Mueller - ENGR 100 - Fall 2011 - November 2011

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Talk made in November 2011 on entrepreneurship and engineering in the ENGR 100 course at the University of Louisville.

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Mueller - ENGR 100 - Fall 2011 - November 2011

  1. 1. Entrepreneurship John Mueller November 2011 ENGR 100 - Mueller
  2. 2. ASK QUESTIONS!!! (be engaged) ENGR 100 - Mueller
  3. 3. Who has taken an entrepreneurship course? ENGR 100 - Mueller
  4. 4. Who wants to be an entrepreneur? 4 ENGR 100 - Mueller
  5. 5. Who wants to start a company? ENGR 100 - Mueller
  6. 6. Who wants to be an entrepreneurial? 6 ENGR 100 - Mueller
  7. 7. Educate MeWho is an engineer?What is engineering? ENGR 100 - Mueller
  8. 8. November 14-20http://unleashingideas.org ENGR 100 - Mueller
  9. 9. ENGR 100 - Mueller
  10. 10. ENGR 100 - Mueller
  11. 11. http://www.bloomberg.com/tv/shows/techstars/ ENGR 100 - Mueller
  12. 12. Friday, November 18, 2011 Powered by ENGR 100 - Mueller
  13. 13. ENGR 100 - Mueller
  14. 14. (SocialQs – 8 members, mostly engineers) Important Lessons Learned from Rob McCrea1. Make sure you have a product that customers will really BUY2. Know your MARKET & initially make it NARROW (to fit plan)3. Know HOW you will make MONEY & takes LONGER than you think @ Simon Fraser University Vancouver, Canada ENGR 100 - Mueller
  15. 15. Mueller’s Career Advice (N of 1)• Learn how to think – Paul & Elder critical thinking framework• Preferably get a non-business undergraduate degree – can get a business graduate degree• Work for someone else first• Solve a problem from your knowledge set• Do what you love ENGR 100 - Mueller
  16. 16. Mueller’s Career Advice for Successful Entrepreneurs• Be engaged• Be continuously learning• Have positive attitude• Be persistent at what you do• Be passionate about what you do ENGR 100 - Mueller
  17. 17. Let’s all go homeHave a Happy Thanksgiving 17 ENGR 100 - Mueller
  18. 18. Outline• Official introduction• What is entrepreneurship?• Opportunity discovery / recognition / creation• Why start a firm?• Performance of new firms ENGR 100 - Mueller
  19. 19. Information about Mueller– Education • BBA – Southern Methodist University (1992) – Started out in Computer Science (honors) – Management Information Systems (MIS) • MBA – University of Illinois / University of Texas (1999) – Entrepreneurial way to get an MBA– 4th year Ph.D. Student • Entrepreneurial finance; resourceful financing– Interests • Golf • Music • Computers • Travel ENGR 100 - Mueller
  20. 20. Information about Mueller– Prior to UofL • 10+ years running my own companies • Worked for others – Jack Nicklaus, Hank Haney, Arthur Andersen • Worked and lived in various places in the USA and the world – Texas, Illinois, Florida, Colorado – Europe – Middle East – Africa ENGR 100 - Mueller
  21. 21. Information about Mueller– GolfSolutions.com (founded in 1998) • Online facility management software • Golf Investors • Golf Watercolors– SmartBond (founded in 2000) • Working with universities in various places • SmartBond Remote Explorer • Timeline Resume– Colorado Software Architects (bought in 2004) • 1Disk • 1Safe • 1Disk.com (like Dropbox) • vSERV (storage aggregation)– Idea Mornings (started in 2011) • Breakfast talks to spark ideas ENGR 100 - Mueller
  22. 22. Information about Mueller– My Focus • Entrepreneurial Finance • Technology Entrepreneurship • Sport Entrepreneurship– Course: Entrepreneurial Finance • Financial forecasting for new ventures • New venture financing– Course: Entrepreneurial Creativity and Innovation • Entrepreneurship vs. Intrapreneursihp • Opportunity discovery • Become more creative; thinking process ENGR 100 - Mueller
