The document provides an overview of the key steps needed to start a new technology company: 1) Establish a vision, mission, and business goals for the company. 2) Generate product/service ideas and develop initial designs. 3) Determine the necessary resources and timing. 4) Develop marketing, business, and financial strategies. 5) Perform all five steps concurrently rather than sequentially.

1. Strting a New Technology Company = Innovation & Entrepreneurship<br />Overview<br />Problem: How does one create a new technology company?<br />Approach/Process: 5 key steps<br />Setup a VISION, a MISSION and Business Goals for the company<br />Like: how much Revenue you hope to make<br />Growth (%)<br />Product Strategy<br />Generate Ideas for products and services<br />Design and develop the product/service<br />Resources needed (people, equipment, space, …)<br />Timing (when?)<br />Market Strategy<br />Market segmentation of the products and potential customers<br />Market sizing ($)<br />Market Mix (the 4 p’s)<br />Product (features,…)<br />Price<br />Promotion (advertising,…)<br />Placement (distribution channels,…)<br />Business Strategy<br />What industry/market combination is your company operating in? (consumer electronics industry, healthcare industry…)<br />Who are tehe major players (or companies) in that industry? <br />What is the competitive strategy of each player?<br />How is your company going to operate in that space?<br />Financial Strategy<br />Cash flows (revenues, costs, profit) for 3-5 years<br />Funding<br />Who will finance the new company? (friends and family, government, venture capital,…)<br />Financial structure (ownership, shares and stock,…)<br />How do you obtain the necessary funding?<br />These Five steps (^^) have to be performed concurrently as opposed to sequentially. <br />Skills To be learned in this course<br />Problem Solving <br />Da Vinci circa 1450s<br />Edison around 1850s<br />How to start a new technology company<br />Tools, Methods within each of the five steps<br />Applications<br />Covered in lectures and homework<br />Mastery of the tools<br />Through the comprehensive midterm and final<br />By creating a startup as part of a team project<br />HW – every other Thursday<br />Team Project Report – every other other thursday<br />Idea Generation: One Popular method for idea Generation is: <br />STRUCTURED BRAINSTROMING<br />Idea Generation<br />Quantity of ideas (not quality) is emphasized<br />No criticism<br />Quantity is more important that quality<br />“wilder the better”<br />one person should act as a facilitator and another person records ideas as they are being generated.<br />Todays Problem: Highway 17 is extremely dangerous, especially when it rains.<br />Generate: 30 – 50 ideas to make highway 17 safer<br />Structure the ideas into 3 groups<br />A: ideas of immediate usefulness (“low-hanging” fruit)<br />B: ideas for further exploration<br />C: radically new approaches<br />Agenda:<br />Review<br />Project teams<br />Project kick-off & hw number 1<br />Problem solving<br />Product/service dissection – (reverse engineering)<br />Project Kick-off<br />2 levels of brainstorming<br />Level 1:<br />Brainstorm on societal/customer/market needs (25-50 needs):<br />i.e. clean drinking water for everyone<br />better transportation<br />alternate fuels….etc.<br />Level 2:<br />reduce to 3-5 for close examination<br />get specific within the ideas/needs<br />specify ideas to solve or satisfy these needs<br />Create a project proposal<br />main body - A prioritized list of 5-7 ideas, with a brief description of each idea (2-3 pages).<br />Include an appendix (larger set of needs and ideas generated with all details of brainstorming activities)<br />Structured problem solving<br />High-level process: <br />Define the real problem<br />Plan the approach (a set of steps)<br />Execute the plan<br />Check your work<br />Learn/Generalize (drawing conclusions)<br />Product/service dissection – (reverse engineering)<br />Comment: The word “product” refers to a spectrum of offereing.<br />Before we can create new products and services, we need to understand how to analyze (or dissect) existing products<br />Step 1: Problem definition<br />What does the product do? (functions)<br />What is the form of the product? (how are the functions realized)<br />Step 2: Plan the approach<br />How does the product work?<br />Define function and form in a more formal fashion<br />Create a structured (organized) diagram that relates the functions to the form<br />Draw conclusions at the end about the product that was dissected.<br />Step 3: Execute the approach<br />Understand how the product works<br />Find a real product and play with it<br />Define function and form<br />Function is a noun-verb combination that indicates the purpose, i.e., what a product does, or what a sub-system does, or what a component does.<br />Agenda:<br />Review<br />Product Dissection<br />HW #1<br />Function Structure<br />Review<br />The importance of having and using a structured problem solving approach<br />There are 5 key steps outlined in the last lecture<br />We applied this method to “product dissection”<br />See handout for details<br />Product dissection<br />The FAST (function analysis system technique)<br />Is a systematic (structured) way of organizing the functions (whys) and the forms (hows) of a product service<br />Key idea: organize the product in a FAST diagram with the whys to the right and the hows to the left<br />Product Dissection<br />Useful hints (for complex products like our hw)<br />Draw a little sketch of the system you are trying to dissect and make a list of the key subsystems and components <br />Work from both ends of the FAST diagram; the process is an ITERATIVE TRIAL and ERROR process<br />The FAST diagram stops when you reach the level of subsystems and components in your list<br />HW PROBLEM NUMBER 1<br />Step 1: define the real problem<br />Assess existing home computers and then develop guidelines or recommendations for improving home computers with respect to each one of these needs<br />What are user (customer) needs?