Intro to Entrepreneurship & Innovation

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Overview of what it takes to conceive and execute a startup idea; where entrepreneurial ideas come from; dispelling some myths about entrepreneurship; short case studies and examples of different types of startup success.

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  • A Formation Space is designed to:Form teams from diverse skillsets and backgroundsForm ideas through role playing, game playing and simulationsForm innovations that solve market or societal issuesForm value propositions and business models through the use of visual tools and techniquesForm new products and services through the use of rapid prototyping and agile engineering methodsForm new skillsets for participants through Rapid Startup SchoolmodulesIts projected outcomes are:New innovation and startup teams New products and services that reach their respective marketsParticipants with enhanced innovation and entrepreneurial capabilities and skills It accomplishes this by:Targeting underused human assets including military veterans, retirees and skilled unemployed Targeting latent and potential entrepreneursTargeting students from diverse disciplinary backgrounds This is supported by:Academics in Resident (AIR) who are entrepreneurially minded teaching facultyResearchers in Residence (RIR) who are faculty involved in cutting edge technologiesSpecialized mentor pool from both active and retired people with corporate and serial entrepreneur backgrounds
  • First state-wide collaboration around tech transfer (3 state universities, one private hospital group)Create New startups to commercialize technologies from Arizona universities and research institutions (207 patents available on Furnace website) www.azfurnace.orgTied with an accelerator program of 6 months (Phoenix, Tucson, Flagstaff) and grants of $25K from state org’s22 startup teams through to final pitching on 5th of Nov, 10 successful teams announced 16th Nov. Because Furnace startups are tech transfer related, need more specific mentors with energy, medical device, hardware backgrounds Received EDA grant to support it
  • First state-wide collaboration around tech transfer (3 state universities, one private hospital group)Create New startups to commercialize technologies from Arizona universities and research institutions (207 patents available on Furnace website) www.azfurnace.orgTied with an accelerator program of 6 months (Phoenix, Tucson, Flagstaff) and grants of $25K from state org’s22 startup teams through to final pitching on 5th of Nov, 10 successful teams announced 16th Nov. Because Furnace startups are tech transfer related, need more specific mentors with energy, medical device, hardware backgrounds Received EDA grant to support it
  • Intro to Entrepreneurship & Innovation

    1. 1. Introduction to Entrepreneurship StartupThinkingMarch 2013Rapid Startup School
    2. 2. A journalist and an artist in 1977…..
    3. 3. In the late 1970S Banana Republic pioneered a new form of storytelling asmarketing, filling its catalogues with tales of jungle treks and safaris. Formerjournalists Mel and Patricia Ziegler, now 67 and 63, respectively, spun theiryarns into retail gold.
    4. 4. We came up with the idea of Banana Republic byfantasizing about the source of our merchandise.We invented a world in our catalogue that quicklyfound a following.In the beginning, every day was about making enoughmoney to survive. In 1979 we charged $1 for thecatalogues.Wed work until we were exhausted, go home, openthe mail, and take the dollars from the envelopes to goto dinner.This story is from the March 18, 2013 issue of Fortune
    5. 5. • By the end of 1982 the firm had $2.5 million sales (80%margins) with no outside investment• Were getting offers to let them open stores in shopping centersbut they felt they didn’t have the money or knowledge• A connection introduced them to the founder of Gap• Gap buys Banana Republic in Feb 1983; start to create theirown private label goods• By 1988 they had 100 stores and turnover of $250 million• They left after a disagreement on strategy with Gap• Set up Republic of Tea and sold it three years later• Now working on a healthy foods company…..
