Synectics

Rick Harriman from Synectics provided us with a seminar on how to think about the creative process, and different approaches to idea generation and problem solving. It was interesting to hear the Synectics approach, as it went a lot further than simply brainstorming and focused more on different ways of looking at the situation, and triggering ideas from alternative areas to the problem.

It was great to learn new techniques regarding idea generation and there were a number that will be useful for the future, such as the principle that just by thinking harder about a problem, won’t necessarily get you much further down the innovation route, there are other levels that you must build on such as analogies, diversity and absurdity are useful tools to utilize.

The interactive nature of the session was useful, and it was good to work through the tools in a real situation to see how they could be used to rethink a problem within the teams we had.

Rick provided a useful session and it was good to hear the alternative strategies to brain storming.

Changing the world with Robin Chase - GoLoCo

It was great to hear from Robin Chase as she spoke so passionately about her past and future projects. She had a lot of useful insights into her ventures and ways in which we could apply some of her knowledge in our own entrepreneurial activities. I was amazed to hear about how bold and forward thinking Robin is in the way she looks to negotiate areas and fields that she doesn’t necessarily have a background in, but wishes to revolutionize those industries with disruptive thinking. I would definitely describe Robin as a serial entrepreneur, as not only has she started successful ventures such as ZipCar and GoLoCo but also hitting out into Mesh Networking and congestion charging.

Robin talked openly about different aspects of entrepreneurship and touched on a number of areas. She mentioned that you need to know how to satisfy the small amount of new users in a beta test when working with networks of people. Her approach is to satisfy the small, before organically growing to the large. This approach has been proved a success from the monster his such as Google and Facebook, so she can’t be too far wrong.

She also made it clear that if you are working at the intersection of two industries, then you can quickly become an “industry expert”, which is where Robin has often found herself, working with hi-tech, automotive, environmental and networking solutions.

Her opinion on making sure mesh networking devices become successful and well accepted is to integrate them into other technologies that are well maintained and required. That way the mesh network will be kept running because it is necessary by another solution, such as within cities for use in congestion charging.

A sound piece of advice is to try and hire people who have an “I can do that attitude”, this generally means a team of entrepreneurs. I can see issues with this, if there isn’t a common focus of the company, and everyone is working towards the same goals. Along with this attitude another thing that you usually can group entrepreneurs under is the thinking of, “It’s always looking up”, a great way to think about things, obviously as long as it’s actually looking up!

When asked how to go about asking people for advice, and to be on your board as a new entrepreneur, Robin suggested that successful people generally come from a place where they feel people have helped them, so are will to help others be successful too. A great way of thinking about things, and from my experience this is commonly true.

Robin was a great speaker, and we had an interesting discussion with her. It was also good to be able to debate some of the issues that she arose, and hear how she defended her position. I think Robin is doing a great job, and wish her all the success in the future. She really is changing the way people think about transportation and the environment at both the highest and lowest levels in the world.

Law, law, law

Our first talk of the day was from John Akula from MIT on the topics of law issues with employment, with focus on trade secrets, loyalty, non-competitive agreements through an interactive case study. John went through some of the issues that surround employment from a US perspective, which was interesting to hear. I was surprised most by the at-will contracts that are common in the US, where an employee can leave at any time, or can be let go at any time, without notice, or reason. Although there are many courteous reasons to give notice, this doesn’t have to be the case. This obviously has many implications for job security, and therefore affects areas such as loyalty and trade secrets.

There are many differences between both the laws and the cultures between the US and UK regarding employment law and areas such as non-competitive agreements. Having come from the games industry, where there is a lot of anxiety surrounding these areas, it was fascinating to hear another perspective on this. I was glad to hear that there are States, such as California that ban non-competitive agreements, and it seems to be a factor in the success of Silicon Valley.

The interactive workshop worked really well in this situation, on what could have been a very dry topic. However the interested case studies, along with the insights from the fellows, who all have a variety of backgrounds that they were able to bring to this area made it an enjoyable session.

MIT Entrepreneurship Center

It was interesting to visit the MIT Entrepreneurship center as I could see how much weight MIT has put behind its entrepreneur focus. It’s not surprising they are considered one the best colleges for entrepreneurs, especially regarding their 100K competition when they have a center and dedicated staff at the university, even if it is only run by 5 strong full time team. The center being outside the remit of the other schools seemed to be an important aspect of the success, along with the strong alumni network MIT has.

We had an interesting discussion with Bill Aulet regarding business plans and how they could be successfully implemented as a PowerPoint presentation. If you are able to create a 10 slide version of your plan, that acts as a plan of execution for your business.

