Another key will be thinking of new ways to approach entrepreneurship education. For instance, we and others have called for an expansion of teaching entrepreneurship from a process-based approach – with known inputs and outputs – to a methods-based approach that supports iteration and more spontaneous creativity. In addition, web-based resources in the form of podcasts, videos and massive open online courses are ushering education into a new and promising era.
And looking ahead, we urge each of the following stakeholder groups in undergraduate engineering education to consider the following questions and actions:
Students: Ask questions of your professors, administrators and fellow students. Where does entrepreneurship fit into the educational picture at your school? What opportunities already exist for you?
Engineering faculty: Consider the role of entrepreneurship in all facets of your work, from teaching to research. How might the subjects you teach connect to engineering and business practice? How might your students benefit from seeing this larger context for their technical learning?
Academic administrators: Speak with your faculty, students and alumni about their attitudes about entrepreneurship. How have elements of entrepreneurship and innovation added to their professional success? How might additional training in these areas contribute to future success?
Industry leaders and representatives: Reflect on how your operations use engineers with an entrepreneurial approach and mindset. How can you engage academic program faculty in discussions about the key entrepreneurial skills and abilities you need in your engineering ranks?
Beginning these conversations can expose connections between motivated individuals and groups and yield opportunities for expanding the innovative and entrepreneurial ecosystem at your institution.
With the growing support of entrepreneurship in the engineering community, we are confident that 21st century engineering graduates can and will be equipped with the ability to address the challenges of the coming decades in innovative and economically beneficial ways.
“Regardless of whether it’s a classroom or the offices of a billion-dollar company, space is something to think of as an instrument for innovation and collaboration,” Stanford d.school founder David Kelley says in the foreword for make space. “Space is a valuable tool that can help you create deep and meaningful collaborations in your work and life.”
The d.school — formally, the Hasso Plattner Institute of Design at Stanford — teaches design thinking to graduate students in what many would consider a maker’s paradise in the middle of campus. The book make space chronicles the d.school’s experiences in designing its interior features, instructing readers how to replicate its unconventional furnishings and, just maybe, its extremely creative atmosphere.
We at STVP think a lot about space, too. Currently, our office is quite open, and everything in it — from the desks and chairs to the storage shelves — are movable. Over the summer, we plan to reconfigure our space in a way that will both continue to foster staff interaction and designate areas for the various activities that take place throughout the year.
We’ll share before-and-after photos later this summer on Facebook and Twitter. So be sure to follow us!
Staying Hungry and Humble
In the video clip below, Facebook’s engineering director, Jocelyn Goldfein, tells STVP Executive Director Tina Seelig about the unfinished ceilings, bare concrete floors and bold phrases — such as “Move Fast and Break Things” and “Fail Harder” — written all over the walls of the company’s headquarters.
“The entire environment is meant to keep you from feeling complacent, or comfortable, or like we’ve won,” Goldfein explained during her May 22 Entrepreneurial Thought Leaders talk. “We never want to feel like we’ve won. We always want to feel pretty hungry.”
Being Out in the Open
In this clip, Spotify Co-Founder Daniel Ek shares how he manages to lead a growing company with a workforce distributed on multiple continents. “I don’t think the physical experience can be replaced yet,” says Ek, who admits to traveling extensively and sitting out in the open to encourage conversations in his company’s offices.
In this conversation with entrepreneur Steve Blank, inDinero Co-Founder Jessica Mah offers a humorous story about the dangers of young startups moving into fancy office spaces. She described how one of the luxuries in hers included a hot tub — a particularly amusing admission to Blank, who invested in inDinero.
But Mah went on to say how inDinero then moved much closer to home: into an apartment down the hall from her own unit. “It’s cheaper,” she said. “Everyone’s in a small room together. So you really feel like you’re in it together.”
Late last month, a flurry of wild ideas blew through the Palo Alto offices of Citi Ventures, in the form of energetic Stanford students interested in working with financial industry professionals around the future of personal finance.
Putting fun into the personal-finance experience was the aim of a May 30 design challenge led by Stanford faculty Tina Seelig, Leticia Britos Cavagnaro and Rich Cox. The two-hour session gave students the opportunity to work on real-world challenges alongside global executives from Citi Ventures who grapple with them daily.
In true divergent-to-convergent form, the workshop began with the inviting office’s glass panels covered in sticky notes – each bearing a separate idea – and ending with just a handful of concepts that the teams then drilled down on and fleshed out.
Working on teams with the pros, students considered personal finance broadly: from retirement investing and credit card management to fundamental questions such as why we even carry wallets. While some of the ideas proposed were worthy of further exploration, the real goal of the challenge was to let students try out techniques and exercises in creativity taught at Stanford.
Sweet’s team focused on the familiar frustration of having multiple credit cards, each with their own rewards program. One team suggested coming up with a universal card that would allow the owner to distribute charges among various rewards programs online.
For Citi Ventures, the benefit of hosting the design challenge was simply being exposed to the energy and enthusiasm of the students and faculty. As the venture capital arm of the global financial services company, Citi Ventures has taken part in other extracurricular activities and resources for students at Stanford.
As part of an active partnership with STVP, Citi Ventures has participated in a panel discussion on women in entrepreneurship earlier this year during Stanford Entrepreneurship Week, as well as offered free professional mentoring through Coaches on Call.
“We at Citi Ventures were thrilled to be able to collaborate with the Stanford faculty and students in the design challenge, and to support the students in their journey to become great entrepreneurs,” said Debbie Brackeen, Managing Director of Citi Ventures. “The insights and ideas we generated together were awesome.”
Just as personal relationships can be a juicy topic of conversation, a rich area to explore in entrepreneurship is the dynamics between co-founders. Indeed, a recent article on Mashable compared the quest for a business co-founder to “choosing who you want to marry.”
What holds true for both types of partnerships is the advice — often, wearily given — “It isn’t for everyone.” On that note, here are three videos that feature varying perspectives on the perception and value of working with co-founders.
In the video clip below, Instagram Co-Founders Kevin Systrom and Mike Krieger describe their working relationship. Both Systrom and Krieger explain the stages of their relationship, and how the partnership respects each other’s areas of specialty, while also providing a tremendous opportunity to sound out ideas.
Because of this benefit, Systrom explains the co-founder relationship needs to be cherished. Krieger also believes honest and direct communication of expectations can prevent the relationship from wearing down over time.
Real-time Sanity Check
In this clip, entrepreneur Steve Blank asks inDinero Co-founder Jessica Mah about the value of having a co-founder. Mah explains that fellow co-founder Andy Su provides a contrarian opinion to her own, which serves as an invaluable “real-time sanity check” when it comes to making critical decisions.
Yet, while many legendary Silicon Valley companies were founded by teams of two, partnerships aren’t without their problems, venture capitalist Mark Suster asserts in the clip below. Disagreements arise based on personal life changes, business strategies and roles within the company.
And yes, the marriage metaphor comes up again: Suster prefers to avoid playing the role of “marriage counselor” between drifting co-founders by instead working with a strong, individual entrepreneur.
What is the sum of 5 plus 5?
What two numbers add up to 10?
The first question has only one right answer, while the second has an infinite number of solutions, including negative numbers and fractions. These two problems, which rely on simple addition, differ only in the way they are framed. In fact, all questions are the frame into which the answers fall. And as you can see, by changing the frame, you dramatically change the range of possible solutions.
“If I had an hour to solve a problem and my life depended on the solution, I would spend the first fifty-five minutes determining the proper question to ask, for once I know the proper question, I could solve the problem in less than five minutes.”
Albert Einstein once said, “If I had an hour to solve a problem and my life depended on the solution, I would spend the first fifty-five minutes determining the proper question to ask, for once I know the proper question, I could solve the problem in less than five minutes.”
Taking photos is a great way to practice this skill. When Forrest Glick, an avid photographer, ran a photography workshop near Fallen Leaf Lake in California, he showed the participants how to see the scene from many different points of view, framing and reframing their shots each time. He asked them to take a wide-angle picture to capture the entire scene, then to take a photo of the trees close to shore. He then asked them to bring the focus closer and closer, taking pictures of a single wildflower, or a ladybug on that flower. He pointed out that you can change your perspective without even moving your feet. By just shifting your field of view up or down, or panning left or right, you can completely change the image. Of course, if you walk to the other side of the lake, climb up to the top of one of the peaks, or take a boat onto the water, you shift the frame even more.
A classic example of this type of reframing comes from the stunning 1968 documentary film Powers of Ten, written and directed by Ray and Charles Eames. The film, which can be viewed online, depicts the known universe in factors of ten. Starting at a picnic by the lakeside in Chicago, the film transports us to the outer edges of the universe. Every ten seconds we view the starting point from ten times farther out, until our own galaxy is visible only as a speck of light among many others. Returning to earth with breathtaking speed, we move inward — into the hand of the sleeping picnicker — with ten times more magnification every ten seconds. Our journey ends inside a proton of a carbon atom within a DNA molecule in a white blood cell.
This magnificent example reinforces the fact that you can look at every situation in the world from different angles, from close up, from far away, from upside down, and from behind. All day long, we are creating frames for what we see, hear, and experience, and those frames both inform and limit the way we think. In most cases, we don’t even consider the frames — we just assume we are looking at the world with the proper set of lenses.
Being able to question and shift your frame of reference is an important key to enhancing your imagination, because it reveals completely different insights. This can also be accomplished by looking at each situation from different individuals’ points of view. For example, how would a child or a senior see the situation? What about an expert or a novice, or a local inhabitant versus a visitor? A wealthy person or a poor one? A tall person or a short one? Each angle provides a different perspective and unleashes new insights and ideas.
At Stanford’s Hasso Plattner School of Design, or ‘d.school’, students are taught how to empathize with very different types of people, so that they can design products and experiences that match their specific needs. When you empathize, you are, essentially, changing your frame of reference by shifting your perspective to that of the other person. Instead of looking at a problem from your own point of view, you look at it from the point of view of your user.
Another valuable way to open the frame when you are solving a problem is to ask questions that start with, Why?
For example, if you are designing anything — from a lunch box to a lunar landing module — you soon discover that different people have very diverse desires and requirements. Students are taught how to uncover these needs by observing, listening, and interviewing and then pulling their insights together to paint a detailed picture from each user’s point of view.
Another valuable way to open the frame when you are solving a problem is to ask questions that start with, Why? In his need-finding class, Stanford d.school Professor Michael Barry uses the following example:
If I asked you to build a bridge for me, you could go off and build a bridge. Or you could come back to me with another question: “Why do you need a bridge?” I would likely tell you that I need a bridge to get to the other side of a river. Aha! This response opens up the frame of possible solutions. There are clearly many ways to get across a river besides using a bridge. You could dig a tunnel, take a ferry, paddle a canoe, use a zip line, or fly a hot-air balloon, to name a few.
You can open the frame even farther by asking why I want to get to the other side of the river. Imagine I told you that I work on the other side. This, again, provides valuable infor- mation and broadens the range of possible solutions even more. There are probably viable ways for me to earn a living without ever going across the river.
The simple process of asking ‘why’ questions provides an incredibly useful tool for expanding the landscape of solutions for a problem.
This type of thinking can be applied to any industry. For example, the directors of the Tesco food-marketing business in South Korea set a goal to increase market share substantially and needed to find a creative way to do so. They looked at their customers and realized that their lives are so busy that it is actually quite stressful to find time to go to the store. So they decided to bring their store to the shoppers.
They completely reframed the shopping experience by taking photos of the food aisles and putting up full-sized images in the subway stations. People can literally shop while they wait for the train, using their smartphones to buy items via photos of the QR codes and paying by credit card. The items are then delivered to them when they get home. This new approach to shopping has boosted Tesco’s sales significantly.
Companies need to continually reframe their businesses in order to survive as markets and technology change.
Reframing problems is not a luxury. On the contrary, all companies need to continually reframe their businesses in order to survive as markets and technology change. For example, Kodak defined its business as ‘making cameras and film.’ When digital cameras made film photography obsolete, the company lost out badly, because it wasn’t able to open its frame early enough to see its business as including this new technology. On the other hand, Netflix began delivering DVDs of movies by mail. It framed its goals much more broadly, however, seeing itself as being in the movie-delivery business, not just the DVD-delivery business.
Framing and reframing of problems also opens up the door to innovative new ventures. Scott Summit, the founder of Bespoke, created a brand-new way to envision prosthetics for people who have lost a limb. The word ‘bespoke’ comes from Old English and means “custom-tailored” — and that is exactly what his company does: it makes custom-tailored limbs for those who have lost them.
Scott’s biggest insight was that some people with artificial limbs are embarrassed by their disability and want to hide their unsightly artificial limbs as much as possible. He reframed the problem by looking at an artificial limb not just as a functional medical device, but as a fashion accessory. Essentially, he decided to make prosthetics that are cooler than normal limbs.
Bespoke makes its customized limbs using a brand-new technique for 3D printing. Its designers first do a 3D scan of the surviving limb to make sure that the new limb is completely symmetrical with the surviving one. After they print the new limb, they cover it with materials that match the user’s lifestyle. For example, a new leg can be designed to look like a leather cowboy boot, or it can be covered in brushed chrome to match the user’s motorcycle, or it can be cut out to look like lace to match a fashionable dress. Not only is the leg functional, but the wearer is actually proud to display it publicly. Essentially, the prosthetic was transformed from a medical device into a fashion statement.
Reframing problems takes effort, attention and practice, but it enables you to see the world around you in a brand-new light. As indicated, you can practice reframing by physically or mentally changing your point of view, by seeing the world from others’ perspectives, and by asking questions that begin with Why? Together, these approaches will enhance your ability to generate imaginative responses to the problems that come your way.
The power of entrepreneurial thinking not only serves to launch products and organizations. In the actions of individuals and groups, who are passionate about solving problems, entrepreneurial activity can be a catalyst for creating great change. By seeing problems as opportunities just waiting to be seized, we can go a long way in addressing many of the most pressing problems on Earth. To inspire all of us to be change-makers in 2013, here are three inspirational videos featuring passionate leaders who are making change in the world.
Making Change Through Cultural Lines
Using a illustrative example from her experiences in Niger, Melinda Gates, co-chair and trustee of the Bill & Melinda Gates Foundation, talks about developing approaches to increasing contraception access and use, by tapping into the cultural realities and interactions between groups of men and women.
Can Products Save the World?
Serial entrepreneur Jeff Church discusses whether social enterprises can sell products to affect change in the world. As the co-founder of social enterprise Nika Water, Church believes social entrepreneurs can only have lasting success if they start their enterprises as “nine parts business, one part cause.”
Using Serial Innovation to Create Change
Method Products Co-Founder Adam Lowry loves it when competitors copy his company’s products because it means they are changing the rules of the game in their sector. Lowry also explains why this allows his company to innovate in the cleaning products category and pushes their industry to create desired social change.
Check out more entrepreneurial insights on Stanford eCorner.
It’s easy to fall in love with a cool technology or an amazing idea, but can these actually be turned into useful products that customers desire. While visions of huge profits and market domination can begin to dance in the mind of aspiring entrepreneurs, it is a commitment to building valuable products and deeply understanding the problems you are solving for customers that provide the true foundation for success. Here are three videos examining the importance of keeping laser focus on creating products that connect with audiences.
What is a Product?
“Product is everything,” says Smule Co-Founder and CEO Jeff Smith. While his previous (and successful) entrepreneurial experiences taught him the impact of sales, marketing and finance, Smith sees nothing being more important than product. Here he discusses why it’s important to consider what the first demonstratable use case of the product will be, and to work creatively to communicate this to customers.
Are You Building Products Customers Want?
“What customers want isn’t necessarily what you or your engineering team wants to build,” says Jessica Mah, co-founder of inDinero. Here Mah describes the debates that went on inside her company when aligning the desires of the engineering team with new requests for product features. Eventually a strict weekly schedule was implemented at inDinero to provide more insightful customer feedback, says Mah, which provided new insights that would shape the future of the product roadmap.
Show Investors a Working Product
To inspire a vision about the possibilities of a product, entrepreneurs should show investors a working version of their product, says serial entrepreneur Jack Dorsey. In the video below, the co-founder of Square and Twitter explains how this approach also makes the telling of the product’s story easier. Dorsey also shares the amusing (and money-making) technique he used when presenting Square to investors.
Check out more entrepreneurial insights on Stanford eCorner.
Entrepreneurship education is in high demand across the globe. And in the face of headlines bemoaning economic challenges, particularly in Europe, greater numbers of governments and universities are racing to embrace the promise of entrepreneurial skills for students and graduates. However, not all efforts are the same.
To effectively boost the long-term value of these initiatives, a growing number of universities are focusing on a collaborative, multi-disciplinary approach to entrepreneurship education. One of the finest examples exists at Finland’s Aalto University, host of the upcoming Roundtable on Entrepreneurship Education (REE).
“Aalto University is an incredible model, where three established universities have combined to form the perfect entrepreneurship combination … business, technology and design,” says Tom Byers, professor of Management Science and Engineering at Stanford University, who will be attending REE. “I look forward to learning from their experiences and process, as they continue to influence the ecosystem in Finland.”
From September 5 though 7, REE attendees from around the world will convene in Helsinki, Finland, to participate in interactive workshops and engaging presentations to discover the latest approaches to delivering high-growth entrepreneurship education. Leading engineering, business and design faculty will not only be sharing some of their best curricular programs, but looking to connect with other faculty taking entrepreneurship and innovation learning to the next level.
“The REE community explores new opportunities and possibilities,” says Alistair Fee, visiting professor of marketing and innovation at Queen’s University, Belfast. “I want to hear new ideas, get inspired and become energized.”
The theme of this year’s conference is entrepreneurship education as a platform for cross-disciplinary collaboration to bring people together from across subjects, interests, and backgrounds in a university setting. With the energy continually building behind this approach, entrepreneurship has taken its place at the forefront of a new era in education, says Byers.
“This gives us, as educators, the opportunity to think about how to optimize classroom learning. Entrepreneurship educators are often on the vanguard of new teaching methodologies and techniques, and this will be no different.”
For more than a decade, faculty from around the world have connected through the REE experience to discover the latest strategies in experiential entrepreneurship learning. An added bonus in this year’s event is the opportunity to engage within the unique and thriving Aalto/Helsinki ecosystem, where student involvement has driven the entrepreneurship revolution.
A key to the entrepreneurship revolution around Aalto University, and in Finland, was the organized passion of Aalto students when they formed the Aalto Entrepreneurship Society in 2008. The purpose was to bring together engaged students and researchers interested in entrepreneurship. Since then, the Aalto ecosystem has continued to blossom with the development of new programs and offerings, such as the Aalto Venture Garage and the Aalto Ventures Program.
“I am eager to learn more about the robust entrepreneurial ecosystem at Aalto,” says STVP Executive Director Tina Seelig, who also teaches creativity and innovation at Stanford. “I’m also interested in gaining more insights into the opportunities and challenges faced by colleagues across Europe.”
REE Europe 2012 may prove to be a catalyst for generating new ideas around how to address the economic future of Europe. According to Hervé Lebret, senior scientist with the College of Management of Technology at Ecole Polytechnique Fédérale de Lausanne, this may include, “a recognition that Europe does not have strong enough clusters, so that joining forces might be an option.”
No matter what changes come to the larger regional political and economic structures of Europe, the power of entrepreneurship education is here to stay, which according to Fee, is contributing to a new vibrancy throughout Europe.
“People in every country are pushing the entrepreneurship envelope. There has never been a greater need for targeted, active, entrepreneurship – we have a duty to stretch ourselves and our communities to do it better,” says Fee. “Entrepreneurs need lifetime support and access to ideas, material and hope. REE must contribute to the ecosystem.”
Want to see why Helsinki is a top landing spot for entrepreneurs? Watch this video to see why the new era in Finland is built on an influx of bright minds and Aalto University’s open community approach to new ideas.
Last weekend the University held its 121st commencement ceremony in Stanford Stadium. The ceremony not only marks a milestone in the life of each graduate, but it is the moment each of these students join the ranks of Stanford alumni that go on to change the world.
As well as leaving an incredible legacy during their time on The Farm, many of these new alumni will choose entrepreneurship as the way of creating impact on all of our lives. In honor of our newest grads, and the great things we know are sure to come, here is a collection of entrepreneurial insights from some prominent Stanford alums.
Finding the Problem is the Hard Part
Instagram Co-Founder Kevin Systrom believes building solutions for most problems is the easy part; the hard part is finding the right problem to solve. Of course, once you solve the problem in an elegant way, good things can happen.
Here he opens up about how he and fellow Co-Founder Mike Krieger (both Stanford Mayfield Fellows) identified the problems they wanted to solve around sharing photos through mobile devices. Systrom also reminds entrepreneurs to embrace simple solutions, as they can often delight users and customers.
Learn More by Starting at the Bottom
Acclaimed film and television producer Gale Anne Hurd tells the story of leaving a role in marketing to take an entry-level position on a film set, based on a promise she received from a fellow Stanford grad, legendary filmmaker Roger Corman.
It was hard to watch Stanford peers in other industries succeeding during this period, says Hurd, but she values the decision she made to accept the challenge of starting over, making herself indispensible on movie sets and earning the respect of her colleagues.
You Must Take Intelligent Risks
LinkedIn Co-Founder and Stanford alum Reid Hoffman articulates why individuals and companies who do not take intelligent risks will eventually marginalize themselves over time. To completely avoid risk, says Hoffman, is to avoid the moments of incredible opportunity that successful entrepreneurs strive for.
Hoffman describes why companies must take risks to create breakout products and innovations. He also shares the importance of holding and testing contrarian views throughout the entrepreneurial process.
As spring quarter 2012 comes to close on the Stanford campus, here are some announcements and resources we are excited to share. Campus life may begin to slow down, but entrepreneurship activity, education and professional development continue to move at high speed.
New Research Honors
Earlier in May, STVP Co-Director Professor Kathleen Eisenhardt traveled to Stockholm, Sweden, to receive the Global Award for Entrepreneurial Research. The prestigious honor is awarded by a collection of major Swedish institutions, who seek to increase interest in the study of entrepreneurship around the world. We congratulate Kathy on the honor, recognizing her work on “strategy, strategic decision making, and innovation in rapidly changing and highly competitive markets.” See a short video from the ceremony>>
STVP Ph.D. student Douglas Hannah is the winner of the 2012 Gerald J. Lieberman Fellowship. Lieberman was a distinguished scholar and teacher for over 40 years at Stanford, and the fellowship aims to “recognize and promote doctoral students who demonstrate the potential for becoming academic leaders.” Doug joined the STVP Ph.D. program in 2009 and his research focuses on collaborative firm innovation processes and inter-firm networks. Check out Doug’s profile on the STVP website>>
If you missed any of the spring quarter’s DFJ Entrepreneurial Thought Leaders seminars, summer is the perfect time to catch up with the latest videos and podcasts. This quarter featured startup founders, social entrepreneurs and leaders from the publishing and entertainment sectors. Check out the recently added content on ECorner>>
Skill building should be a lifelong pursuit, as there is something revitalizing about the process of learning and striving to master an endeavor or practice. Within business organizations, professional development opportunities are clearly valued by rank-and-file employees, who often pursue skill building or training as a stepping-stone toward career advancement.
But what about the leaders of startups, mid-size companies, and enterprise organizations; what types of skills should they focus on building? For some leaders, it may mean learning new ways to understand the business, right down to the proverbial nuts and bolts of the operation. This is of particular value to those who “fancy themselves as grand strategists and visionaries.”
While leaders often act as if they have all the right answers, perhaps a more authentic approach is admitting when you could use the advice of others.
Another valuable skill is the ability to communicate authentically with colleagues and employees. While leaders often act as if they have all the right answers, perhaps a more authentic approach is admitting when you could use the advice of others, and by doing so, encourage employees to openly bring their best ideas and efforts to bear on the products and culture of a business.
Here are three videos exploring ways entrepreneurially-minded leaders can cultivate these types of skills in themselves — and then reap the benefits of doing so.
See Your Business at Each Level
Entrepreneur Sukhinder Singh Cassidy argues that the judgment to know at what level to examine your business at any given moment is a vital leadership quality. Using a short anecdote from her time at Google, Singh Cassidy explains successful founders and executives must understand the tactical drivers of a business to effectively manage from the top of an organization.
Listen Carefully to Tough Advice
“You must decide how you receive advice,” says Mårten Mickos, CEO of Eucalyptus Systems. Mickos believes this simple, but important, concept is critical for leaders and entrepreneurs who are bombarded by input and challenges from all sides.
Using a story from his experience at MySQL AB, Mickos illuminates the need to re-evaluate positions based on new information and adversities.
The Value of Being Vulnerable
“Leaders who are vulnerable are far more trusted by their employees,” says Ori Brafman, bestselling author of Click: The Magic of Instant Connections. Brafman explains that vulnerability, while often seen as a weakness in business, is a valuable skill that can play a critical role in binding deep, immediate relationships in the workplace.
To illustrate this point, Brafman shares the unique story of a hostage negotiator’s willingness to reveal vulnerability to help form an intense, but unorthodox, business relationship.
Stanford junior Aditya “Adi” Singh had a problem. Struggling to form effective teams to work on projects, and weary of being approached by fellow students mainly searching for a technical “code monkey,” Singh wanted something different.
“There was no platform where students could gather teams effectively,” Singh said. “At social gatherings, people are under such social pressures to put the best foot forward, it can cause people to be misleading, sometimes even verging on lies.”
So Singh and fellow classmate Pukar Hamal began developing farmGeni.us, a platform for connecting members of the Stanford community who have specialized skills.
But after initial development, Singh didn’t know what to do with his budding venture. Enter the entrepreneurship concierge.
The concierge, a new position in the Stanford Technology Ventures Program in Huang Engineering Center, is charged with developing programs and building Silicon Valley relationships that serve Stanford’s entrepreneurship community.
The first person to hold the title is Angela Hayward, who comes to the university from Khosla Ventures.
“Entrepreneurship thrives at Stanford, but entrepreneurship means different things to different people,” says Hayward. “Each student has unique needs, experiences, and appetite for risk, therefore, there’s no such thing as a ‘standard’ entrepreneurship inquiry. Listening and staying connected to students from all over campus is key to the success of this role.”
When Singh reached out for guidance, Hayward met with him to learn about his interests and the new venture. She told Singh about all of the resources available for students on campus and she was able to make connections for Singh with external mentors.
“A large part of what I’m doing is front-line engagement with the wider Silicon Valley community because, even with the extensive resources available at Stanford, there are still times when it’s necessary for students to reach beyond the campus,” says Hayward.
The entrepreneurship concierge, perhaps a one-of-a-kind role in higher education, is supported by Citi Ventures, the corporate venturing arm of Citi.
Debra Brackeen, head of incubation for Citi Ventures, works from the unit’s headquarters in downtown Palo Alto. The group will be providing industry mentors and coaches to students.
“Anything we can do to promote the entrepreneurial spirit at Stanford ultimately benefits all of us in the venture community,” says Brackeen. “Citi Ventures works with internal and external partners to develop the highest new growth opportunities that are relevant to Citi customers and businesses. Supporting the next wave of Stanford entrepreneurs through our work with the concierge and the Stanford Technology Ventures Program is a perfect fit for us.”
As well as serving as the entrepreneurship concierge to all Stanford students, Hayward is charged with managing the Stanford Entrepreneurship Network (SEN), a federation of over two dozen, campus entrepreneurship programs and student groups. Hayward’s work in growing this organization is a critical component to expanding the entrepreneurial ecosystem at Stanford.
