Four years have come and gone since the last World Cup, which I enjoyed in Switzerland. This is my first time really following the action in the US, which is - of course - a different experience. One side effect of having attended such a global school as IMD is that I have friends and classmates from almost every country represented in the Cup. This results in friendly rivalries popping up all over my facebook feed during these few weeks of competition.
The upshot is that, even when the US loses, I hold no animosity toward the victors. For example, it is hard to stay mad at Germany after they beat the US 1-0 when some of my best IMD friends are German. And taking an anti-Belgium stance before tomorrow's knockout match would be impossible in light of my Belgian classmate and professor / program director.
I suppose this is the intent of the World Cup: to foster friendly rivalries rather than riots and beatings. Much as the Olympics draws attention to more obscure (at least from the American perspective!) sports every four years, it is fun to see so many Americans getting swept up in World Cup fever. Here's hoping for a strong US showing and for a good World Cup regardless of the outcome!
2014-06-28
A Visit to OwlSpark
Last week I was in Houston and took advantage of the opportunity to spend some time at OwlSpark. OwlSpark is Rice University's tech startup accelerator, providing funding, space, connections, and mentorship to budding Rice entrepreneurs. It actually began as a project in the lean startup course I taught during my tenure as EIR and I'm thrilled to see it taking off so well. This is its second year of operation and it was inspiring to meet this cohort's eight teams.
I gave two talks (one on lessons learned from my own entrepreneurial journey, one on oral presentation skills) which I will post soon and also sat in on their first pitch practice. The OwlSpark team also posted a brief interview with me, the text of which follows below:
OwlSpark: You were an Entrepreneur in Residence at Rice and taught a project-based startup course. How would you describe Rice’s entrepreneurial environment today compared to before, and where do you see it in the coming years?
Bryan: When I was a student at Rice, there simply was no entrepreneurial environment. Even though it was the peak of the dot com boom, the number of students and faculty starting up companies was exceedingly small.
Today there is much more energy and visibility around entrepreneurship, which is a great trend. Organizations like OwlSpark, Rice Launch, and on-campus business competitions are creating several “entry points” into an entire stream of Rice entrepreneurship offerings. The next step is for Rice to become less insular, engaging not only the local Houston ecosystem but also entrepreneurial alumni around the world. Most people don’t realize that Silicon Valley was built on the backs of several Rice alumni (known in the Bay area as the “Rice Mafia”) and there are many other incredibly successful entrepreneurs, VCs, and corporate leaders elsewhere. We need to establish Rice as THE epicenter of entrepreneurship to draw those people back to campus and entice them to be resources for our next generation of entrepreneurs.
OwlSpark: In your blog “The Green Knight,” you wrote about preparing engineers “to be job makers, not job takers.” Similar perspectives have been gaining popularity lately. Why do you think this is such an important paradigm shift for engineers, and why do you think this is just starting to take hold now?
Bryan: A large percentage of job titles today simply didn’t exist 15 years ago and an even larger percentage won’t exist 15 years from now. We have a responsibility to prepare students not just for historically stable roles but also for a highly uncertain future in which those same roles might be performed by robots or even obsolete. Entrepreneurship is the art of capitalizing on – and even driving – the uncertain future so entrepreneurial skillsets are highly relevant for addressing this challenge. Entrepreneurship is empowerment. Rice students should not be at the fatalistic mercy of the job market; they should be creating the job market.
OwlSpark: In what ways do you think an engineering education really prepares you for major entrepreneurial and leadership roles?
Bryan: In many ways the traditional engineering education does NOT prepare students for major entrepreneurial and leadership roles. Traditional engineering coursework features endless problem sets all leading individual students toward a single, provably correct, known answer. Entrepreneurship is exactly the opposite: entrepreneurs operate in an environment so complex that the “answer” is not only unknown, but also unknowable. Entrepreneurs *create* answers, test them quickly and cheaply for fit, and rapidly iterate to create better answers – and almost always in teams.