  23. 23. So What?Practice What I Preach (personal gratification?) ENGR 100 - Mueller
  24. 24. Once an entrepreneur,Not always an entrepreneur (being an entrepreneur is episodic) ENGR 100 - Mueller
  25. 25. Ted Leonsis ENGR 100 - Mueller
  26. 26. Introduction 26 ENGR 100 - Mueller
  27. 27. Is Tim Cook an entrepreneur? Was Steve Jobs an entrepreneur?Is Tim Cook entrepreneurial? Was Steve Jobs entrepreneurial? ENGR 100 - Mueller
  28. 28. Once entrepreneurial, Always entrepreneurial(being entrepreneurial is a way of thinking) ENGR 100 - Mueller
  29. 29. “Entrepreneurs can change the world” ENGR 100 - Mueller
  30. 30. Entrepreneurship and Intrapreneurship– Monster.com (1999) • “When I grow up, I want to be….” commercial ENGR 100 - Mueller
  31. 31. If I paid you $5 million in total over 40 years to do the following: Dig a hole in the morning, fill it in the evening,and come back and do that again each weekday for the next 40 years, would you take the offer? ENGR 100 - Mueller
  32. 32. Break into Separate Rooms (for 30 minutes) ENGR 100 - Mueller
  33. 33. Entrepreneurship = ? (word association) ENGR 100 - Mueller
  34. 34. Who IS NOT an entrepreneur? ENGR 100 - Mueller
  35. 35. Who IS an entrepreneur? ENGR 100 - Mueller
  36. 36. What DOES an entrepreneur DO? ENGR 100 - Mueller
  37. 37. What DOESN’T an entrepreneur DO? ENGR 100 - Mueller
  38. 38. Examples of Entrepreneurs ENGR 100 - Mueller
  39. 39. Return from Separate Rooms ENGR 100 - Mueller
  40. 40. Words Used to Describe an Entrepreneur– …Visionary; see potential Question conventional wisdomAmbition Well-rounded; familiar with many thingsDriven CuriosityThink outside of the box At peace; relaxedSee what others don’t Good at thinking; constantly thinkingPromoting KnowledgeableNetworking InitiativeEncouraging HonestyAbility to dream ConfidenceImagination Good personal skills (can read other people)Creator EngagingInnovator ActiveSelf-made QualityTake risks ReputationExplorer Good instinctEschew rigid rules Had a purposePassionate Fearless; not afraid of failingMisfit (doesn’t fit the standard mold) Cultivated a good reputationGoal oriented Accurate business senseCompetitive (heated rivalry) TrustworthyRich Integrity ENGR 100 - Mueller
  41. 41. Engineering = Entrepreneurship? ENGR 100 - Mueller
  42. 42. Entrepreneurship = Creativity = Innovation = Creative destruction ENGR 100 - Mueller
  43. 43. Can You Draw Curious George? ENGR 100 - Mueller
  44. 44. ENGR 100 - Mueller
  45. 45. ENGR 100 - Mueller
  46. 46. – My question: Is there a time when there is too much innovation?– My examples: • Golf balls and equipment becoming too good – Thus players are outdating / out-distancing the current courses – Square grooves – Drivers – material – Ball flies more; spins more • Basketball shoes – NBA has ruled a certain shoe as being an advantage to players (article)– Other Examples?? ENGR 100 - Mueller
  47. 47. Entrepreneurship = $ $ = Entrepreneurship ENGR 100 - Mueller
  48. 48. Entrepreneurship = Philanthropic Work = Greedy ENGR 100 - Mueller
  49. 49. Entrepreneurship = Good for Society = Productive = Unproductive = Destructive ENGR 100 - Mueller
  50. 50. Entrepreneurship = Jobs(new, fast growing firms create jobs) ENGR 100 - Mueller
  51. 51. Entrepreneurship = High Risk = Uncertainty = Unknowns, unks ENGR 100 - Mueller