“Participating in SEN is extremely important to our group,” says Keren Ziv, co-president of the Association of Industry-Minded Stanford Professionals, an organization supporting post-doctoral scholars. “We are slowly changing the current view of postdocs as ‘scientists only.’”
The entrepreneurship network is expanding what it has to offer through a renewed customer orientation to serving students, a focus on increasing cross-disciplinary connections and a deeper engagement with student groups developing their own Silicon Valley resources.
Mary McCann, president of BASES, the Business Association of Stanford Entrepreneurial Students, says she believes students would be interested in working with Hayward to “see what niches can be filled at Stanford in the entrepreneurship scene.”
“We are currently doing a field test to see what is missing as a entrepreneurship resource at Stanford, and we hope to share this information with Angela so that she and the rest of SEN can help us fill those gaps,” McCann said.
While the work to build network resources continues, student entrepreneur Adi Singh says he is already encouraging fellow students to take advantage of having access to the concierge.
“Every time we meet, Angela’s approach lets us know where we stand,” says Singh. “Just knowing all the options we have is extremely helpful.”
Each quarter STVP offers a number of courses to help students build the vital entrepreneurship and innovation skills and experiences needed to start new ventures or to become innovative employees and citizens. Our course lineup for spring quarter 2012 is below, featuring courses in marketing, innovation, entrepreneurial management and more.
Plus, all students interested in entrepreneurship should register for the DFJ Entrepreneurial Thought Leaders Seminar, a one-unit class that offers the unique opportunity to hear the first-hand insights and experiences of an incredible collection of entrepreneurial leaders. Watch and listen to previous DFJ ETL lectures on ECorner.
Only available to students selected for the Mayfield Fellows Program, this first section of the three-part MFP course sequence focuses on understanding management and leadership within high technology startups. Students work with engineering faculty, founders, and venture capitalists, as they explore issues of organizational development, financing, recruitment and market strategy. Learn about the 2012 Mayfield Fellows.
MS&E 178: The Spirit of Entrepreneurship
Instructor: Toby Corey
This course teaches students to think like a successful entrepreneur by learning how to analyze key parts of various startup business models. The course uses the speakers at the DFJ Entrepreneurial Thought Leader seminar (MS&E 472) as the source of the companies to be explored.
Students meet before and after each DFJ Entrepreneurial Thought Leaders seminar to prepare and debrief, respectively.
This course examines classical and contemporary organization theory. Students will explore the behaviors of individuals, groups, and organizations, and come to understand why certain behaviors impact the management of organizations.
Enrollment preference is given to MS&E majors.
How do you market technology-based products to a global audience of customers? Learn how in this course that examines cases of startups and other technology firms that are doing this work.
Students will not only learn how to target markets and build partnerships, but will also tackle issues of sales, negotiations, outbound marketing based on real-world examples.
Prof. Tom Byers
MS&E 276: Entrepreneurial Management and Finance
Instructor: Tom Byers
Limited enrollment. Prerequisites: MS&E 140 and ENGR 60, or equivalents.
This course places an emphasis on managing high-growth ventures, especially those based on technology products and services. Students will develop a set of skills and approaches to becoming effective entrepreneurial managers. Topics covered in the course will include opportunity recognition and selection, raising capital, financial management, operations and organizational administration.
This popular and highly experiential course explores the variables that stimulate and inhibit creativity and innovation in individuals, teams and organizations. Through classroom activities, design challenges and interactions with visiting experts, students will learn that every problem is an opportunity for a creative solution.
The DFJ Entrepreneurial Thought Leaders Seminar is a weekly speaker series that presents innovators from across the business, finance, technology, and philanthropy sectors, to share their insights with aspiring entrepreneurs. Through MS&E 472, students have the opportunity to learn real world knowledge from prominent leaders and entrepreneurs.
DFJ Entrepreneurial Thought Leaders Seminar Speakers – Spring 2012
April 11: Jeff Church – Co-Founder, NIKA Water
April 18: Gale Anne Hurd – Television/Film Producer & Screenwriter
April 25: Frank Quattrone – Founder & CEO, Qatalyst Partners
May 2: Rebeca Hwang – CEO, YouNoodle & Elizabeth Samara-Rubio – Founder, StorWatts
May 9: Brian Murray – President & CEO, HarperCollins Publishers
May 16: Daniel Ek – Co-Founder, Spotify
May 23: Adam Lashinsky – Author, Inside Apple
May 30: Drew Houston – Co-Founder & CEO, Dropbox
From now through March 7, member organizations of the Stanford Entrepreneurship Network are presenting events as part of Entrepreneurship Week (E-Week) 2012. Members of the Stanford community, as well as the general public, can enjoy lectures, workshops, networking events and conferences, all celebrating entrepreneurship-related activity.
The entrepreneurial spirit runs strong at Stanford, and the Stanford Technology Ventures Program (STVP) is offering a number of opportunities for students and others interested in developing their entrepreneurial mindset.
There are two ETL seminars taking place during E-Week. The lectures are open to the general public, and will take place on Wednesday, February 29 and March 7, respectively. DFJ ETL seminars run from 4:30 – 5:30 pm in NVIDIA Auditorium at Huang Engineering Center. This series is generously sponsored by DFJ.
On February 29, Kristina M. Johnson, former undersecretary for Energy at the United States Department of Energy will speak at ETL. At the DOE Johnson focused on bringing greater cohesion to energy and environmental programs at the federal level. Prior to that role, she served as provost at Johns Hopkins University, and as dean of the Pratt School of Engineering at Duke University. A Stanford alumna, Johnson will be sharing insights on leadership from her time in the public, higher education and private sectors.
On March 7, E-Week 2012 will wrap-up with a special ETL presentation from a mother and son tandem of entrepreneurs. Join us as Sandra and Andy Kurtzig speak to discuss their own entrepreneurial journeys as founders. Sandra Kurtzig transformed the manufacturing software industry when she founded ASK Computer Systems in 1972. Over the next two decades, she would go on to grow the company into one of the largest software companies in the world. She is now the current CEO and chairman at Kenandy.
Andy Kurtzig founded the expert answer website, JustAnswer, in 2003, and previously served as CEO and co-founder of eBenefits, which was acquired by an Inc. 500 company. As well as being a serial entrepreneur, Kurtzig is an active and successful angel investor and philanthropist.
Stanford students are invited to sign-up for E-Week Coaches-on-Call mentoring sessions to be held at STVP. During these “office hours,” students can gather advice from industry professionals representing different fields and areas of expertise. Please note that availability is limited.
Here are coaches available for E-Week 2012:
Feb. 28 – Mark Reinstra, Wilson Sonsini Goodrich & Rosati
Take part in a design thinking workshop on Friday, March 2, aimed at discovering ways to help the Epicenter achieve its mission to create a nation of entrepreneurial engineers. The Epicenter, the National Center for Engineering Pathways to Innovation, is an exciting new initiative dedicated to infusing entrepreneurship and innovation into undergraduate engineering education across the United States. The Epicenter is based at Stanford, and is directed the Stanford Technology Ventures Program.
In this hands-on, fast-paced workshop, participants will apply the design thinking process to tackle the challenge of sparking enthusiasm and engagement from engineering faculty and students to embrace and implement the Epicenter’s mission. Students and faculty of all disciplines, as well as entrepreneurs, engineers and designers are welcome, however, availability is limited for the event and registration is required.
The industrial revolution transformed the business landscape, just as the managerial revolution transformed how we manage large firms. Today, a third revolution, an entrepreneurial revolution, is underway, shaking the very foundations of what we believe about entrepreneurship. What does this mean for entrepreneurs?
As an entrepreneur, Greg was doing everything right according to traditional wisdom and it was killing his business.
Take the example of Greg Whisenant at CrimeReports.com. As an entrepreneur, Greg was doing everything right according to traditional wisdom and it was killing his business. It started several years earlier when Greg’s apartment building had been robbed. Frustrated and feeling a need to do something about it, he joined a neighborhood watch group and offered to map crimes happening in the area.
As Greg continued, he came to believe that mapping the locations of crimes would align and empower the efforts of citizens and police to reduce overall crime in each neighborhood. So then he did everything right according to standard entrepreneurial wisdom: he had a big vision, built a product, landed a customer, raised venture financing and hired a team.
But despite his best efforts, doing everything right was leading nowhere quickly. In fact, after several years, Greg had still landed only one customer. But once Greg changed his process, in the next three years he landed over 2,000 paying customers. So what was the difference?
Several years ago, my co-author Paul Ahlstrom, a serial entrepreneur and experienced venture capitalist, set out to write a book, Nail It Then Scale It. Based on my research and his experience, we worked to describe a new entrepreneurial process. The process we articulated involved nailing your business and, for Greg and all entrepreneurs, the journey should begin by nailing a pain.
…we argued to Greg that he needed to stop building, get into the field and uncover the Monetizable Market Pain—a pain so significant that customers will return your cold calls.
Unfortunately, most entrepreneurs begin with their idea and build a product. Instead we argued to Greg that he needed to stop building, get into the field and uncover the Monetizable Market Pain—a pain so significant that customers will return your cold calls. If you don’t uncover a Monetizable Pain (and we measure that by 50% of your potential customers being willing to return your call), then you probably don’t have a sustainable business worth your blood, sweat and tears.
So how did Greg do this?
He stopped building and started talking to everyday people and police departments. He quickly discovered that everyday consumers wouldn’t pay for his service and that police departments hated his advertising-based business model. At this point, Greg and his fellow founders began to despair, but as they continued to listen (rather than sell), they discovered some crucial pieces of information.
For one, police officers were fascinated by the data possibilities of the website and were excited about leveraging the Internet to increase the quality of their communication with citizens. Police chiefs and officers could now use a data “dashboard” to track trends and daily activity.
As the enthusiasm built in each conversation, the CrimeReports founders learned that police would actually pay them to post their data — advertising wasn’t necessary. As they continued to learn and refine their prototype, the feedback from customers was astonishing. Their customers said things like:
“This blows other choices out of the water.”
“We’ve been trying to do this for years.”
“It used to take us six months to get this kind of data. Now we can get it the next day.”
The number of police departments purchasing the product went from one customer to over 2,000 paying customers in three years. And not only did customers clamor to sign up, but the CrimeReports website jumped in popularity with everyday citizens. Applying the process was nothing short of transformational.
During my first year as a teaching assistant for the DFJ Entrepreneurial Thought Leaders (ETL) seminar, I was as a green as could be. I wanted to go in every direction at once (and I still do). One night, the lead teaching assistant at the time, George Tang, took me aside. “You need to focus,” he said. “You should meet Phil. Phil Libin at Evernote. Phil is a really good guy.” A year later, I found myself in front of that very man.
During his fall quarter ETL lecture, Libin joked, “I was so nerdy the high school chess team wouldn’t hang out with me!” While this may be a joke, you can see he really means it. Along with his enjoyment in entertaining an audience, two other things immediately standout when meeting Phil Libin.
First, Libin excludes an interminable passion about everything he does. You can see his eyes light up when he talks about his early obsession with “transcending the end of the world,” as a youth growing up in Soviet Russia. And a smile always creeps across his face when he mentions an interesting technology he played a part in building.
To Libin, Evernote is a company for the long term, with no exit strategy.
Most of all, Libin is unabashedly in love with his own product, Evernote, an idea and inspiration capturing application. He began his talk by taking a picture of the audience and uploading it to his Evernote account. To Libin, Evernote is a company for the long term, with no exit strategy. Libin is one to choose his passions and go all in. The feeling is infectious.
Second, as George Tang told me a year ago, Libin is a really good guy. He is driven by goals of having a positive impact that are larger than him. His childhood desire of helping humanity preclude the end of the word is just one example.
When merging his startup with another to form Evernote, Libin talked of focusing on the best interests of all the individuals involved. He also applies this principle when Evernote acquires other startups. He stresses working with the cofounders of companies that Evernote acquires to take their product further than they could without it.
This focus on a better product exemplifies Libin’s vision of Evernote as an extension of humanity’s collective mind being used to combat what he sees as a plague of commonplace “stupidity” that threatens apocalypse. He is always thinking about creating products that support the goodness of the world.
Libin’s intense geek-passion for his product and his genuine mindfulness for the common good are qualities that I feel are sometimes overlooked in Silicon Valley. At Stanford, it often feels like startups are popping up everywhere. It is easy to believe that they also happened over night. Listening to the story of an entrepreneur like Libin puts things back in perspective.
Many of the greatest and longest lasting companies were decades in the making. Libin’s experience reminds me of something that a venture capitalist once told me — the best founders are those whose motivations for their company lie in their childhoods. The 100-year companies come from the ideas that inspire founders from their earliest ages. It is a matter of finding what those noble passions are and latching onto them with geek-like intensity.
Enjoy Evernote CEO Phil Libin’s DFJ ETL seminar.
How will you live a more entrepreneurial life in the new year? If you’re planning a new venture or working hard to develop a new technology, a little extra inspiration couldn’t hurt.
The 2011 DFJ Entrepreneurial Thought Leader seminar offered a dynamic group of leaders with different views on the meaning and value of entrepreneurship. However, the impact entrepreneurship plays in changing lives was a similar thread for many of speakers. Here are a few of the most inspirational videos clips from 2011 to help you start the new year off right. And don’t forget to check out the Winter 2012 DFJ ETL line-up.
Entrepreneurship is a Belief System
“You have to believe in something bigger than the business you are trying to address.”
“You have to believe in something bigger than the business you are trying to address,” says Eucalyptus CEO Mårten Mickos.
In this video, Mickos explains why the foundation of an entrepreneurial mindset is a belief system that not only requires a belief in big ideas, but includes believing in oneself and working with others that believe in you.
The Best Time to Start is Right Now
Serial entrepreneur Phil Libin believes now is ‘the best time in the history of the universe” to start a new company. The CEO of Evernote, Inc. magazine’s 2011 Company of the Year, argues that today we live in a geek meritocracy where great products are king.
He encourages entrepreneurs to take advantage of modern distribution tools such as app stores, social conversations, free-mium economics, and smart phone technology.
Why are You Doing This?
“The essence of what you’re trying to do… is to create amazing things that impact all of us.”
Investor Brad Feld challenges entrepreneurs to question why they are pursuing this path. According to Feld, “The essence of what you’re trying to do… is to create amazing things that impact all of us.”
The tactics around entrepreneurial success probably don’t matter very much, says Feld, if you are not working on something you are passionate about.
The winter 2012 edition of the Entrepreneurial Thought Leaders Seminar (ETL) kicks off Wednesday, January 18. Join us at ETL on Wednesdays from 4:30 pm to 5:30 pm, at NVIDIA Auditorium in the Huang Engineering Center at Stanford, to enjoy this quarter’s engaging mix of innovators and entrepreneurs.
Stanford students can sign-up for MS&E 472 to earn one unit of credit for the course. Members of the public interested in earning credit for this quarter’s Entrepreneurial Thought Leaders Seminar should contact the Stanford Center for Professional Development. Visit their online catalog.
We invite you to take advantage of this opportunity to hear first hand from entrepreneurial leaders and pioneering trailblazers from different industries. And for those of you not able to attend in person, you can still enjoy the lecture podcasts and videos available for free on the Entrepreneurship Corner (ECorner) website. You can also enjoy ECorner on-the-go with our free iPhone app.
Deborah Hopkins – Chief Innovation Office, Citi
Twice named by Forbes as one of the most powerful women in American business, Deborah Hopkins visits ETL to discuss Citi’s approach to delivering client-focused innovations and building partnerships with venture capitalists, startups and universities to support emerging technologies and disruptive business models. Hopkins will also share insights gained from holding previous senior positions at The Boeing Company, Lucent Technologies and General Motors Europe.
Alexander Osterwalder – Entrepreneur & Author
Alexander Osterwalder is an entrepreneur, business model innovator, and the co-author of the global bestselling book, Business Model Generation. Join us as Osterwalder discusses his dynamic tools for visualizing, challenging and re-inventing business models. Osterwalder is also the founder of The Business Model Foundry, which offers strategic tools for entrepreneurs and innovators, and he has served as a guest lecturer at Stanford, UC Berkeley and IESE in Madrid.
Ted Zoller – Senior Fellow, Kauffman Foundation
Ted Zoller has engaged in all aspects of the entrepreneurial experience, including time as an entrepreneur, an investor and as a leading entrepreneurship educator. In his current role at the Kauffman Foundation, Zoller performs research and advises the organization’s leaders on creating impactful entrepreneurship strategies and programs. Prior to Kauffman, Zoller oversaw teaching and outreach programs as the director of the entrepreneurship center at the Kenan-Flagler School of Business at the University of North Carolina at Chapel Hill.
Warren Packard – Founder & CEO, Thuuz
Warren Packard is the founder and CEO of Thuuz, a consumer platform for real-time sports discovery, tune-in and sharing. Packard is also a venture partner at Draper Fisher Jurvetson. He currently serves on the Boards of EoPlex, Microfabrica and SeaMicro and leads DFJ’s investments in BinOptica, Hola!, Primet Precision Materials, and YeePay.
Sukhinder Singh Cassidy – Founder & Chairman, Joyus
As the founder and chairman of Joyus, the web’s first premium video shopping network, Sukhinder Singh Cassidy continues to build on her dynamic career as a leading consumer Internet and media executive. Cassidy previously served as CEO of social commerce site, Polyvore, and as CEO-in-Residence with Accel Partners. Join us as Cassidy illuminates her entrepreneurial journey and shares wisdom gained from her roles with global and early-stage companies including Google, Amazon, Yodlee and News Corp.
Reid Hoffman – Co-Founder, LinkedIn; Partner, Greylock
Over the past decade, Reid Hoffman has become a leading voice in entrepreneurship, with successes in the consumer Internet and online payment spaces. Hoffman is the co-founder and executive chairman at professional networking company LinkedIn, and led the company through its first four years into profitability. Hoffman served as executive vice president at PayPal, where he was a founding board member. He is also an angel investor and a partner at Greylock Ventures.
Kristina Johnson – Former US Undersecretary of Energy
Kristina Johnson was the undersecretary for Energy at the United States Department of Energy, where she successfully brought greater cohesion to energy and environmental programs. Prior to that role, she served as provost at Johns Hopkins University, and as dean of the Pratt School of Engineering at Duke University. Dr. Johnson holds dozens of U.S. patents and received the prestigious John Fritz Medal, the highest award in engineering. She earned her B.S., M.S., and Ph.D. degrees in electrical engineering from Stanford University.
Sandra Kurtzig – Founder, ASK Group; Founder & CEO, Kenandy
AND Andy Kurtzig – Founder, CEO & President, JustAnswer
In a special event, technology pioneer and entrepreneur Sandra Kurtzig will speak at ETL, along with her son and fellow serial entrepreneur, Andy Kurtzig.
Sandra and Andy Kurtzig
Sandra Kurtzig transformed the manufacturing software industry when she founded ASK Computer Systems in 1972. Over the next two decades, Kurtzig would go on to grow the company into one of the largest software companies in the world. As the current CEO and chairman at Kenandy, Kurtzig aims to drive innovation and collaboration for manufacturing management in the cloud. Kurtzig is also the managing partner of SLK Investment Partners, a private equity investment partnership.
Andy Kurtzig founded the expert answer website, JustAnswer, in 2003, in response to his need for accurate online medical information. Prior to his current venture, Kurtzig served as CEO and co-founder of eBenefits, which was acquired by an Inc. 500 company. As well as being a serial entrepreneur, Kurtzig is an active and successful angel investor and philanthropist.
Participating in an innovation tournament is a fun and effective way for aspiring entrepreneurs to practice how to leverage resources and take actions to create value.
Based on STVP’s successful Global Innovation Tournament (GIT), this fast-paced, multi-day competition offers teams a chance to solve a mystery challenge to create as much value and impact as possible.
Help students learn skills for idea generation, teamwork, problem solving and value creation, all in an environment of ambiguity and resource constraints.
The educational purpose of the competition is to simulate the experience of being an entrepreneur, in an activity that is suitable for students of all ages. This means learning and developing skills for idea generation, teamwork, problem solving and value creation, all in an environment of ambiguity and resource constraints.
In past years at Stanford, the tournament challenge was to create value from common, everyday objects, such as “sticky notes,” rubber bands and water bottles. The challenges can also be concept-based, such as “Make Saving Money Fun.”
As an organizer, you will select the tournament challenge, set the schedule and organize judges and prizes. You will also promote the tournament challenge online or assign the challenge to local students.
Once the challenge has begun, students will have just a few short days to create as much value as possible around the challenge and to upload a video to YouTube to show a record of their progress.
Once the challenge has begun, students will have just a few short days to create as much value as possible around the challenge and to upload a video to YouTube to show a record of their progress. At that point, judges will evaluate the video entries and winners will be selected.
Try placing emphasis on having fun and unleashing student creativity rather than on any competitive aspects of the tournament.
If you are assigning an innovation tournament as part of a university course, the time period just after mid-term examinations seems to be optimal for performance.
Teams can be of any size, from one person to many. Also, we suggest giving students somewhere between four and seven days, including a weekend, to complete the challenge and upload their video.
Wait to pick your award categories until the judges have seen all of the video entries. Name the awards and assign prizes to fit the submissions that warrant recognition.
Reach out to entrepreneurs and business leaders in your local community for experiential prizes. Some ideas include lunch with a startup founder or business executive, or one-on-one meetings with an angel investor or venture capitalist.
Of course, you could also seek out donations of resources to help young entrepreneurs to build the next iteration of their product.
While some people thrive on competition, others thrive on studying it. Meet Sruthi Thatchenkery — an STVP PhD student, in the department of Management Science & Engineering at Stanford, with a keen interest in understanding competition.
Thatchenkery grew up outside Washington, D.C. and holds an economics degree from Duke University. Prior to her arrival at Stanford, she worked as an analyst at Cornerstone Research. And earlier this year, she received a graduate research fellowship from the National Science Foundation. Thatchenkey sat down to chat about life as a PhD student, her research interests and why competition is still ripe for exploration.
STVP: What made you choose the Stanford Technology Ventures Program?
Thatchenkery: I knew that I wanted to study strategy and management, and at first I was looking at business schools. But when I read the papers that professors were reading, I noticed Kathy Eisenhardt and Riitta Katila were being cited often, and I discovered they were professors in Stanford Engineering rather than the Graduate School of Business. It sounded like a really unique experience, so I decided to give California a try.
STVP: Did you connect with faculty to learn more about the program?
Thatchenkery: Yes. First I checked out STVP’s website, and then I had the chance to meet Riitta at the Academy of Management conference. Riitta was very helpful and generous with her time, as she even agreed to meet with me before I applied to the program.
STVP: What makes STVP’s research program different?
Thatchenkery: One difference is the size. For example, Wharton has closer to 40 people in their department. But here, we are much more focused on technology and high-tech ventures. Because of the great topical fit between my interests and STVP, I thought the size of the program would be a real asset.
STVP: How do you decide what to explore as a PhD student?
Thatchenkery: As a first year, you may have broad interests, and we’re allowed to keep exploring. I know I’m interested in innovation, competition and rivalry, in particular. And what’s really great about the professors here is that as soon as you tell them something you might be interested in, they can really help you focus on the papers you should look at and let you know the open holes in the research that you may want to consider for a second year paper or dissertation. They really help you narrow down what you want to look at so you can eventually make a real contribution.
STVP: What do you mean by “holes” in the research?
Thatchenkery: I mean identifying gaps in the research. In the second year, you pick a topic to write a paper on, which involves a literature review and hopefully a very well defined topic, which is needed to discover a real gap to explore.
STVP: Are there challenges in choosing a topic?
Thatchenkery: Well, conceptually you can identify a real question or gap, but often a big challenge lies in accessing the data you need to truly study something empirically. I know this from my previous consulting work, as it was hard to even gain data from the clients you were working for.
STVP: So getting companies to share data impedes your work?
[quote_right]“… part of the reason there is such a gap is that it’s so hard to figure out what a firm’s competitive moves are and what was their intent in taking a particular action.”[/quote_right]Thatchenkery: It can, but in the case of competition, I think part of the reason there is such a gap, is that it’s so hard to figure out what a firm’s competitive moves are, and what was their intent in taking a particular action. So you usually need to get some inside access to the company.
STVP: What drew you to study competition and collaboration?
Thatchenkery: Initially, I think I was interested in collaboration as understanding formal alliances, or joint ventures versus competition. Now, I think my interests have gone more exclusively into the competition side.
STVP: Do you see any industries especially attractive for study?
Thatchenkery: I do have a particular interest in the auto industry, especially around alternative fuel technologies. Thinking of rivalry, it might be interesting to explore what happens when new technologies enter a mature market. How do you define who your competition is? For example, if you’re Tesla, are you competing with just other electric carmakers, or are you also competing with GM, Ford, and Toyota? I think it would be interesting, as a nascent market emerges, to see if the perceptions of who your competitors are changes over time.
STVP: So do you plan to return to consulting after completing your PhD?
Thatchenkery: I’m actually hoping to go into academia. I found that I prefer the scholarly nature of an academic setting.
Stanford students have exciting opportunities to build their entrepreneurial mindset in winter quarter 2012. As the entrepreneurship center in Stanford’s School of Engineering, the Stanford Technology Ventures Program (STVP) is proud to offer courses, programs and resources that help unlock the Stanford entrepreneurial spirit.
Below you will find course descriptions for the winter quarter, with links to course websites and instructor bios. For course information covering the entire academic year, you can also view the STVP Courses webpage.
[quote_right]”With all of the problems that need solving, the world needs more graduates trained to develop an entrepreneurial mindset of turning problems into real opportunities.” —Assistant Prof. Chuck Eesley[/quote_right]How do you create a successful startup? How does an entrepreneur form a team and gather the resources necessary to create a great enterprise? This class mixes mentor-guided team projects, in-depth case studies, research on the entrepreneurial process, and the opportunity to network and ask questions of Silicon Valley’s top entrepreneurs and venture capitalists.
How do companies and organizations of all sizes maintain creativity and innovation? In MS&E 175, students explore avenues for problem solving in organizations, and develop creativity and innovation skills.
Learn the thinking tools used by creative organizations, teams and individuals to create communities with a lasting culture of innovation.
MS&E 178 The Spirit of Entrepreneurship— 3 units
Instructor: Heidi Roizen
This course teaches students to think like a successful entrepreneur by learning how to analyze key parts of various startup business models. The course uses the speakers at the Entrepreneurial Thought Leader seminar (MS&E 472) as the source of the companies to be explored.
Students meet before and after each Entrepreneurial Thought Leaders seminar to prepare and debrief, respectively.
ENGR 245 offers students the chance to apply emerging entrepreneurship principles, including the “lean startup” and “customer development” frameworks, to prototype, test, and iterate a product. Students will also discover if a profitable business model exists for the product.
Students will work and study in teams or, in rare cases, alone. A proposal is required during first week of the quarter, and can be for software, a physical good, or a service of any kind. Projects are treated as real startups, so students are encouraged to prepare for intense work.
Watch Steve Blank and Ann Miura-Ko discuss lean startups, financing and the product development process.
Students will learn skills needed to market new technology-based products to customers around the world. The course includes case method discussions on examples from startups and global high-technology firms.
The coursework covers targeting markets and customers, product marketing and management, partners and distribution, sales and negotiation, and outbound marketing.
