Engineer to Entrepreneur

Engineer to EntrepreneurEngineering 499 Capstone Project , Winter 2013

©David Mayes 1

Engineer to EntrepreneurDavid Mayes, Lecturer: UBC Faculty of Management

©David Mayes 2

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

http://www.linkedin.com/in/mayo615

mailto:[email protected]

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


©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


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


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


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


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


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


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


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







©David Mayes 17

What is

Entrepreneurship?


©David Mayes 18

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


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


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


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


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


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


Four Routes to Entrepreneurship

Entering a family business

Opening a franchised business

Starting a new business

Buying an existing business

©David Mayes 26


Agenda







©David Mayes 27

The Need for Competitive Advantage


©David Mayes 28

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


Evaluative Criteria – Market Factors

©David Mayes 30


Evaluative Criteria – Competitive Advantage

©David Mayes 31

HMKNT 401, Introduction of EntrepreneurshipThe Need for Competitive Advantage

Evaluative Criteria - Economics

©David Mayes 32


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


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


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


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


Environmental and Organizational Impact on Opportunity Assessment

©David Mayes 38


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


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




• UBC Library Resources



©David Mayes 43

UBC Entrepreneurship Resources

HMKNT 401 Introduction to Entrepreneurship

©David Mayes 44

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

http://guides.library.ubc.ca/new_enterprise_development

https://www.exchange.ok.ubc.ca/exchweb/bin/redir.asp?URL=http://toby.library.ubc.ca/subjects/subjpage2.cfm?id=660

Agenda



• Start-up and the need for Competitive Advantage

• UBC Library Resources



©David Mayes 46

UBC Small Business Accelerator

Human Kinetics 401, Introduction to Entrepreneurship

©David Mayes 47

http://www.sba-bc.ca/

UBC Small Business Accelerator

©David Mayes 48

http://www.sba-bc.ca/

Additional Entrepreneurial

Resources


©David Mayes 49

• 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

http://www.entrepreneurship.ubc.ca/

http://www.uilo.ubc.ca/pages/entrepreneurship/voucher

http://www.uilo.ubc.ca/pages/entrepreneurship/voucher

Questions?

©David Mayes 51

©David Mayes 52