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Entrepreneurship for Scientists & Engineers

Mike Panesis
April 30, 2013

Speakers
Topic Speakers Mike Panesis Craig R. Cummings James Rogers Dave Seibold

Entrepreneurship for Scientists & Engineers


Top 10 Lessons I have Learned about Start-Ups aPeel Technology TMP Graduate Program

Agenda

Why entrepreneurship for STEM? Whats different about entrepreneurship for STEM? Transforming technology into a business Is entrepreneurship for me? Getting started Helpful hints

Why entrepreneurship for STEM?

Probably not the right question WHY NOT?

Companies with founders holding advanced degrees

Plenty of representation in the Forbes 400

Twice the population

Source: http://ethanbeute.com/wordpress/forbes-400-rich-american-education-level-college-dropout 6

Whats different about entrepreneurship for STEM?

Any sufficiently advanced technology is indistinguishable from magic. Arthur C. Clarke

The Science/Technology Cycle


Science

Research is the transformation of money into knowledge. Innovation is the transformation of knowledge into money. Geoffrey Nicholson, Vice President, 3M

Research

Knowledge

Innovation Technology

What you do with what you know

Technology

(Tek-nol-uh-jee) From the Greek: (tchn), "art, skill, craft and - (-loga), "study of-"
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Whats different about entrepreneurship for STEM?

Intellectual property protection barrier to entry Incubation time


Non-profit motive while in research Peer review Access to grants

Creating a Minimum Viable Product in a cost-effective manner can be a challenge Technology maturity is critical Higher value to investors and more potential buyers Often results in a solution in search of a problem
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Transforming technology into a business

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Turning the technology corner


The accumulated learning from your research

Knowledge

Technology

The entire space of potential applications of your knowledge Direct and adjacent

Business Idea

Technology application that has the most potential to be of value to customers Can start with more than one

Business Model

A framework for creating value for customers Validated by testing hypotheses about each element of the model Customer discovery is critical Attract seed capital

Business

Dependent upon discovery of a sustainable, repeatable business model Attract growth capital

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Properties of a Great Business Idea


Most important:
Solves a problem in elegant fashion Versatility that makes it a platform solving many problems Has a compelling Value Proposition

Product or Service
Clearly performs better than the incumbent May seem impossible to industry experts

Price
Ideally does more for less Someone is willing to pay, even if its indirectly

Market
Disrupts an established market Applies best practice from one market to another Serves an under-served market
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Where to find a great business idea

A great idea and a great business idea are not the same thing. You dont have to be first, just better. If an idea isnt coming to you, then go find one:
Put an idea person on the team Practice brainstorming or lateral thinking Look for inspiration in failed experiments Keep a notebook (recommend Evernote) Hone your listening skills, keep an eye (or ear) out for frustration, complaint, wishes, dreams, etc Start with one property of a great idea, then work on the others
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From business idea to business model

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Validating your business model with scientific method

Hypothesis

Analysis

Prediction

Test

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Is entrepreneurship for me?

Passionate about your start-up Willingness to take big risks Can live with losing everything Able to weather adversity Want to make a difference

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Getting started

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Where the money comes from


Investment Sources

Personal

Friends & Family

Individuals & Angels

Venture Capitalists & Corporations

Where?

Financial Milestones

First Sale
Confirm customer interest

Cash Flow Positive


Business can operate without new investment

Net Income Positive


Business can invest in itself

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Innovation Corps (I-Corps)


NSF program to accelerate technology commercialization Goal: to develop and nurture a national innovation ecosystem $50,000 grant to pursue business model and customer discovery Available to teams with an active NSF award or one that has been active in the last five years First UCSB recipient: AppScale More info at 19 http://www.nsf.gov/news/speci

Helpful Hints

Not all those who wander are lost. - Tolkien

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Your start-up and TIA


You signed an invention agreement.
Its a legally binding contract. If you violate it, you run the risk of being sued. Its the cost of having a great environment for research.

Learn how to work the invention agreement.


If you dont use university resources, you own the IP (did I mention Im not a lawyer?). The avoidance of taxes is the only intellectual pursuit that carries any reward Keynes

Even if you cant, its not all bad.