Rice’s George R. Brown’s School of Engineering has introduced a strong focus on collaborative design projects instead of individual problem sets in recent years. This type of multidisciplinary design is much more applicable to both entrepreneurship and leadership. Starting a company is essentially a design problem, but one with commercial and organizational design constraints instead of just functional and technical. The GRBSOE also recognizes that engineers rarely work in environments comprising exclusively engineers so it is attempting to create more opportunities that transcend academic boundaries. For example, in the entrepreneurship course I taught only 1/3 of students were engineers. This made for startup teams that much more closely modeled real entrepreneurial ventures.
OwlSpark: You focus on the clean tech and energy space. What does being an entrepreneur in that area entail that may be unique as compared to other industries?
Bryan: Both “cleantech” and “energy” are such broad terms encompassing so many different industries and market segments that it is hard to generalize about them. Still, one of the aspects I enjoy about this space is how incredibly impactful working in the energy industry is. Energy affects literally everything we see and touch and do. As Rice Nobel Laureate Dick Smalley was fond of saying, if we solve the energy challenge, we solve the next nine greatest challenges facing the world for free. As an entrepreneur working hard to have a positive impact on energy use, I find that that sense of making a meaningful impact helps me get through tough times.
OwlSpark: From a business perspective, if present-you could give one piece of advice to past-Bryan, what would it be?
Bryan: “Dear past-Bryan, work smarter, not harder.” When the going gets tough, my natural instinct is to put my head down and power through by working longer hours. However, I’ve now found that I’m most effective when I pull my head up and ask why the going is tough and – and whether there might be smarter ways to address the current challenge. Looking back at my career, there are probably several instances in which I would have been more successful (and better rested!) if I had taken this approach.
I gave two talks (one on lessons learned from my own entrepreneurial journey, one on oral presentation skills) which I will post soon and also sat in on their first pitch practice. The OwlSpark team also posted a brief interview with me, the text of which follows below:
OwlSpark: You were an Entrepreneur in Residence at Rice and taught a project-based startup course. How would you describe Rice’s entrepreneurial environment today compared to before, and where do you see it in the coming years?
Bryan: When I was a student at Rice, there simply was no entrepreneurial environment. Even though it was the peak of the dot com boom, the number of students and faculty starting up companies was exceedingly small.
Today there is much more energy and visibility around entrepreneurship, which is a great trend. Organizations like OwlSpark, Rice Launch, and on-campus business competitions are creating several “entry points” into an entire stream of Rice entrepreneurship offerings. The next step is for Rice to become less insular, engaging not only the local Houston ecosystem but also entrepreneurial alumni around the world. Most people don’t realize that Silicon Valley was built on the backs of several Rice alumni (known in the Bay area as the “Rice Mafia”) and there are many other incredibly successful entrepreneurs, VCs, and corporate leaders elsewhere. We need to establish Rice as THE epicenter of entrepreneurship to draw those people back to campus and entice them to be resources for our next generation of entrepreneurs.
OwlSpark: In your blog “The Green Knight,” you wrote about preparing engineers “to be job makers, not job takers.” Similar perspectives have been gaining popularity lately. Why do you think this is such an important paradigm shift for engineers, and why do you think this is just starting to take hold now?
Bryan: A large percentage of job titles today simply didn’t exist 15 years ago and an even larger percentage won’t exist 15 years from now. We have a responsibility to prepare students not just for historically stable roles but also for a highly uncertain future in which those same roles might be performed by robots or even obsolete. Entrepreneurship is the art of capitalizing on – and even driving – the uncertain future so entrepreneurial skillsets are highly relevant for addressing this challenge. Entrepreneurship is empowerment. Rice students should not be at the fatalistic mercy of the job market; they should be creating the job market.
OwlSpark: In what ways do you think an engineering education really prepares you for major entrepreneurial and leadership roles?
