Engineer to EntrepreneurEngineering 499 Capstone Project, Winter 2013
David Mayes
Lecturer, Faculty of Management
©David Mayes 3
Lecturer Introduction:
UBC Faculty of Management
ENGR 499, Engineering Capstone Project
©David Mayes 4
ENGR 499, Engineering Capstone ProjectInstructor Introduction
David Mayes: UBC Faculty of Management
LinkedIn Profile: http://www.linkedin.com/in/mayo615
UBC Office: EME 4151 (250) 807-9821 / Hours by appt.Email: [email protected]: (250) 864-9552Twitter: @mayo615
Experience: Executive management, access to venture capital, International business development, sales & marketing, entrepreneurial mentorship, technology assessment, strategic planning, renewable energy technology.
Intel Corporation (US/Europe/Japan), 01 Computers Group (UK) Ltd, Mobile Data International (Canada/Intl.), Silicon Graphics (US), Sun Microsystems (US), Ascend Communications (US/Intl.), P-Cube (US/Israel/Intl.), Global Internet Group LLP (US/Intl.), New Zealand Trade & Enterprise.
©David Mayes 5
Agenda
• Engineer to Entrepreneur:• Common Business Misperceptions
• What is Entrepreneurship?
• The need for Competitive Advantage
• UBC Library “entrepreneurship”resources
• UBC Small Business Accelerator
ENGR 499, Engineering Capstone Project, Winter 2013Engineer to Entrepreneur
©David Mayes 6
Engineer to Entrepreneur:
Common Misperceptions
ENGR 499, Engineering Capstone Project
©David Mayes 7
ENGR 499, Engineering Capstone ProjectEngineer to Entrepreneur: Common Misperceptions
Misconception # 1:
“Everybody Loves “Cool New Technology”
• Not exactly!• Assess commercial viability first!• Listen to potential customers• Validate with third party market research
©David Mayes 8
ENGR 499, Engineering Capstone ProjectEngineer to Entrepreneur: Common Misperceptions
Misconception # 2:
“I need to go-it-alone to insure quality & design elegance”
• Working alone or only with other engineers sounds good, but…
• You need a team with diverse skills to build a thriving business
• Think “business management” from the outset
©David Mayes 9
ENGR 499, Engineering Capstone ProjectEngineer to Entrepreneur: Common Misperceptions
Misconception # 3:
“Marketing is fluff and selling is black magic”
• If you build it, they will NOT necessarily come!
• In reality, many “best designs” lose to competitors with better marketing• Intel 8086 was a “DOG!”
©David Mayes b
ENGR 499, Engineering Capstone ProjectEngineer to Entrepreneur: Common Misperceptions
Misconception # 3:
“Marketing is fluff and selling is black magic*”
*UBCO Library
©David Mayes 11
Davidow, William, (1986); Marketing High Technology: An Insider’s View, New York, The Free Press
ENGR 499, Engineering Capstone ProjectEngineer to Entrepreneur: Common Misperceptions
Misconception # 4:
“We need to maximize functionality before we focus on customers”
• You can’t engineer the right functionality UNTIL you focus on listening to customers
• Customers will buy only the functionality they need and want…nothing more
©David Mayes 13
ENGR 499, Engineering Capstone ProjectEngineer to Entrepreneur: Common Misperceptions
Misconception # 5:
“A good engineer hates unpredictability and risk”
• A good entrepreneur embraces risk• Engineer driven solutions are often too
little, too late…if they ever ship!• Managing risk is good; trying to eliminate
risk is bad
©David Mayes 13
ENGR 499, Engineering Capstone ProjectEngineer to Entrepreneur: Common Misperceptions
Misconception # 6:
“We can’t worry about making money until we get it built”
• If you can’t make money, it isn’t a business• Business and market constraints are key
determinants of “getting it right”• Getting it right at the wrong cost = failure
©David Mayes 14
ENGR 499, Engineering Capstone ProjectEngineer to Entrepreneur: Common Misperceptions
Misconception # 7
“Outside financing causes loss of control and undue pressure to deliver”
• Funding turbocharges a startup company• “Smart money” adds management value• Canadian gov’t grants focus on pure R&D
• “Grantsmanship” is bad business strategy• Angels and VC’s focus on making money
©David Mayes 15
ENGR 499, Engineering Capstone ProjectEngineer to Entrepreneur
Suggested Reading*
Uppuluri, Krishna (2011), Engineer to Entrepreneur, The First Flight, self-published, Krishna Uppuluri
* UBCO Library
©David Mayes 16
Agenda
• Engineer to Entrepreneur:• Common Business Misperceptions
• What is Entrepreneurship?