Some investors see a license from a major research university as a selling point. License agreements generally dont affect the long-term attractiveness of the business.

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Helpful hints

Just because you want to start a business doesnt mean you can afford to.
Get a job Teach Save as much as you can Start your business on the side

Think like a business person without becoming one.


Ask questions Look for opportunities from your environment Attend a trade show in an industry that interests you

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How TMP can help

Courses GPMP Certificate Upcoming degree program

New Venture Competition NVC Seminars Participate multiple years Events and mixers Connections
Business students Mentors Investors Careers

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Keep in touch with TMP


Group: UC Santa Barbara Technology Management Program http://bit.ly/UCSBTMPLnkd

Page: UC Santa Barbara Technology Management Program http://www.facebook.com/TMPUCSB

@UCSBTMP https://twitter.com/#!/UCSBTMP

The presentation will be available at http://tmp.ucsb.edu/nvc

Reading
Web Sites Osterwalder & Pigneur, Business Model Generation Steve Blank http://www.steveblank.com How to Build a Startup https://www.udacity.com/course/ep245 Block & Dorf, The Startup Owners Manual VentureBeat http://www.venturebeat.com AngelList http://www.angel.co InfoChachkie (John Greathouse) http://www.infochachkie.com TMP Web Site http://www.tmp.ucsb.edu

Ries, The Lean Startup

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Top 10 Lessons I have Learned about Start-Ups

Craig R. Cummings
April 30, 2013

#10 Lesson I have Learned

Can you explain your technology to a 6 year-old?

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#9 Lesson I have Learned

Corporate titles dont matter; the most powerful and the most admired title is Founder.

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#8 Lesson I have Learned

Why your technology matters is far more important than How it works.

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#7 Lesson I have Learned

Venture capital is the most expensive money you will ever take. Stick with Mom and Dad and the Angel next door for as long as you can.

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#6 Lesson I have Learned

Is it you, or is it the PowerPoint?

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#5 Lesson I have Learned

Great execution will always win over great intellectual property.

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#4 Lesson I have Learned

Outsource everything that can be done by someone else; focus only on your core competencies.

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#3 Lesson I have Learned

One can sweep a lot sins under the carpet of rapid growth.

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#2 Lesson I have Learned

Its all about the customer.

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#1 Lesson I have Learned

Never doubt the power of a single entrepreneur to change the world. Indeed, it is the only thing that ever has.

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aPeel Technology James Rogers james@apeeltech.com

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Graduate Program

Dave Seibold Director, Graduate Program in Management Practice Professor of Communication

Graduate Program in Management Practice Certificate


Goals To educate graduate students to be successful entrepreneurs or management-level employees within tech-based companies.

To stimulate graduate students thought processes, outside of their more traditional research-based training, concerning enablers/constraints on creativity that lead to meaningful innovation in business and society. To introduce graduate students to an exceptional group of local, regional and national leaders in technology management and entrepreneurship as members of a strong network (many are mentors, lecturers and advisors within TMP).

Graduate Program in Management Practice Certificate


Requirements
The progression of classes emphasizes, first, the business FOUNDATION needed in a business/entrepreneurial environment. Second, a student selects one of two emphases, entrepreneurial or corporate, focusing on the CONTEXT of her or his career expectations beyond college. Finally, the GPMP requires a meaningful experience putting these ideas into PRACTICE, where students choose one of the following: an Internship or participation in the New Venture Competition. Foundation ENGR 240 Business Strategy & Leadership (4 units) ENGR 241 Managing Innovation (4 units) ENGR 244 Entrepreneurial Marketing (3 units) ENGR 246 New Venture Finance (3 units) Context (Entrepreneurial or Corporate Emphasis) ENGR 242 Entrepreneurship (4 units) OR ENGR 255 New Product Development (4 units) Practice (upon completion of above) Internship (160 hours in a management role) OR New Venture Competition

2012 - 2013 Graduate Courses


Fall 2012
ENGR 211 Opportunities and Perspectives in Technology, Business and Society (Greathouse) elective ENGR 240 (4) Business Strategy & Leadership (Hansen)
ENGR 242 (4) Entrepreneurship (Greathouse)