Bryan: In many ways the traditional engineering education does NOT prepare students for major entrepreneurial and leadership roles. Traditional engineering coursework features endless problem sets all leading individual students toward a single, provably correct, known answer. Entrepreneurship is exactly the opposite: entrepreneurs operate in an environment so complex that the “answer” is not only unknown, but also unknowable. Entrepreneurs *create* answers, test them quickly and cheaply for fit, and rapidly iterate to create better answers – and almost always in teams.
Rice’s George R. Brown’s School of Engineering has introduced a strong focus on collaborative design projects instead of individual problem sets in recent years. This type of multidisciplinary design is much more applicable to both entrepreneurship and leadership. Starting a company is essentially a design problem, but one with commercial and organizational design constraints instead of just functional and technical. The GRBSOE also recognizes that engineers rarely work in environments comprising exclusively engineers so it is attempting to create more opportunities that transcend academic boundaries. For example, in the entrepreneurship course I taught only 1/3 of students were engineers. This made for startup teams that much more closely modeled real entrepreneurial ventures.
OwlSpark: You focus on the clean tech and energy space. What does being an entrepreneur in that area entail that may be unique as compared to other industries?
Bryan: Both “cleantech” and “energy” are such broad terms encompassing so many different industries and market segments that it is hard to generalize about them. Still, one of the aspects I enjoy about this space is how incredibly impactful working in the energy industry is. Energy affects literally everything we see and touch and do. As Rice Nobel Laureate Dick Smalley was fond of saying, if we solve the energy challenge, we solve the next nine greatest challenges facing the world for free. As an entrepreneur working hard to have a positive impact on energy use, I find that that sense of making a meaningful impact helps me get through tough times.
OwlSpark: From a business perspective, if present-you could give one piece of advice to past-Bryan, what would it be?
Bryan: “Dear past-Bryan, work smarter, not harder.” When the going gets tough, my natural instinct is to put my head down and power through by working longer hours. However, I’ve now found that I’m most effective when I pull my head up and ask why the going is tough and – and whether there might be smarter ways to address the current challenge. Looking back at my career, there are probably several instances in which I would have been more successful (and better rested!) if I had taken this approach.
2014-06-23
When to Listen to Investors
One of the best - and worst - aspects of being a startup founder is being inundated with a nearly constant stream of advice. Advice comes from everyone - friends, business partners, professors, customers, competitors, journalists, employees - but especially from investors. This makes sense as investors have a lot riding on the outcome of your venture.
Part of the art of entrepreneurship is knowing when to take the advice and when not to. I saw an article on this subject today and it resonated with me. Many startup investors have not started up companies themselves. It is important to be cautious with their advice as startups are not simply small versions of large companies. The techniques and decisions used to launch and rapidly scale a disruptive startup are different than those that would make sense in larger companies or businesses in more mature markets.
Even investors with startup experience may be biased by a different time, a different industry, or false attribution of success in previous ventures. But all these investors are [hopefully] smart, experienced, high-integrity people who are earnestly trying to help the founder be successful and they should all be heard. It falls on he entrepreneur to process all of their advice and make the ultimate decision.
At Smart Office Energy Solutions we have managed to bring on some very savvy investors with a lot of valuable advice to offer. Although we don't always take 100% of the advice offered to us, these investors are a key asset and strategic advantage - and we'll take every advantage we can get!
Part of the art of entrepreneurship is knowing when to take the advice and when not to. I saw an article on this subject today and it resonated with me. Many startup investors have not started up companies themselves. It is important to be cautious with their advice as startups are not simply small versions of large companies. The techniques and decisions used to launch and rapidly scale a disruptive startup are different than those that would make sense in larger companies or businesses in more mature markets.
Even investors with startup experience may be biased by a different time, a different industry, or false attribution of success in previous ventures. But all these investors are [hopefully] smart, experienced, high-integrity people who are earnestly trying to help the founder be successful and they should all be heard. It falls on he entrepreneur to process all of their advice and make the ultimate decision.