He also went through the areas that a 100k plan would be marked on, in the areas of opportunity and risk. These are:
• Market
• Execution
• Team
• Plan
• Competitive Advantage (tech)
• Financial
• Other i.e. Green energy, political implications (where appropriate)

Further details on this were that the market needs to be broken down into manageable steps, rather than looking at the market as a whole. The example was you can’t just say you’re going to sell cars to 1% of the market, need to look at it on a much smaller scale.

Gross margin is an important consideration, and something that hasn’t been touched on yet. Bill said that you need to be careful when presenting the margin, near to 10% is what a distributor has, and 90% is Microsoft, which is very difficult to achieve and would be hard to convince a panel, or VC that you could work with this percentage.

Competitive advantage is usually thought of as tech, but can also be critical mass of customers, or even having customers locked into your system. Having the best technology is not always necessary, and often overrated by the entrepreneur. Speaking of VC’s he warned that all they care about is Internal Rate of Return (IRR), it’s what they are rated on and the most important figure to them.

Once you have a plan, it should be signed by all management so that they are all in agreement with its contents, and are all dedicated to its success. The plan needs to convince a number of people that it will be successful. Intially this is you, then your team and also your customers. Finally your mother, meaning it should be easy to understand. At all times it should stir up passion and excitement, only then will it be ready for others to look at.

An invention on its own is like counterfeit money, it’s not worth anything until it’s commercialized!

Innovation = invention + commercialization

Even if there is no competition in the market, then you need to explain why. If there is no competition, this will flag warning messages in anyone’s head looking at the plan. It’s best to frame it as, even though there is no competition right now, you recognize there will be in the future. It’s also a bad idea to compare your new product with a product a competitor already has on the market, they will often have new products with your functionality in the works that you don’t know about. A better way to look at them is to find out what they are competing on, and differentiate yourself that way.

One thing I was disappointed with regarding the center is their concentration on graduate and PhD students for the programs and not undergraduates. One thing I have learnt since being on this fellowship is that you can never start too young in teaching entrepreneurial practices and if you are introducing the practices to school children, then the opportunities should also be there for all students. It was also interesting to hear that they haven’t achieved any increase in students that wish to pursue entrepreneurship who finish at MIT compared to when they start.

I don’t want to sound negative, but have a few other observations about the center. They rely on donations from local businesses and past students for funding, which account for 70% of the income. This doesn’t seem like a sustainable business model to me, and could suffer in the future. It also appeared that the classes were generally given by lecturers at the university, and they rarely used active businessmen.

It was great to hear from Bill again, he really is an inspiration and has so much knowledge and insights into the process we are all going through its scary. I would jump at the opportunity to spend more time with Bill and his team.

Y Combinator

I attended a Harvard School dinner this evening that discussed a start up incubator, Y Combinator started by Paul Graham that offers seed funding and mentoring for very early stage start ups.

It was great to hear from former participants in the incubator and hear first hand their stories and insights. It sounds like a fantastic opportunity for a business, and strangely for the US, the draw isn't really about the money (attendees get $5000 for each member of the team, and the business gets $5000 for a small percentage of the company) it's about the contacts and mentoring that are available through the programme.

There have been some hugely successful companies come out of this experience already, including Reddit and Justin.TV and more here.

Visit to Adobe

Adobe Office

My last day in San Francisco and managed to organise a meeting at the Adobe Office in the centre of town. Their offices are very impressive, and looked like a pleasure to work in.
I met with Josh and Ryan from the mobile and design teams, and they were both extremely nice guys, and very open to a chat. We discussed various aspects of Flash Lite development; all agreed that the lack of Flash Lite at the GDC conference was very disappointing and the opportunities going forward for Flash on the mobile platform is really exciting.
I hope that Fluid Pixel can develop a working relationship with Adobe, as I believe it would be a pleasure to work for them, and it would be great to be an integral part of the Flash Lite, Flash Home and Flash Cast platforms going forward.
Obviously I can’t talk about some of the more interesting that we spoke about but let’s just say mobile Flash isn’t going away anytime soon!

Brunch, Palo Alto Style

Today’s event was breakfast with the effervescent Peter Davies, along with his friend David Perry. David is a remarkable man, having been the CEO of the record braking company Chemdex. Chemdex was a company David started during the height of the internet bubble, and is a true example of how companies rose and fell so quickly. Started after leaving Harvard University, David single handily raised large sums of VC and took the company from nothing to worth $10 billion in less than 4 years, and then back to little over $100 million when he eventually sold it. I was in awe of the casual manner that David spoke about his experience as the youngest CEO to take a company to such a valuation and in one of the shortest periods in America’s history, only to lose nearly everything by the end.