MS&E 280 Organizational Behavior: Evidence in Action — 3-4 units
Instructor: Robert Sutton Limited enrollment; priority to MS&E students.
This course examines organization theory and explores concepts and functions of management. Additional topics to be covered include behavior of the individual, work group, and organization. Work within the course will emphasize case studies and related discussion.
Watch Professor Sutton discuss why organizational structures can often inhibit a manager’s ability to hear the truth.
MS&E 472 DFJ – Entrepreneurial Thought Leaders Seminar — 1 unit
Instructors: Tom Byers, Thomas Kosnik, and Tina Seelig
Required web discussion. Course may be repeated for credit.
The DFJ Entrepreneurial Thought Leaders Seminar is a weekly speaker series that presents innovators from across the business, finance, technology, and philanthropy sectors, to share their insights with aspiring entrepreneurs. Through MS&E 472, students have the opportunity to learn real world knowledge from prominent leaders and entrepreneurs.
DFJ-ETL Speaker Lineup for Winter 2012
Jan 18: Deborah Hopkins – Chief Innovation Office, Citi
Jan 25: Alexander Osterwalder – Entrepreneur & Author
Feb 1: Ted Zoller – Senior Fellow, Kauffman Foundation
Feb 8: Gale Anne Hurd – Film Producer & Screenwriter
Feb 15: Sukhinder Singh Cassidy – Founder & Chairman, Joyus
Feb 22: Reid Hoffman – Co-Founder, LinkedIn; Partner at Greylock
Feb 29: Kristina Johnson – Former US Secretary of Energy
Mar 7: Sandra Kurtzig, AskGroup & Andy Kurtzig, JustAnswer
Enjoy these popular clips from Entrepreneurial Thought Leader seminars in 2011.
MAYFIELD FELLOWS PROGRAM Application Period: December 9, 2011 — February 1, 2011
[quote_right]”Entrepreneurship courses at Stanford have a great reputation for having an appropriate mix of theory and hands-on learning. The Mayfield Fellows Program is legendary on campus, and after several friends recommended MFP, it was too hard to resist applying.”
– John Melas-Kyriazi ’11, MFP[/quote_right]The Mayfield Fellows Program (MFP) is our nine-month work/study program designed to develop a theoretical and practical understanding of the techniques for growing technology companies. Starting in the spring quarter, the program combines an intense sequence of courses on the management of technology ventures, a paid summer internship at a startup company, and ongoing mentoring and networking activities.
It is raining on the first day of Stanford’s DFJ Entrepreneurial Thought Leaders Seminar series, and it couldn’t be more fitting for today’s speaker. David Friedberg is the CEO of The Climate Corporation (formerly WeatherBill), a weather insurance company. In fact, David came up with his original idea for WeatherBill on a rainy day in San Francisco.
“Founder isn’t really a role. It’s really not a role that I like.”
On his daily commute through San Francisco, Friedberg noticed that rain regularly closed down a bicycle shop that caters to tourists. Soon after, Friedberg would go on to found The Climate Corporation on the observation that so many businesses are affected by the weather. But David Friedberg hates being called a founder. In fact, he says that when his venture capitalists introduce him as the “founder” of The Climate Corporation, he tells people, “Founder isn’t really a role. It’s really not a role that I like.”
Friedberg is a person focused on solving problems. He describes this as “revealing truth and fact,” and he doesn’t hang on to the founder title like others do. Instead, he is practical. He takes the executive position bluntly stating that “I’m the CEO of the company today, and I might not be the best CEO tomorrow.” He is blissfully truthful about his no nonsense role in the company.
He has built a multimillion dollar funded company in a short while, pulled everything together, and readily admits he would be ready to remove himself if/when he is no longer the right person for the job. That is a really intimidating statement to hear, especially coming from someone as obviously talented as Friedberg.
Listening to Friedberg, I sheepishly think of my own LinkedIn profile, where the title of “Founder” is plastered in at least one or two places in connection with some of my previous side projects. I am tempted to skirt over to my profile for some quick resume tidying, but then a question comes to mind: What is a founder?
Continuing with his lecture, Friedberg projects two pictures on screen for the audience. One of the pictures is of a “rock star” founder, just having made his exit — an image commonly featured by Fast Company and Forbes. The other picture is of the archetypal “real” founder, sleep deprived, running on caffeine, and near the end of his rope.
Seasoned entrepreneurs, CEOs, professors and founders alike tell us that the “rock star” picture is a fantasy.
The former image is a Silicon Valley dream boy, a ubiquitous legend not only in the Valley, but also in pop culture. It is simultaneously the joke of Silicon Valley, while inadvertently being a false representation of the Valley and the entrepreneurial community at Stanford. Seasoned entrepreneurs, CEOs, professors and founders alike tell us that the “rock star” picture is a fantasy.
The second of David Friedberg’s pictures looks more like a Stanford computer science student scraping away at the last bugs in a systems assignment, or in Friedberg’s case, a startup. In fact the difference between the two might be minuscule. Students straining on Redbull aren’t much different than those founders pulling late nights on Starbucks. This latter image is a dose of reality, and Friedberg has some statistics to further the point.
According to Friedberg, the odds of starting a company and having it be worth $1 billion dollars in 49 months after founding are about 0.0006%. After accounting for average dilution, this is the equivalent of earning a $73,000 annual salary. But you also have a 67% chance of making absolutely nothing at all. The audience laughs at this, but are we convinced?
It seems there are more people in my Stanford class who are going to be “founders” than employees. I have more Silicon Valley business cards with “founder” on them than anything else. And how often do you hear the phrase “YC Founder” from Y-Combinator, Paul Graham’s premier accelerator? Sometimes I wonder how we have anything but single person LLCs in Silicon Valley. Stanford and Silicon Valley rightly lionize the act of taking initiative, but where is the line between taking initiative to solve real problems and taking initiative for initiative’s sake?
A trend of some of the friends/entrepreneurs I look up to most is to label themselves “janitor at Stealth Startup” on their LinkedIn profiles. It’s a humorous, self- deprecating poke at their predicament. Janitors clean up messes. It isn’t a frilly job, but a janitor’s role is indispensable. To put it simply, janitors solve problems.
“I don’t want to say be entrepreneurial,” says David Friedberg. “I want everyone in this room to walk away from this discussion today, reflective about what it is you want out of life and then make a choice that is based on some of the things that I am trying to tell you about today.”
As the lecture ends, the rain gives the crowd a break as they trickle from NVIDIA Auditorium on the Stanford campus. The crisp California evening air brings clarity, and I am reflecting on Friedberg’s advice.
And weighing a career in janitorial work.
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“Good fortune is what happens when opportunity meets good planning.” This is how entrepreneur Thomas Edison viewed the role of luck in one’s life and work. But no two people see luck in quite the same way. Each person’s life experiences, beliefs and expectations mingle together to create a willingness, or refusal, to place much stock in the idea of luck. For example, it’s hard to image ol’ Thomas Alva religiously playing the lottery each week — he was probably too busy getting things done.
In a recent essay for the New York Times, Jim Collins and Morten T. Hanson discuss what luck is really about in successful entrepreneurial enterprises. Having completed a nine-year research study on such organizations, Collins and Hanson do not see luck as abstract occurrences, but as identifiable events. Give the article a read to see how companies like Microsoft and Progressive Insurance handled these luck events, and eventually leveraged them to create ROL — return on luck.
Here are some technology business leaders, who recently visited the DFJ Entrepreneurial Thought Leaders seminar at Stanford, sharing their opinions on the role they hold for luck and the unknown in startups and product development.
Getting Rid of Luck
“Your pursuit should always be to remove the unknown from the equation,” says The Climate Corporation CEO David Friedberg. In this clip, Friedberg shares why this is a fundamental premise in building a successful venture. He also teases apart the different roles that risk and uncertainty play in fully understanding a business.
Luck is Committing to Big Bets
Evernote CEO Phil Libin explains how Evernote creates a great deal of luck by making big bets on which platforms to support. In this amusing and insightful anecdote, Libin tells how Evernote developed their application to work on Apple’s iPad by using cardboard cutouts of the device.
Doing What’s Right Creates Luck
According to Trip Adler, the founder of Scribd, luck is not what made the launch of his company successful. “It wasn’t luck, we were just doing things right,” says Adler. Rather than waiting for good fortune, Adler definitely aligns with the Edison approach to creating your own good fortune. Enjoy this video on eCorner to watch Adler explain how luck comes to any entrepreneur who works hard and remains persistent in trying to reach his or her goal.
Aalto University’s ecosystem brings muscle to Finland’s growing entrepreneurship scene
In Espoo, outside of Helsinki, the entrepreneurial waters are churning thanks to new initiatives connected with Aalto University’s technology and engineering campus. In fact, the Aalto ecosystem is helping to set an exciting new course for the Finnish economy, and entrepreneurship as a whole, throughout the Baltic region. Not sure you know any Finnish startups? Perhaps you’re more familiar with solving puzzles by launching irate birds at evil green pigs.
Yes, Finland is home to Angry Birds, the worldwide gaming sensation from Rovio Mobile. And Rovio’s founders were graduates of the Helsinki School of Technology, one of three schools that now make up the newly established Aalto. However, the university’s students, faculty and staff have even bigger plans for Finland, with their sights set on an entrepreneurship future that blasts past the bird-launching, pig-crushing phenomenon.
While other universities might consider their entrepreneurship work done just by setting up an incubator, Aalto is discovering real momentum by connecting the essential dots between entrepreneurship education, access to funding, student organizations for early development, and the creation of a culture that is open to outsiders. One catalyst for the Aalto entrepreneurship explosion is the intense passion held by students. “We were interested in building companies and changing things,” says Kristo Ovaska, founder of the Aalto Entrepreneurship Society (AaltoES). “We saw the need for something that wasn’t there.”
AaltoES was founded in 2009 as a privately funded, student-led initiative that focuses on building a startup community, not just for Aalto, but also for Northern Europe. Ovaska and his colleagues dreamed of a Silicon Valley-style culture in the Nordic region, a culture that offered students with big ideas the resources and mentorship to create cutting-edge startups in Finland. But when AaltoES was quickly inundated with requests for space from startup teams, the need for an additional organization became clear.
With some seed funding and access to space from the university in 2010, the Aalto Venture Garage (AVG) opened as a co-working space within the Aalto community. Participants in the Aalto Venture Garage work side-by-side with other teams trying to develop and iterate on their products and ideas. Along with their interactive (and attractive) co-working space, AVG has also created Startup Sauna, a self-described “Y-Combinator-esque” accelerator program that identifies promising startups from throughout the Baltic and Nordic regions, and brings them together for an intense six-week entrepreneurship boot camp.
“The students [love discussions] of risk-taking and learning to fail fast. The young people are looking for ways to make cultural changes in their country that will open it up to more entrepreneurship.”
During a teaching trip to Aalto, STVP adjunct faculty member Donna Novitsky saw the excitement that Aalto students have for different aspects of entrepreneurship. “The students loved the discussions of risk-taking and learning to fail fast,” says Novitsky. “The young people are looking for ways to make cultural changes in their country that will open it up to more entrepreneurship.”
While students can drive passion from the ground up, the secret sauce to building a thriving entrepreneurial ecosystem also requires real support from institutions and the larger society. This is where the Aalto Center for Entrepreneurship (ACE) comes in. Established in 2010, ACE seeks to pull more ideas out of the Aalto community and help them to see the light of day as new products and companies.
ACE serves as a one-stop shop for the teaching and research of entrepreneurship, technology transfer assistance, intellectual property management, and early-stage startup support. According to Will Cardwell, who leads the Aalto Center for Entrepreneurship, the center is tackling issues of great importance to Finland. ACE’s activities, and its 15-member team, are funded approximately 60 percent by Aalto University and 40 percent by TEKES, the Finnish Funding Agency for Technology and Innovation.
“The nation needs to speed up the commercialization of technologies to capture more long-term value for both Finnish society and the global society,” says Cardwell. “We’re trying to create fans — corporate, investors and other stakeholders who are interested to interact with the innovations and startups that come out of Aalto. And we’re also seeking to get more Finns to think entrepreneurially.”
“We’re trying to create fans — corporate, investors and other stakeholders who are interested to interact with the innovations and startups that come out of Aalto. And we’re also seeking to get more Finns to think entrepreneurially.”
This point takes on deep significance in light of current trends in the Finnish economy. The longtime flagship of the Finnish technology sector, Nokia, is still struggling to find its footing. At the same time, the mobile gaming sector is taking off fast, led by Rovio’s bird-flinging success. Cardwell clearly sees Finland’s challenges as new opportunities for Aalto-based entrepreneurs.
“As market demands and employment levels are in transition, our idea is to encourage and attract talent to bear on the creation of new startups and the powering of current ventures,” says Cardwell. “At Aalto, we want to be a platform for the rest of the country, and ultimately for the whole region.”
Working with a multimillion-dollar budget and significant support from the Finnish government and the private sector, ACE is looking at business proposals from inside and outside Aalto, including founding teams and ideas emerging from the Aalto Venture Garage. From the past year’s 300 proposals to ACE, 60 percent came from Aalto’s paid researchers and 40 percent came from Aalto students or parties outside the university. This dynamic mix reflects Finland’s interest in being perceived as a welcoming center for developing new ideas in Europe.
“We need to be competitive in Finland to create the type of environment where companies would want to develop,” says Cardwell. “No matter where a startup chooses to plant itself, Aalto’s commitment to being open allows us to put our best foot forward.” Proposals identified for support by ACE travel through a multi-level funding process, progress in which is determined by market size, concept feasibility and intellectual property opportunities. At every stage in the process, each idea must show improvement around these factors to move on to the next level of funding. “We’re very ready to fail with these projects in the early stages, if they’re not hitting on these attributes,” says Cardwell.
Some projects will be identified for “fast track” development and be connected with large corporate partners, such as Nokia and Microsoft. Others will continue forward in the evaluation and development process within ACE. The center seeks to develop a portfolio each year that consists of at least 15 startups, 15 new patent families and a growing set of intellectual property licenses that will produce regular revenue to fund the next wave of startups.
“Finns can be stubborn and independent, so they avoid mimicking others. They often don’t really care what others do. I think this independence is a fundamental characteristic for entrepreneurs…”
Stanford Management Science and Engineering Professor Riitta Katila, a native of Finland who teaches a popular course on creativity, innovation and change, sees entrepreneurial advantages in the national mindset. “Finns can be stubborn and independent, so they avoid mimicking others. They often don’t really care what others do,” says Katila. “I think this independence is a fundamental characteristic for entrepreneurs…” While no perfect system exists for establishing an effective entrepreneurial ecosystem, the laser-like focus of the Aalto community points to hot times for entrepreneurship in the Arctic North.
America has fallen hard for entrepreneurs.
The aesthetic appeal is easy to understand. Compare the Fortune 500 CEOs interviewed on the HBR IdeaCast talking about Campbell’s Soup or Coca-Cola (podcast here) with the entrepreneurs at the Stanford Entrepreneurial Thought Leader Seminar Series discussing Pandora and Instagram (podcast here).
The big company CEOs sound just like you’d expect. They are competent, factual, and in control. But while most of them presumably have strong interpersonal skills and a high EQ, they come across as dry, unemotional and focused on the “core business.” In contrast, the entrepreneurs presenting at Stanford wear their hearts on their sleeves. They are vividly passionate. They exude emotion. They are selling themselves, with a kind of animated desperation. They tell student to “do what you love.” It’s an appealing message, and you can see why it catches on.
In contrast, the entrepreneurs presenting at Stanford wear their hearts on their sleeves. They are vividly passionate. They exude emotion. They are selling themselves, with a kind of animated desperation. They tell student to “do what you love.” It’s an appealing message, and you can see why it catches on.
These two personalities generally reside at opposite ends of the business spectrum, presumably reflecting two very different business needs. It’s essential to be brash and irrationally exuberant to start a business. But to sustain a large multinational corporation, you’ve got to be calculating and rational. It’s also a well-described phenomenon that as startups evolve into progressively larger companies, their character changes, and their needs evolve, or “mature.”
Mature organizations are supposed to act predictably, responsibly, unemotionally. The qualities embraced (or at least tolerated) at the startup level can become liabilities. Many startup CEOs hand over the reins at this stage, or at least share them (as Google did for years when Brin and Page hired Eric Schmidt), explicitly acknowledging the need for an “adult in the room.”
While many large organizations might similarly benefit from having a kid in the room — someone who is energetic, passionate, emotional, excitable — it’s hard to envision a corporate phenotype that would be more doomed: the environment just doesn’t support it. Sure, companies trot out bromides about “cultivating entrepreneurship,” while HR departments sponsor group training sessions on innovative thinking.
But the reality is that the culture of most big companies is geared to performing established activities in increasingly efficient ways. Simply stated: doing the old things better takes precedence over doing new things well enough. Most employees (and certainly the ones who last) figure out extremely quickly how you’re supposed to act at work (Sir Joseph wasn’t far off). You could say most large organizations have elected to trade the passion of young love for the predictability of adult relationships.
And perhaps this is why we look so wistfully at entrepreneurs. They seem to exude the raw passion that experience has taught us to modulate, the vivid emotion that we’ve learned to suppress, the intense energy that we learn must be channeled, the unreasonable audacity that has been replaced by sensible objectives. We cheer for them because they represent our youthful hopes, our idealism, our ambitions and our dreams. And when these entrepreneurs defy the extraordinary odds, and succeed, we rejoice, for at the moment we can sense, if only fleetingly, the exceptional untapped potential within each of us. We rejoice, and wonder: what if?
It would be easy to dismiss our infatuation with entrepreneurs as misty-eyed revisionism, the way we might selectively recall and invoke treasured childhood memories while forgetting the many painful challenges of youth and adolescence. The day-to-day reality of getting a new company off the ground is generally far less glorious than the inspirational experiences trotted out by the small minority of ultra-successful entrepreneurs who are routinely invited to share their stories. There’s a significant selection bias here, to say nothing of the urge to write oneself into a heroic cultural narrative.
But I’d argue that if we had to find a group of people to admire and admittedly idealize — and you know we’re going to — we could do a lot worse than taking our inspiration from impassioned, dedicated individuals seeking against all odds “to make a dent in the world.”
Incredible things happen when entrepreneurial skills are layered on top of deep technical knowledge. New products are created that solve real world problems. Markets and industries spring up where none existed before.
And while all individuals reap the benefits of developing entrepreneurial skills, when engineers engage with this type of knowledge, tremendous potential for economic and societal growth is unleashed. Here are some viewpoints on what happens when entrepreneurship skills and engineering collide.
Engineers Come to Understand Customers
The most radical thing a new company can do is sell their product, says serial entrepreneur Steve Blank. He believes that the company founders — not the sales team — should be the first to try to turn a profit, as they will learn firsthand about their product’s shortcomings and usability. Great engineers should directly understand what their customers need. Of course, this idea should also be true for scientists.
Remain Passionate About Entrepreneurship
Renowned entrepreneur and investor Vinod Khosla believes entrepreneurship is the driving engine of the economy. However, the path to entrepreneurial success will be littered with traps of self doubt and setbacks. Khosla reminds engineers to stay committed to their dreams with a passion, as this is an essential ingredient to becoming a change-maker in the world.
Engineers Can Learn Entrepreneurship Skills
Engineers, and students from other technical fields, can learn entrepreneurial skills covering finance, organizational strategy and business model generation, says investor Randy Komisar. These skills are useful for engineers because they provide context about the personality and character of entrepreneurship.
However, according to Komisar, entrepreneurial skills are only part of the equation. In the following clip, he argues that possessing a suitable entrepreneurial character will also come into play. While we believe students can improve their comfort levels for working in environments full of uncertainty and ambiguity, Komisar sees this attribute as an inherent trait that only some individuals possess.
Our team at the Stanford Technology Ventures Program (STVP) is privileged to play a role in educating the next generation of entrepreneurs and innovators, preparing them to see the world as a place rich with opportunity and full of potential.
As the entrepreneurship program at Stanford’s School of Engineering, centered in the department of Management Science and Engineering, we see our job as helping students to gain the knowledge, skills and attitudes that are needed to turn the challenges around them into opportunities, and to build a better world. Whether they launch a startup, join an established company, or choose another path, these skills will be pivotal in helping them progress through their careers and to contribute to society.
[quote_right]Our philosophy is that it is no longer good enough for engineers and scientists to come out of school with purely technical training.[/quote_right]At STVP, our philosophy is that it is no longer good enough for engineers and scientists to come out of school with purely technical training. They must have the entrepreneurial skills needed to bring their ideas to life. This is important for them as individuals, for the companies they found or join, and for the nation as a whole. We do this by providing them with the knowledge they need as well as experiences that hone their skills. They graduate with an entrepreneurial mindset, fully understanding that the challenges they face are opportunities, and that as entrepreneurs their role is to do much more than is imaginable with much less than seems possible.
Since the earliest days of Stanford, the university has been building bridges between our research labs, classrooms, and Silicon Valley to create scalable ventures that fuel the local and national economy. An iconic example occurred as early as 1939 when Engineering Dean Fred Terman encouraged students William Hewlett and David Packard to launch a company to commercialize an audio oscillator based upon work that Hewlett had developed as a graduate student in Terman’s lab. Since then, Stanford has fostered the creation of an ever-growing list of technology companies, including Varian, Sun Microsystems, Cisco Systems, Yahoo, Rambus and Google. We would look forward to the bringing our knowledge and experience to New York City to help shape and support the local entrepreneurial ecosystem, built upon the unique resources and culture of the community.
Our work at Stanford is attracting recognition and support on a national level. For example, STVP was recently awarded a five-year grant to launch a national center dedicated to unleashing the entrepreneurial spirit in undergraduate engineering students across the country. This National Center for Engineering Pathway to Innovation, or Epicenter, will be connecting the nation’s 350 engineering schools with the goal of igniting interest in entrepreneurship and sharing best practices in entrepreneurship education.
The NSF has also asked Stanford to help leading scientists commercialize new technologies through their new Innovation Corps program. Teams from around the country, including faculty members and PhD students, are participating in an intense, 10-week program designed to help them discover and test scalable business models based upon their discoveries. The first cohort of 21 teams is participating in this program right now.
In all of our efforts, we will build upon our deep experience with online education. For the past ten years we have offered a free collection of materials on entrepreneurship that is both extensive and growing. Our ECorner website has thousands of videos and podcasts of entrepreneurial thought leaders, most of whom are from Silicon Valley. We look forward to expanding this collection with speakers from New York City. Along with other efforts, this will allow us to build strong ties to the New York City community of entrepreneurs, venture capitalists and company leaders.
[quote_right]To me, New York City is an amazing jewel, poised for entrepreneurial growth.[/quote_right]New York City holds a very special place in my heart. My parents both grew up, went to college, and worked in New York City, and I grew up in New Jersey. I spent endless hours in “The City,” taking full advantage of the world-class cultural environment that continues to thrive. To me, New York City is an amazing jewel, poised for entrepreneurial growth. My colleagues and I are extremely enthusiastic about the potential to contribute to Stanford’s efforts to build a New York City campus. We look forward to building a vital bridge between Palo Alto and New York City, between Stanford and Roosevelt Island, and between the present and the future.
Stanford alumni, faculty and staff engage in many different types of innovation. These are early results from the Stanford Innovation Survey, and I would be grateful for help in catching any errors, suggestions on further analysis, or feedback on what would be most interesting. Over the next several weeks, I will go through some initial results and analysis of various types of innovation and entrepreneurship that we gathered in the survey on the Stanford Innovation Survey website.
One type of innovation that Stanford is famous for is creating new organizations. In recent years, I’ve noticed a trend in my classes towards increased interest in the creation of non-profit organizations. So I wanted to see if we picked up this trend in the data and how many non-profits Stanford alumni were creating.
In the survey, 2,365 individuals reported having founded at least one non-profit organization in their careers. Similar to the phenomenon of serial entrepreneurship, it turns out that many of these alumni have created multiple non-profits. Respondents indicated having founded a total of 6,432 non-profit organizations. If we extrapolate that up, based on the response rate, Stanford alumni, faculty and staff have created over 30,000 non-profit organizations over the decades! Of course, not all of these survive, but that’s quite an impact.
The first figure shows the total number of new organizations (including angel investments, early employee positions and Board of Directors positions) for the respondents.
We also asked what general field the non-profit was operating in. By far the most common type of non-profit created is related to Education. The second most frequent response was Arts/Culture/Recreation followed by Global Health or Healthcare related. Consumer Rights non-profits were the least common.
Next, we turn to the graduation year of the non-profit founder. Here we find that the creation of non-profits peaks with graduates from the 1960s and 1970s. We might expect that the downward curve is due to the fact that graduates from more recent decades may plan to start non-profits in the future or in a more advanced stage of their careers, but have not had time yet.
Interestingly, confirming the trends I have noticed in classes, we do see a big bump upwards in the rate of non-profit creation among students who graduated very recently (in the 2000s). We should also plot these by the year that the non-profit was founded to see if there are similar trends there.
Talking with a few alumni who had engaged in both for-profit and not-for-profit entrepreneurship, I was also curious how many of these non-profit founders had also started for-profit businesses. We see that many of them have founded for-profit businesses as well. In particular, many of those who had founded an incorporated business or been a Board of Directors member had also founded a non-profit organization (either before or afterwards).
The final figure shows the proportion of Stanford alumni, faculty and staff who created a for-profit company vs. a non-profit company. While non-profit entrepreneurship has been growing over time, it is still a relatively smaller percentage compared with the number who engage in for-profit entrepreneurship and innovation.
Visit the Stanford Innovation Survey website and let me know if you have comments or further suggestions. We plan to continue this analysis with the next step being to examine the schools and departments that have most frequently produced non-profit founders and whether there have been changes in those patterns over time.
Today the National Center for Engineering Pathways to Innovation (EPI.Center) launches operation to create seismic change in how undergraduate engineers are educated in the United States. The EPI.Center, based at Stanford University’s School of Engineering, will serve as an education, research and outreach hub for the creation and sharing of entrepreneurship and innovation education resources among the nation’s engineering schools.
The EPI.Center leadership team has selected Dr. Tina Seelig to serve as the center’s director. Dr. Seelig is an award-winning educator, having received the Gordon Prize for innovative curriculum design and teaching methods from the National Academy of Engineering in 2009. Dr. Seelig will also continue to serve as STVP’s executive director.
“In choosing Tina as the EPI.Center’s inaugural director, we have an effective and engaging leader who can hit the ground running when it comes to changing engineering education in America,” says Stanford Professor Tom Byers, a principal investigator on the EPI.Center project. “Tina will be instrumental in the EPI.Center’s efforts to identify and harness excellent entrepreneurship education curricula and activities from a wide variety of engineering schools across the US.”
[quote_right]“The economic future of the United States is dependent upon unleashing the enormous untapped potential for innovation in America’s talented engineering students.[/quote_right]Dr. Seelig is currently working with the EPI.Center principal investigators, including Byers and Stanford Professors Kathleen Eisenhardt and Sheri Sheppard, to develop a comprehensive operating plan. With the EPI.Center’s focus on accelerating the creation of the next wave of American innovators, Dr. Seelig is eager to put the center’s work into motion.
“The economic future of the United States is dependent upon unleashing the enormous untapped potential for innovation in America’s talented engineering students,” says Seelig. “I am honored to play a role in engaging higher education engineering faculty and students in this important effort.”