At Smart Office Energy Solutions we have managed to bring on some very savvy investors with a lot of valuable advice to offer. Although we don't always take 100% of the advice offered to us, these investors are a key asset and strategic advantage - and we'll take every advantage we can get!
2014-06-13
Entrepreneurship at Rice
As I wrapped up my role as the inaugural Entrepreneur In Residence at Rice, I was asked to summarize what we accomplished during my time there in this article, published in the trade journal of the Society of Petroleum Engineers. The article is on pages 29-31 of the journal but, for those who don't wish to click through, following is just the text:
Preparing Engineers to Be Job Makers, Not Job Takers
The entrepreneurial spirit is an
increasingly valuable asset in today’s
economy. The same toolkit used to
launch a business from scratch turns
out to be quite applicable to larger,
more established organizations as well.
Mature energy companies and even
nonprofit or government bodies have
just as much need as startup companies
for ambitious employees who have
the ability to identify problems, listen
to customers/stakeholders, marshal
resources, and inspire teams to create
efficient solutions.
The George R. Brown School of
Engineering, part of Rice University
in Houston, Texas, is tasked with
preparing the next generation of
engineers for careers in academia or
industry. In fact many of the students
could spend the majority of their
professional lives working in the energy
industry. However, it is difficult in a
traditional classroom setting to imbue
engineering students with the spirit of
entrepreneurialism. In addition, there is
a dearth of rigorous scientific research
about entrepreneurship and its effective
development. So, if entrepreneurialism
is an increasingly important skill for
engineering careers, how does a
university prepare its students today for
their careers of tomorrow?
As part of Rice’s vision for its second
century of existence, the Rice Center
for Engineering Leadership (RCEL)
was given the specific task of helping
Rice engineers develop into inspiring
leaders, exceptional team members, and
bold entrepreneurs. RCEL’s approach to
entrepreneurship development is based
on three key elements:
1. A curriculum built on
rigorous academic research
on entrepreneurship.
Myriad authors, speakers, and
bloggers profess they have
unlocked the formula for
entrepreneurial success. However,
the evidence presented is largely
anecdotal, and more often than
not using their formulas only
demonstrates their ineffectiveness.
RCEL’s entrepreneurship
curriculum uses concepts from
“effectuation,” which the Society
for Effectual Action (SEA) touts
on its website as being “a logic
of thinking, discovered through
scientific research, used by
expert entrepreneurs to build
successful ventures.” The
members of SEA have created
a body of research spanning
multiple academic institutions
and industry partners around
the world.
2. Programming that is
experiential in nature.
Students are required to practice
entrepreneurship rather than just
study it. This requires interaction
with real-world entrepreneurs, not
just with academic faculty.
3. Focus on the intersection
between economic value
and social value—called
“transformational
entrepreneurship.”
Students succeed in RCEL’s
entrepreneurship curriculum
by attempting to develop
entrepreneurial opportunities that
don’t just make money but also
provide positive societal value.
To implement these elements,
RCEL has taken a three-pronged
approach: curricular, co-curricular,
and extracurricular.
Curricular
The curricular approach is based on
the classic academic model in which
students take courses offered by
faculty. Students complete assignments,
and receive course credit and a
grade. Rice offers several curricular
entrepreneurship courses, ranging
from those that are industry-specific to
those broadly scoped in nature and from
those that provide a light exploration of
entrepreneurship to those that are deep
experiential dives.
RCEL’s most significant “deep-dive”
entrepreneurship course, ENGI 540, is
a lean startup course in which students
must deliver a business—not a business
plan—by the end of the semester.
This course attracts students from
all disciplines, from engineering to
business to architecture to the liberal
arts, at both the undergraduate and
graduate levels. The number of male
and female students is about equal, and
students come from a broad spectrum of
backgrounds, cultures, and continents.
Students must perform a lot of work
before being accepted into ENGI 540,
including an initial application during
the semester before enrollment and
a significant amount of preparatory
homework the summer before the
semester begins.