    6. 6. Why did we set up AREA48 as a Formation Space• Help individuals learn skills needed to follow anentrepreneurship path• Help people to find the right ideas• Help people to find the right team members• Give you the opportunity to work on your ideas throughthe business model canvas• Prepare you to use other resources in the ecosystem e.g.incubators, accelerators, co-working spaces, fundingopportunities
    7. 7. • The Applied Regional Economic Action (AREA)48 is termed a Formation Space (prestartup/pre incubator)• It is designed to help individuals to form new teams, ideas, products, services andskills• It accomplishes this by bringing together a range of different groups of people• These work together with a number of academic assets includingmentors, ecosystem partners, researchers, staff and students• Its projected outcomes are:• New innovation and startup teams• New products and services that reach their respective markets• Participants with enhanced innovation and entrepreneurial capabilities andskillsAREA48: a Formation Space –Birthing New Entrepreneurial Teams and Innovators
    8. 8. I never perfected an invention that I didnot think about in terms of the serviceit might give others... I find out what theworld needs, then I proceed to inventThomas Edison, inventor and scientist
    9. 9. Why are people getting into entrepreneurship?• Costs are falling…. Off-the-shelf technologies/platforms• Coding is being ‘democratized’ for internet startups• Financial crash has made people re-assess their aims and futures• No longer seen as a ‘crazy’ idea – now a real career choice• Rapid growth in freelancers and supports e.g. Freelancers Union• Rapid growth of support structures for aspiring entrepreneursfrom training to space to mentors• Growth of new methodologies like Lean & Business Model canvas
    10. 10. So before we get into more detail…..why are you all here?
    11. 11. Lean thinking states that a startup is ‘temporary organization’• First we have untested hypothesis so we conduct a systemof ‘search’ for a value proposition• Use the business model canvas as a framework for testingthese hypothesis with customers• This means customer discovery (talking to, not selling to)• Repetitive process as we glean more information• This goes with agile development (software, engineering)in which we speed up product development (iterative,incrementally)
    12. 12. Objective of all this?• Our search for a business model will result in success(or we change direction or ‘pivot’)• Find a value proposition backed by multiplecustomer interactions• A business model to allow us to deliver on this valueproposition• That we have a scalable business (depends on whatyou mean by this)• That we can get/keep/grow our customer base
    13. 13. We don’t believe in the term ‘lifestyle’ business• Every potential startup is a Great Little Company• The ability to succeed is based on ability to execute• AREA48 is designed to help ‘shorten the odds’• Scalability can often be based on ambition level ofthe founders• How much do you really want it, how much are youwilling to sacrifice?
    14. 14. Business Plans versus Lean Startup• Business plans are falling out of favor• Being replaced by lean thinking includingthe Business Model Canvas• BUT banks and funders still seek the 3-5year business plan• Lean can help develop a business planeasily
    15. 15. What’s the difference between a business plan, marketing planand other plans?
    16. 16. Entrepreneurship is a ‘Minority Sport’ that onlysuits certain typesSome Sobering Thoughts…• The average working week for a self employed personis 64 hours• Most people do not increase their income by becomingself employed• 1 in 5 Entrepreneurs do not earn anything within thefirst 12 months• Support of the spouse or partner is critical (3 F’s)• 50% of all new businesses in fail in the first 12-24months
    17. 17. Benefits of Being an Entrepreneur• Do what you enjoy• Control your own destiny• Contribute to society• Potentially huge financial rewards
    18. 18. Push the Team Idea• Nothing like the feeling of running yourown business….• But it takes commitment….• …and you can’t do it alone….• Investors look for TEAMs and invest inthese more than in ideas….
    19. 19. Create Like a GodCommand Like a KingWork Like a SlaveRef: Guy Kawasaki (Ex-Apple, Garage.com)
    20. 20. Some Points to get across to buddingEntrepreneurs• Don’t do it if you think you will get rich easy or quick• Don’t do it if you think it means 9-5 hour, 5 day a weekjobs• Don’t do it on your own – successful companies areTEAMS• Or at the very least advisors, mentors• Don’t assume just because you came up with the ideathat you will be the CEO or Boss• There are a lot of programs outside of the universitythat can support you too20
    21. 21. “Entrepreneurs are risk takers, willing to rollthe dice with their money or reputation onthe line in support of an idea or enterprise.They willingly assume responsibility for thesuccess or failure of a venture and areanswerable for all its facets.”Victor Kiam, Remington
    22. 22. Technology Transfer Office PartnersFunding PartnersFurnace Technology Transfer Accelerator – first in the worldSupport Partners
    23. 23. Furnace offers an opportunity to take unused patents and turn them intobusinesses• Furnace is designed to stimulate even more activity:• Take the best, unencumbered technologies from Arizona research institutions• Offer them to external entrepreneurs/mixed teams• Offer acceleration and $25K in grant funding each• Pilot in 2012 resulted in ten new startups:• Created a successful public/private partnership• Over 200 patents, copyrights uploaded to Furnace website (after ‘translation’)• Over 50 applications, 22 finalists, 10 chosen startup teams• Total of $250,000 in startup state grant funding awardedwww.azfurnace.org
    24. 24. MYTHS WE TELL OURSELVES
    25. 25. "The real act of discovery consistsnot in finding new lands but inseeing with new eyes."Marcel Proust
    26. 26. Where do entrepreneurial ideas come from?• Passion• Opportunity• Despair (small d and big D)• Situation
    27. 27. The world of entrepreneurship is full of myths and half truths• It must be your idea to be passionate• Being passionate isn’t enough• You must have deep knowledge• You must be fully committed• There must be a visible market or need…these are all true…BUT…..