The center is now inviting design submissions for the EPI.Center’s logo. The creator of the winning logo concept design will receive $700 USD. All contest entries must be submitted by September 28, 2011.
The Stanford Technology Ventures Program is ready for another fantastic year of delivering entrepreneurship education to students in the School of Engineering and other entrepreneurially-minded students from across the Stanford campus.
Even if you’re not ready to found a company, there’s no time like the beginning of the academic year to start exploring entrepreneurship. Not sure where to start? We’d suggest registering for the Entrepreneurial Thought Leaders Seminar, MS&E 472 — the gateway into entrepreneurship.
Below you will find course information for Autumn 2011, along with links to available course websites and instructor bios. For course information covering the entire academic year, you can also view the STVP Courses page.
MS&E 140: Accounting for Managers and Entrepreneurs (3 – 4 units)
Instructor: Vic Stanton
MS&E 140 provides an introduction to accounting concepts and the operating characteristics of accounting systems. The principles of financial and cost accounting, design of accounting systems, techniques of analysis, and cost control are explored throughout the quarter, as is the interpretation and use of accounting information for decision making.
This couse is specifically designed for the user of accounting information and not as an introduction to a professional accounting career. Non-majors and minors who are taking elementary accounting are not advised to enroll.
MS&E 178: The Spirit of Entrepreneurship (3 units)
Instructors: Heidi Roizen
This course teaches students to think like a successful entrepreneur by learning how to analyze key parts of various startup business models. The course uses the speakers at the Entrepreneurial Thought Leader seminar (MS&E 472) as the source of the companies to be explored.
Students meet before and after each Entrepreneurial Thought Leaders seminar to prepare and debrief, respectively.
MS&E 180: Organizations: Theory and Management (4 units)
Instructors: Kathleen Eisenhardt
Limited enrollment; Preference to MS&E majors
MS&E 180 offers an examination of classical and contemporary organizational theory. The course will explore the behavior of individuals, groups, and organizations. Students must attend the first class session.
ME 208: Patent Law and Strategy for Innovators and Entrepreneurs (2 – 3 units)
Instructor: Jeffrey Schox
The course will provide a foundation to understand the patent system, and strategies to build a patent portfolio and avoid patent infringement. Students will learn how to conduct their own patent search and how to file their own provisional patent application on an invention of their choice. Although listed as a ME course, the course is not specific to any discipline or technology.
This course provides an introduction to the basic concepts of strategy used within high-technology firms. MS&E 270 examines decisions and actions that shape the long-term future of these organizations by establishing, sustaining, and enhancing the basis for their competitive advantage.
Topics covered within the course include competitive positioning, resource-based perspectives, “co-opetition” and standards setting, and complexity/evolutionary perspectives.
In this video clip, Professor Eisenhardt discusses opportunity creation.
MS&E 273 Technology Venture Formation (3 – 4 units)
Instructors: Mike Lyons and Audrey MacLean
Limited enrollment; Recommended prerequisite: MS&E 270, 271, or equivalent. View the MS&E 273 course website.
This course forms integrated teams from graduate engineering, computer science and business students to experience the immersive and “no-holds-barred” process of creating a Silicon Valley startup, including presentations to business experts and venture capitalists.
Learn to build venture-scale technology firms where engineers and business personnel can clearly articulate the market opportunities and value proposition of leading-edge technologies to investors. MS&E 273 teams are treated as real startups, as they explore concepts of opportunity assessment, marketing and distribution strategies, R&D and operational planning, legal considerations, and more.
MS&E 472 DFJ – Entrepreneurial Thought Leaders Seminar (1 unit)
Instructors: Tom Byers, Tina Seelig and Thomas Kosnik Required web discussion. Course may be repeated for credit.
The DFJ Entrepreneurial Thought Leaders Seminar is a weekly speaker series that presents innovators from across business, finance, technology, and philanthropy sectors, to share their insights with aspiring entrepreneurs. Through MS&E 472, students have the opportunity to learn real world knowledge from prominent leaders and entrepreneurs.
Oct 26: Scott Summit — Co-Founder & CTO, Bespoke Innovations
Nov 2: Mårten Mickos — CEO, Eucalyptus; Former CEO, MySQL AB
Nov 9: Adam Lowry — Co-Founder & Chief Greenskeeper, Method Products
Nov 16: Dana Mead — Partner, Kleiner Perkins Caufield & Byers
Nov 30: Jessica Mah — Co-Founder, Architect & CEO, inDinero
Here are video highlights from 2011 DFJ ETL speakers.
Additional STVP-Affiliated Course News
Mayfield Fellows Program: ENGR 140 C Our class of 2011 Mayfield Fellows will be completing this intense, nine-month work/study program designed to develop a theoretical and practical understanding of the techniques for growing technology companies.
The program combines an intense sequence of courses on the management of technology ventures, a paid summer internship at a startup company, and ongoing mentoring and networking activities. Learn more about MFP and see where the 2011 Fellows interned over the summer.
Prof. Byers Teaches in Bing Overseas Study Program
During the fall quarter, MS&E Professor and STVP Co-Director Tom Byers will be teaching entrepreneurship courses in Florence as part of Stanford’s Bing Overseas Study Program.
There are many factors that can inhibit entrepreneurship from thriving in a particular region. Perhaps it’s lack of access to capital. Or maybe governments put up too many barriers to startup creation, either intentionally or unintentionally. The region may not have existing entrepreneurship models with which to inspire the next generation of growth. Even cultural or societal traditions may serve as roadblocks to innovation and a willingness to try new ideas.
In the following videos, successful entrepreneurs and political figures discuss a number of the specific challenges to entrepreneurship in Latin America.
High Friction and Weak Venture Capital Resources
While serial entrepreneur Wences Casares concedes startup success rates are low around the world, he argues that Latin America-based startups face additional challenges due to friction points in the regional ecosystem.
Fellow entrepreneur Meyer Malka explains why venture capital is “wired differently” in Latin America, and how venture support is different in Silicon Valley and Latin America. Casares also outlines an intriguing benefit to building talented technical teams in the developing world, indicating a possible advantage over Silicon Valley.
A Need for Reliable Institutions
Protego CEO Pedro Aspe believes greater amounts of education are necessary for entrepreneurship to flourish in a region. In this video from an Endeavor Entrepreneur Summit, Aspe also articulates why entrepreneurship can only grow in societies with reliable governmental institutions.
As a former secretary of finance in Mexico, Aspe emphasizes the importance of removing discretionary power, in matters of trade and finance, from the hands of public officials in order increase the reliability of an economic system.
Lack of Entrepreneurial Thinking and Education
Chilean science professors are not used to thinking in terms of startups, says Juan Andrés Fontaine, Chile’s Minister of Economy, Development and Tourism. In this video, STVP Executive Director Tina Seelig asks Minister Fontaine to identify skills that students should be developing to become better entrepreneurs, and what Chile’s universities are doing to address these needs.
Fontaine expresses his desire for students to take risks and learn to solve problems using an entrepreneurial frame of mind, and why this type of education can unlock economic growth and opportunities.
Right now, the economy is looking up in Silicon Valley. For a number of possible reasons, this special place appears to be escaping some of the economic woes plaguing economies in other parts of the world. So what can Silicon Valley offer to help alleviate these issues for others? We think programs such as the STEM Center and the Innovation Corps are a terrific start, however, there may be something else we can export… an entrepreneurial mindset.
Thanks! That mindset is really going to come in handy when I need to feed my family and all the jobs have left town. I know… telling someone to build an entrepreneurial mindset is like telling someone to stay positive. However, even if the advice seems soft and intangible, that doesn’t mean it’s not worth trying to follow.
What if the big companies never come back to town? What if no more manufacturing plants show up and hire 5,000 people? What do you do then? The government looks for ways to stimulate the economy, but at the end of the day, the government can’t employ everyone forever. So what do we do? Perhaps it’s time to accept that all careers in the future will be entrepreneurial.
One of the least talked about attributes of successful entrepreneurs is an ability to work in environments fraught with ambiguity. While this skill is important for leaders, thriving amidst ambiguity is a skill that is valuable for everyone. And in these economic times it’s more important than ever. You’re not alone when it comes to building your entrepreneurial mindset, but it will be up to you to reach out to others.
In the following video clip, serial entrepreneur Reid Hoffman (LinkedIn, PayPal) talks about the power of networks to share knowledge, information and resources. As you watch the clip, consider how can you build new networks of knowledge in your community? It’s likely that other members of your community have skill sets you need, or ones you can leverage, to work on new ideas and projects.
Rather than sitting and waiting for someone to give you a chance, embrace ambiguity and connect with others around you to create new opportunities. That is being entrepreneurial and working with an entrepreneurial mindset. Echoing an idea shared by Hoffman, individuals do not create competitive advantage by coming up with a great idea, but by being the ones in motion toward achieving it.
The autumn 2011 edition of the Entrepreneurial Thought Leaders Seminar (ETL) kicks off Wednesday, October 5. Join us at ETL on Wednesdays, from 4:30 pm to 5:30 pm, in the NVIDIA Auditorium at the Huang Engineering Center at Stanford, to enjoy this quarter’s engaging mix of innovators and entrepreneurs.
Stanford students can sign-up for MS&E 472 to earn one unit of credit for the course, and those who enroll should attend an information session on Wednesday, September 28. Members of the public interested in earning credit for this quarter’s Entrepreneurial Thought Leaders Seminar should contact the Stanford Center for Professional Development. Visit their online catalog.
A new quarter of ETL means more opportunities to hear first hand from entrepreneurial leaders and pioneers in different industry and technology sectors. And for those of you not able to attend in person, this also means new lecture podcasts and videos available for free on the Entrepreneurship Corner (ECorner) website. You can also enjoy ECorner on-the-go with our free iPhone app.
In 2006, David Friedberg founded WeatherBill, which offers customers the ability to purchase customizable weather insurance, based on global weather simulation modeling and information from local weather monitoring systems. Prior to founding WeatherBill, Friedberg worked as a founding member of Google’s corporate development team and a business product manager for Google AdWords. He has also invested in dozens of technology companies, and previously worked at the Lawrence Berkeley National Laboratory.
As the CEO of Evernote, Libin leads the company’s effort to offer customers the ability to easily collect and search ideas, notes, or moments of inspirations, captured on the user’s device of choice. Libin’s background includes leading multiple Internet companies from startup to rapid growth and commercial success. Prior to joining Evernote, Libin founded and served as president of CoreStreet, which provides credential and identity management technologies to governments and large corporations. Libin was also the founder and CEO of Engine 5, a software development company acquired by Vignette Corporation.
Brad Feld has more than 20 years of experience as an entrepreneur and early stage investor. Prior to the Foundry Group, Feld co-founded Mobius Venture Capital, and Intensity Ventures, which launched and operated several software companies. Feld currently serves on the board of directors of numerous companies, including Gist and Zynga. He is also a co-founder of TechStars, a mentorship-driven seed stage investment program, and he is the author of Do More Faster and the widely read blogs at feld.com and askthevc.com.
Over his 20-year career designing consumer products, Summit’s work has included innovations for Apple, Nike, Palm, and other major brands. Summit has held faculty positions teaching design and process at Stanford University, Carnegie Mellon, and Singularity University. Additionally, Summit writes for Time Compression Magazine on the art and technology enabled by additive fabrication.
Nov. 2: Mårten Mickos – CEO of Eucalyptus; Former CEO of MySQL AB
Mickos leads Eucalyptus Systems’ efforts to deliver on-premise infrastructure-as-a-service clouds to IT departments within enterprise organizations. During Mickos’ seven year tenure as CEO of MySQL AB, he grew that company from a small startup to the second largest open source company in the world. After Sun Microsystems acquired MySQL AB, Mickos served as Senior Vice President of Sun’s database group. Mickos has previously held other CEO and senior executive positions in his native Finland.
In his role at Method, Lowry focuses on sustainable innovations for Method’s line of home care products. He also directs the sustainability aspects of product design, sourcing, production and marketing. Lowry previously worked as a climate scientist at the Carnegie Institiution, developing software products related to climate change modeling. He has been honored as one of Vanity Fair’s Global Citizens and the People for the Ethical Treatment of Animals’ (PETA) Man of the Year for his pioneering work on sustainable business and product design.
Since joining KPCB in 2005, Mead has focused his work in the life sciences sector, building on his career success in identifying new medical technologies, developing new markets and therapies and building world-class management teams. Previously, Mead was president of Guidant Vascular Intervention, a billion dollar division of Guidant with over 4500 employees. Mead also serves on the boards of Apnicure, Corventis, Inspire Medical Systems, intersect ENT, Invuity, Navigenics, Pulmonx, Spiracur, Spinal Modulation and Voyage Medical.
Nov. 30: Jessica Mah – Co-Founder, Architect and CEO of inDinero
As the co-founder and CEO of inDinero, Mah drives the development of the company’s product strategy, software development, and design efforts. inDinero’s online software product offers business customers an easier way to see and manage their money. Since Mah and her partners orginal build of the core product in 2009, inDinero has raised seed funding from numerous sources, including Y Combinator. Mah has been programming since the age of nine and starting businesses since the age of 12.
Prof. Tom Byers
Recently, the National Science Foundation awarded a grant to our program at Stanford University to launch a national center for teaching innovation and entrepreneurship in engineering. We are deeply grateful for this opportunity to help our nation’s commitment to innovation and economic growth.
Connecting students with the best technology entrepreneurship minds and organizations is a key component of our entrepreneurship and innovation courses at Stanford. This includes a passionate commitment to experiential learning, balanced with exposure to the latest research and theory. The key here is to help bright young minds come to perceive their technical gifts as our greatest hope for creating positive economic and societal change in the world.
Another essential component to the education of 21st century engineers is learning how to move research from the lab, to the classroom, and then into the world. With the United States seeking to maintain its innovation edge, developing more engineers and scientists who understand the value of concepts such as business models and product development is of the upmost importance.
[quote_right]”Our aim is nothing less than to fundamentally change how engineers are educated in America.”[/quote_right]Our program believes these concepts are a major key to unlocking the full potential of students to become world-changing innovators. With this grant, we hope to encourage this idea and share the wealth of dynamic entrepreneurship education insights being generated at universities across the US. Our aim is nothing less than to fundamentally change how engineers are educated in America.
Along with Stanford Professors Kathleen Eisenhardt and Sheri Sheppard, my fellow principal investigators on the project, we hope this center will catalyze changes in undergraduate U.S. engineering programs by developing an education, research and outreach hub for the creation and sharing of resources among the almost 350 U.S. engineering schools.
The center, launching operation in September 2011, will focus on three critical goals:
Create the next wave of American innovators and entrepreneurs who will build lasting economic growth and job creation.
Provide offerings tailored to address the distinct innovation education issues across all engineering disciplines.
Leverage an open platform to connect students and faculty across U.S. engineering schools to share the latest tools and insights related to entrepreneurship education.
The center’s efforts to deliver the latest research and insights into classrooms will not only benefit students, but will also allow participating faculty to leverage the center’s network to disseminate research on the efficacy of entrepreneurship education. This accelerated approach will also impact the future development of the center and its processes, and we will actively engage participation by U.S. faculty and students to understand our impact. The center will develop, disseminate and deliver content across the US, and we are fortunate to be partnering with the National Collegiate Inventors and Innovators Alliance (NCIIA) in this effort.
To augment NSF funding and ground our center in real world experience, we are establishing a growing list of corporate partners, including some of the most innovative companies and venture capital firms in the United States, such as Raytheon, Microsoft, MWH Global, Draper Fisher Jurvetson (DFJ), Edison International, Accel Partners, the X-Prize Foundation and Kleiner, Perkins, Caufield and Byers. These partners will provide resources for curriculum development, dissemination tools and student access to industry mentors.
While we encourage all students who have a desire to start their own companies, not everyone who takes entrepreneurship courses will end up founding a company or becoming a serial entrepreneur. However, entrepreneurship education provides broad skills that complement a technical education, empowers citizens to create their own futures in uncertain times and encourages development of the innovative problem-solving abilities necessary to solve our nation’s most daunting challenges.
Interest in “social” entrepreneurship continues to soar. The number of conferences and business plan competitions on social entrepreneurship are growing rapidly, the number of courses offered on university campuses is expanding, and social entrepreneurship is getting a lot of press. So, what differentiates a social entrepreneur from a plain old vanilla entrepreneur? I must say that it isn’t clear to me….
“A company certainly does not have to be a not-for-profit to be socially responsible.”
To loosely quote Carl Schramm, president and CEO of the Kauffman Foundation, “All entrepreneurship is ‘social’ because at a minimum it generates jobs and stimulates the economy.” Given that as a baseline, companies can be socially responsible in an endless number of ways. If a company has family friendly policies, it is socially responsible. If a company recycles used materials and installs solar panels on the roof, it is socially responsible. If a company makes medical products that save lives, it is socially responsible. If a company makes energy efficient cars, it is socially responsible. A company certainly does not have to be a not-for-profit to be socially responsible.
I would argue that people use the term “social” entrepreneurship because they don’t always know what entrepreneurship is. The way we teach it, entrepreneurship is about identifying problems and solving them by leveraging scarce resources. It means creating value, where value can be measured in a wide range of ways. To quote John Doerr, “Entrepreneurs do more than anyone thinks possible with less than anyone thinks possible.” This can happen in any arena.
For many years, I have been an advisor to a large student group at Stanford, called BASES, that runs the campus-wide business plan competition. Several years ago they started a parallel competition for “social” business plans. The number of submissions were small and the prizes were much smaller than for the traditional business plan competition. Over the past few years, the number of submissions for the Social E-Challenge has grown until now there are as many submissions as the E-Challenge.
“I would argue that people use the term “social” entrepreneurship because they don’t always know what entrepreneurship is.”
There has always been healthy debate about whether a plan can be entered in both competitions at the same time. My fantasy is that some day the winner of the Social E-Challenge will also be the winner of the E-Challenge. It will demonstrate that a company that is attractive using traditional metrics can also have a powerful social agenda.
Below is a video clip featuring Guy Kawasaki, one of the most popular speakers on STVP’s Entrepreneurship Corner website. Over the years, Guy has shared his insights on everything from principles of startup success to tips on how to build enduring brands. Here he talks about the importance of having the goal of making meaning for your company as opposed to making money. He argues that if you make meaning, you are more likely to make money; but if your major goal is to make money, then you are unlikely to make either.
Innovation sure is popular these days. But saying the word innovation again and again is not enough to make it happen. How can you create and sustain innovation within an organization? How do you encourage an innovative spirit within a group of employees or an entire corporate culture?
We suggest learning from those who have traveled the path and made it happen. This is a guiding principle behind Stanford University’s Entrepreneurship Corner, or ECorner. This free, online collection of over 2,000 entrepreneurship-related videos and podcasts shares the stories of innovators who have changed the world, and who have led the companies who continue to make a global impact.
According to Larry Page, co-founder and CEO of Google, not many companies are innovators in both technology and business. In order to be successful in technical innovation, says Page, you also must understand the business and marketing sides of the equation.
Page also explains that “As you get more and more people working on one thing, it becomes harder and harder for them to be innovative.” He even admits seeing this problem at Google, which at the time of this lecture had almost 400 employees. Today, Google’s headcount is approaching 30,000 employees. This video contains valuable insights for a young startup.
Don’t Take Innovation for Granted
Not only does innovation drive the economy, says JLABS CEO Judy Estrin, but it influences the very quality of our day-to-day life. In the following video clip, Estrin explains how innovations need decades of institutional push and resources behind them to develop.
Estrin also asserts that we have become too shortsighted and more risk averse when it comes to developing new technology, and that this cultural shift away from innovative breeding grounds is to our own long-term detriment.
Never Stop Spending on Innovation
Symantec Chairman John Thompson states a company must never stop spending on innovation, even in challenging times. Early in his tenure as the company’s CEO, Symantec’s customers had no way to measure the effectiveness of the security technology they deployed. To make things worse, Thompson states Symantec was going through a challenging period during that time.
However, Thompson and the management team remained committed to innovation by applying a sizable share of revenue to developing a wave of products and technologies that addressed customers’ needs. This strategy is an example of Geoffrey Moore’s explanation of why product teams hold the power within an organization. The strategy paid off and Symantec’s new portfolio would become, Thomspon argues, industry standards for how security should be done.
Silicon Valley was born in an era of applied experimentation driven by scientists and engineers. It wasn’t pure research, but rather a culture of taking sufficient risks to get products to market through learning, discovery, iteration and execution. This approach would shape Silicon Valley’s entrepreneurial ethos: In startups, failure was treated as experience (until you ran out of money).
The combination of Venture Capital and technology entrepreneurship is one of the great business inventions of the last 50 years. It provides private funds for untested and unproven technology and entrepreneurs. While most of these investments fail, the returns for the ones that win are so great they make up for the failures. The cultural tolerance for failure and experimentation, and a financial structure which balanced risk, return and obscene returns, allowed this system flourish in technology clusters in United States, particularly in Silicon Valley.
Yet this system isn’t perfect. From the point of view of scientists and engineers in a university lab, too often entrepreneurship in all its VC-driven glory – income statements, balance sheets, business plans, revenue models, 5-year forecasts, etc. – seems like another planet. There didn’t seem to be much in common between the Scientific Method and starting a company. And this has been a barrier to commercializing the best of our science research.
[quote_right]The NSF has announced the Innovation Corps – a program to take the most promising research projects in American university laboratories and turn them into startups.[/quote_right]Today, the National Science Foundation (NSF) – the $6.8-billion U.S. government agency that supports research in all the non-medical fields of science and engineering – is changing the startup landscape for scientists and engineers. The NSF has announced the Innovation Corps – a program to take the most promising research projects in American university laboratories and turn them into startups. It will train them with a process that embraces experimentation, learning, and discovery.
The NSF will fund 100 science and engineering research projects every year. Each team accepted into the program will receive $50,000.
To commercialize these university innovations NSF will be putting the Innovation Corps (I-Corps) teams through a class that teaches scientists and engineers to treat starting a company as another research project that can be solved by an iterative process of hypotheses testing and experimentation. The class will be a version of the Lean LaunchPad class we developed in the Stanford Technology Ventures Program, (the entrepreneurship center at Stanford’s School of Engineering).
This is a big deal. Not just for scientists and engineers, not just for every science university in the U.S., but in the way we think about bringing discoveries ripe for innovation out of the university lab. If this program works it will change how we connect basic research to the business world. And it will lead to more startups and job creation.
Introducing the Innovation-Corps The NSF Innovation-Corps program (I-Corps) is designed to help bridge the gap between the many scientists and engineers with innovative research and technologies, but little knowledge of the first steps to take in starting a company.
I-Corps will help scientists take the first steps from the research lab to commercialization.
Over a period of six months, each I-Corps team, guided by experienced mentors (entrepreneurs and VC’s) will build their product and get out of their labs (and comfort zone) to discover who are their potential customers, and how those customers might best use the new technology/invention. They’ll explore the best way to deliver the product to customers, the resources required, as well as competing technologies. They will answer the question, “What value will this innovation add to the marketplace? And they’ll do this using the business model / customer development / agile development solution stack.
At the end of the program each team will understand what it will takes to turn their research into a commercial success. They may decide to license their intellectual property based on their research. Or they may decide to cross the Rubicon and try to get funded as a startup (with strategic partners, investors, or NSF programs for small businesses). At the end of the class there will be a Demo Day when investors get to see the best this country’s researchers have to offer.
What Took You So Long A first reaction to the NSF I-Corps program might be, “You mean we haven’t already been doing this?” But on reflection it’s clear why. The common wisdom was that for scientists and engineers to succeed in the entrepreneurial world you’d have to teach them all about business. But it’s only now that we realize that’s wrong. The insight the NSF had is that we just need to teach scientists and engineers to treat business models as another research project that can be solved with learning, discovery and experimentation.
On Monday, the National Science Foundation awarded a five-year, $10 million grant to STVP to launch a national center for teaching innovation and entrepreneurship in engineering, based at Stanford University. This new center addresses the nation’s critical need for greater numbers of innovative and entrepreneurial engineers. The project principal investigators include Stanford Professors Tom Byers, Kathleen Eisenhardt and Sheri Sheppard.
[quote_right]”This center is an opportunity for U.S. engineering educators to openly share knowledge about preparing students to be entrepreneurial leaders.”[/quote_right]”This center is an opportunity for U.S. engineering educators to openly share knowledge about preparing students to be entrepreneurial leaders,” says Byers. “With the participation of faculty across America, the center will fundamentally change how engineers are educated in this country.”
The center, which launches operation in September 2011, will catalyze changes in undergraduate U.S. engineering programs by developing an education, research and outreach hub for the creation and sharing of resources among the almost 350 U.S. engineering schools. Fellow principal investigator Kathleen Eisenhardt takes the long view of the center’s influence on corporations and, ultimately, national economic growth.
[quote_right]”The hope is to link innovation-savvy students with revolutionary technology companies, and influence significant job creation.”[/quote_right]“This grant can serve as a spark to ignite a social movement that reaches into the leading technology-based corporations and promising ventures of the country,” says Eisenhardt. “The hope is to link innovation-savvy students with revolutionary technology companies, and influence significant job creation.”
Connecting students with the best technology entrepreneurship minds is a key component of STVP’s courses, from a gateway course into entrepreneurship, such as the Entrepreneurial Thought Leaders Seminar, to unique offerings such as the Mayfield Fellows Program.
“Entrepreneurship courses at Stanford have a great reputation for having an appropriate mix of theory and hands-on learning,” says Stanford student and Mayfield Fellow John Melas-Kyriazi. “The Mayfield Fellows Program is legendary on campus, and after several friends recommended MFP, it was too hard to resist applying.”
Melas-Kyriazi came to Stanford with the intention of being a classics major, however, after becoming fascinated by energy and climate change, he chose a more entrepreneurial direction.
“I came to believe strongly that the private sector has a central role to play in fighting our current energy crisis, and that startups are the most promising driver of innovation in clean technology,” says Melas-Kyriazi. “That’s why I chose to study engineering and entrepreneurship as an undergraduate.”
With the United States seeking to maintain its innovation edge, its of vital importance to develop more engineers and scientists who understand the value of business models, operational issues and product development. Direct exposure to these skills as an undergraduate has the power to change how a student sees their place in the world, according to Stanford alum Jessa Lee, who now works as a scientist at Pacific Biosciences.
“All these people were exposing you to something new, trying to broaden your perspective to understand how much more creative and innovative you can be, when you understand how the system works,” says Lee about her experience as a Mayfield Fellow in 2008. “It’s about seeing the bigger picture and getting a better sense of how my technical skillset can be put to use in an entrepreneurial context.”
Helping students to see these connections will be a major aim of the national center, which will actively engage participation by U.S. faculty and students. Part of his effort will be developing and delivering the center’s content across the US. STVP’s key partner on this initiative is the National Collegiate Inventors and Innovators Alliance (NCIIA). NCIIA Executive Director Phil Weilerstein sees real value in creating a center with such a dedicated focus.
“The need for innovation and entrepreneurial engineers is at an all-time high,” says Weilerstein. “NCIIA is looking forward to applying its expertise to helping universities build cultures of innovation on their campuses, and to supporting the entrepreneurial endeavors of engineering students and faculty.”
Based on evolving tools and techniques in engineering education, the center will provide U.S. engineering students and faculty with resources for curriculum, program and professional development.