• The need for Competitive Advantage
• UBC Library “entrepreneurship”resources
• UBC Small Business Accelerator
ENGR 499, Engineering Capstone Project, Winter 2013Engineer to Entrepreneur
©David Mayes 17
ENGR 499, Engineering Capstone ProjectWhat is Entrepreneurship?
Entrepreneurial Opportunity
• An economically attractive and timely opportunity that creates value.
• The best opportunities exists only for the entrepreneur who has the interest, resources, and capabilities required to succeed.
©David Mayes 19
ENGR 499, Engineering Capstone ProjectWhat is Entrepreneurship?
The First Consideration: Your “Character”
• Self-analysis: Do you have what it takes to be an entrepreneur?• Discuss your personality, capabilities, strengths
and weaknesses with a mentor who knows you.• Listen!• Are you a visionary leader?• What about the chemistry with your team?
• Investors will focus on three things:• “The team, the team, and the team.”
©David Mayes 20
Entrepreneurial Incentives
©David Mayes 21
ENGR 499, Engineering Capstone ProjectWhat is Entrepreneurship?
Drawbacks of Entrepreneurship• Hard work
– Finding new customers and markets– Frustrations with financing, government, tax,
technology, and employment issues• Long hours
– 20% work more than 60 hours per week• Emotional loneliness• Strong possibility of failure• Disruptions to personal life
©David Mayes 22
ENGR 499, Engineering Capstone ProjectWhat is Entrepreneurship?
Causes of Business Failure• Lack of managerial and financial abilities
• Fail to adapt to competitive environment
• A broad based study found the following:– 32% inadequate research and development– 23% lacked competitive advantage– 14% uncontrolled costs– 13% poorly developed marketing strategies– 10% poor market timing– 8% succumbed to competitor activities
©David Mayes 23
ENGR 499, Engineering Capstone ProjectWhat is Entrepreneurship?
Characteristics of Artisan Entrepreneurs
• A person with primarily technical skills and little business knowledge:
– Paternalistic approach– Reluctance to delegate– Narrow view of strategy– Personal sales effort– Short planning horizon– Simple record keeping
©David Mayes 24
ENGR 499, Engineering Capstone ProjectWhat is Entrepreneurship?
Characteristics of Opportunistic Entrepreneurs
• A person with both business skills and technical knowledge:– Scientific approach to problems– Willing to delegate– Broad view of strategy– Diversified marketing approach– Longer planning horizon– Sophisticated accounting
and financial control
©David Mayes 25
ENGR 499, Engineering Capstone ProjectWhat is Entrepreneurship?
Four Routes to Entrepreneurship
Entering a family business
Opening a franchised business
Starting a new business
Buying an existing business
©David Mayes 26
ENGR 499, Engineering Capstone ProjectWhat is Entrepreneurship?
Agenda
• Engineer to Entrepreneur:• Common Business Misperceptions
• What is Entrepreneurship?