Winter 2013
ENGR 211 Opportunities and Perspectives in Technology, Business and Society (Greathouse) elective ENGR 240 (4) Business Strategy & Leadership (Hansen) ENGR 246 (3) New Venture Finance (Adornetto) ENGR 251 (3) Patents and Intellectual Property (Ben-Yaacov) elective ENGR 258 (4) Asia Business Opportunities (Bogart) elective

Spring 2013
ENGR 211 Opportunities and Perspectives in Technology, Business and Society (Greathouse) elective ENGR 255 (4) New Product Development (Campbell/Slaff) ENGR 244 (3) Entrepreneurial Marketing (Gabriele) ENGR 291K (2) Leading Change (Hansen)

ENGR 241 (4) Managing for Innovation (Seibold)

ENGR 250 (3) Managing Operations (Slaff) elective

* Gray required for GPMP Yellow Electives

Graduate Program in Management Practice Certificate


Selected GPMP Data (Historical) GPMP introduced 1999 Approx 125 certificates awarded 2000-2012 CoE, MLPS, Social Sciences, Bren, Education, Humanities >500 grad students have taken GPMP classes > 45 companies sponsored internships Approx 20 firms lauched Uses: end in self (w/ degree), immediate leverage to PhD and MBA (HBS + SEAS), later return to MBA (Ross)

Graduate Program in Management Practice Certificate


Selected GPMP Data (Current)
7 GPMP Certificates this year: BMSE (Biomolecular Science and Engineering Program), MCDB (Molecular Cellular and Developmental Biology), Physics, Mechanical Eng., Chemical Eng. (2), Materials
Internships vs. NVC 5 of 7 GPMP graduates were involved in NVC. 1 interned at Aptitude Medical 1 interning at InTouch Health
> 30 grads currently pursuing GPMP

Total Grad enrollments in AY 2012-2013: 111 Total Unique enrollment: 68 Engineering: 33 Sciences (BMB, Chem, EEMB, MCDB, Phys): 12 Bren: 20 Other: 3

Master of Technology Management Degree


Prior Summer Fall Quarter Foundation
TMP 401: Seminar: Opportunity Recognition in New Technology TMP 411 Theory of Markets, Competition and Technological Development Micro and Macro Econ, Theories of Competition, Creative Destruction, Industrial Org, Innovation, Diffusion TMP 421: Individual, Group and Organizational Effectiveness in High Velocity Environments Working in teams, leadership, motivation, negotiations, organizational design TMP 431: Accounting and Financial Challenges in Rapid Growth and Uncertain Technology Driven Environments Financial & non-financial measures, operating cycle, cash flow, Financial Planning Systems, Risk Assessment TMP 441: Analysis for Business Decisions in High Velocity Environments Theoretical models & mathematical tools to be used for: quantitative analysis, statistics, decision theory, management

Winter Quarter Value Creation

Spring Quarter Integration

TMP 425 A/B: Commercialization Team/Leadership Project (includes once per week leadership workshop) TMP 471: Business Models in Technology Driven Industries Business models and structures for value creation, innovation, competitiveness; leadership and decisions TMP 451: Market Research Under Uncertainty Quantitative and qualitative data collection and analysis, focus groups, survey research, forecasting. TMP 442: Project, Program & Operations Management project and program management tools, supply chain, critical path, crisis management, Human Resources, budgeting and planning considerations TMP 473: Leading Change Lean design and operations, creativity, start-up process vs new product development, team building TMP 452: Managing the New Product Launch Strategies for researching and introducing innovative technologies to businesses and markets, demand and price forecasting, global marketing.

Students with an MS, Econ, Math or CS Degrees. Priority given to those with prior work experiences, evidence of leadership, communication, emotional maturity, Positive orientation towards risk and over coming challenges.

TMP 472: Negotiations and Sales Management Getting to Yes, Labor, vendor and investor management, understanding stakeholders, communications strategy TMP 489: Special Issues Technology Commercialization A) Life Sciences Businesses B) Information Technology Businesses C) Advanced Data Analytics D) Energy Efficiency E) Sustainable Business Practices TMP 475: Business Planning in Dynamic Markets Preparation of a comprehensive business plan (strategy implementation) in connection with top-line Team Project