“Hundreds of educators are already working to develop new programs addressing creativity, innovation and entrepreneurship as essential components in an engineering education,” says Dr. Tina Seelig, STVP’s executive director. “We look forward to gathering the most effective approaches and to sharing them with faculty and students across the country.”
The center’s efforts to deliver the latest research and insights into classrooms will not only benefit students, but will also allow participating faculty to leverage the center’s network to disseminate research on the efficacy of entrepreneurship education. This accelerated approach will also impact the future development of the center and its processes.
“This center will adopt the iterative approach powering the most successful startups in America,” says principal investigator Sheri Sheppard. “As our research explores how engineers develop the skills and mindset to bring ideas to life, what we learn can be immediately incorporated into the resources the center provides to students and faculty.”
In anchoring the center, the Stanford Technology Ventures Program will leverage its extensive experience in entrepreneurship education. STVP’s entrepreneurship and innovation courses are built upon a passionate commitment to experiential learning.
[quote_right]”Stanford’s willingness to throw open the doors to new ideas is very attractive to students and is an incredible opportunity for faculty who want to make a real impact.”[/quote_right]”STVP’s approach embraces key ideas to unlocking entrepreneurship and innovation, such as learning to reduce barriers, understanding customers and developing scalable business models,” says serial entrepreneur Steve Blank, who serves as a Stanford adjunct faculty member. “Stanford’s willingness to throw open the doors to new ideas is very attractive to students and is an incredible opportunity for faculty who want to make a real impact.”
To augment NSF funding and provide additional real world experience, the center has also established a set of corporate partners, including some of the most innovative companies and venture capital firms in the United States, including Raytheon, Microsoft, MWH Global, Draper Fisher Jurvetson (DFJ), Edison International, Accel Partners, the X-Prize Foundation and Kleiner, Perkins, Caufield and Byers. These partners will provide resources for curriculum development, dissemination tools and student access to industry mentors.
“Now is the best time for the creation of this center,” according to DFJ Partner Tim Draper. “Engineers are technical wizards, but their skills can be raised to new heights when infused with the drive and knowledge to turn ideas into the products and organizations that will shape our nation’s collective future.”
Prof. Tom Byers
In 2011-12, STVP will present an entirely new series of Accel Roundtable on Entrepreneurship Education (REE) conferences, in partnership with regional hosts on five continents. REE conferences bring together business, science, engineering and design faculty, with business and policy leaders, interested in building leading-edge entrepreneurship programs and ecosystems.
Someone who truly understands the power of these events is STVP Co-Director Tom Byers. As a dedicated entrepreneurship educator at Stanford’s School of Engineering, Byers is excited by the ever-growing wave of interest for entrepreneurship and innovation education around the world. Byers sat down with us to discuss the benefits of the REE conference experience and how each conference offers something unique for regional attendees.
New conference dates have been announced for the 2011-12 season. Where is REE headed this year?
Byers: Our schedule for the upcoming year is really fantastic. We are kicking things off in Puerto Rico, where Interamerican University will host REE Latin America in October. The 2010 REE Latin America conference was a packed house, so we’re excited to build on that success, this autumn, in San Juan. We also have upcoming REE conferences scheduled in Asia, Europe, the Middle East/North Africa region, and we will also hold REE USA in San Francisco, in partnership with the NCIIA’s OPEN conference in March.
How would you describe the REE conference experience?
Byers: Focused and collaborative. The educators and leaders from business and government who attend REE know these are very special gatherings. You get the chance to meet and work side by side with leaders in the field. You are surrounded by colleagues who are passionately committed to driving innovation and entrepreneurship education. And attendees leave with an infectious desire to be change-makers once they return home. Plus, REE conferences are intimate enough to offer attendees solid face-to-face time to network and build relationships with peers.
Is that intimate environment created by design?
Byers: It’s one we definitely encourage, and I think that each conference reflects this attitude to some extent. REE conferences are very interactive, with less emphasis on the presentation of scholarly papers than at traditional academic meetings. And each REE also has a unique character that reflects the host region’s culture and entrepreneurial ecosystem. We love to see new ideas presented at REE, and watch them be tested and examined through a region’s specific cultural lens.
Do you see similarities from region to region when it comes to entrepreneurship education?
[quote_right]Today’s educators want their research and coursework to have a sustaining power to affect change in the real world.[/quote_right]Byers: Absolutely. Every university would like to have deep impact within their local or national entrepreneurial ecosystem. At REE, we don’t see a lot of faculty or institutions solely interested in abstract or esoteric aspects of entrepreneurship. Today’s educators want their research and coursework to have a sustaining power to affect change in the real world.
What does change mean in this context?
Byers: It really depends, as entrepreneurial focus can vary from program to program. Some schools are looking to focus solely on training founders or being an incubator for their region. While this is not the purpose of our program at Stanford, we understand many international faculty are working within entrepreneurial ecosystems that are still early in their development, and with student populations with far less exposure and inherent inclination for the entrepreneurial life.
Can you describe a best-case example of experiential entrepreneurship learning?
Byers: At Stanford we try to infuse experiential learning into as many of our entrepreneurship and innovation courses as possible. This may be most evident in our Mayfield Fellows Program, which I have the sincere pleasure of teaching. Each spring a select group of our students take a deep dive into entrepreneurship through a series of classes and a hands-on internship in a developing technology company. This frontline exposure provides a lifetime of insights for the students.
Is it possible for faculty at other schools to build this type of program, particularly outside Silicon Valley?
[quote_right]I think it’s just as important, if not more so, for programs outside Silicon Valley to build course experiences that connect students to major technology firms in a region.[/quote_right]Byers: I think it’s just as important, if not more so, for programs outside Silicon Valley to build course experiences that connect students to major technology firms in a region. While we would encourage all students who have a desire to start their own companies, not everyone who takes entrepreneurship courses will end up founding a company or becoming a serial entrepreneur. However, entrepreneurship education provides broad skills that complement a technical education, which can then empower students to become innovative professionals in larger, established organizations, as well.
How should an entrepreneurially-minded faculty member go about developing a program?
Byers: A major key is for educators to identify the business, science and technology leaders who are successful in their home region. These leaders run the companies that can provide support and mentoring opportunities to get a program off the ground. Of course, designing a regionally-informed curriculum that fits the needs of the ecosystem is also a critical component. That’s why we started the Roundtable on Entrepreneurship Education conference series in 1998. At REE, educators can connect with one another and share the latest strategies and most-effective techniques for teaching entrepreneurship. The insights and tools you learn at REE can be put to work immediately.
“Most of our assumptions have outlived their uselessness.”
Human beings have an amazing ability to create assumptions. In fact, this ability is only trumped by the human race’s ability to rely on these assumptions as facts. The old adage goes, “you know what happens when you assume…,” however, you only risk embarrassment if you refuse to test your assumptions. In this collection of ECorner video insights, Tom Kelley, Ann Winblad and Randy Komisar explain the role assumptions play as starting points for entrepreneurs and, when left untested, as inhibitors to innovation.
Assumptions Blind You to New Products
As the general manager at design firm IDEO, Tom Kelley constantly sees clients anxious for new products. However, companies struggle to innovate when they can’t let go of industry assumptions about customers.
When IDEO was charged with helping a corporate client to design a new children’s toothbrush, Kelley’s team performed hands-on field research on how children actually brush their teeth. Blowing up tired assumptions about pint-sized users allowed IDEO to create a new bestselling product for their client.
Keep Testing Core Assumptions
“As time goes on, turn the assumptions into facts.”
Venture capitalist Ann Winblad advises entrepreneurs to boil down their business plan to identify the “top five core assumptions” for success. Particularly in the case of young startups, founders might make large changes to their product or service, often based on assumptions and incomplete evidence. This is an acceptable course of action, if the company is willing to constantly test these assumptions. “As time goes on, turn the assumptions into facts,” says Winblad.
Assumptions as Starting Points
Even though many ventures do not find success until discovering the pivot, KPCB Partner Randy Komisar sees the value of assumptions in an initial business plan. According to Komisar, any “Plan A” must flesh out your business assumptions, challenges and risk mitigation insights.
Those critical first thoughts on paper help an entrepreneur create the language with which to discuss their strategy. Here assumptions can serve as jumping off points for testing ideas and moving the organization forward.
Summertime for entrepreneurs means less time at barbecues and more time for business model generation. For those of you planning to spend the summer working on a venture, or developing the next great technology innovation, here’s a quick round-up of cool insights for you to use as you sweat out the hot weather. Of course, you could also make a business out of soaking up the sun.
Plus, enjoy this video of Le Meur sharing his entrepreneurial story at Stanford.
Large Scale Change Won’t be Easy
[quote_right]One of the impediments to successful change is that people use the belief that “it is difficult and takes a long time” to avoid trying to make necessary changes at all.
— Prof. Bob Sutton[/quote_right]Stanford Professor Bob Sutton is currently working on a new book, with colleague Hayagreeva Rao, on scaling constructive action. As the author of Good Boss, Bad Boss and The No Asshole Rule, Bob is widely known for engaging work that consistently presents valuable insights into human and team interaction, particularly in the workplace.
Earlier in June, Sutton shared a post on his blog discussing the direction of his current thinking, and examined earlier research on why organizations cannot always achieve large scale change through simplification of processes to reduce cognitive load on employees. Read the full post Sutton’s blog: Work Matters.
Reducing Your Innovation Risk
BYU Entrepreneurship Professor Nathan Furr is currently blogging for Forbes.com on topics related to entrepreneurship and innovation. In a recent post, Furr describes the challenges faced in unlocking the secrets to repetitive innovation. When picturing innovators, it’s easy for most people to become enchanted with the romantic notion of one creative individual repeatedly coming up with big successes.
However, Furr believes reality lies in understanding innovation as a process, rather than a series one-off moments of invention. Furr also provides a model for how to lower the risks of innovation, by increasing the speed with which entrepreneurs attempt to validate new ideas in the marketplace.
Perhaps even more interestingly, he goes a step further in suggesting that tech bubbles are not a bad thing for creating long term value and innovation. See Blank’s full closing argument on his blog.
You will not be alone when starting a company. There will be vendors, suppliers, partners, developers, regulators, and, with some luck, customers who will embrace your company’s product or service. Who knows, you may even get some of them to pay for it.
There should be no shortage of people to make human contact with when getting your venture off the ground. However, in the life of your company, there is one person that will be more important than any other: your co-founder. Unless you choose to fly solo.
The Buddy System
Some entrepreneurs see major benefits in being the sole founder when starting a company (or even being the only board member). However, starting on your own will be a challenging experience, and possibly a lonely one. At the end of each grueling day, who will you talk to who can completely understand what you’re trying to accomplish. Remember, friends and significant others aren’t paid to hear you complain.
For Wences Casares and Micky Malka, co-founders of Patagon and Bling Nation, their positive working relationship thrives on a shared willingness to over-communicate. Also, as serial entrepreneurs, Casares and Malka continue to work together because each man recognizes complementary strengths in the other. Casares comes from a technical background, whereas Malka brings more direct experience in financial aspects of business management. However, according to Malka, “We don’t divide the roles. We always [project] as one coherent owner, founder and CEO.”
Having a strong co-founder relationship also provides the leaders with a sounding board who can see the big picture. You can pitch wild ideas to your partner and know that you will receive honest (sometimes brutal) feedback on whether the idea has merit. “You need to have a strong ego to be an entrepreneur,” says Casares, “or at least very strong convictions about your abilities.”
Both men show this confidence to the outside world, but when it comes time to work together, Casares and Malka solidly believe in leaving egos at door. In this video, Casares and Malka discuss the role of ego and the importance of sharing credit with your co-founder.
Not everyone buys into the necessity of the co-founder relationship. Venture capitalist Mark Suster calls this the “co-founder mythology.” Suster believes Silicon Valley is particularly keen on perpetuating the co-founder model as the only way to go. Of course, he also said Silicon Valley is lazy. And keep in mind that if you choose to have more than one co-founder, and the relationship sours, they might make a movie about it.
In the end, each entrepreneur needs to make the decision that is right for them and right for the venture. Are you the type of personality who can share control, credit and camaraderie with another person? It’s not about adhering to one ideology or another, but about choosing what works best. An intelligent, dynamic and hardworking individual can certainly lead a venture to success. But so can co-founders… like at Google, Yahoo and maybe this new venture will five million users and counting.
Kevin Systrom and Mike Krieger launched Instagram, the wildly popular photo-sharing service for iPhone, in late 2010. Since that time, the young company has attracted users who enjoy their simple-to-use application that allows classic camera filters to be applied to mobile photos before they are shared through social media.
While Instagram’s elegant product took hard work and many long hours to create, discovering solutions is not the hard part when designing a product, according to the co-founders. “The hard part is actually finding the problem to solve,” says Systrom. “Solutions come rather easily for most problems, not all, but most.”
“The hard part is actually finding the problem to solve.”
Rather than just designing a slick web application that was all sizzle and no substance, Systrom and Kreiger always saw Instagram as a solution to the top problems with sharing photos taken on mobile devices: 1) Mobile photos don’t always look great, 2) Uploads of mobile photos take too long, and 3) It’s hard to share these photos with multiple services at the same time.
While Systrom and Krieger personally experienced these issues with other photo services, the co-founders needed to verify that other users struggled in the same way. They got their gut-check by getting their product in front of early users and learning from these interactions. This process of testing your hypotheses is also a fundamental principle of the customer development/lean startup methodology.
Systrom and Krieger are Stanford graduates who also share a desire to tackle problems. While many people in tech claim only to be interested in taking on huge problems, smaller problems present unique challenges, according to the co-founders, as simple solutions are often harder to scale.
“You should not be afraid to have simple solutions to simple problems,” says Systrom. “If you delight people with even a simple solution, it turns out it will go really far.”
Author and venture partner Geoffrey Moore believes it’s a major privilege to work for a high-tech company. While an engineer coming off back to back (to back) all-nighters might disagree, a role in a high-tech firm can provide a number of unique opportunities. According to Moore, this is especially true for individuals who have the chance to tackle roles in product marketing and product management.
In the following video, Moore explains why product roles are special in the technology industry, because the work is often done by young people in their first 10 years of employment. As a product manager, “you actually have your hand on the tiller that will change the fate of your company,” says Moore. He also discusses some tools that product managers can use to build innovation and power for their company. Check out the video.
Moore encourages product teams and leaders to remain innovative even within large organizations. This is an important idea as innovation and entrepreneurship are not just for individuals who start companies. In fact, it often takes a different kind of courage to be entrepreneurial inside a much larger team or organization. To create power and innovation, Moore suggests three valuable tools: creating differentiation, neutralizing competition and optimizing productivity. And heed Moore’s warning that a single team should only be focusing on one of these areas at a time.
Create Real Differentiation
One place to spend your team’s limited resources is on the research and development of new ideas. This is where product teams help create power for the company by building innovations that will hopefully elicit a major “wow” from customers. But the “wow factor” will not come from small tweaks to established products, instead, teams must aim to create the fundamental product differentiation that will allow a company to gain separation from competitors within a category.
Neutralize the Competition
Have you done a gut check on how your current offer stacks up in the marketplace? It’s hard for companies to admit their products are falling behind the competition, but that is often due to stubbornness and pride. If competitors’ products have a standard feature that your product is missing, how can you expect your product to win if it’s not even in the conversation? Engineering teams may not see the glamour in work focused on catching up to the competition, but these tasks are vital if a company wants to stay relevant in a market space.
While “optimization” may seem like a trite buzzword, it’s also a key ingredient to freeing up resources within the constraints of a tight budget. These “found” resources can then be re-distributed to product teams focused on creating differentiation or neutralizing the competition. Moore encourages product managers to get serious about optimizing productivity because, “you have resources reporting to you doing stupid stuff.”
This may be a brash observation, but product managers must always be on the look out for the process and resource inefficiencies that develop over time as teams change in size and focus. This can also be an opportunity to realign your resources and ensure you have the best possible team in place.
“A bad word whispered will echo a hundred miles.”
Amidst the daily pressures of trying to successfully deliver a product and win over customers, entrepreneurs can forget how their words and actions appear to partners and co-workers. What you might view as your unwavering commitment to success, may appear to colleagues as bullying and grandstanding.
Of course, if your startup is a one-person shop, feel free to blast orders as you’ll be the only one responsible for delivering on them. In fact, some founders prefer to fly solo when it comes to all strategic decisions. But when other employees are involved, savvy entrepreneurs should choose their words wisely.
Richard Scheller, Executive VP of Research and Early Development at Genentech, discovered this lesson when he moved from Stanford University to an expansive management role in the private sector. Here Scheller shares his awkward, amusing, but ultimately illuminating first experience with direct management and the employee/manager review process.
First time managers and entrepreneurs may identify with Scheller’s inaugural experience in building open relationships with employees. The careful selection of one’s words is critical in management, as Scheller says, because employees will try to deliver on what you ask of them. Entrepreneurs benefit from strong leadership in operations, not just when sharing the “big” vision, but also when communicating clear expectations to employees.
Keeping these open lines of communication may require entrepreneurs and employees to face honest and open feedback from one another. While some of this feedback may come as a surprise to each party, a willingness to share constructive insights can encourage greater trust among team members. And beyond carefully choosing your words, as Scheller points out, you need to be a better listener and learn to respect other peoples’ opinions, if you want to make the most of your working relationships.
As the United States trudges its way out of recession and high unemployment rates, Silicon Valley appears to be growing jobs at a faster pace. Even if the job market is picking up, competition for jobs at valley companies will continue to be fierce. And if you’re a startup founder looking to add the next key members to your team, the hiring process can be a fantastic opportunity to seek out great people. Here are a few insights on the recruitment process from some iconic Silicon Valley leaders.
Hire Great People
IDEO Founder David Kelley suggests avoiding conventional approaches to hiring, and in this clip, he offers a few recommendations: 1) Hire non-confomists to stimulate the organization, 2) Hire experts and generalists from different fields, and 3) Form “hot groups” of 8-12 people for maximum impact. Kelley says ideal hires interact well with staff and demonstrate an “attitude of wisdom” that balances the ability to promote ideas and still consider feedback.
Hire the Right People
“The number one thing I look for is raw intelligence,” according to Mark Zuckerberg, the high-profile founder of Facebook. Zuckerberg also believes it’s important to hire individuals who align well with the company’s focus. In this video clip, the founder also reveals the skills and balance of experience he looks for when recruiting college graduates.
Hiring Affects Company Culture
Deciding which candidates to extend offers to is no small responsibility. Emphasizing this point, NVIDIA Founder Jen-Hsun Huang states that hiring decisions are the choice of the company and no one else. With skilled engineers everywhere, hiring decisions often come down to the personalities and motivations of the candidates. Huang believes a candidate’s ability to mesh with the company culture must be a primary consideration in the hiring process.
From engineering teams of just a few members, to global companies with tens of thousands of employees, organizations must constantly search for new ways to reinvigorate stressed-out workforces. You may be familiar with corporate initiatives that pop up every few years announcing new (often expensive) employee programs or software purchases intended to make working life easier. However, a lack of tools may not be the root of the problem. Maybe it’s a lack of trust in human relationships.
If trust seems too touch-feely a concept, you may be surprised to learn that it has caught the attention of the US Army. After a decade of continuous engagement around the world, military commanders are faced with “employees” who have been asked to maintain a near-constant state of fighting readiness. In this state, soldiers are often called upon to exert hard power over other human beings. According to author Ori Brafman, this means a workforce overwhelmed by exposure to the stress hormone cortisol. If you can’t avoid exposing workers to stress, how do you create an organization better prepared to deal with this exposure?
Brafman’s suggestion to the Army was to develop the capacity to create more soft power and trust-based networks. In the video below, Brafman describes his experiences working with military personnel to help them relate their feelings and experiences in a more humane way. Between the participants, these interactions actually developed a greater level of intimacy, says Brafman, a concept that doesn’t often come to mind in business or the military.
If you’re dealing with stressed-out workers, perhaps you should hold off on purchasing that new collaboration tool with all the bells and whistles, and instead, invest your energy into improving the relationships between the human beings that make up your company’s human capital.
Entrepreneurship activities continue to blossom at Stanford, even as spring quarter is coming to an end. Here is a round-up of campus entrepreneurship opportunities, information and events for you to explore.
Courses & Research
Info Session for “Creating a Startup” Courses
Wednesday, May 18, 4:00 – 4:30 pm, Huang Engineering Center Room 10
Professor Haim Mendelson will host an information session before the DFJ Entrepreneurial Thought Leaders seminar on May 18 to discuss Creating a Startup I and II (STRAMGT 356/366). Offered through the Graduate School of Business in Autumn 2011 and Winter 2012, respectively, the courses will bring together business, engineering and science graduate students to focus on startup fundamentals from a business point of view. Admission is by application only. For non-GSB students, the deadline for early admission is Friday, June 3.
Stanford Innovation Survey STVP faculty member Charles Eesley is conducting the Stanford Innovation Survey as part of an academic research study of innovation and entrepreneurship. If you are an alumni of Stanford, your participation will help to improve departmental and university educational programs. To participate and to learn more, visit the Stanford Innovation Survey website.
ENGR 145: Technology Entrepreneurship
This summer, Consulting Professor Tom Kosnik teaches our popular Technology Entrepreneurship course. The course blends mentor-guided team projects, in-depth case studies, research on the entrepreneurial process, and the opportunity to network and ask questions of Silicon Valley’s top entrepreneurs and venture capitalists. Check out a video profile of the course on Forbes.com.
Dates Announced for Upcoming REE Conferences
New Roundtable on Entrepreneurship Education conferences will be held in 2011-12, including REE Latin America in Puerto Rico, October 19 – 21, 2011. REE brings together business, engineering and design faculty from around the world, interested in building leading-edge entrepreneurship programs. Registration information will be made available in the coming months, so save the date to take part in REE-inventing entrepreneurship education for the 21st century.
STVP Hosts Partners from Universidad del Desarrollo
This week our program is honored to host faculty from UDD in Chile. Our partnership with UDD aims to foster the acceleration of high-technology entrepreneurship in Chile by sharing curriculum and strategies successfully used at Stanford to teach entrepreneurship and innovation. UDD is currently developing a cross-discipline center to promote innovation thinking, and Stanford faculty will also be traveling to Chile to support the development of their effort.
Bling Nation Co-Founders at DFJ ETL Wednesday, May 18, 4:30 pm, NVIDIA Auditorium – Huang Engineering Center
Join us for this week’s DFJ Entrepreneurial Thought Leaders seminar, featuring the co-founders of Bling Nation, Wences Casares and Meyer Malka. Bling Nation is an innovative mobile payment technology platform that allows businesses to build loyalty programs, while helping customers to integrate their checkout experience with social media profiles. A reception, generously sponsored by Endeavor, will follow this seminar.
Building Innovative Brands with Lynda Smith
Thursday, May 19, 7:00 pm, Sequoia Room, Tressider
Students and entrepreneurs can learn to take their businesses to the next level from Lynda Smith. At this engaging talk, Smith will discuss how to build innovative brands – specifically focusing on what entrepreneurs need to know about marketing. Light refreshments will be served.
The Innovator’s Paradox
If you work for any type of business there is a good chance you may get trapped by the innovator’s paradox. At some point in the quest for growth, you will be forced to look at growing into new area or an incredible opportunity will come up. Your business will face the decision of whether to be leaders in a new market or let the competition pass you by. Most likely you will put together a cross-functional team of your best players, they will put together an ambitious plan that gets everyone excited, perhaps even some outside attention from the press about how your corporation is leading out, and then you will start executing.
Most of Your Projects Will Fail
Sadly, despite your best efforts, most likely you will fail. In fact, some research suggests that up to 85% of new initiatives fail. It will start slowly … a few press releases and consulting engagements later, the big new initiative slowly starts to lose steam and higher ups, whether they are the board or the CEO start to doubt whether the new initiative really makes sense. Usually the all-star team starts getting recruited into other projects and the initiative just seems to disappear. Without recognizing it, your team got caught in the innovator’s paradox. You believed in the new opportunity, you allocated resources, you put your best talent on the project, but somehow it didn’t seem to work out. How do I know? Because I’ve lived it and seen it happen inside some of the best businesses in the world.
The paradox is that even though these companies believed in the idea, allocated resources, and planned for success, by doing these things they were actually increasing their chances of failure. Furthermore, most of what you’ve learned in business school won’t help you to manage real innovation and growth. Of course, if you are working on a minor product line extension or something familiar, you may succeed. But if you are trying to conquer a new market, a new product, a new customer, most of what you learned will actually trap you and the consulting companies you hire to help you won’t answer the real questions, instead they will mirror back to you what you already know.
The Innovator’s Solution
The solution to the innovator’s paradox is to use the right management techniques—the techniques to manage unknown problems rather than known problems. Below I highlight the contrast between these two types of management:
If you asked me to say it in one sentence, it would be: identify your assumptions, rapidly test those assumptions, and iterate. When most managers see this list, they nod their heads and say “I already do that,” but in practice, most people don’t. Everything in our training and in our organizations runs counter to managing unknown problems! Why? Because the tactics for managing unknown problems are terrible for managing known problems and the bills today get paid by managing known problems.
The Bills Tomorrow Get Paid When You Manage Unknown Problems
Unfortunately, the bills tomorrow get paid when you manage for unknown problems. Therein lies the fundamental tension for businesses trying to grow. And the tactics for managing unknown problems can be surprising different than those one might think at the outset. As one example, consider John Seely Brown’s recommendations for how to incorporate innovations into the corporation during a recent lecture at Stanford.
I’ll write more about how to really use these tactics in your business. But for those of you who read my posts regularly, if this sounds familiar, it should. But notice I didn’t use the word entrepreneur. Why? Because managers and innovators, you face this problem every bit as much as, even more than, entrepreneurs because you have to fight uphill against the established way of doing things to really innovate. And I’ll help show you how.
Innovators face a paradox: they wouldn’t act unless they believed in their idea but their belief leads them to failure because they use the wrong techniques to execute on a guess
Success depends on recognizing that you face the unknown and applying the right management techniques
Although you may believe you already understand these management techniques, they can be difficult to use correctly, particularly in a corporate environment that favors the opposite
Ten years ago, every company founder dreamed of taking their startup public. Maybe they wouldn’t openly admit to fantasizing about an IPO, but this major event could provide a company with capital for expansion, while also rewarding early investors. But over the past decade, fewer companies have been able to take the IPO plunge. Why has this “dream” become so hard to achieve?
According to SecondMarket CEO Barry Silbert, the factors causing the long, slow death of the IPO also made a permanent impact on all public markets. In the video clip below, Silbert describes some of these factors, including the shift to online brokerages, reduced interest and research in small cap stocks, and the cost pressures of Sarbanes-Oxley compliance, among others.
So if you couldn’t go public, what else could you do? Over the past decade, one popular option was to make your startup an attractive target for acquisition. In fact, many companies just chose to define acquisition as the measure of success. However, according to Silbert, SecondMarket now offers a new way for startups to discover needed capital and liquidity, without being forced into public markets.
In the past few months, SecondMarket’s model has garnered participation from some high-profile companies, including Facebook, Zynga and Twitter. While investors speculate on the valuations of these companies, and when (if ever) they will go public, SecondMarket’s framework appears to be allowing these firms to not only raise capital, but to buy more time to consider their options.