The requirement to perform
preparatory work serves two purposes:
It weeds out the least committed
students, and it ensures that students are
ready to hit the ground running on the
first day of class. In essence, students
spend the summer developing and
refining multiple startup ideas. They
arrive on the first day of class ready to
pitch their ideas to their classmates.
During the first day of class, students
self-organize into startup teams that will
focus on the venture ideas they found
most promising. No single-student teams
are allowed; if a student fails to compel
students to join his or her venture, the
venture is dead. This closely models
the real startup world in which very
few lone founders make it very far. The
self-organizing policy also creates a
free market in the class for talent as
teams with skill gaps try to entice key
students to join their cause. The breadth
of student disciplines and backgrounds
ensures that engineering students
gain experience working in highly
diverse teams—again modeling the real
startup world.
The ENGI 540 semester
comprises 13 weekly cycles of startup
development, during which the students
adopt the lean startup mantra of “getting
out of the building” to gather feedback
from real customers. Each week students
must present at the beginning of class
what they accomplished and what they
learned (rather than just what they did)
during the previous week.
The aspect of ENGI 540 with which
Rice students struggle the most is the
absence of a clear grading rubric.
Since they first set foot on campus,
Rice students have been optimizing
their efforts around a causal grading
rubric (“If you do x, y, and z, then you
will get an A”). However, predictable
causality has no place in the world of
entrepreneurship. We deliberately keep
our grading methodology concealed
from the students in order to increase
their comfort level under conditions of
heightened uncertainty—a critical skill
for entrepreneurs.
At the end of the semester,
student teams pitch their ventures to
evaluators—an audience of venture
capitalists, angel investors, corporate
development officers, academic leaders,
and entrepreneurs.
Each evaluator is given a finite
amount of virtual currency to invest in
as many or as few ventures as he or
she sees fit. RCEL uses this investment
distribution as the primary determiner
of student grades. The final pitch isn’t the
first time evaluators have heard about
the student ventures. Each evaluator
has been introduced to the class over
the course of the semester as a potential
mentor and network connector. Most
evaluators work closely with student
teams for months so they can make a
much more informed final investment
decision than if they had just heard a
pitch for the first time.
Co-Curricular
This approach supplements
nonentrepreneurial academic curricula
with entrepreneurial practicum. There
is a lot of intellectual property being
developed in every lab and every
classroom across the Rice campus
every day. However, the faculty leading
those labs and classes often lack the
entrepreneurial expertise to help
students commercialize their work.
Faculty now have the option of
adding an entrepreneurship module
to each of their courses. In this
entrepreneurship module, RCEL
entrepreneurship faculty present several
guest lectures on entrepreneurship
and work closely with the students
outside class time to ensure that they
take commercial opportunities into
consideration when pursuing their work
in the lab.
For example, in a course titled BIOE
428 (Bio-MEMS [microeletromechanical
systems] and medical microdevices),
several student teams designed and
developed nanoscale biosensors.
Through the course’s entrepreneurship
module, they identified, sized,
and validated target markets, and
honed in on some applications for
their inventions—one of which
ultimately became the basis for a
startup company.
Extracurricular
RCEL also provides entrepreneurial
support that is completely unrelated
to academic coursework. Last
summer, RCEL, in partnership with
the Rice Alliance for Technology
and Entrepreneurship, launched
OwlSpark, an on-campus
technology startup accelerator for
Rice entrepreneurs. OwlSpark—
itself a startup that started in ENGI
540—provides funding, space, and
mentorship for Rice’s most innovative
startup ideas.
There are several student
entrepreneurship organizations RCEL
supports and sponsors. Additionally,
RCEL regularly brings entrepreneurs
and investors on campus where they
hold “open office hours” for students,
faculty, staff, and alumni seeking
entrepreneurship advice.