    28. 28. How to spot a good thing....and being brave enough to switch
    29. 29. From accident to empire
    30. 30. It wasn’t their idea…..but that didn’t stop themYour Idea?
    31. 31. Starting one at a time…and changing your mind to catch anopportunity….31Your knowledge?
    32. 32. So we went to Atari and said ‘Hey, we’ve got thisamazing thing, even built with some of your parts andwhat do you think about funding us? Or we’ll give it toyou. We just want to do it. Pay our salary, we’ll comework for you.’ And they said ‘No.’So then we went to Hewlett-Packard and they said‘Hey, we don’t need you. You haven’t been throughcollege yet.’Apple Founder Steve Jobs on trying to get people interested in the startof Apple ComputersEntrepreneurshipas a second choice
    33. 33. People often start with what they like….even broken laserpointers….in 1995Your knowledge?
    34. 34. They even revolutionalize products and markets they knownothing about….Your knowledge?
    35. 35. ASU alums Kate and Andy Spade• Kate was accessories editor forMademoiselle magazine in 1991 –she was a journalism major, herfuture husband advertising• Before attending a large show sheunpicked the labels from her bagsand put them on the outside….abrand was born• Two friends joined as equitypartners as the business grew“Growing up I always had a passion for thrifting…” Susan Kroger
    36. 36. People often start with something they love….modcloth.com• Susan Kroger loved vintageclothing….• Set-up an online store from herCarnegie Mellon dorm room at17….• Then moved into a house/office….• Now has over 100 employees“Growing up I always had a passion for thrifting…” Susan Kroger
    37. 37. And they create markets where there are none…the David KleinstoryA visible market?
    38. 38. These Entrepreneurs are a bunch of clowns…• it was founded in Canada in 1884 by two street performers GuyLaliberte and Daniel Gauthier• Cirque du Soleil shows have since been seen by more than 90 millionpeople worldwide.• In 2006, Laliberté was named the Ernst and Young Entrepreneur of theYear• Its shows employ approximately 4,000 people from over 40 countries• Total revenue over $1 billion a year…during the 1980’s the companyalmost went bankrupt several times (familiar story…McDonalds, Virginetc)
    39. 39. “The critical ingredient is getting off your buttand doing something. Its as simple as that. A lotof people have ideas, but there are few whodecide to do something about them now. Nottomorrow. Not next week. But today. The trueentrepreneur is a doer, not a dreamer.”Nolan Bushnell, founder of Atari
    40. 40. Start with a broad view of the sector ….and look forthe gapsLook for unfulfilled NeedsLook for problems to be solvedTALK to customers early
    41. 41. The road to being a startup is not straight….• Some entrepreneurs are ‘born’ to do a startup e.g.Richard Branson, Bill Gates• Some fall into it by accident e.g. Steve Jobs• Some wanted a particular product in a particular waye.g. Anita Roddick• Some developed college projects e.g. FedEx• Some were research students in universities e.g.Google, Yahoo
    42. 42. Many reasons motivate entrepreneurs, particularly students• Solving a problem or ‘saving the world’– Human angle– Environmental angle• Creating a ‘cool’ technology or device• Following a hobby or a ‘dream’• Stumbling upon an idea
    43. 43. Question: Which would you invest inA. Great Idea, good teamorB. Good idea, great team?