In all the excitement around creating a new product or starting a fresh company, even seasoned entrepreneurs can lose sight of the importance of connecting with customers. Maybe customers aren’t that interested in what you’re selling. Maybe your product doesn’t actually solve a problem they have. Maybe listening to customer feedback is the key to turning your ho-hum offering into a product they just can’t live without. To keep these very important people in the front of your mind, enjoy these excellent insights on connecting with your customers.
Use Technology to Enchant Customers
In the clip below, entrepreneur and author Guy Kawasaki explains how technology implementation affects a company’s ability to enchant customers. Kawasaki urges companies to “remove roadblocks” when it comes to helping customers interact with a product, and he also offers tips on the best types of interactions and information to offer to be successful in social media environments.
Acting on Customer Discovery
Customer feedback simply cannot be outsourced, according to serial entrepreneur Steve Blank. Here he shares an anecdote demonstrating the importance of speaking directly to customers. Blank recalls how an entrepreneur was forced to listen to customer needs and tried to alter his product accordingly. These changes turned single-digit sales into the thousands, and resulted in an eventual $400 million company sale.
Acquire Customers with the Right Model
Originally, Box.net customers were charged for online storage when they signed up with the company. However, CEO and Co-Founder Aaron Levie realized the opportunity to grow the customer base by lowering barriers to product adoption. In this clip, Levie describes the company’s successful implementation of the “freemium” business model, which not only increased their number of customers, but also served as a future differentiator from larger competitors.
Over the past few weeks, many companies have scrambled to address component and part shortages due to the devastating Tohoku earthquake and tsunami in Japan. While large scale natural disasters cause immediate havoc for buyers and supply chain managers, companies that depend on raw materials are beginning to take notice of other environmental hazards looming on the horizon.
In light of the effects of global development and climate change, the safety of supply chains is a growing concern for corporations. Conservation International Executive Vice President Jennifer Morris sees this “enlightened self interest” from companies as a tremendous opportunity to advance her organization’s mission.
As head of Conservational International’s Ecosystem Finance and Markets unit, Morris works to develop corporate partnerships that support sustainable economic development. While these programs provide Conservation International with important resources, they also help to assuage economic fears of supply chain disruption.
In past years, Morris’ team has worked with major corporations, such as Starbucks, Walmart and Marriott International, to customize programs that successfully protect long-term resource needs, while successfully supporting the livelihoods of local citizens in regions around the globe. According to Morris, by analyzing the environmental risks to supply chains, Conservation International can suggest viable solutions that successfully meet the long-term needs of corporations and the planet.
In the video below, Jennifer Morris discusses how Conservation International helps to ensure supply chain sustainability.
We all face uncertainty in life, especially at times of great change or transition. With our minds full of problems and questions, it’s easy to feel overwhelmed by challenging circumstances. Students are keenly aware of this experience upon leaving school, and in today’s guest post, STVP Executive Director Tina Seelig discusses helping students confront uncertainty to turn problems into opportunities.
As we head towards graduation, I have been asked to speak in several classes at Stanford to talk with students about life after school. After sharing some stories about my career path, I decided to do an experiment… I asked the students to write down the biggest problems they are currently facing so that together we could try to solve their problems by turning them into opportunities.
Each student instantly pulled out a sheet of paper and started writing. After a few minutes I asked them to pass them to the front of the room. The problems were all anonymous. As I started reading them, I was shocked and amazed by the problems they wrote down. In retrospect, I’m not sure what I expected, but it was certainly not what I received.
Some problems were written in bold letters (I NEED A JOB) and others were written in tiny letters that were nearly impossible to read (I want a boyfriend). They were scrawled as a quickly crafted list with dozens of existential questions or they were written with an unsteady hand (I am not motivated). It was clear that these big, bold questions are looming in these students minds.
They are finding, as generations before them have, that life after college is filled with zillions of questions without a right answer.
After doing this exercise in a few classes, the patterns started to emerge. Clearly, even after receiving an education at a top tier university, a large number of students are struggling to figure out what they want to do with their lives. And, of course, the gloomy economic environment isn’t making life easier. They are finding, as generations before them have, that life after college is filled with zillions of questions without a right answer.
While in school, students live a life that is cut up into quarters or semesters with a nice long summer break. They are given specific assignments and receive a grade at the end of each one. They know if they have done well or not. But, life beyond college is quite different. It is the ultimate open-book exam.
In fact, after school, we are the students AND the teacher, creating the tests ourselves. Nobody gives us a text book or a course reader, and the comforting rhythm of semesters and summer breaks is gone. In fact, a colleague of mine in Chile provocatively tells his students that they should take courses from the worst professors at their school since this will prepare them better for life where they won’t have a talented teacher showing them the way.
In the classes this quarter we organized all the questions into categories and spent as much time as needed addressing all the concerns. Students stayed long past the allotted class time to think about these problems in creative ways. One of the benefits of this public discussion was that the students all realized that each of them was facing similar challenges. They are all going out into the unknown and need to learn a brand new set of skills, including how to motivate themselves, how to make decisions with incomplete information, and how to embrace the uncertainty on the path ahead.
Is it possible to have an amazing product, but have no idea who it’s for? Absolutely, according to Idealab Founder and CEO Bill Gross. Before starting Idealab, the tech incubation firm that started Picasa and Overture, Gross started an educational software company called Knowledge Adventure.
In the early 1990’s, Knowledge Adventure was selling a reasonable number of their multimedia CD-ROM products, but as Gross explains in the video below, the company struggled to explain who their products were actually for. Gross even admits one product’s packaging claimed it to be, “fun for ages 8 to 108.”
While this is an understandable approach in trying to capture a larger audience, the result was less than effective in targeting specific customer groups. To attack this issue, the company mobilized their workforce into “weekend warriors,” deploying employees into retail outlets to demonstrate the products and gain direct customer feedback.
“We would have never, ever discovered it, if we had not been in the stores, seeing the confusion of [customers] in the aisle.”
While this initiative boosted sales, more importantly, the effort illuminated a customer pain point that would become the basis for a major pivot. After each weekend excursion, employees shared stories and insights from their experiences with customers. One major observation was that parents were confused as to which product to purchase for their child. Was the cool Space Adventure product in their hands meant for their five-year-old or ten-year old child?
Knowledge Adventure subsequently built and marketed a product specifically for children just entering kindergarten. The result: the age-specific product sold “20 to 50” times as many units as the company’s other products. Off this success, the company would eventually build targeted products for children entering the first through sixth grades.
Pursuing valuable customer feedback allowed for the discovery of this major pivot, which Gross admits, “We would have never, ever discovered… if we had not been in the stores, seeing the confusion of [customers] in the aisle.”
You’re the CEO/Founder of an early-stage startup and it’s your favorite time of the month. Are you ready for the board meeting?
How much time (or days) have you spent preparing for it? Do you look forward to sitting down with your board or do feel like you’re headed for another round at the Inquisition? These get-togethers should be useful and productive for CEOs, but they can also result in animosity between management and directors. So here’s a new method for avoiding board fights. Have you ever considered being your own board?
“There was only one person on the board, and that was me, and we always got along.”
Brent Constantz, founder of cleantech firm Calera, came to this idea from direct experience. As the founder of numerous companies, Constantz regrets the time he lost preparing for board meetings, claiming this work can devour up to 20 percent of a management team’s time. Rather than preparing a defense for every operational decision he made, this time would have been better utilized focusing on innovation and operations. “It’s a sad thing, but board[s] of directors debilitate companies,” says Constantz. “It’s not intended, but it’s the reality of the situation.”
A few companies back, Constantz decided to be his own board of one. No longer would he deal with directors who don’t review the board packet and then fire off “shoot from the hip” decisions. Nor would he have to deal with these same directors questioning the intelligence of their own decisions in the following month’s meeting. While Constantz sees value in putting together advisory boards and quarterly operating plans, he admits being a board of one has real benefits. “There was only one person on the board, and that was me, and we always got along.”
Building a team for your company can be a daunting task. While you may be focusing on how many employees you need, whom you actually choose to bring in can be a far more important issue. That’s why successful OptiMedica CEO Mark Forchette believes figuring out how to put the right people in the right seats is the single most important thing entrepreneurs can learn.
Building the right company dynamic certainly includes selecting the right board members, investors and fellow employees. Entrepreneurs should always be trying to work with great people. However, putting the right people in the right seats can also extend to personal relationships. Whom do you choose for friends, partners and even a spouse? The entrepreneurial life is hard enough, so make sure to surround yourself with people who support what you are trying to accomplish.
Another reality is that dysfunctional teams probably know they’re dysfunctional. Whether exemplified by poor overall morale or negative communication between internal teams, it’s really easy to tell (at least for employees) when your organization just isn’t working as it should. “Everybody probably knows when they’re not the right person in the right seat,” says Forchette. Entrepreneurs must be brave enough to acknowledge when a relationship just isn’t working out and be ready to make a move.
As the Stanford campus receives a healthy dose of spring showers, our students are finalizing their schedules for the upcoming quarter. And coming off the bounty of events at Entrepreneurship Week 2011, many students are looking to add entrepreneurship-related courses. STVP offers a number of choices for students interested in entrepreneurship, or those whose next great idea has been hibernating through the winter. It’s time to push those slumbering ideas into start-up action.
Check out our spring offerings below, including courses on organization theory and management, global marketing, creativity, and financial knowledge for entrepreneurs. Plus, in our humble opinion, all students should register for the DFJ Entrepreneurial Thought Leaders Seminar. If you’re not sure entrepreneurship is for you, attend this one-unit class to hear amazing stories and insights from the brightest entrepreneurial minds. Check out the DFJ ETL speaker list for Spring 2011.
Only available to students selected for the Mayfield Fellows Program, this first section of the three-part MFP course sequence focuses on understanding management and leadership within high technology startups. Students work with engineering faculty, founders, and venture capitalists, as they explore issues of organizational development, financing, recruitment, and market strategy. Learn how the MFP experience changes lives.
MS&E 140/240: Accounting for Managers and Entrepreneurs
Instructor: Francis Stanton
Open to graduate and undergraduate students, Accounting for Managers and Entrepreneurs introduces concepts related to accounting and the operating characteristics of accounting systems. Designed for students who will need to work with accounting information for operational uses, the course identifies how to interpret and use accounting information to make decisions.
How do you market technology-based products to a global audience of customers? Learn how in this course that examines cases of startups and other technology firms that are doing this work. Students will not only learn how to target markets and build partnerships, but will also tackle issues of sales and negotiations and outbound marketing.
MS&E 180: Organizations: Theory and Management
Instructor: Pamela Hinds Limited enrollment.
This course examines classical and contemporary organization theory. Students will explore the behaviors of individuals, groups, and organizations, and come to understand why certain behaviors impact the management of organizations.
Enrollment preference is given to MS&E majors.
This popular and highly experiential course explores the variables that stimulate and inhibit creativity and innovation in individuals, teams, and organizations. Through classroom activities, design challenges, and interactions with visiting experts, students will learn that every problem is an opportunity for a creative solution.
The DFJ Entrepreneurial Thought Leaders Seminar is a weekly speaker series that presents innovators from across the business, finance, technology, and philanthropy sectors, to share their insights with aspiring entrepreneurs. Through MS&E 472, students have the opportunity to learn real world knowledge from prominent leaders and entrepreneurs.
Comparisons are frequently drawn between CEOs and the head coaches of sports teams. Maybe this explains all the management books written by championship winners. In this comparison, CEOs are leaders who create game plans and find the players they need to win. Jack Dorsey, Twitter co-founder and CEO of mobile payment company Square, sees his job as being much closer to the role of Chief Editorial Officer.
Young companies are constantly flooded with input from customers, engineers, and support teams. However, startups need to choose the one or two ideas that are truly worth focusing on to sustain the product and service for the long-term, says Dorsey. As the Chief Editorial Officer of a startup, he targets three areas in which to apply his editorial guidance.
Editing Team Dynamics
Dorsey believes that if you’re trying to build a group of people to focus on building one great thing, it’s important to aim for the optimal team dynamic. “Edit the best people in, so [you] have a good cast of characters, and edit away any negative elements,” says Dorsey. Moreover, “editing away negative elements” may not mean you have bad employees, but that these employees may just not be the right fit at this time.
All competent CEOs appreciate the need to communicate vision to internal teams, but what about external audiences? Dorsey believes that a company needs to communicate everything they are through the product or service. Customers and the general public should not be thinking about a person (like a CEO?) when they think about your company. According to Dorsey, the CEO needs to offer editorial guidance to ensure that, “The product is the story we are telling the world.”
Editing the Money in the Bank
For Dorsey, the CEO also fulfills an editorial need when choosing from financing options for a startup. Do you take money from angels or venture capital investors? Or do develop a business model that allows you to build revenue from the start? Dorsey says Square has been fortunate enough to take in revenue since day one, which allows his firm to better balance these issues. However, as every startup is different, a CEO must constantly be editorially selective in choosing the right blend of revenue generation and outside investment to power future growth.
As core components to economic recovery and stimulation, entrepreneurship and innovation are more than buzzwords at many colleges and universities across the globe. When members of the higher education community convene at the 15th Open Conference in Washington, D.C., from March 24 – 26, 2011, they will focus on the latest strategies and successes for developing learning in these critical areas.
NCIIA, the National Collegiate Inventors and Innovators Alliance presents Open 2011, and for the first time, STVP’s Roundtable on Entrepreneurship Education (REE) will take place as part of the Open conference. The combination of Open and REE creates the premiere event for faculty and students engaged in entrepreneurship and technology innovation in higher education.
On point with the national discussion around sustaining focus on innovation, Dr. Kristina Johnson, former U.S. Undersecretary of Energy, will present a keynote address on how the innovation landscape can provide a pathway to economic recovery. In another address, Startup America Partnership CEO Scott Case will discuss his organization’s initiatives and how they impact the work of higher education faculty who teach innovation and entrepreneurship.
Open 2011 offers panel discussions and lectures that focus on aspects of developing technology innovation education, in areas such as design, assessment, and the commercialization of student ventures. There will also be numerous workshops that offer attendees tools and techniques that can be used in their own programs and courses.
Enjoy this video showing some of the sights and sounds of Open 2010.
Our REE USA conference is proud to be taking part in Open 2011. As a “conference within a conference,” REE USA offers an engaging mix of events focusing on the future of entrepreneurship education in the US and abroad. REE sessions will explore the student perspective of entrepreneurship education and examine concepts for building entrepreneurship across universities. Here are some highlighted REE USA sessions:
Fantasy Island: Brainstorming the Future of Entrepreneurship Education How will entrepreneurship education change and evolve over the next five or ten years? As the demand for entrepreneurship education continues to grow, how can successful courses and programs scale to reach a larger audience? In this interactive brainstorming session, take part in defining the future of the field.
How Are We Doing? The Student Innovator’s Perspective Colleges and universities expend a large amount of effort building entrepreneurship and innovation into new programs. Have these efforts been successful in supporting students’ ability to develop new ideas and ventures? Hear from a panel of student innovators to learn the resources they find to be most beneficial to their work.
Moving Beyond the Inertia of the Business Plan Researchers do not agree on the relationship between venture success and completed, tome-like business plans, so what role can planning play to create momentum for new ventures? This interactive panel discussion addresses startup planning as an effective exercise in momentum generation.
Global Entrepreneurship Education: Around the World in 90 Minutes Does entrepreneurship education translate across international borders? This workshop and panel examines the similarities and differences of how entrepreneurship education is taught throughout the world. Audience participation will be encouraged as the session explores the unique variables and opportunities that exist in the US, Europe, Asia, and Latin America.
Toward a New Model of University-wide Entrepreneurship What does it take to build and integrate campus-wide entrepreneurship programs? Based on successful university entrepreneurship examples, this workshop examines components of infrastructure and curriculum development, technology commercialization, and community engagement.
We’re a big believer in the idea that entrepreneurial skills can be taught. It may take a tremendous amount of effort for an individual to develop their entrepreneurial mindset, but it can be achieved. However, what about inherent personal qualities of entrepreneurs? Are there common character traits or behaviors found in these risk takers? Based on experiences throughout her career, UCSF Chancellor Susan Desmond-Hellmann can identify two such traits.
Tenacious “Like a Dog on a Bone”
The first trait she acknowledges is a relentless tenacity mixed with optimism. Desmond-Hellmann says that a successful entrepreneur will refuse to quit in the face of setbacks, and stays locked on their goal, “like a dog on a bone.” Great entrepreneurs never accept that a problem is unsolvable. Moreover, this never-say-die tenacity is often mixed with optimism, according to Desmond-Hellmann. Entrepreneurs constantly face criticism from naysayers and non-believers, so the ability to persevere with your chin up is a critical ability. Of course this is a valuable life skill for everyone, not just entrepreneurs.
No Fear of Embarrassment
“Don’t think of what others think of you, think about the purpose or the outcomes you want.”
Entrepreneurs must also be willing to overcome the fear of embarrassment. During Desmond-Hellmann’s tenure as president of product development for Genentech, she recalls colleagues literally rolling their eyes at her suggestion of an innovative new treatment for cancer. It’s hard to think you might be making a fool of yourself in front of peers, but entrepreneurs must remain so committed to the value of their idea that they can withstand such attitudes. According to Desmond-Hellmann, if you’re the type that has the courage to take risks “don’t think of what others think of you, think about the purpose or the outcomes you want.”
How do you make a company endure? Author, VC, and entrepreneur Guy Kawasaki believes that a secret to building enduring brands is to enchant your customers. But what are you willing to do to make this happen? For the Grateful Dead, it meant letting their fans tape their concerts and share them with the world — starting in the late 1960’s. This model didn’t hurt business, and it’s now even a subject of management studies.
“Once we’re done with it, the audience can have it.” This quote about the band’s music is famously attributed to late Dead guitarist, Jerry Garcia. While listeners were certainly enchanted by the Dead’s music, this audience-centric attitude moved people from being fans to becoming devoted followers. As Kawasaki shares in the video below, the Grateful Dead even set up special sections at concerts to help fans in taping (ask your parents) the highest quality audio recordings.
“Once we’re done with it, the audience can have it.”
It’s not that hard to see parallels between technology startups and up-and-coming bands. How will you enchant your customers? What can you do to build deep value for your “fans?” Share your ideas and experiences on creating great customer value below, and watch Guy Kawasaki’s full lecture on Enchantment at ECorner.
In the volatile life of a young company, success often comes to those who take risks. The willingness to try new ideas and ways of doing things is a valuable trait within a startup culture. But earlier this month, an up-and-coming Silicon Valley firm was publicly embarrassed by a young engineer’s overzealous suggestions. At what point does risk-taking become bad ethics?
What type of culture exists where any employee considers bad ethical choices as viable tactics?
In this particular case, the company responded by placing the engineer on leave, and then claimed they did not even possess the technical capacity to act on the young engineer’s questionable strategies. However, that response sidesteps the real issue. What type of culture exists where any employee considers bad ethical choices as viable tactics? Rather than approaching this issue as a public relations embarrassment, a company leader should consider this opportunity as a teachable moment for all employees. Doing so allows a commitment to the highest ethical standards to become a central tenet of the growing company’s culture.
In the following video, former Hewlett-Packard CEO Carly Fiorina discusses the role of ethics in a company. She describes the reality that many organizations will tolerate behavior “on the edge,” because these choices often produce better results in the short term. However, leaders who tolerate these ethical lapses are not only gambling with long-term results, but according to Fiorina, they are also abdicating their core leadership responsibility to show that “values matter and ethics count.”
It’s easy for entrepreneurs to become discouraged when looking at the competitive landscape for a new product idea. However, as a small startup, or as an individual entrepreneur working on the next great idea, how can you possibly “out effort” a major corporation? Rather than becoming frustrated that you don’t have the financial and human capital of an Apple, Cisco, or Facebook, embrace the fact that constraints can be your friends.
In the video clip below, David Heinemeier Hansson, partner at 37signals, explains how constraints help you examine the reality of what you can achieve, and also allow you to focus on bringing the best possible product to life. An individual or small team only has so many hours to put towards developing a new product, so it might be wise to consider building a simple, innovative product that allows you to avoid getting into head-to-head competition against 800-pound corporate gorillas. David Heinemeier Hansson also articulates why this approach can pay major dividends when it comes to winning over customers.
Aaron Levie is a young man with some very big ideas on improving how enterprises share and work with information. Levie started Box.net out of his college dorm room, upon realizing fellow students shared his need for cheap and accessible online storage. Along with identifying this pain point, he also recognized major changes occurring in business and computing. With data storage efficiency continuing to improve at a rapid pace, and greater calls to enhance data access for remote workforces, Levie saw a serious opportunity he needed to jump on before someone else did. In this video from Levie’s visit to the DFJ ETL speaker series, he discusses the decision to make the leap.
Constantly Changing Business Models
According to Levie, Box’s business model would go through nearly constant changes in the early days. The young company examined numerous ways to build revenue and grow their customer base. At the company’s inception, users were charged for online space, a model that had some initial success. Box also considered sponsorship agreements with media companies, an idea that was met with little interest. The company even considered licensing the technology, allowing partners to rebrand the service as a white-label product. But Levie and his team were also focused on finding ways to reduce friction and increase product adoption. The successful answer, as Levie explains in the following video, was the introduction of a “freemium” model.
Deciding to Focus on the Enterprise
Once Box saw huge increases in their customer base, the company needed to drill down on where they could best compete in the burgeoning “cloud” computing space. Looking at the major companies that were entering the space, or would have the resources to do so at any moment, caused a question to arise. Would Box have better chances of success staying as a consumer offering, or becoming a targeted service for the enterprise market? Box settled on enterprise, based on a number of factors that Levie shares in the video below. The most interesting of these was Box discovering they could out innovate much larger competitors by releasing product iterations at a much faster rate than industry-standard three-year product cycles.
Compete Through Product Iteration
Levie believes the success of a startup is directly tied to an organization’s ability to try many things on the market, and to quickly shut down the ones that don’t work. Beyond this concept of “failing fast,” Levie believes startups need to find ways to compete that are impossible for bigger competitors to accomplish. In this space, for a company such as Microsoft, they would need to cannibalize multiple revenue streams to better compete, according to Levie. Of course, this option may not be possible for a large firm, so Box can take advantage of this situation by maintaining focus on their product, and staying agile to respond to future threats. While the use of cloud computing continues to blossom across many industries, this agility may be Box’s most competitive advantage. In this video, Levie explains this competitive position.
Entrepreneurs are often excited to receive initial customer feedback about their newest product or service. Of course, when so much time, sweat, and (maybe) tears have been poured into the latest iteration, the process of collecting feedback can also fill entrepreneurs with deep anxiety. And once all the feedback is gathered up, entrepreneurs want to quickly analyze the collected information, look for patterns, and make decisions for the next iteration.
However, according to entrepreneur and KPCB partner Randy Komisar, there may be a problem with responding to all that feedback — customers aren’t paid to be visionaries. While great insights can be gained from actual product users and customers, you can’t ask them whether a new innovation is something they need today.
“You’ve got to ask them the questions that allow you to know whether or not you think that innovation is something they will respond to when it’s ready,” says Komisar. This requires a great deal of focus and discipline on the part of entrepreneurs. Smart entrepreneurs still need to collect as much contextual information from customers as possible, but, in the end, they must find the answers to these questions for themselves. Remember, you’re the innovator.
In the following video, Komisar shares his thinking on this issue with STVP’s Executive Director, Tina Seelig.
At STVP, we work to develop “T-shaped” individuals. Within Stanford’s School of Engineering, that means helping students with strong skill sets in a technical or engineering discipline to also develop broad entrepreneurship and innovation skills. Learning these new “top of the T” skills allows students to more easily approach problems as challenges.
The generation of novel and unique solutions to problems are easier to develop when you gain the big picture perspective that comes with entrepreneurial thinking. However, the value of an entrepreneurial mindset increases for those who work hard to attain that initial deep well of knowledge in a particular area of study.
Tom Conrad, Pandora’s chief technical officer, has worked for major organizations with different views on whether employees should be “renaissance” thinkers, or should stay tightly focused on a specific role. Entrepreneurial skills benefit employees in both types of environments, but Conrad urges individuals to find out what they are great at, and to always look for opportunities to go deep.
The desire for change is an easy concept to capitalize on in America. A society that embraces consumerism-based “retail therapy” and has an endless appetite for self-help products indicates a robust market. However, how hungry are people and organizations for actual change on a transformative level? The desire for change, the taking of action to create change, and the lasting commitment to achieve change are three entirely different things.
In 1989, when Wendy Kopp came up with an idea to try and end inequities she saw in America’s education system, she was only at the first stage. Kopp would come to learn hard lessons about creating change as CEO of Teach For America, the social entrepreneurship organization she built to tackle these major issues. Whether you’re a fan or foe Teach For America’s efforts to change education in some of the nation’s most disadvantaged communities, Kopp’s experience still provides solid lessons on staying committed to change.
Not Everyone Wants Your Brand of Change
When an organization tries to make change, a plan is developed and put into action. However, even with the most thorough planning, new information and unexpected situations will present themselves upon the plan’s execution. When Teach For America released its first 500 teachers into schools, according to Kopp, many of these bright and passionate agents for change ran straight into walls. These new teachers found themselves in the midst of rigid, traditional school districts throughout America, populated with teachers and administrators that took offense at the idea that a person with just a summer’s worth of pre-service training would know how to better teach students than more experienced educators. Kopp quickly realized that affecting change in such entrenched systems was going to be an even harder task than originally thought.
Learning Curves Never End
Teach For America learned that having a plan for change is not enough. In the video below, Kopp describes the various learning curves that she and the organization would come to face. An organization must be willing to constantly iterate their approach and processes to address new insights gained along the way. Teach For America continues to learn new things about recruitment, professional development, financing models, and working to affect change through classroom instruction and public policy initiatives. The great lesson is to accept that learning curves never end.
Leaders Must Commit to Change
Over her organization’s 20-year history, Kopp has come to identify certain factors that make environments more conducive to achieving transformational change. When asked for the most common factor, Kopp explains that within an environment the leaders must be absolutely committed to making change happen. This may seem an obvious point on the surface, but think of how often we see leaders walk back from early proclamations of change, such as department heads who pull funding from product teams when a project begins to stall, or politicians who back down when faced with political interference.
For Kopp, the leaders who bring about the most transformational change retain their tenacity for seeing the change happen, and also bring high-levels of energy and discipline to the effort. While Teach For America builds leaders in education, Kopp also sees these traits as similar to those observed in transformational leaders from other industry sectors. In the following video, Kopp elaborates on these traits, and identifies other important leadership qualities, including an obsession with building strong teams and systems, and the willingness to create cultures committed to continuous improvement — qualities all entrepreneurs should seek to build.
Entrepreneurs spend an immense number of hours dedicated to bringing their ideas and businesses to life, so they should carefully choose the colleagues who will surround them during all that time. Of course, technological or organizational knowledge is a fair prerequisite to have in coworkers, but the human factor can easily be overlooked until a problem arises. Are you surrounding yourself with crew members that not only bring out the best business results, but also the best in their fellow employees?
In this video with Gregory Waldorf, from when he was CEO of eHarmony – now CEO of Invoice2go – he discusses the value of working with great people. According to Waldorf, this can be one of the most memorable and joyful aspects of choosing an entrepreneurial career. In fact, finding a way to work with great people is not only an excellent idea for entrepreneurs, but also for employees working in organizations of all sizes, from small businesses to enterprises.