Results
How will we know if our efforts are
successful? How can we measure
the efficacy of our actions? Most
organizations like RCEL choose
relatively simplistic entrepreneurship
measures—such as number of startups
launched or total dollar amount raised.
However, these metrics gauge activity
levels, not results.
Academic institutions, in particular,
are prone to use metrics such as
the number of students enrolled in
entrepreneurship courses.
Even if we included all the students
impacted by the co-curricular and
extracurricular entrepreneurship
offerings at Rice, we would still be
measuring means to ends and learning
nothing about our efficacy in achieving
those ends. In startup jargon, these
are referred to as “vanity metrics”
because they look pretty but, at best,
offer no real insight and, at worst, give
a false sense of confidence that leads
to complacency.
It will probably be years before
we can really tell if RCEL’s efforts have
been effective.
In the meantime, however, we have
turned to a tool gaining significant use
in the marketing industry: Net Promoter
Score (NPS). Using an extremely simple
question—“How likely would you be
to recommend Product X to your peer
group?”—and a rating system based
on a scale from 1 to 10, the team behind
NPS has had success segmenting
customers into Promoters (9s and 10s),
Passives (7s and 8s), and Detractors
(1 through 6).
NPS is the percentage of a product’s
customers who are Promoters less the
percentage who are Detractors and is
scored on a scale from -100 to 100. An
organization’s goal is to improve the NPS
of its product or service relative to its
competitors’ scores and/or relative to its
historical scores.
In 2012, RCEL began using the
NPS system to gauge the perceptions
of its entrepreneurship constituents:
Rice students, faculty/staff, alumni,
entrepreneurs, investors, and
even people with no Rice affiliation
whatsoever. Our hypothesis was that,
if we were effective in our efforts to
improve entrepreneurship at Rice, that
would be reflected in an increase in our
entrepreneurship NPS.
Over 12 months we conducted five
NPS assessments asking, “How likely
would you be to recommend Rice for
entrepreneurship to your fellow [peer
group members]?”
In 1 year the three-period moving
average of Rice’s entrepreneurship
NPS improved overall by 9 points. It
improved most significantly with oncampus
constituents (students, faculty,
and staff) but also improved consistently
among alumni, entrepreneurs, and the
community at large.
There is no NPS industry benchmark
for entrepreneurship at academic
institutions; however, we interpret these
relative score increases as an indicator
that RCEL is having a positive impact on
entrepreneurship at Rice.
While we have launched dozens
of startups since RCEL began its
entrepreneurship efforts, we should be
clear that our goal is not for students
to drop out of college to launch what
they hope might be the next Microsoft
or Facebook.
We do believe, however, that many of
the hardest and most worthy problems
entrepreneurship can address require
entrepreneurs to have spent significant
time in the “real” world. Industries
as complex as energy, aerospace,
and healthcare need entrepreneurs
who have been to the front lines and
experienced their industry’s actual,
functioning state of the art.
Our hope is that, by preparing
students today to take the problem
solving and design skills they hone in
their engineering coursework and focus
them on engineering startup companies,
they will be better equipped to
make significant contributions
tomorrow as entrepreneurial
founders, commercialization-oriented
academics, and
“intrapraneurs” effectively solving
meaningful problems within
established corporations.
Preparing Engineers to Be Job Makers, Not Job Takers
The entrepreneurial spirit is an
increasingly valuable asset in today’s
economy. The same toolkit used to
launch a business from scratch turns
out to be quite applicable to larger,
more established organizations as well.
Mature energy companies and even
nonprofit or government bodies have
just as much need as startup companies
for ambitious employees who have
the ability to identify problems, listen
to customers/stakeholders, marshal
resources, and inspire teams to create
efficient solutions.