  52. 52. "If you want to be original, you have to accept the uncertainty,even when it’s uncomfortable, and have the capability to recover when your organization takes a big risk and fails." Ed Catmull, President, Pixar Animation Studios Source: "How Pixar Fosters Collective Creativity, HBR, 2008-09 ENGR 100 - Mueller
  53. 53. Entrepreneurship = Cool = Heroes = Gunslingers = Gamblers ENGR 100 - Mueller
  54. 54. – Examples of an Entrepreneur as portrayed by the media • Larry Page and Sergey Brin – Founders of Google (1998) – Is Eric Schmidt (CEO) an entrepreneur? • Jim Clark and Mark Andreesen – Founders of Netscape (1994) • Kevin Plank and Kip Fulks – Founders of Under Armour (1996 – UofMaryland) – Created moisture-wicking T-shirt; tired of changing t-shirt – Breakthrough – Jeff George (Raiders – wearing one of their mock turtlenecks)– Are these typical entrepreneurs?– What about…? Are they cool? Are they heroes? • Dry cleaners • Mechanics owning their own shop • Lawyers working in their own practices • Doctors working in their own practices ENGR 100 - Mueller
  55. 55. Entrepreneurship = Smart People = Highly Educated ENGR 100 - Mueller
  56. 56. – Does a college education help / hurt entrepreneurial activity?– Education doesn’t hurt…how you use it depends on how it will help– Increase in education, associated with increase in entrepreneurship activity (Shane, 2003) • Except at the PhD level– But, the following have college degrees: • 317,000 waiters / waitresses (8k have PhDs / pro degrees) • 80,000 bartenders • 18,000 parking lot attendants • 17m Americans with college degrees doing jobs less than their skills • 5,057 janitors in U.S. with PhDs / professional degrees • Source: Chronicle of Higher Education and Jon Bischke ENGR 100 - Mueller
  57. 57. Entrepreneurship = Solving Problems ENGR 100 - Mueller
  58. 58. – Example: Fishbowl Water Faucet– What problem is being addressed? ENGR 100 - Mueller
  59. 59. – Example: Gutter Robot– What problem is the Gutter Robot (iRobot Looj) addressing? ENGR 100 - Mueller
  60. 60. – Example: Birdie Ball– What problem is Birdie Ball addressing? ENGR 100 - Mueller
  61. 61. • Don’t get caught up in the idea and your product…• Example: Audible.com• Facebook status update• The main point: Understand and Address the Source of the Problem ENGR 100 - Mueller
  62. 62. Entrepreneurship = Think Differently = Diff. Perspectives = See Differently = Visionary ENGR 100 - Mueller
  63. 63. Envisioning the Future• Bob Rotella – sports psychologist• Putt: If you don’t think you will make it, what will happen? – Focus is in the wrong direction – Worse, might not even try to make it ENGR 100 - Mueller
  64. 64. What Do You See? ENGR 100 - Mueller
  65. 65. Entrepreneurship = Thinking Out of the Box ENGR 100 - Mueller
  66. 66. How many squares can you see in the graphic? ENGR 100 - Mueller
  67. 67. How many squares can you see in the graphic? 55 ENGR 100 - Mueller
  68. 68. ENGR 100 - Mueller
  69. 69. ENGR 100 - Mueller
  70. 70. ENGR 100 - Mueller
  71. 71. ENGR 100 - Mueller
  72. 72. ENGR 100 - Mueller
  73. 73. ENGR 100 - Mueller
  74. 74. ENGR 100 - Mueller
  75. 75. ENGR 100 - Mueller
  76. 76. ENGR 100 - Mueller
  77. 77. ENGR 100 - Mueller
  78. 78. ENGR 100 - Mueller
  79. 79. Entrepreneurship = Challenge Status Quo = Critical Thinking = Break Rules ENGR 100 - Mueller
  80. 80. – By moving one circle, make two rows of 4 circles ENGR 100 - Mueller
  81. 81. – By moving one circle, make two ROWS of 4 circles– It doesn’t have to be an exact line; i.e. question the rules ENGR 100 - Mueller
  82. 82. ENGR 100 - Mueller
  83. 83. Entrepreneurship = Hard Working = Perseverance = Persistence = Passion ENGR 100 - Mueller