Don’t lose sight of this aspect of your working life. As you create the next path in your career, be judicious when choosing the crew members you want around for the battles ahead. Success is not easily won, especially for startups, so having the support of quality individuals around you will definitely improve your chances and experience.
“Out of all the classes I took at Stanford, none has influenced my career to a greater and more positive degree.” – Albert Hsu
This is how Albert Hsu feels about his experience in the Mayfield Fellows Program, in which he participated in 2005. Offered through the Stanford Technology Ventures Program, the Mayfield Fellows Program (MFP) is a nine-month, life-changing entrepreneurship journey that takes its participants through a rich combination of intense study and real-world technology venture experience.
For 2011, the program is currently accepting applications from Stanford juniors, seniors, and co-terminal students. On average, the competitive program accepts only 12 students each year; and with applications due by noon on February 4, interested applicants have just a few more weeks to apply. MFP information sessions will be held at STVP’s offices in the Huang Engineering Center on January 20 and 26, from 5:30 to 7:00 p.m.
MFP was founded at Stanford University in 1996, to provide students with exposure to entrepreneurial leadership in the high-technology sector. MFP is taught by STVP Co-Director Dr. Tom Byers and STVP Executive Director Dr. Tina Seelig. According to Seelig, the program impacts students’ lives well beyond the nine-month session. “The students who come through MFP develop innovative ways of seeing problems as real opportunities, a skill they can use to their benefit for the rest of their lives.”
[quote_right]”I learned that being innovative and entrepreneurial doesn’t necessarily mean starting your own company. It is a state of mind and a framework for solving problems.”
— Sandy Yu, MFP alum[/quote_right]During the spring quarter, Mayfield Fellows study entrepreneurship issues related to the areas of people, products, and resources. As most of the issues examined in the spring overlap more than one of these areas, this period of research highlights the engaging and complex decisions faced by technology entrepreneurs. With guidance from professors and industry professionals, MFP students also investigate business models and case studies to discover examples of both success and missteps by startup organizations.
During the summer quarter, students take a paid internship at one of a number of emerging companies in Silicon Valley. Over the years, Mayfield Fellows have been placed at a variety of firms, such as Facebook, Google, Plaxo, IDEO, Atheros, and Hara. Beyond working at a company that might go on to change the world, Mayfield Fellows gain access to mentorship from many of the visionary leaders and thinkers who start, and work at, these firms.
In fact, sometimes the relationship is so positive, students end up finding a home to start their careers. Alex Liu, a 2001 Mayfield Fellow, is a perfect example, having stayed with Atheros for the 10 years since his Mayfield placement. “Without MFP, I never would have had the platform of visibility, confidence, and scope that allowed me to start these projects. I am immensely grateful to MFP for my present success and satisfaction in work and life,” says Liu.
In the fall quarter, students return to Stanford to reflect on their experiences and share what they have learned with the other Mayfield Fellows. The students compare what they experienced during summer against the models and concepts they evaluated during the previous spring. As many unexpected events can occur during the summer job placements (product launches, IPOs, mergers), the fall quarter is also a time for students to appreciate that the paths of entrepreneurial leaders will not always follow a pre-determined plan, and are often altered by new challenges requiring a willingness to take risks.
With each subsequent year of the MFP, Dr. Byers continues to be impressed with each group of fellows. “Every spring, we are fortunate to begin with 12 exceptional Stanford students, who possess intelligence and poise. And over the course of the program, I am continually impressed by their growth and insights.”
In December, the 2010 class of Mayfield Fellows took part in a graduation ceremony at Stanford’s Huang Engineering Center. Surrounded by family, friends, summer employers, and professors, each of the graduates shared insights and memories from their Mayfield Fellows experience. Each one articulated how fortunate they were to take part in the program, but each also noted the priceless connections they built with their fellow classmates. The positive camaraderie, mixed with this unique entrepreneurship experience, continues to make the Mayfield Fellows Program such an attractive opportunity for a select group of Stanford students.
You’ve had a “great” idea for a long time. Maybe it’s for a game-changing hardware product, or an iPhone app, or a web service, and you “know” it’s a great idea because it’s been bouncing around your head for months. So you’re at a party, or a family gathering, and you can’t take it any longer — you start telling everyone your idea. How’d it go Mr./Ms. Soon-to-be Entrepreneur? How many people liked your idea?
“No good idea that changes the world is universally regarded as one at the outset.”
In the following video, Steve Jurvetson, managing partner at Draper Fisher Jurvetson, explains that ideas from some of today’s biggest companies (Google, Skype, eBay) were laughed at by investors when they tried to secure early funding. If everyone likes your idea, according to Jurvetson, maybe it’s just not that “big” of an idea. In fact, if most people don’t like your idea, that can be a great thing as long as you find one person who truly loves it. Jurvetson also touches on ever-shortening forecast horizons, trying to identify “black swan” events, and the impact of society’s perpetual future shock. There’s tons of entrepreneurial takeaways in this short video. Watch, reflect, repeat.
The Entrepreneurial Thought Leaders Seminar series begins on Wednesday, January 12, with Teach For America CEO Wendy Kopp. As the brainchild of Kopp while studying at Princeton, in 1989, Teach For America works for equity in American classrooms by recruiting some of the brightest college graduates to take on the duty of teaching. From its inception as a social entrepreneurship startup with a tiny budget, Teach for America is now an enterprise-size organization with net assets in the hundreds of millions of dollars. Her visit offers students the chance to hear from an entrepreneur who has traversed the successes and struggles of starting an organization and staying with it for the last 20 years.
The ETL seminar is actually a course hosted by the Department of Management Science and Engineering at Stanford University. Stanford students can sign-up for MS&E 472 to earn one unit of credit for the course, but all members of the public are welcome to attend the seminars on Wednesdays, from 4:30-5:30 pm, in the Huang Engineering Center at Stanford University. Of course, for those fans of ETL who may not be able to make it to the campus, you can enjoy all of our speakers’ entrepreneurship insights, lessons, and stories by visiting ECorner. Visitors can access podcasts, full-length videos, and highlighted clips from each of our speakers.
Here are a few sample videos from last quarter’s series.
For winter quarter the ETL Seminar presents visionaries and entrepreneurs from a number of cutting-edge sectors.
Mobile, Web, and Cloud Computing Technology
Aaron Levie (Jan 19), co-founder and CEO of Box.net, leads an organization seeking to let everyone have the freedom to share content, from anywhere, through the power of cloud computing. Beyond individual users and small businesses, Box.net has also shown the value of their platform to a growing number of enterprise customers.
Wenceslao Casares and Meyer Malka (Feb 9) are the founders and co-CEOs of Bling Nation, as well as founding partners of private investment firm, MECK, Ltd. Bling Nation’s mobile technology platform works to connect users’ online and offline customer experiences. Businesses can build loyalty programs, while consumers gain integration between smooth checkout experiences and their social media presences.
Can you use captured carbon-dioxide emissions to help develop sustainable building materials? Founder Brent Constantz (Jan 26) and his company, Calera, are doing just that. With Calera’s portfolio of technologies, the company is building a profitable model to create a new future for the environment. Constantz also serves as a consulting associate professor at Stanford.
As a successful serial entrepreneur and the founder of Idealab, Bill Gross (Feb 23) has a track record of bringing innovative technologies to market. As an incubator, Idealab focuses on technologies and products in the clean-tech, communications, Internet media, and automation categories. Gross also serves on the board of directors at eSolar, a solar power plant company, and the California Institute of Technology.
Susan Desmond-Hellmann (Feb 2) is not only chancellor of UCSF and an oncologist and clinical researcher, but she also served as president of product development at Genentech for much of the past decade. She was also named one of the world’s seven most “powerful innovators” by Forbes magazine in 2009.
As president and CEO of medical device company OptiMedica, Mark Forchette (Feb 16) leads the organization in its mission to deliver leading-edge technologies for the treatment of ocular disease. Some of the company’s most valuable offerings for the treatment of retinal conditions were initially developed right here at Stanford.
Special ETL Seminar to Close E-Week 2011
Author Guy Kawasaki (Mar 2) rounds out the series for winter quarter, discussing his new book, Enchantment. Kawasaki is a legendary visionary, tech evangelist, and serial entrepreneur. Video clips from his previous visits to DFJ ETL are some of our most popular content. As an added bonus, The Valley Girl, Jesse Draper, will be holding a post-seminar interview with Kawasaki. Be sure not to miss this special seminar on March 2. We look forward to seeing you at ETL throughout the winter.
How do some ideas take flight when others never get off the ground? What causes audiences to engage while being constantly bombarded with media images and stories? Stanford professor Jennifer Aaker seeks answers to these questions, and works to understand the core components to building powerful ideas that grab audiences and move them to action.
Aaker is co-author of The Dragonfly Effect, a book that guides individuals and organizations to use social media to advance social change. During her visit to the DFJ ETL seminar series, she shared principles to guide the crafting of stories and ideas in the social media sphere. It turns out that a person’s happiness can play a key role in how and when they choose to take action. However, happiness is not the same for everyone.
The Paradoxes of Happiness
The idea of happiness is more complex than you think, according to Aaker, who describes a number of happiness paradoxes. The first paradox is that individuals have varying conceptions of happiness, depending on factors such as age, gender, and culture. The second paradox is that each person’s conception of happiness constantly changes as they move through life. The third paradox is a false belief that meaning can be built solely through short-term happiness, when a mix of both short- and long-term happiness is required. In the following video, Aaker explains how the concept of happiness changes over a lifetime.
Create Environments That Allow for Happiness
Aaker believes a growing body of research shows that attaining a state of happiness often requires individuals to “unplug” from the search of trying to “find” happiness. Perhaps time and resources would be better spent on trying to create environments that allow for happiness to develop organically. If so, what would such an environment be built upon?
Aaker identifies three key factors that need to be present in environments to encourage happiness. The environment should:
Enable people to build meaning
Enable people to find connections
Allow people to feel they are a part of something bigger
Aaker describes the happiness-enabling factors in this video.
Instant Brands and Social Action
As the shifting conception of happiness can mean different things to different people, sometimes delivering a compelling story to an audience can achieve meaning and subsequent action. Aaker illustrates this idea with the emotional story of Sameer Bhatia and Vinay Chakravarthy. When both men were diagnosed with leukemia, their friends led an integrated social media campaign to organize bone marrow drives in an effort to find good donor matches. Team Sameer and Team Vinay became instant brands, powered by web 2.0 tools and a compelling story, with the single goal of registering 20,000 individuals.
Sadly, even though good matches were found for both Sameer and Vinay, both men did eventually pass away from leukemia. However, in just 11 weeks, the social media campaign successfully resulted in the registration of over 24,000 South Asians, a group that is commonly underrepresented in the bone marrow registry. This type of lightening fast social action shows how a powerful, meaningful story can connect with audiences through social media, and drive audiences to make positive social change.
Learn about 100K Cheeks, a Stanford University-based advocacy group dedicated to increasing the number of people enrolled in the international bone marrow registry.
As 2010 comes to a close, it makes sense to take a moment to consider how we have spent our time throughout the past year, and to choose what to focus on in 2011. Anyone planning entrepreneurial adventures in the coming year should be prepared to judiciously manage their time, as it’s one of an entrepreneur’s most precious commodities. Today’s guest post is on the real value of time, from STVP‘s Executive Director, Tina Seelig.
Most people look at their bank accounts with great attention and assess how much money they have to spend, to invest, and to give away… but, they don’t look at their time the same way, and end up wasting this incredibly valuable resource. In fact, time is much more valuable than money because you can use your time to make money, but you can’t use money to purchase more time.
Time is the great equalizer… each day has only 24 hours — nobody has any more than anyone else. Everyone, from poets to presidents, fills those hours, one after the other, until they are all filled up. Every single minute is unique, and once gone, can never be regained.
When you look at someone who has accomplished a lot, you can be pretty sure that he or she has spent considerable amounts of time mastering the required skills, filling hours upon hours with hard work. There are those who look at others’ accomplishments and say, “I had that idea, “ or “I could have done that.” But ideas are cheap and intentions are just that. If you don’t invest the time needed to achieve those goals then all you have are empty ambitions.
People often say, “I don’t have the time to…,” fill in the blank with whatever you like: exercise, make dinner, write a book, start a company, run for political office. What makes these people think that they have less time than anyone else? Of course they don’t. We all have the same 24 hours in each day and make real decisions about how we spend them. If you really want to get in shape, then carve out time to exercise. If you want to write a book, then pick up a pen and do it. And, if you want to run for president, then get started. It isn’t going to happen if you plan your day around your favorite TV shows or spend hours updating your Facebook page. These are entertaining distractions that eat up your irreplaceable time.
I teach a course on creativity and innovation at Stanford University. During a workshop on how to brainstorm I often give the following prompt: There aren’t enough hours in a day. Come up with creative solutions to this dilemma. The brainstorming results in an endless list of solutions — from the practical to the preposterous — demonstrating that there are lots of ways to extract more from each hour, each day, and each year. Some of the most interesting solutions involve figuring out how to do two things at once. I know many people who have successfully incorporated this approach into their own lives.
For instance, I met a woman named Audrey Carlson several years ago who was struggling to figure out how to spend time with her friends and take care of her growing family. She started a group called “Chop and Chat.” Every Sunday six friends got together to cook at a member’s home. Each member brought the ingredients to make a different recipe that was then split into six portions. Members took home six different main courses for the week. Chop and Chat was an inventive way for the women to cook together, socialize, and prepare meals for their families.
Another example is venture capitalist Fern Mandelbaum. You would assume that meetings with Fern take place in her office… and you’d be wrong. Fern is an avid athlete and her meetings take place on hiking paths. Everyone who knows Fern knows to wear walking shoes and carry a bottle of water to their meetings in anticipation of a strenuous hike. Fern finds that this strategy is a great way to get to know each entrepreneur while also getting exercise.
There is an oft-quoted saying that “time is money.” You can interpret this to mean that time is a valuable currency. In fact, each day another 24 hours is deposited into each of our “bank accounts.” We get a choice about how to spend these hours. We decide how much we spend right away, how much gets invested for the future, and how much we give away. The worst choice is to waste these hours by letting them slip away.
It is almost noon, and I have 12 more hours to invest today!
Marc Andreessen is no stranger to the challenges of achieving startup success, possessing in-the-trenches entrepreneurship experience as a co-founder of Netscape and Ning. And as co-founder of the venture capital firm Andreessen Horowitz, he uses his experience and insight when evaluating projects to discover the next big thing.
During his visit to our DFJ ETL seminar series earlier this year, Andreessen described the three criteria needed for high-tech startup success.
Is there a big market?
Does your company plan to disrupt established companies in an existing market, or do you believe your offering will do something amazing in a new market?
Will your company or product provide a fundamental change?
Andreessen believes that a new company must bring a product to market that can “punch through the status quo.” As an rough indicator, consider if your product will cause a “10x” type improvement in technology or a significant economic change.
How outstanding is the founding team?
Do you have a great technologist on the team? Or how about more than one? Also, does the founding team have members with complementary skill sets, including someone with a deeper understanding of markets and sales?
In the following clip, Andreessen expands on the criteria for market, product, and team, and even explains which of three areas a wise investor might be willing to compromise on.
The relationship between boss and employee can be filled with respect and integrity. It can also be filled with tension and conflict. And for some, the relationship is filled with dread, acrimony, and dysfunction. Stanford Management Science and Engineering Professor Robert Sutton studies the dynamics and behaviors at work in these unique relationships. Sutton is a bestselling author whose latest book, Good Boss, Bad Boss, examines the actions and behaviors of bosses that become capable and respected leaders and the actions of those that, well… don’t. During Sutton’s recent lecture at the DFJ ETL seminar series, he discussed a number of issues relating to boss and employee interaction.
Beware of Power Poisoning
“When you become successful is when you should be especially wary you’re going to turn into an idiot.”
According to Sutton, the most reliable way to turn a human being into a jerk is to put them into a position of power over another human being. Invariably, three things begin to happen in this situation, which Sutton describes collectively as “power poisoning”: 1) The person in power focuses more on their own needs and concerns, 2) The person in power focuses less on the needs and concerns of others, and 3) The person in power begins to act like the rules don’t apply to them. Sutton warns that when a boss or manager (or CEO, for that matter) reaches a great moment of achievement or success, this is the same moment when the boss is at greatest risk of succumbing to power poisoning. In this video clip, Sutton describes these points in greater detail.
Hallmarks of a Good Boss
Sutton explains that good bosses diligently strive to remain in tune with their employees. Beyond building a stronger bond with employees, staying in tune makes addressing problem issues easier to do. Another hallmark of a great boss is being able to modulate one’s assertiveness. If a manager has the ability to turn up, or turn down, their assertiveness level in a given situation, the behavior is looked upon from employees as being a positive attribute. Knowing when to push and when to back off on employees is a necessary tool for a good boss.
In this area, there are particular dangers when managing employees who do creative work. According to Sutton, current research indicates that managers who relentlessly ping employees with questions in a constant state of evaluation, inhibit a creative employee’s willingness to try out or suggest new ideas. In a positive example of a great boss, Sutton cites IDEO founder David Kelley as “the master of management by walking out of the room.” When a meeting begins to go well, Kelley will step out of the room to avoid being a distracting authority figure. While traditional management theory may call for a boss to stay in the face of employees, Sutton suggests this method may not always create the best results. Sutton discuss these points in this video clip.
Listening for the Truth
Employees have many reasons and incentives to not tell bosses the truth. This can be true in all types of interactions, on all types of subjects. One issue of concern is a concept that Sutton describes as the “mum effect.” Sutton explains this effect as, “when people deliver us bad news, we like them less.” Somewhat conversely, Sutton also says that flattery affects how we interact with and feel about others. He explains that the research on flattery shows that not only does it work, but false flattery works too. In the clip below, Sutton shares how these issues come together to keep the truth from reaching bosses.
While CEOs may be able to pick-up early on market trends, they cannot see the future with certainty. They approach each day, as we all do, knowing they will be presented with new information and unexpected changes in their business, their particular market sector, or the general economy. If everything is constantly changing, what is the most rational management mindset to have in the face of this environment? Get comfortable with ambiguity.
In the clip below, NVIDIA co-founder Jen-Hsun Huang describes his ability to “see around the fuzzy edges” and be comfortable with ambiguity. In the current economic and financial environment, this ability may be more critical than ever before. According to Huang, CEOs my have varying characteristics and attitudes when it comes to communication and management styles. However, he sees the ability to be comfortable with ambiguity as a much more common trait among successful CEOs.
Are you comfortable with ambiguity? Watch the video below.
In the winter quarter, Steve Blank, along with co-teachers Ann Miura-Ko and Jon Feiber, will present ENGR 245: Technology Entrepreneurship and Lean Startups. This new course will present students with a intense and rewarding opportunity to try out the lean startup approach to entrepreneurship. In this post from Steve Blank’s blog, he explains his approach to the exciting new class.
I’ve introduced a new class at Stanford to teach engineers, scientists and other professionals how startups really get built. They are going to get out of the building, build a company and get orders in ten weeks.
Why Teach This Class? Business schools teach aspiring executives a variety of courses around the execution ofknown business models, (accounting, organizational behavior, managerial skills, marketing, operations, etc.) In contrast, startups searchfor a business model. (Or more accurately, startups are a temporary organization designed to search for a scalable and repeatable business model.) There are few courses which teach aspiring entrepreneurs the skills (business models, customer and agile development, design thinking, etc.) to optimize this search.
Many entrepreneurship courses focus on teaching students “how to write a business plan.” Others emphasize how to build a product. If you’ve read any of my previous posts, you know I believe that: 1) a product is just a part of a startup, but understanding customers, channel, pricing, etc. are what make it a business,
2) business plans are fine for large companies where there is an existing market, existing product and existing customers. In a startup none of these are known.
Therefore we developed a class to teach students how to think about all the parts of building a business, not just the product.
Students will start by mapping their assumptions (their business model) and then each week test these hypotheses with customers and partners outside in the field (customer development) and use an iterative and incremental development methodology (agile development) to build the product.
The goal is to get students out of the building to test each of the 9 parts of their business model, understand which of their assumptions were wrong, and figure out what they need to do fix it. Their objective is to get users, orders, customers, etc. (and if a web-based product, a minimum feature set,) all delivered in 10 weeks. Our objective is to get them using the tools that help startups to test their hypotheses and make adjustments when they learn that their original assumptions about their business are wrong. We want them to experience faulty assumptions not as a crisis, but as a learning event called a pivot —an opportunity to change the business model.
How’s the Class Organized? During the first week of class, students form teams (optimally 4 people in a team but we’re flexible).Their company can focus in any area– software, hardware, medical device or a service of any kind.
The class meets ten times, once a week for three hours. In those three hours we’ll do two things. First, we’’ll lecture on one of the 9 building blocks of a business model. Secondly, each student team will present “lessons learned” from their team’s experience getting out of the building learning, testing, iterating and/or pivoting their business model.
They’ll share with the class answers to these questions:
What did you initially think?
So what did you do?
Then what did you learn?
What are you going to do next?
At the course’s end, each team will present their entire business model and highlight what they learned, their most important pivots and conclusions.
Are you one of the over 12 million players of World or Warcraft, or WoW? If yes, according to Dr. John Seely Brown, your game play may prove the concept of exponential learning.
For those not fluent in the online world of Azeroth, WoW is a massively multi-player online role-playing game, or MMORPG, that allows thousands of players to interact within an online gaming world, at the same time. Individual players form guilds that work as collective units to achieve advanced goals, such as going on raids within the fantasy world. The wildly popular game just released Cataclysm, the fourth expansion pack in the WoW series.
As an Independent Co-Chairman of the Deloitte Center for the Edge, and former Chief Scientist at Xerox PARC, Brown believes a major knowledge economy exists on the edge of the WoW ecosystem. He argues that so much knowledge is created within the game each day, without the collective guild structure, individual players would be compromised by the onslaught of information to process and learn from. On an average night within the WoW universe approximately 12,000 new ideas are created — a pace that outpaces even biotechnology, according to Brown.
Whether you’re a spell-casting mage or a healing druid, Brown claims successful guild members work together to process all these new ideas each week, and then distill this information into actionable ways in which to act in the future. High-end guilds even go a step further by doing after-action reviews following each raid. This form of play requires players to craft their own dashboards to measure personal performance, as well as comment on the performance of fellow guild members.
Watch the video for a deeper understanding of the knowledge economy within World of Warcraft.
This week, the Abu Dhabi Water and Electric Authority announced their selection of Hara’s environmental and energy management solution to address a number of the authority’s energy initiatives. Using the Hara software’s ability to offer strategic and tactical suggestions, based on energy input and output data crunching, Abu Dhabi Water and Electric may be able save 10 million tons of carbon-dioxide by the year 2020, according to Hara.
Look for Opportunity Across the Globe
It’s easy to be impressed by the physical (and assumed financial) size of this deal, especially involving a company that has only been selling for the last 18 months. However, sealing deals without limits on geography is part of the plan, according to Hara CEO and Founder Amit Chatterjee. In this video clip from Chatterjee’s recent visit to our DFJ Entrepreneurial Thought Leaders seminar, he explains why globalization doesn’t just mean more competition for entrepreneurs, but also access to a planet full of future customers.
Change the Market When You Arrive
From the beginning, Hara saw that enterprise firms could measure energy consumption in as many ways as the want, and still not make smart decisions based on all the incoming data. Knowing energy outputs may help an organization fill out a regulatory reporting form, but it does nothing to help take actionable steps in changing the numbers. Out of this issue, Chatterjee saw an opportunity to form a unique energy management business process, at the intersection of info-tech and clean-tech. To understand how Hara approached the development of their idea in the early stages, in the following clip, Chatterjee outlines his company’s decision to function in stealth mode through its initial round of funding.
Build a Team for Lasting Impact
Hara clearly sees energy management solutions as having enormous room for growth in the next decade, but to maintain leadership in the space, Chatterjee set out to build a team to achieve the company’s hope of delivering a lasting impact. According to Chatterjee, it was important to build a team culture that demands excellence. The Hara CEO also warns company founders to be aware of their own issues when building the most effective team.
A founder may be intimidated by hiring someone more talented in a particular area of expertise, but how will you grow and learn, if you are always the “smartest” person in the room? This theory of being surrounded by the brightest and most capable individuals carries over into recruiting a high-quality board of advisors. Personal hubris, or relying solely on your technology, is not enough to navigate uncharted business waters, so a team of advisors provides solid support in times of crisis and confusion. In the following clip, Chatterjee expands on these key points to building success.
STVP and Stanford’s School of Engineering will offer two sections of Engineering 145 – Technology Entrepreneurship, in the 2011 winter quarter. This popular undergraduate course explores the fundamentals of technology entrepreneurship through case studies, mentor-guided team projects, and research on the entrepreneurial process. Assistant Professor Chuck Eesley is currently preparing to teach both sections, and he was happy to answer some of our questions on technology entrepreneurship and the benefits of taking the course.
The course demonstrates the value of using an entrepreneurial mindset. Can students actually develop an entrepreneurial mindset?
[quote_right]”…the world needs more graduates who have been trained broadly to develop an entrepreneurial mindset of turning problems into opportunities.”[/quote_right]Absolutely. Entrepreneurial thinking and developing creative ideas for new products and services are skills, like any other, that can be taught and learned. Such a mindset is important, not only for those who want to start new ventures, but also for those who want to be entrepreneurial within large, established companies, or who want to start non-profits or new social ventures. With all the opportunities out there, and problems that need solving, the world needs more graduates who have been trained broadly to develop an entrepreneurial mindset of turning problems into opportunities. Employers are requesting these skills be taught, and that’s partly what attracts them to Stanford students.
Everyone seems to have an idea for business. What’s the difference between an idea and a legitimate business opportunity?
This is something that we cover in the first half of the course – how do you screen ideas for the ones that represent the best opportunities to spend your time and energy on. We explore the cases of Yahoo! and Sirtris as examples, and we talk about customer development as a model and framework for what to look for in an opportunity. Our hope is that students will use these frameworks to screen through many different ideas to find one worth pursuing for the rest of the quarter, and possibly beyond. We then match each project team with a mentor from Silicon Valley in their project area. These mentors give feedback and begin to connect students to the broader entrepreneurial network beyond Stanford.
So you don’t need to come to class with a business idea?
No, definitely not. We find that many students recruit their friends to take the class with them, and that they already have some ideas in mind. However, other students are just interested in learning more about entrepreneurship and will join teams where others have an idea, or they brainstorm new ideas together. We hope to get across the idea that entrepreneurship is a team sport, so while the idea is important, there are many other critical roles to be played in forming and executing on a start-up idea.
What are some of the major misconceptions that students tend to have about technology entrepreneurship?
There are many! I know because I held many of these misconceptions when I began to work on my first start-up, Sun Dance Genetics, as a senior in college. People, especially engineers and scientists, tend to think that success is all about the technology. Yet most new businesses do not fail or succeed on the quality of the technology. The technical idea is one step of many on the road to creating a new venture. The team, along with business and fundraising dynamics are equally important, and it’s those issues that we emphasize in the class.
Entrepreneurship can be understood as both an individual and team activity. Why does the course employ the use of project teams?