He had a few insights into what his insights into how to be a successful entrepreneur that resonated with my experiences and beliefs. The first is to not worry so much about what it is you are doing as long as you fulfil 2 criteria. They are that you are always learning and you are enjoying what you are doing. This mantra is true whether or not you are perusing entrepreneurial activities, or working for a company. Whatever choices you make in this regard will work themselves out eventually, and there’s no reason you can’t move on in the future.

Secondly he outlined a perspective when raising capital that I hadn’t heard before, but was particularly interesting. His idea when making a pitch is not to skirt around potential barriers and risks, but rather spell them out and make the investor aware of everything you are aware of. His reasoning is that they will look for risks anyway, and if you leave them to their own devices they will probably come to the wrong conclusions. However the ingenious part is once you have outlined the obviously fantastic opportunity, then prepared them with the risks, instead of asking money to pursue the opportunity, you ask for the money to eliminate the risks. So if you identify the risks in order of priority, and necessity, and ask for X amount to overcome the top Y risks, you can show how strong the company will be at that stage, what the risks will then be (presumably a lot less) and therefore show how much investment will be required at that stage to continue to overcome the further risk. If done properly, you will organise the risks into stages, and at each stage it will become easier and easier to raise the capital required to overcome the risks (if necessary of course).

Finally he also warned about a situation that currently seems a long way off, and that is raising too much money! Apparently he has encountered the situation, and Peter also, where VC’s wish to invest a much larger amount of capital. This usually occurs when investor groups work together and all want a piece of the pie. In this situation, to support the higher valuation this causes, it is too easy to spread the company too thinly and work on products that aren’t core to your business, and therefore you can lose focus on the key areas. Not something that is immediately relevant perhaps, but something to think about nonetheless.

I really enjoyed the breakfast and it sounds like David is onto something equally impressive for his next venture, this time with the experience behind him, and having learnt a number of hard lessons. He has found a technology that could potentially revolutionise the way in which molecular treatments work, with the associated rewards, so it will be interesting to see how this venture fairs. I have no reason to believe that he won’t be a success.

Stanford Tech Licensing Office

Today we visited Stanford Tech Licensing Office for a discussion at one of the most successful technology transfer universities in the world.

It was interesting to see how Stanford, a model university for licensing manages its assets and handles IP. We were able to ask some touch questions and gain invaluable insights into how UK universities compare to Stanford.

We were told about the Stanford way, and that often the inventor isn’t the best person to take on the technology, if you look at the technology from a viewpoint of what’s best for it. This approach from Stanford is something I hadn’t heard mentioned previous to this, and a thought provoking statement. I will continue to see how other universities approach their IP and see if anyone approaches the experience and insight that Stanford has achieved. I will also try and work with Teesside to improve their Licensing model.

It was a very interesting session, and we could have been left debating the pros and cons of Stanford’s approach all day long!

iRhythm

In the afternoon we a meeting with Uday Kumar from iRhythm, who have a revolutionary cardiac-rhythm monitoring device. Uday was very enthusiastic, and showed that even with no knowledge of the business world, it is possible to form a great team, and start up a successful company. His dedication showed, and it was an inspiring talk, especially as he is coming from a similar position to myself, with lots of specialist skills, but little business background.

I have learnt from Uday's first hand expereince that dedication, hard work and enthusiasm for your idea are a great place to base a business from. Along with a lot more hard work it is possible to start a business in a short space of time, and raise significant funding, and also build a team.

Uday was very inspiring and a businessman who is less than a year down the line from where I am now, so he had lots of relevant knowledge, albeit in another field. Overall he had the right mix of technology speak, with business insights and really inspired enthusism from me and the group.

Microsoft - San Jose

Visit to the Microsoft Offices in San Jose. It was very interesting to hear from inside Microsoft as to how they approach entrepreneurship and innovation from such a large company. It was new information to me, as I don’t feel Microsoft is particularly good about showing it’s innovation, compared to companies such as Google, even though in some respects they act in similar ways.

We have heard a lot recently about how difficult it is for large companies to continue to innovate and keep market share when there are new companies able to come in with disruptive technologies. Microsoft appears initially to be too large for this to occur, but it was clear from this talk that they are fully aware of the fragility of their market, and need to keep on innovating, either internally or externally through other companies, which they ultimately may or may not buy.