  84. 84. James Dyson– History • Byam Shaw art school (London) • Studied architecture • But he wanted to create, not just draw • Graduated: worked on marine devices (engineering)– First Invention • Ballbarrow – Assigned patent to company – Company sold patent, against his will ENGR 100 - Mueller
  85. 85. James Dyson• Big Invention – In 1978, local sawmill, with giant cyclone • Spun sawdust out of the air • Collecting in a chamber – 5,127 prototypes – 15 years – Dual Cyclone technology • First vacuum that didn’t lose suction – Manufacturers rejected product • Running, to get through difficult times – Licensed product in Japan in 1983 (G-Force) – Within 22 months, best selling vacuum in the UK – Dyson DC101 ENGR 100 - Mueller
  86. 86. James Dyson– … ENGR 100 - Mueller
  87. 87. James Dyson– Other Inventions • Washing machine with 2 drums • Emission-filtering diesel exhausts • Clean air hand dryers • New type of school • ….and more– Strategy • Keeping inventions secret • Protecting the ideas • Always taking risks– Quote: • “It seems as though you can’t carry on, but if you just get through the pain barrier, youll see the end and be okay. Often, just around the corner is where the solution will happen” ENGR 100 - Mueller
  88. 88. James Dyson– Ad on the Ball-technology ENGR 100 - Mueller
  89. 89. “Glass breaks, why don’t you fix it?” – Executive to an engineer (circa late 1950s) ENGR 100 - Mueller
  90. 90. Gorilla Glass ENGR 100 - Mueller
  91. 91. Never Summer Industries (Snowboards) ENGR 100 - Mueller
  92. 92. Entrepreneurship = Implementation = Execution ENGR 100 - Mueller
  93. 93. ENGR 100 - Mueller
  94. 94. TNG Pharmaceuticals ENGR 100 - Mueller
  95. 95. Entrepreneurship = Opportunity = Opportunistic = Greedy ENGR 100 - Mueller
  96. 96. Entrepreneurship– Entreprendre (French) – “to undertake“– Various definitions for entrepreneurship, entrepreneur, entrepreneurial • Owner-manager (economists) • Self-employed (economists) • Founders of new businesses (Davids, 1963; Draheim, 1972) • Person assuming risk in a business venture (Cantillon, 1755) • Innovation in business; new combinations (Schumpeter, 1942) • The pursuit of an opportunity without regard to resources in hand (Stevensen, 1983) • The process of discovering, evaluating, and exploiting an opportunity (Shane and Venkat, 2000) • and others….it can get messy ENGR 100 - Mueller
  97. 97. Start a new firm or within a firmOpportunity Discovery Exploitation Evaluation(or recognition or creation) (or exploration) * Keep evaluation separate from opportunity discovery (idea generation) ENGR 100 - Mueller
  98. 98. Start a new firm or within a firmOpportunity Discovery Exploitation Evaluation(or recognition or creation) (or exploration) * Keep evaluation separate from opportunity discovery (idea generation) ENGR 100 - Mueller
  99. 99. Opportunity Discovery ENGR 100 - Mueller
  100. 100. Exercise: Missing Numbers1 1 1 1 11 3 5 71 5 131 71 ? ENGR 100 - Mueller
  101. 101. Exercise: Missing Numbers1 1 1 1 11 3 5 7 91 5 13 251 7 251 9 ? ENGR 100 - Mueller
  102. 102. Exercise: Missing Numbers1 1 1 1 11 3 5 7 91 5 13 25 411 7 25 631 9 41 ? ENGR 100 - Mueller
  103. 103. Exercise: Missing Numbers1 1 1 1 11 3 5 7 91 5 13 25 411 7 25 63 1291 9 41 129 ? ENGR 100 - Mueller
  104. 104. Exercise: Missing Numbers1 1 1 1 11 3 5 7 91 5 13 25 411 7 25 63 1291 9 41 129 321 ENGR 100 - Mueller
  105. 105. What does this exercise have to do with opportunity discovery? ENGR 100 - Mueller