    44. 44. What Makes a Great Business?• Great People• Well Differentiated Product• Must Have Customers• Sufficient Infrastructure and Resources
    45. 45. Sometimes products are developed by accident…..Teflon developed byDuPont (Plunkett) butwere actually looking foran alternative to FreongasMicrowave oven…..super glue…..pacemaker…….polio vaccine…..X-Ray…..penicillan….Viagra was intended to treat hypertension. Cellophane was meant tobe a waterproof tablecloth. Play-Doh was originally wallpaper cleaner
    46. 46. Entrepreneurship is risky because…..?• Few entrepreneurs actually know what they are doing• They lack the methodology• Management incompetence• Poor financial control (cash flow!)• Failure to develop a plan• Uncontrolled growth (cash flow)• Improper inventory control (cash flow)
    47. 47. The development of entrepreneurial ventures has changed a lot in the last tenyears…But the lessons from the failures are still very valid….Many people try and hop on the ‘hype’ wagon…If there are front page articles on the front of Time Magazine then you haveprobably missed it…..The key is understanding customers no matter what business you are in….Investors look for ability to deliver – execution of the plan
    48. 48. “Real Artists Ship!”Steve Jobs, Founder of Apple
    49. 49. Rules for doing a high tech startup are the same … but….• Internet or Web 2.0 are the ‘easiest’ to set-up and get to revenue• Pure software take a little longer…• Hardware generally takes a little longer than that and costs morefor development• Medical devices take longer again and are also capital intensive• Biotech or pharma take the longest, are higher risk, take moreinvestment but have high rewards• And there are non-traditional startups too….
    50. 50. Hybrid Models
    51. 51. …the space between ‘for profit’ and ‘more than profit’ isbecoming blurred….
    52. 52. Investor Motivation
    53. 53. Sources of Funding for pure social startups• Friends and family• Community/Geographic location• High Net Worth Individuals (HNWI)• Government, Foundation funding• Social Venture FundsMore likely to get venture funding if a hybrid or have a social missionas well as a profit one e.g. Ben and Jerry’s
    54. 54. Art of the Pivot
    55. 55. Startup Teams – Ability to Pivot• Many successful startups go through some form of a‘pivot’, changing their direction when their first idea was notsuccessful.• For Example:– PayPal was originally about beaming money between PalmPilots– YouTube was originally a video dating site– Twitter was about Group SMS– Groupon started as a website for collective political action– Easier for software/internet/Apps than devices or biotech
    56. 56. …and plenty of companies who started in one segment and expanded….• Many companies started in one specificsegment, dominated and then broadened theirappeal• Examples include Amazon, eBay, LinkedIn, Facebookand Yelp,• An important distinction between pivots and merelyexpanding a core business: Amazon going frombooks to other categories and Facebook going fromcollege students to open registration.
    57. 57. Start with a broad view of the sector you arein….and look for the gaps
    58. 58. What can be counted as a ‘new’ product?• A product that opens an entirely new market• A product that is adapted or replaces anexisting product• A product that significantly broadens themarket for an existing product• An old product introduced in a new market• An old product packaged in a different way• An old product marketed in a different way
    59. 59. Pivoting has actually beenaround since the dawn oftime….it is just easier to do nowthan in the past…..
    60. 60. “The greatest risk is not in thedevelopment of newproducts, but the development ofcustomers and markets.”STEVE BLANKThe Four Steps to the Epiphany
    61. 61. …why work on a start-up, spin-out company of your own?
    62. 62. 5 top incentives…..• Because You Can Now!• What Have You Got to Lose?• Professional Experience and Networking• Perspective• Marketability• High numbers in early twenties and then again inearly fifties…Source: Investopedia./Forbes
    63. 63. ….And sometimes a bit of luck…(right time, right place)….what they call chutzpah!
    64. 64. So AREA48 is partly designed to help you form teams• You should TALK to as many people as possible• You should use LinkedIn to connect with people• You should try out your ideas in our Phase II• You should try out team members from day one
    65. 65. It’s about the People, Stupid
    66. 66. Wrap-Up
    67. 67. What new entrepreneurs need to do …. tomorrow (or today)• Focus on an idea• Build a team• Research the market• Build a plan• Start• Look for ideas that are working elsewhere(similar, complimentary)– e.g. www.springwise.com
    68. 68. Online ResourcesFast Company www.fastcompany.comInc magazine www.inc.comEntrepreneur magazine www.entrepreneur.comVenturebeat www.venturebeat.comInnovation America www.innovationamerica.usBusiness Insider www.businessinsider.comSpringwise www.springwise.com@VentureFaster@EntrepreneurASU

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