All in all it was a great session, it was just unfortunate that we didn’t have more time for the discussions to continue, and even more unfortunate that we didn’t have time for a full tour of the building.

Monster Jam

Monster Jam -Sprint

We jumped at the chance to see the trucks at Monster Jam at the Sprint Center here in Kansas City.

It was a fantastic event, not only with huge monster trucks but also quad bikes and motorbikes.

It certainly wasn't for the feint hearted, these things are VERY noisy, adrenaline pumping machines.

Well worth the visit, and a great day out!

Zoller Returns

Ted spent a couple of days with us this week, and covered a huge range of topics in a crunch style MBA program. The most valuable insights were the discussions of our Value Propositions that he had asked us to do for this week, and looking into the market and management of the business.

The number of lessons learnt from Ted was incredible, he consistently challenged me to look at things in new ways which was an great experience. He stressed the importance for a new venture to aim to be the primary player in the market, not to aim for number two or three. There was a lot of emphasis, quite rightly put on the customer, and he suggested to seek out the customer that cares about your venture, and hold hands with them to learn as much as you can about how you can solve their pain. Also he suggested that if you have done the work in the key areas of management, advantage and market, then the money will follow. This is different to where many entrepreneurs start, with seeking capital. The value proposition is a vital element in the business, and everything should flow from this original key idea.

In your network, you can generally only properly manage about 20 people, and only really work with 2-5 at any one time.
Regarding the pricing model, he made the point that you shouldn’t be selling you time, as time is a finite resource. Really you should be exploiting your value that you add to the customer through your product or service.
He covered a number of key areas in market strategy, including how to divide up a market, and which markets segmentation you should attack first to exploit the best opportunity. The customer will have certain preferences, and you should aim to exploit these, but also be aware that their preferences change, so you will have to consistently adapt to their needs. If you don’t then your competitors will exploit the gap you leave in the market. As a first mover, especially will a disruptive technology, this is very important, as you will be offering the market something that is beyond their preferences.
You shouldn’t rely on the physical characteristics of your product to differentiate it from the market, as this can easily be exploited by competitors, but try and fight on multiple fronts such as not just being faster, but also more efficient, or cost effective. Customers can pay less attention to the physical characteristics than the company.
Ted suggests the following as a model pitch outline when seeking investment in the company:
1. Audience connection
2. Opportunity and Value Proposition
3. Business model
4. Market and penetration strategy
5. Implementation and rollout
6. Management and personal
7. Financials
8. Financial opportunity/outcomes
9. Closer and exit

He also warns, not to extend beyond your own capabilities, if you stretch to meet areas such as marketing/business, they will see right through you. State that that's not your strong point, and reassure that the appropriate team will be brought on board.
He also provided some good insights into management and team. As a leader it is the bigger vision you have is what people invest in when they work for you. This is important because the team is the number one factor in investment ideas so much so that an idea without a team has no value. Market experience will trump education every day, apart from in an R&D situation and so either hire the best A team players, or beg and borrow them!

The amount of material Ted talked about was staggering, and it was tough to keep up with everything. However he was able to cover many key areas, and the combination with his slides, my notes and further research it will be a great resource.

I was truly inspired by Ted’s presentation, he is able to take familiar topics, and present them in such a way that I gained new insights into them, and expanded my understanding of the areas.

Tribulations of a Founder

Noam Wasserman dropped by from Harvard to discuss a case study of his, relating to the relationships of a team when building a venture, and how team members were rightly or wrongly selected. It was a lively discussion and covered many areas that were really useful when considering team makeup, such as skills, knowledge, network and passion. Each area is a key factor when trying to decide who to bring on board at the critical stages of a new business.
The second stage of the talk looked into Noam’s research into the life cycle of a founder of a business, and how his studies have shown the usually finite life as a CEO of the company.

It was interesting to hear the different opinions from the fellows during this talk, and how each of them viewed the various attributes of the founding partners. Each having their own viewpoint on the key attributes for who to bring on board for the business. During the talk on his research Noam made some really interesting observations that are great to know at this stage of business. The salient point was that as the founder and CEO of the company, you are likely to be removed from this position, whether you are successful or a failure. Obviously if you the company is failing with you at the helm, then you will be replaced by the board, but also, if you are very successful, then the board (usually pushed by the investors) will replace you with someone that they feel will be in a better position to take the company into this new era.
Another interesting area was how to split equity amongst the founding team members the key elements being; past contributions, future contributions, opportunity cost and willingness to fight over equity. Even though the majority of partners split the equity equally, this can have implications for team stability and growth potential. Serious consideration should be made for a vetting strategy for equity, and increase the teams equity based on their achievements and time at the company.
Noam has a blog, http://FounderResearch.blogspot.com, that he is updating alongside his research, so I will be following this closely to gain a better insight into the role of the founder and CEO.