  106. 106. The Person with the Best Imagination Wins“Problems don’t get solved bythe smartest or the fastest or thestrongest; they get solved bythe one who sees thepossibilities.” – Dan Roam – Believe it can be done – Get in the habit of thinking up ideas – Keep an idea journal – Look for better ways to do things – See problems as opportunities – Relax, daydream – Think young – Be curious – Inspire yourself ENGR 100 - Mueller
  107. 107. Announcements– Hiring at Zappos (CEO: Tom Hseih)– Question they ask in an interview: Do you consider yourself lucky?– Study: • Asked them if they were lucky • Then had them read a newspaper and count how many photos • Some headlines said: “There are 37 photos, stop now and collect $100” • Conclusion: Lucky people tend to be open to a wider realm of options and solutions – thus can work with more people and come up with more creative ideas (“be creative and a little weird” – from Zappos culture definition) ENGR 100 - Mueller
  108. 108. The Candle Problem The GoalAffix the candle to the wall such that the candle will not drip wax onto the table. Use only the materials provided in the picture. ENGR 100 - Mueller
  109. 109. The Candle Problem ENGR 100 - Mueller
  110. 110. The Candle Problem ENGR 100 - Mueller
  111. 111. The Candle Problem– Example of “Functional Fixedness”; include the box ENGR 100 - Mueller
  112. 112. Be Aware of Environment and Changes in It– Change Blindness: The BistroSource: http://nivea.psycho.univ-paris5.fr/Slow%20changes%20bis/1_BISTRO.HTM ENGR 100 - Mueller
  113. 113. Be Aware of Environment and Changes in It– Change Blindness: The WorkroomSource: http://nivea.psycho.univ-paris5.fr/Slow%20changes%20bis/5_IVRY.HTM ENGR 100 - Mueller
  114. 114. Be Aware of Environment and Changes in It– Change Blindness: The Door Study ENGR 100 - Mueller
  115. 115. Why Start a Firm? ENGR 100 - Mueller
  116. 116. Why Not Start a Firm?– Fear– Risk aversion– Lack of resources– … “Dont let the fear of the time it will take to accomplish something stand in the way of your doing it. The time will pass anyway; we might just as well put that passing time to the best possible use.” – Earl Nightingale (1921-1989) ENGR 100 - Mueller
  117. 117. Why Start a Firm?– Self-realization– Financial success– Roles– Innovation– Recognition– Independence (autonomy)– Necessity (lost job, can’t find job)– …any others?– Guy Kawasaki (formerly w/ Apple) • Make Meaning – Increase quality of life – Right a wrong – Prevent an end to something good ENGR 100 - Mueller
  118. 118. • Guy Kawasaki “Make Meaning” video ENGR 100 - Mueller
  119. 119. Performance of New Firms ENGR 100 - Mueller
  120. 120. Performance of New Firms• # of firms in the USA – ~27.4 million (2007)• # of firms started each year in the USA – ~670,000 (2007)• # of firms closed each year in the USA – ~595,000 (2007)• % of firms raising from angel investing, venture capital funds, IPO – Angel investing: 1-3% – Venture capital funds: 0.3 – 1% – IPO: < 0.1% ENGR 100 - Mueller
  121. 121. Performance of New Firms• Failure (Success) rates ENGR 100 - Mueller
  122. 122. Why do new firms fail? ENGR 100 - Mueller
  123. 123. Performance of New Firms• Business Idea / Model• Founders (Management)• Capital Structure• Environment ENGR 100 - Mueller
  124. 124. Entrepreneurship = Happiness? ENGR 100 - Mueller
  125. 125. ENGR 100 - Mueller
  126. 126. IF ( love what you do & passionate about what you do ) THEN Entrepreneurship = Happiness & Success ENGR 100 - Mueller
  127. 127. Is being an entrepreneur for everyone? No, but being entrepreneurial is beneficial for many ENGR 100 - Mueller
  128. 128. 129ENGR 100 - Mueller
  129. 129. John Muellerjohn.mueller@louisville.edu ENGR 100 - Mueller

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