<br />How well do existing computers satisfy these needs?<br />How can we improve?<br />Step 2: Create a plan<br />What are the different types of home computers, and which type am I going to focus on?<br />Assumption: Focus on laptop? (<br />Identify key user needs for the home-computer (key functions, WHYs)<br />Identify the key subsystems of the home computer<br />Create a FAST diagram that relates <br />Assess how well existing home computers satisfy user needs (starting with your own experience, other users, internet research…)<br />Create a table summarizing your assessment and providing guidelines + recommendations for improvement using structured brainstorming<br />Column 1: customer need, performance, UI/experience, reliability, price, etc…<br />Column 2: assessment (use a scale)<br />Column 3: guidelines for improvement<br />Product Design<br />A useful tool in product design is the function structure (FS)<br />Question: Is there a solution-neutral representation (mental model) of existing products or new products that will enable us to create several different realizations of the product.<br />“solution neutral” does not suggest or imply a single solution<br />FS is useful for enetarting several alternative design concepts<br />Came in late….<br />Step 3: Create a morphological matrix, showing alternatives, called solution principles for each sub-function (refer to notebook)<br />Important note: the morphological matrix is constructed, one row (i.e. one sub-function) at a time. NOT one column at a time.<br />Step 4: combine the solution principles (in the morphological matrix) to create alternative design concepts<br />Use experience, logic, discussion, to determine appropriate combinations<br />Design concept 1: existing breathe-right nasal strip<br />It is the combination of a plastic spring strip to open the nasal passages, which attaches to the nose (how stuff works)<br />Step 5<br />Step 6: Select 1-2 feasible alternatives based on the slection criteria for further development<br />Criteria:<br />Performance (effectiveness, etc…)<br />Price attractiveness<br />Safety<br />Project Phase 1: Need high-level criteria to narrow down the list of 5-7 potential ides (from the prelim proposal) to 1 or 2 ideas as a basis for a the startup<br />Criteria:<br />Technical feasibility of the idea. <br />Can it be physically realized in a reasonable amount of time and at a reasonable cost?<br />Commercialization potential of the idea<br />Is there a market for the idea?<br />Construct a 2x2 matrix<br />Agenda<br />Remarks on the morphological matrix<br />Product strategy<br />The resources need to develop the product<br />Expertise: skill sets, tools<br />Infrastructure: space, computing<br />Source: From where? Are we outsourcing?<br />Timing: when?<br />Business (competitive) strategy<br />Problem:<br />How do you characterize the industry/market in which the company (startup) wants to operate<br />What competitive strategy should a company adjust to successfully operate (ie make profit, grow) in that industry / market landscape?<br />Market => customer or buyer for the product<br />Industry => types of market<br />Consumer electronics industry, entertainment industry, health care…<br />Players: competitors, new entrants, substitutes<br />Barriers to entry (of market)<br />Capital<br />Brand<br />Economies of scale<br />Etc…<br />Near term/Long term strategy:<br />Near term for start-up is “focus”<br />Long term: splits into cost effective or differentiated.<br />Step 3: development a business model how to deal with the different sets of players in the the undustry market landscape<br />For each force, F1…, determine the strength (high, medium, low) of the key factors (called determinants) that influence the force see table 1 of the five forces handout <br />START OF LECTURE:<br />Agenda:<br />Complete the five forces business/competitive strategy discussion<br />HW #2<br />HW 2: Problem 2<br />Market and competitive analysis for the digital camera industry<br />Apple the structured problem solving approach<br />Step 1: define the problem<br />Understand and characterize the market (buyers & industry (competitors, suppliers, new entrants…) for digital cameras.<br />Market analysis: 5-step process (lecture #5)<br />Industry analysis: 3-step process (lecture six + handout)<br />In particular, determine:<br />Types of digital camera products – product segmentation<br />Types of digital camera customers (or buyers) – customer segmentation<br />Manufacturers or makers of digital cameras – competitors<br />Market size of the digital camera<br />Step 2: Plan<br />Do some internet-based research to collect the information needed<br />Create a document to collect and organize the information as you go along. (note that you may not obtain exactly the information you are looking for)<br />Chapter 1: Idea<br />It is a substitute for pen and paper<br />How to acquire/contact with a good set of collaborators<br />Be careful about sharing ideas (intellectual capital)<br />Chapter 2: The deal<br />Interaction with the venture capitalists<br />Competition between VC’s benefits the entrepreneur<br />Chapter 3: Creation<br />Resources (people and physical)<br />Planning<br /> <br />