Noam made the discussion of the case study really easy, and encouraged involvement and for us to offer differing viewpoints. It was a good split for the talk to follow first the case study, before looking more in depth into Noam’s research. Overall Noam was a great speaker and I’m looking forward to following his research further, and hopefully seeing him again when we make a trip to Harvard.

MIT Seniority

Bill Aulet gave a great talk on how to approach a new market as an entrepreneur, with practical examples through a case study and insights into what problems a new venture faces with new opportunities. It was interesting to see how even a great new business can fail if they don’t approach new markets in the right way, keep up with market transitions and come to market at the right time.

Like all the talks so far, there was a huge amount gained from the session with Bill. Some of the main lessons were the importance to focus on particular markets, rather than trying for a conquer all strategy. The most successful companies are able to deselect markets, and dominate a good place in the market they are in. The DNA (vision) of a company is set by the founders and it can't be changing all the time if the company is to be successful. An interesting thing to note is a market pull company will move towards a tech company over time, and a tech company will move towards a marketing company. This should be realized and decisions based on this such as hiring staff.
There are three main areas that a company can compete on, price, innovation and intimacy (customer service) and you shouldn’t try to compete on all three areas. It’s also not a fun experience to only compete on price.
You should be aware in your marketing strategy what customers you are selling to at a particular time, such as early adopters compared to late majority. There are different kinds of sales and support that need to be provided for each customer.
The company should be built from the customer out, not the technology out and it’s not all about the effort, it’s about being at the right market at the right time.

The case study was an interesting read, but as the first Harvard case study I had approached, I was taken by surprise how much I was expected to know from the case study, and the depth of that knowledge. It was certainly a great learning experience to follow through in detail how the company unfolded.

Bill's session was very interesting, and he was able to articulate how important other aspects to a new venture are such as market positioning and sales are for a new business. This was a great expansion on other talks we’ve had so far. The learning experince just keeps on getting better and better.

A taste of Harvard

Professor Nanda, a lecturer at Harvard University, gave us a talk today and explained some of the different areas that are faced at a negotiation between an entrepreneur and a venture capitalist. It was interesting to walk through a case study that covered both sides of the term sheet, and see how the two sides saw the same situation and related to each other. It made me aware of the difficulties faced by both sides in this situation.

Ramada talked through a lot of the key negotiation areas of the term sheet, focusing on the various stock options that are available and how that relates depending on how well the company does. It was interesting to see how a seemingly minor word in the term sheet, can make the difference of many millions when it comes to paying back the investor. Looking at the backgrounds of both the VC and the entrepreneur and seeing how each can view the same situation was interesting, such as the make-up of the board and the valuation of the company.
A main portion of the talk was invested in how each side can come up with widely different evaluations for the same company based on the same data, and how key figures such as price to earnings ratios and discount rates can widely affect the value of a company. It was also interesting to hear how much of the valuation is “fudged” to match the figures that either the VC or the entrepreneur wants to see, rather than what is actually the case.

The talk from Ramada was extremely interesting, and has given me a basic understanding of many of the concepts found in a relationship with a venture capitalist. He was extremely good at explaining the information so that it made sense to me. It was a strange situation because many people in the group, including myself, hadn’t discussed a case study in this setting before, and I though Ramada adapted really well, to what was obviously a lot quieter session than he is used to at Harvard.

I'm really looking forward to visting Harvard!

Carnage after the meal

Carnage after the meal.

The results of a visit to Jack Stacks BBQ wtih Carl Schramm. Ribs included lamb, beef pork and dinosaur! The food was fantastic, and it was great to spend some time with Carl and the rest of the fellows to chat about entrepreneurship.

However, I'm not sure I will be able to face another rib for a while...

Superbowl

A day of work, followed by Superbowl, kindly hosted at Wendy's house. The game was rather drab until the last quarter, by which time I'd figured out the rules, and was brilliant.

Monet in Kansas?!

A visit to Kemper Gallery and Nelson Atkins Museum of Contemporary Art. A fantastic gallery, right next to our appartments that has a truely great collection of art.

Profit from Non Profits

Meeting with Dan from NonProfit Technologies and also inspirational lunch with Harold from the Kauffman Foundation.