Well, this is another common misconception. People tend to think that successful entrepreneurs have a certain personality type or have to be charismatic, since we often hear about Bill Gates, Mark Zuckerberg, or other famous individuals. But many different types of people become successful at entrepreneurship, and it’s often more about the team and the process of how they implement an idea than a single individual. [quote_right]”But many different types of people become successful at entrepreneurship, and it’s often more about the team and the process of how they implement an idea than a single individual.”[/quote_right]In the real world people tend to work on projects in teams, so learning to work with teams and lead them toward a common vision are incredibly important skills. Moreover, the Silicon Valley entrepreneurs, VCs, and employers who serve as guest speakers and mentors in the class also believe in the value of these skills. At the same time, working in a team, you learn important knowledge about yourself and the kind of career you want to craft.
Students from outside engineering are encouraged to register for ENGR 145. In what ways can students leverage the processes learned in Technology Entrepreneurship in fields beyond engineering?
What we’re trying to do is to build “T” shaped people — people who have depth in a particular field, who also have a breadth of understanding about leadership, the process of innovation, team building, fundraising, etc. In many fields outside of engineering, let’s take the non-profit world as an example, there are many problems and often numerous good ideas on how to potentially solve them. Turning those ideas into reality and doing something that’s never been done before requires knowing how to recruit a team, gather resources, fundraise, and inspire others toward a vision. It also means building and testing a business model of how it all fits together, and creating an organization where there wasn’t one before to get it done. These are the skills and topics we discuss and apply to technology entrepreneurship and commercializing technology, but they can be used in a broad variety of settings. Plus, exploring these topics turns out to be incredibly fun. Many of the students tell me afterwards that this was their favorite class they’ve taken at Stanford, and that they also learned an incredible amount in a short time.
Why can’t I come up with any great new ideas?
Maybe you’ve stopped taking note of what’s around you.
Have you noticed that a certain part of your brain seems dialed-up when you travel somewhere new? In the engaging video below, Tom Kelley, general manager of juggernaut design firm IDEO, discusses why this higher level of awareness is a huge benefit when trying to come up with new, innovative ideas.
“You are the undisputed expert of your own experience.”
Kelley points out that when you travel to a new destination, you become acutely aware of everything that may be different, right down to the currency being used and the shoes people are wearing. But what would happen if you maintained this kind of mindset for use in your everyday thinking? Get ready for a wave of new insights and ideas.
However, these new observations may be fleeting, and Kelley urges you to capture them in any way you can. By doing so, you are not only creating a well of new ideas, but you may also be constructing a more up-to-date view of human behavior. This can be another major advantage when it comes to innovating a product, design, or concept. According to Kelley, “you are the undisputed expert of your own experience.” Think like a traveler and capture all the lessons around you.
Approximately half of Amazon.com’s revenue comes from outside the United States, according to the company’s Senior Vice President of International Retail, Diego Piacentini. This makes global strategy a key component to the company’s continued success. During Piacentini’s visit to the Entrepreneurial Thought Leaders seminar, he explained that, for Amazon, global strategy means delivering a consistent customer experience based on their original vision: Allow customers to discover the products they want to buy at the lowest possible price. Amazon aims to be the “most customer-centric company on the planet.” But what do you build, and how do you act, to make this mean something?
Not Everyone Thinks Customer First
“Start with the customer and work backwards.”
Many companies publicly claim to think about their customers first. However, a fully realized commitment to be customer-centric requires a disciplined approach to developing new products and programs. This is a critical step in Amazon’s process; their logic always takes into consideration what the customer is thinking. “Start with the customer and work backwards,” says Piacentini. An example of this process appears in Amazon’s popular Kindle reading device. Once the company realized how easy it was to purchase a book on the Kindle, they added a purchase process step to allow customers to confirm whether the purchase was intended or just a mistake. In this clip, Piacentini shares Amazon’s idea of thinking customer first.
Keep Your Core Values
When a company expands into foreign territories, common thinking dictates the company must learn to do business according to cultural norms. But Piacentini feels Amazon is better served by discovering ways to continue to deliver on the company’s customer driven vision, even if it goes against cultural business expectations. While the mechanisms and process may need to adjust, the customer experience and the company’s core values must remain consistent across the globe.
According to Piacentini, when Amazon began doing business in China in 2004, some of the company’s core values came into conflict with traditional business practice. After a sudden competitive price drop for the latest Harry Potter book, Amazon refunded the price difference to recent purchasers of the book. While this decision came as a shock to Amazon’s regional business partners, it also maintained Amazon’s core value commitment to low prices for customers.
The Myth of Best Practices
“In our business model, everything is equal unless proven with data that it needs to be different.”
Best practices are often just good intentions, says Piacentini. Moreover, good intentions don’t work — mechanisms work. In Amazon’s view, good mechanisms make for complete processes.” In our business model, everything is equal unless proven with data that it needs to be different,” says Piacentini. Amazon refers to its business model as the “virtuous cycle”, where growth is central, driven by product selection, customer experience, sales results, and lower prices. By focusing on this business cycle, Amazon honors the desires of its global customers as, according to Piacentini, it turns out that all customers like low prices, fast shipping, and access to Amazon’s large selection of products. Piacentini describes the myth of best practices in the following clip.
Take Risks Outside Your Core Business
Piacentini admires Amazon’s willingness to take risks outside of their core business, and he points to some prime examples. Amazon’s revenue flow from its main retail business is seasonal, particularly in the western world. This means that a great deal of the company’s information technology resources previously went unused in other parts of the year. This issue became an opportunity when the company began offering Amazon Web Services (AWS), a cloud computing service that allows companies to replace their web servers. What were once unused servers became a rental revenue stream.
Another example of taking a risk outside of the company’s core business was the development and release of the Kindle reading device. Piacentini says that building hardware was “clearly outside the company’s comfort zone, but we didn’t want to turn out like Kodak.” Through risk-taking and customer focus, Amazon feels positioned to maintain its dominance in the online retail space.
We are experiencing strange economic times. Even if you appreciate the idea that economies move through cycles of growth and recession, at the very least, we are muddling through a strange cycle. However, do investors also go through cycles? In the clip below, Vinod Khosla, co-founder of Sun Microsystems, discusses how investors swing back and forth between cycles of fear and greed. In the clip from 2002, Khosla claims we will see the cycle of too much money again in five or six years. 2002 + 6 = 2008. Interesting…
After the meltdown of 2008-9, we continue to experience stagnant growth in 2010. So is this current economic cycle due to investors being stuck in a cycle of fear? In Khosla’s words, we are at a point where no one “wants to believe in an upside.” If so, how do we get out of it? These are enormous questions, but a possibly prescient Khosla suggests we can move out of this cycle once “a few things squeak by.” This is where entrepreneurs come in. Maybe it’s time to start something.
Are we in a cycle of fear?
If so, are you ready to escape the cycle and put your next great idea into action?
Watch the video and share your thoughts.
The new year (and quarter) is a great time to pick up entrepreneurship courses. Maybe you’re interested in learning what it takes to start your own tech company. Perhaps you want to develop an entrepreneurial mindset to apply to a discipline outside engineering. Or maybe you’re an engineering student looking to satisfy your Technology in Society requirement (see ENGR 145). The Stanford Technology Ventures Program sponsors a number of courses for Stanford students that fit all of these needs and more.
Below you will find our course descriptions for Winter 2011, along with links to course websites and instructor bios. You can even check out the selected instructor videos. For course information covering the entire academic year, you can also view the STVP Courses page. Start-up something awesome in 2011!
[quote_right]”With all of the problems that need solving, the world needs more graduates trained to develop an entrepreneurial mindset of turning problems into real opportunities.” —Assistant Prof. Chuck Eesley[/quote_right]How do you create a successful startup? How does an entrepreneur form a team and gather the resources necessary to create a great enterprise? This class mixes mentor-guided team projects, in-depth case studies, research on the entrepreneurial process, and the opportunity to network and ask questions of Silicon Valley’s top entrepreneurs and venture capitalists. This course is for undergraduates of all majors who seek to understand the formation and growth of high-impact start-ups in areas such as information, green/clean, medical, and consumer technologies.
This course teaches students to think like a successful entrepreneur by learning how to analyze key parts of various startup business models. The course uses the speakers at the Entrepreneurial Thought Leader seminar (MS&E 472) as the source of the companies to be explored. Students meet before and after each Entrepreneurial Thought Leaders seminar to prepare and debrief, respectively.
Watch co-instructors Heidi Roizen and Tina Seelig discuss aspects of entrepreneurship and creativity.
ENGR 245 offers students the chance to apply emerging entrepreneurship principles, including the “lean startup” and “customer development” frameworks, to prototype, test, and iterate a product. Students will also discover if a profitable business model exists for the product. Students will work and study in teams or, in rare cases, alone. A proposal is required during first week of the quarter, and can be for software, a physical good, or a service of any kind. Projects are treated as real startups, so students are encouraged to prepare for intense work.
Watch co-instructors Steve Blank and Ann Miura-Ko discuss lean startups, financing, and the product development process.
This course provides an introduction to the basic concepts of strategy used within high-technology firms. MS&E 270 examines decisions and actions that shape the long-term future of these organizations by establishing, sustaining, and enhancing the basis for their competitive advantage. Topics covered within the course include competitive positioning, resource-based perspectives, “co-opetition” and standards setting, and complexity/evolutionary perspectives.
Students will learn skills needed to market new technology-based products to customers around the world. The course includes case method discussions on examples from startups and global high-technology firms. The coursework covers targeting markets and customers, product marketing and management, partners and distribution, sales and negotiation, and outbound marketing.
MS&E 280 Organizational Behavior and Management — 3-4 units (2 sections)
Instructor: Rosanne Siino Limited enrollment; priority to MS&E students.
This course examines organization theory and explores concepts and functions of management. Additional topics to be covered include behavior of the individual, work group, and organization. Work within the course will emphasize case studies and related discussion.
MS&E 472 DFJ – Entrepreneurial Thought Leaders Seminar — 1 unit
Instructors: Tom Byers, Thomas Kosnik, and Tina Seelig
Required web discussion. Course may be repeated for credit.
The DFJ Entrepreneurial Thought Leaders Seminar is a weekly speaker series that presents innovators from across the business, finance, technology, and philanthropy sectors, to share their insights with aspiring entrepreneurs. Through MS&E 472, students have the opportunity to learn real world knowledge from prominent leaders and entrepreneurs.
DFJ-ETL Speaker Lineup for Winter 2011
Jan 12: Wendy Kopp, CEO and Founder and — Teach for America
Jan 19: Aaron Levie, Co-Founder and CEO — Box.net
Jan 26: Brent Constantz, Founder — Calera
Feb 2: Susan Desmond-Hellmann, Chancellor — UCSF
Feb 9: Jack Dorsey, CEO and Co-Founder — Square
Feb 16: Mark Forchette, President and CEO — Optimedica
Feb 23: Bill Gross, Founder, Idealab and CEO, eSolar
Mar 2: Guy Kawasaki, Author of Enchantment; post-lecture interview by Jesse Draper of The Valley Girl Show
Enjoy these popular clips from previous Entrepreneurial Thought Leader seminars.
Additional STVP Entrepreneurship Opportunities
Mayfield Fellows Program Application Period: Jan. 1 — Feb. 4, 2011 [quote_right]”The Mayfield Fellows Program has done exactly what it promised to do and more. I am a better entrepreneur, teammate, and a better person.” – MFP Alumni[/quote_right]The Mayfield Fellows Program (MFP) is our nine-month work/study program designed to develop a theoretical and practical understanding of the techniques for growing technology companies. The program combines an intense sequence of courses on the management of technology ventures, a paid summer internship at a startup company, and ongoing mentoring and networking activities. Applications are due by noon on February 4, 2011. Learn more about MFP and read testimonials from program alumni.
Want to Study Entrepreneurship in Italy? As part of the Bing Overseas Study Program, you can apply to study in Florence with MS&E Professor and STVP Co-Director Tom Byers. This special undergraduate entrepreneurship course will be offered at the Stanford campus in Florence during the 2011 autumn quarter. Program applications must be submitted by January 23, 2011.
Learn how to apply.
Born from radioactive eggs deep beneath the ocean, thunder lizards rise out of the sea and arrive on the scene with an epic attitude to devour everything within their path. Nope, we’re not talking about Godzilla. We’re talking about the kind of startup founders that Ann Miura-Ko, co-founding partner at FLOODGATE, is interested in investing in. Along with her FLOODGATE partner Mike Maples, Miura-Ko seeks to identify entrepreneurs with this unique DNA and ambition. During her recent visit to our Entrepreneurial Thought Leaders seminar, Miura-Ko shared this description and discussed how many of the barriers to starting a company, or testing a product, are lower than just a few years ago.
Go Build a Prototype
A prime example of a lower barrier is the highly reduced costs to actually build a product. Miura-Ko identified a number key technological advances that give entrepreneurs a leg up on their predecessors. These advances include the proliferation of open-source software and commoditized technology hardware. In years past, software and hardware would have been major gating factors to getting an idea up on its feet. Miura-Ko also pointed to the cost benefit of crowd-sourced infrastructure. For example, if you need to analyze a piece of video content, using actual people through crowd-sourcing may be a better financial choice than employing high-powered technology solutions. Mirua-Ko also espoused the elastic and scalable power of cloud computing as an advantage that current-day entrepreneurs should leverage, if they are developing ideas in the technology space.
Don’t Run Out of Product Iterations
Entrepreneurs are often most concerned over funding sources. The drama surrounding this topic can be overwhelming for any founder. However, Miura-Ko believes startups should be far more worried about running out of product iterations than running out of funding. You can replace funding, but when you run out of iterations for a product, that is when hope is lost. Miura-Ko suggests modeling the lean startup concept, championed by Steve Blank and Eric Ries, to smartly manage your money, so you can squeeze as many product iteration cycles as possible out of existing funds. By doing so, founders can avoid raising additional capital, which exposes a startup to greater dilution. This is another important benefit to the use rapid prototyping.
Business Models Beat Business Plans
At the seed funding stage, thoughtful business models are more impressive than long-winded business plans, says Miura-Ko. Business models allow entrepreneurs to thoroughly examine all of the assumptions they have about their business. Miura-Ko suggests evaluation of a number of critical component areas to understand your startup’s position within the business ecosystem. In this clip, Miura-Ko expands on these critical areas for every business model to address.
Just about everyone has heard the advice, “learn from your mistakes.” However, actually following this bit of wisdom is much harder to do. You may easily remember your mistakes, or the embarrassment and consequences that came with making them, but how do you actually deal with mistakes?
Marissa Mayer, Google’s VP of Geographic and Local Services, was a recent guest on a Digg Dialogg video interview. A number of the interview questions, submitted by Digg users, asked Mayer about Google’s biggest mistakes. Her answer offers a unique way of viewing the whole idea of mistakes. According to Mayer, because Google constantly experiments with new products and launches early, “mistakes” will always happen. However, Google then quickly reiterates the product based on user feedback during the initial release.
Rather than preventing mistakes, this process openly accepts mistakes as part of an innovative creative process. When Mayer spoke at our Entrepreneurial Thought Leaders seminar, she discussed this very point.
Watch the video, and then share how you deal with mistakes.
In a recent guest post on the Harvard Business Review website, economic strategist Umair Haque took Silicon Valley venture capital firms to task for backing companies that only create “thin value.” Haque suggests Zynga and Facebook as examples of “light-weight, feel good” companies, who, though popular, do not actually create “thick” value capable of powering economies on a global level. Haque describes this lack of VC interest in “thick” value creation as disruption deficit disorder. His argument may or may not be true, but it actually raises interesting questions for entrepreneurs.
Do VC firms focus on ideas that can scale quickly and turn profits for investors? Sure. If an entrepreneur pitches a compelling business model, an easy-to-build-and-scale prototype, and low projected startup costs, investment firms will likely be interested. However, if an entrepreneur pitches an idea that could create “thick value” through disruptive technologies, but also requires massive funding, within a business model that assumes working in the red for a long period of time, VCs will have reservations. These are venture capital realities. The fact that your idea could contribute to developing new industries and sustained job growth does not really enter the picture. Is this solely the fault of venture capitalists? Maybe the “Disruption Deficit” starts somewhere earlier in the process. Does the founder or entrepreneur play a role in this?
When an entrepreneur discovers an amazing new idea or technology, the “a-ha” moment rarely involves running the idea through a social value filter. Although some “social entrepreneurs” may come from this perspective, the vast majority of entrepreneurs do not lead with this type of thinking. Bare-knuckle technology entrepreneurship goals usually focus on two things: amazing technology applications or an amazing market opportunity. Of course, it’s nice when both come together at the same time. Moreover, it’s hard enough to pull off smart execution in either of these two areas. But are there other factors to consider, perhaps even an approach that can help you achieve financial goals by thinking about social impact first. In the clip below, Guy Kawasaki explains why seeking to build meaning may be the best thing to focus on when starting a company.
Now, maybe you think this whole discussion is of little concern. You’re saying, “there’s already too many things I have to worry about as a bootstrappin’ entrepreneur.” However, what if making a deeper value impact, beyond financial profit, is actually an opportunity. Discovering an idea that can be financially successful and benefit society is really just a bigger challenge. But if startup founders and entrepreneurs won’t take on this challenge from the very beginning of the idea development process, it won’t matter when you get to venture capital funding, since the idea will already be missing thick value creation as part of its design.
During our Entrepreneurial Thought Leader seminars, many of our Stanford engineering students (read: budding Stanford entrepreneurs) ask a variation of the following question to our speakers: If you were going to start a business right now, what would it be? In that question, you can hear the churning wheels of desire for financial success. However, this type of thinking is a version of selling yourself short. Investors discuss the concept of leaving money on the table. As an entrepreneur, have you ever considered that your quick-to-market idea is leaving innovation on the table? Are you selling your creative technical skills short by just creating a “thin value” variation on an existing idea? If you develop a check-in service for retail shops that lets users earn badges and discounts… well, that’s nice. There will be many competitors, and we wish you the best of luck. However, maybe you’re leaving something on the table – that bit of extra brilliance that is needed to help change the world.
The Stanford Technology Ventures Program serves as the entrepreneurship center for Stanford’s School of Engineering. Teaching entrepreneurship to engineers is critical because engineers and scientists are the very people positioned to bring brilliant technical knowledge to the effort of creating thick value. These professionals can raise their technical gifts to an entirely different level by pursuing challenges that will change the world. It’s not about whether you have a moral compass to guide your technological prowess, or whether VCs are interested in funding your idea. It’s about whether or not you are willing to step up to a truly big challenge: Use your technological gifts to build scalable concepts that treat improving society as a given requirement, rather than an optional by-product.
Look at the society around you; are you ready for a real challenge? It’s really up to you.
Starting your own business takes immense courage. It is a leap of faith — a bet placed on your wisdom, skills, and tenacity to deliver on a dream. With so much often at stake, why would anyone actually choose this path? Is it for money? Is it for power or notoriety? Is it because you’re a swashbuckling risk taker? Or is it for an entirely different reason?
The true answers can be as unique as the people who make this choice. The courage to take this kind of risk can come from so many places. Were you inspired by an amazing idea? Did your struggles with a problem lead you to discover a solution right before your eyes? Or is it something within calling upon you to make an impact in society? In the following video, a group of young entrepreneurs discuss their personal reasons for taking the leap.
Their reasons are all different, some even a bit surprising.
So watch the video, and then tell us… what is your reason?
The Roundtable on Entrepreneurship Education Latin America conference was an astounding success by all measures. The sold-out conference, held in Lima, Peru, brought together regional and global educators to share strategies, ideas, and research on education’s role in bolstering entrepreneurship. From October 19-21, conference attendees took part in interactive workshops, experienced keynote presentations from entrepreneurship leaders, and networked with fellow colleagues. This year’s REE Latin America conference focused on the significant development of entrepreneurial ventures related to the host region’s unique cultural characteristics. An example would be the growing opportunities to re-invent agribusiness throughout Latin America.
However, the region is also deeply engaged in an effort to build an entrepreneurial mindset throughout all industries and sectors. [quote_right]“You need [to use] entrepreneurial thinking to teach entrepreneurial thinking.”[/quote_right]To do this, according to conference presenter Heidi Neck, professor of entrepreneurial studies at Babson College, education must play a key role if entrepreneurial efforts are to take hold. However, Professor Neck also sees this as a challenge to academics as, “You need [to use] entrepreneurial thinking to teach entrepreneurial thinking.” The world’s current economic environment clearly highlights the need for increases in entrepreneurship on all continents, particularly due to entrepreneurship’s multiplying effects on economic development.
STVP, along with the warm hospitality of the Center of Entrepreneurship at Universidad ESAN, co-hosted the conference. Beyond the invaluable education and networking opportunities, REE Latin America provided attendees access to a myriad of opportunities to engage Peru’s culture. Activities included learning about pisco (Peru’s tasty national drink), which is booming in worldwide popularity, and even making visits to the ancient destinations of Cusco and Machu Picchu. All of these activities added an additional dimension to the experience of attending REE Latin America, by providing a regional context for the knowledge gained on how to increase entrepreneurship education throughout the world.
Take a peek inside the 2010 REE Latin America conference.
Having an exciting, disruptive technology is not enough to build a solid business. To grow scale and profits requires entrepreneurs to respect the value of solid operations. Thomas Prescott, CEO of medical technology firm, Align Technology, shares this perspective. When the company’s “invisible braces” product first appeared in August 1999, the use of plastic for custom-built braces was clearly a disruptive technology amidst the long-standing industry norm of using wires and brackets for orthodontic care. However, Align raised $280 million in capital before making any profit. Backed by this level of capital, even companies with the most leading-edge technology are under tremendous pressure to hit milestones. Prescott believes solid operations are a key force in a company’s ability to grow scale and capture profit.
Operational Focus Makes Customers Happy
When the CEO arrived at Align in 2002, the company was shipping product, but “we were not operationally capable,” says Prescott. The company had real weaknesses in shipping logistics, product quality, and customer service, all of which hindered the company’s ability to scale. Prescott realized step was to stop making angry customers, so Align went down the list of problems and addressed the issues. With a revived focus on operations, the company improved customer satisfaction, reduced their burn rate, and turned cash flow positive in 2003.
Operator and Founder Relationships
According to Prescott, maturity is a main component to building a great relationship between a company founder and a new operations leader. This requires an operations person who wants to leverage their skills, but who will also maintain enough respect for the company to avoid trying to “fix” everything on day one.
Start with the Right Team
Leaders often think success is based on building that “perfect” strategy to achieve success. Prescott now realizes the real key is to have the right team. Having the right people also means having a team that evolves to meet current needs. The people you start with may not be the right people to scale with — and that might include you.
Make Money or Cease to Exist
Financing issues can crush even the most incredible companies. “At some point,” according to Prescott, “you have to not be a non-profit anymore.” Even if you a cash rich company, making lots of money, you may only be a few turns around the corner from disaster. “If you can’t see how you will finance it, then you got to figure out how to bootstrap it yourself and cover your costs,” says Prescott.
Execution is Most of the Game
What is execution? It’s everybody knowing what they’re supposed to be doing, and then making that happen again and again, says Prescott. As in Align’s early days, the problem might not be your strategy or product, but rather you inability to execute. “Where strategy is often about the beginning of a plan, execution is about being able to deliver on the plan you set out.”
Going Too Fast Can be a Good Thing
When you don’t make a decision, that still counts as a decision. While going too fast can create a certain type of problems, going too slow burns the one thing you can never get back — time. If you are headed in the right direction, you can make adjustments quickly. This is far better problem than going too slow and considering a problem forever.
We here at STVP encourage the exchange of differing viewpoints. It’s a cornerstone of innovation. When venture capitalist and serial entrepreneur Mark Suster recently spoke at our ETL seminar, he did not disappoint in this department. In fact, he actually referred to many of his beliefs as being downright heresies in Silicon Valley. Now, heresies are one thing, but calling Silicon Valley lazy is an entirely different matter. (Shocking full disclosure: Stanford is in Silicon Valley.)
Suster argues technology entrepreneurs in Silicon Valley are often too lazy to do basic research before trying to launch a company or product. And he’s not talking about crafting a thick, leather-bound, business plan tome; he means Valley entrepreneurs often don’t do basic research on whether anyone will even be interested in paying for their new product. Suster comes to this position based on his direct experience, but is this charge too large a generalization of Silicon Valley entrepreneurs?
Suster charged into a debate on the definition and benefits, or lack thereof, between “lean” and “fat” startups. Proponents of the lean startup movement, such as Eric Ries, contend a lean startup needs to move quickly to discover the point of product reinvention, or “pivot,” to find their market before running out of money. Suster argues this definition is not about being lean or fat, but rather about being fast. Being lean or fat is more a matter of funding, according to Suster. And in raising too much funding, companies end up facing exaggerated expectations and limiting their exit options.
Skate Where the Puck is Going
Along with his strong opinions, Suster offered honest and invaluable advice, based on his experiences in the startup and venture capital trenches. One of his most compelling reminders was to “skate where the puck is going.” He urged the largely student audience not to waste time on technology concepts and web services that are already on the scene. On this point, Suster specifically called out the current love affair with badges and check-in services. As a venture capitalist, Suster really wants to see simple, well-built product prototypes in a new space, rather than hearing about retread ideas lifted from TechCrunch articles.
Oh, what to do when your organization is so big it can no longer focus on inventing new products and technologies? Maybe it’s time to go shopping for companies. In this clip, former Yahoo! COO Dan Rosensweig discusses why Yahoo! goes out and buys a company. He makes no bones about Yahoo! being in the advertising business, the never-ending pursuit for more eyeballs.
Even if Yahoo! purchases something that doesn’t make a sound business on its own, the purchase could make a great add-on to their other services. Anybody ever hear of Flickr? So let’s say you have a great online product or service, but you’re just having a hard time with the whole monetization thing. What is the smart play?
Do you hang in there on your own, as competition springs up on all sides?
Or do you make the deal when Yahoo!/Google/facebook come calling?
Give the video a look and let us know — do you stay or do you go?
STVP‘s Executive Director, Tina Seelig, empowers her students to embrace all their experiences by creating a failure résumé.
Yes… a failure résumé.
This is a great way to appreciate the lessons you learn through experience. So while you’re busy polishing up a standard résumé, framing your most attractive qualities and accomplishments for others, you might want to take time out to build your failure résumé.
Here is Tina’s explanation of this powerful tool:
I require my students to write a failure résumé. That is, to craft a résumé that summarizes all their biggest screw ups — personal, professional, and academic. For every failure, each student must describe what he or she learned from that experience. Just imagine the looks of surprise this assignment inspires in students who are so used to showcasing their successes.
However, after they finish their résumé, they realize that viewing their experiences through the lens of failure forced them to come to terms with the mistakes they have made along the way and to extract important lessons from them. In fact, as the years go by, many former students continue to keep their failure résumé up-to-date, in parallel with their traditional résumé of successes.
A failure resume is a quick way to demonstrate that failure is an important part of our learning process, especially when you’re stretching your abilities, doing things the first time, or taking risks. We hire people who have experience not just because of their successes but also because of their failures.
Failures increase the chance that you won’t make the same mistake again. Failures are also a sign that you have taken on challenges that expand your skills. In fact, many successful people believe that if you aren’t failing sometimes then you aren’t taking enough risks. Additionally, it is pretty clear that the ratio of our successes and failure is pretty constant. So, if you want more successes, you are going to have to tolerate more failure along the way.
You deserve to take credit for all that you have learned in life, so use this tool to do it. What are you waiting for? It’s a job each of us is perfectly qualified for.