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Amos Wenger

May 11th 2012

CDM Entrepreneurship Simulation


Introduction
We were asked to write a report on the CDM venture simulation as part of the Introduction to Entrepreneurship course. I'll start with a short critique on the simulation itself, as I believe there is some valuable feedback to be communicated there, and I'll quickly move on to analysis of my own experience of this simulation

The simulation itself


The good Overall, I found the simulation was of good quality. It communicated especially well some aspects of a venture such as the necessity to be able to deal with a lot of information quickly, the fact that, as an entrepreneur, too much happens too fast and that you are constantly overwhelmed. I appreciated the emphasis it put on the importance of taking time for oneself. And, as a matter of fact, it did make me think and stop the simulation to go breathe a bowl of fresh air, regularly. It also showed pretty well the need for a good organization of your address book. As a CEO, whose main role is in interacting with people, the number of contacts can grow pretty fast and it can be very easy to lose track of some details. Having an assistant in the game would have been much helpful: I'd expect from an assistant to arrange and remind me about meetings or to call back people for me and put us into contact whenever both area available. I can't help but think that the simulation made us do a lot of low-level management that could have been efficiently solved by hiring the right assistant. (Note that the simulation makes us recruit a secretary, but her actual role is not clear: she has only one task that lasts for the entire venture) The less good

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Amos Wenger

May 11th 2012

Now for the the other side of things: some of the content is particularly tainted by stereotypes and an old-fashioned way of thinking. I'll take for example the fact that, we had three stereotypical suppliers for various parts in our venture: The Chinese one, cheap but overlooking crucial thing (like transport costs) The Russian one, sneaky and who eventually launched a copycat of our product And the Swiss one, more expensive but evidently more reliable

While I understand the need to synthesize a typical venture experience in a simulation, which requires some cultural shortcuts to be done, this insensibility is typical of a certain class of people coming from a financial background, and it's simply something I cannot get behind. Similarly, some of the quotes 'Aunt Erika' sent were bullshit from the inside out. Only one example is enough here: I read this in a book once: No patent, no money (This is actually not from Aunt Erika, but from an SMS sent by Daniel Light, my co-founder in the venture) As an active member of the software industry, this remark is not only out of place, but also flat-out insulting. According to recent studies from the University of Boston, patent trolls have cost about half a trillion dollars to innovators[1]. Software patents are widely known to stifle progress: the recent war[2] between Google and Oracle (who apparently acquired Sun Microsystems for the express intent of turning it into a patent troll) about the Java technology and its re-implementation for the Android ecosystem is only one in many many examples of how patents hurt our industry. As a result, I consider it disrespectful to quote such garbage in a simulation that is aimed towards a large number of students from different horizons and with different ambitions as to which industries they want to take by storm. While I recognize the usefulness of patent filing as a defensive mechanism under the very same patent trolls I discuss above, it seemed to take an overbearing part of the CDM simulation, at the expense of more important activities, such as developing the product itself. Perhaps a relentless worry about patents, trademarks, and general IP protection is better suited to industries other than Software development. However, as a general business practice, I find it easier to simply work from a network of personal contacts which you value and trust, as well as following some ground rules that can be easily derived from common sense: for example, not to leak an entire business plan for a course and, three weeks later, to try and impress the whole class into signing a desperate NDA. This kind of behavior is a good 2/4

Amos Wenger

May 11th 2012

example of a serious red flag, indicating people better kept at bay from any serious business matter. With all this carefully considered, I still can't find a justification for including such a broadstrike quote in the simulation as No patent, no money. These quotes mislead nave entrepreneurs everyday, and I have no sympathy for those who help spread them.

Entrepreneurship and boundaries


Another aspect of the simulation subject to discussion is the general staging of the simulation. Events and choices presented to the player orient the simulation in a certain direction, often not leaving many options between the CTI + PSE + Various prizes combo and the rest. I would argue that this is only one of the kinds of ventures than one can build. The progress of the industry, notably in the Software area but not exclusively, allows significant advances to be done in one domain without needing big funding rounds early on. The whole game seems to suggest a preferred (unique?) path to new entrepreneurs: to follow the path that EPFL, Venture Lab and its partners have traced for them. My observation is that this is harmful to the mental structure of new entrepreneurs. As an entrepreneur, one big strength is the faculty to consider things as a whole, to take a step back and see the big picture, where others can't. Applying for certifications, living on-campus, raising money even for basic furniture is only one way to go. I would advocate (again, this is probably more relevant to the software industry, web applications and services in particular) to adopt a much more modest way of life while the initial prototype is being developed, and then follow basic principles of the industry: launch early, iterate. Companies such as GitHub[3] have voluntarily refused to resort to Venture Capitalists and have made it a point of honour to be able to run off their personal investment and minimize expenses at first, waiting for their first revenues to expand. At the time of this writing, GitHub has 55 employees[4] and is continuing to hire at an increasing rate. Their success is a sign of the validity of open source as a business model and inspired many others, such as Orchestra.io[5], to go the bootstrap way. If I was left with one wish about this simulation, it's that it would give to its users a greater sense of vision and boldness in their ventures. I believe that it is beneficial for any entrepreneur to be able to locate their company in a layer structure[6]: clients being in an inner circle, and suppliers being in the outer circle.

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Amos Wenger

May 11th 2012

Such a visualization gives better indicators as to the further development of almost any venture, and is a metric that was totally overlooked in this simulation.

Conclusion
In conclusion, the simulation revealed to be a convincing piece, engaging even (I happened to lose track of time, absorbed by the simulation itself), but after a deeper analysis, it seems to be a tool used to train would-be entrepreneurs to excel at accomplishing a certain, opinionated vision of entrepreneurship. (P.S: I suppose this is not the kind of report you expected, but by the time you'll get this, about thirty perfectly standard and politically correct reports will have already reached you. Hopefully this one gives at least something to think about.)

References
[1] Study: patent trolls have cost innovators half a trillion dollars Ars Technica article http://arstechnica.com/tech-policy/2011/09/study-patent-trolls-have-costinnovators-half-a-trillion-bucks/ [2] Google, Oracle lawsuit: 10 key issues to follow in this case Eweek article http://www.eweek.com/c/a/Mobile-and-Wireless/Google-Oracle-Lawsuit-10-KeyIssues-to-Follow-in-This-Complex-Case-595791/?kc=rss [3] Bootstrapped, Profitable & Proud: GitHub 37signals blog http://37signals.com/svn/posts/2486-bootstrapped-profitable-proud-github GitHub Company Profile CrunchBase http://www.crunchbase.com/company/github EngineYard and Orchestra join forces EngineYard blog http://www.engineyard.com/orchestra Ogres have layers. So do businesses. My blog http://amos.me/blog/2012/layers/

[4]

[5]

[6]

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