• The need for Competitive Advantage
• UBC Library “entrepreneurship”resources
• UBC Small Business Accelerator
ENGR 499, Engineering Capstone Project, Winter 2013Engineer to Entrepreneur
©David Mayes 27
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Creating a New Business
Entrepreneurs may start a new business from scratch due to several reasons:
• A new product or service
• Favourable conditions such as location, equipment, employees, suppliers or bankers
• To capitalize on competitors’ weaknesses
©David Mayes 29
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Evaluative Criteria – Market Factors
©David Mayes 30
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Evaluative Criteria – Competitive Advantage
©David Mayes 31
HMKNT 401, Introduction of EntrepreneurshipThe Need for Competitive Advantage
Evaluative Criteria - Economics
©David Mayes 32
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Types of Ideas That Evolve Into Start-ups
©David Mayes 33
HMKNT, Introduction to EntrepreneurshipThe Need for Competitive Advantage
Competitive Advantage
• A firm offers a product or service that is perceived by customers to be superior to those of competitors, thereby promoting firm profitability
• To establish competitive advantage, a business owner needs to understand the nature of the environment– External – what business potentials exist– Internal – what the firm is able to do
©David Mayes 34
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Sustaining Competitive Advantage
•An established, value-creating industry position that is likely to endure over time
•Markets are dynamic and in constant flux
•Results include superior profitability, increased market share, and improved customer satisfaction
©David Mayes 35
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Assessing the Environment
• The Macroenvironment– A broad environment with its multiple factors
that affect most businesses in a society• STEEP – Sociocultural, Technological, Economic,
Environmental, Political/Legal
• Industry Environment– The combined forces that directly impact
a given firm and its competitors
©David Mayes 36
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Strategies That Capture Opportunities
• Broad-Based Strategy Options–Seek an advantage in cost or marketing
• Cost-Advantage Strategy and OptionsRequires the firm to be the lowest-cost
producer» WestJet began as a low-fare, no-frills airline
• Marketing-Advantage StrategyEmphasizing the uniqueness of the firm’s
product or service» WestJet is moving to differentiate based on quality service
©David Mayes 37
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Environmental and Organizational Impact on Opportunity Assessment
©David Mayes 38
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Core Competencies and Assessing the Organization
• Core Competencies• Value-creating organizational capabilities that are unique to
a firm
• Resources versus Capabilities• Resources are basic inputs that a firm uses to conduct
business (capital, technology, equipment, employees, etc.)• intangible and tangible resources
• Capabilities are the integration of several resources which are deployed together to the firm’s advantage.
©David Mayes 39
HMKNT 401, Introduction to EntrepreneurshipThe Need for Competitive Advantage
Venture Feasibility Assessment Model
• Stage 1: Back-of-the-Envelope concept– Potential customers, technology available, match to
entrepreneur, financial feasibility» Decision: go or no go
• Stage 2: Research and Verification– Detailed analysis of customers, competition, HR
required, technical and financial feasibility» Decision: go or no go
• Stage 3: Refine the Concept– Detailed business plan
» Decision: go or no go
©David Mayes 40
ENGR 499, Engineering Capstone ProjectThe Need for Competitive Advantage
Taking the Plunge
• A Precipitating Event
An event, such as losing a job, that moves an individual to become an entrepreneur.Job terminationJob dissatisfactionUnexpected opportunity
©David Mayes 41
©David Mayes 42
Mullins, John. (2010) 3rd Edition. The New Business Road Test. Harlow, UK: Prentice Hall, Financial Times
Suggested Reading:
Agenda
• Engineer to Entrepreneur:• Common Business Misperceptions
• What is Entrepreneurship?
• The need for Competitive Advantage
• UBC Library Resources
• UBC Small Business Accelerator
ENGR 499, Engineering Capstone Project, Winter 2013Engineer to Entrepreneur
©David Mayes 43
UBC Library “Entrepreneurship” Resources
UBC-O Library Resources: • UBC Library, Industry Research Resource Guide:
http://guides.library.ubc.ca/new_enterprise_development#tabs-6
• UBC, additional Industry and Market Research Resources: http://toby.library.ubc.ca/subjects/subjpage2.cfm?id=660
©David Mayes 45
Agenda
• Engineer to Entrepreneur:• Common Business Misperceptions
• What is Entrepreneurship?
• Start-up and the need for Competitive Advantage
• UBC Library Resources
• UBC Small Business Accelerator
ENGR 499, Engineering Capstone Project, Winter 2013Engineer to Entrepreneur
©David Mayes 46
• entrepreneurship@ubc
• http://www.entrepreneurship.ubc.ca/
• UBC Industry Liasion Office (UILO)
• http://www.uilo.ubc.ca/pages/entrepreneurship/voucher
Additional UBC Resources
©David Mayes 50
Top Related