The George R. Brown School of
Engineering, part of Rice University
in Houston, Texas, is tasked with
preparing the next generation of
engineers for careers in academia or
industry. In fact many of the students
could spend the majority of their
professional lives working in the energy
industry. However, it is difficult in a
traditional classroom setting to imbue
engineering students with the spirit of
entrepreneurialism. In addition, there is
a dearth of rigorous scientific research
about entrepreneurship and its effective
development. So, if entrepreneurialism
is an increasingly important skill for
engineering careers, how does a
university prepare its students today for
their careers of tomorrow?
As part of Rice’s vision for its second
century of existence, the Rice Center
for Engineering Leadership (RCEL)
was given the specific task of helping
Rice engineers develop into inspiring
leaders, exceptional team members, and
bold entrepreneurs. RCEL’s approach to
entrepreneurship development is based
on three key elements:
1. A curriculum built on
rigorous academic research
on entrepreneurship.
Myriad authors, speakers, and
bloggers profess they have
unlocked the formula for
entrepreneurial success. However,
the evidence presented is largely
anecdotal, and more often than
not using their formulas only
demonstrates their ineffectiveness.
RCEL’s entrepreneurship
curriculum uses concepts from
“effectuation,” which the Society
for Effectual Action (SEA) touts
on its website as being “a logic
of thinking, discovered through
scientific research, used by
expert entrepreneurs to build
successful ventures.” The
members of SEA have created
a body of research spanning
multiple academic institutions
and industry partners around
the world.
2. Programming that is
experiential in nature.
Students are required to practice
entrepreneurship rather than just
study it. This requires interaction
with real-world entrepreneurs, not
just with academic faculty.
3. Focus on the intersection
between economic value
and social value—called
“transformational
entrepreneurship.”
Students succeed in RCEL’s
entrepreneurship curriculum
by attempting to develop
entrepreneurial opportunities that
don’t just make money but also
provide positive societal value.
To implement these elements,
RCEL has taken a three-pronged
approach: curricular, co-curricular,
and extracurricular.
Curricular
The curricular approach is based on
the classic academic model in which
students take courses offered by
faculty. Students complete assignments,
and receive course credit and a
grade. Rice offers several curricular
entrepreneurship courses, ranging
from those that are industry-specific to
those broadly scoped in nature and from
those that provide a light exploration of
entrepreneurship to those that are deep
experiential dives.
RCEL’s most significant “deep-dive”
entrepreneurship course, ENGI 540, is
a lean startup course in which students
must deliver a business—not a business
plan—by the end of the semester.
This course attracts students from
all disciplines, from engineering to
business to architecture to the liberal
arts, at both the undergraduate and
graduate levels. The number of male
and female students is about equal, and
students come from a broad spectrum of
backgrounds, cultures, and continents.
Students must perform a lot of work
before being accepted into ENGI 540,
including an initial application during
the semester before enrollment and
a significant amount of preparatory
homework the summer before the
semester begins.
The requirement to perform
preparatory work serves two purposes:
It weeds out the least committed
students, and it ensures that students are
ready to hit the ground running on the
first day of class. In essence, students
spend the summer developing and
refining multiple startup ideas. They
arrive on the first day of class ready to
pitch their ideas to their classmates.
During the first day of class, students
self-organize into startup teams that will
focus on the venture ideas they found
most promising. No single-student teams
are allowed; if a student fails to compel
students to join his or her venture, the
venture is dead. This closely models
the real startup world in which very
few lone founders make it very far. The
self-organizing policy also creates a
free market in the class for talent as
teams with skill gaps try to entice key
students to join their cause. The breadth
of student disciplines and backgrounds
ensures that engineering students
gain experience working in highly
diverse teams—again modeling the real
startup world.
The ENGI 540 semester
comprises 13 weekly cycles of startup
development, during which the students
adopt the lean startup mantra of “getting
out of the building” to gather feedback
from real customers. Each week students
must present at the beginning of class
what they accomplished and what they
learned (rather than just what they did)
during the previous week.
The aspect of ENGI 540 with which
Rice students struggle the most is the
absence of a clear grading rubric.
Since they first set foot on campus,
Rice students have been optimizing
their efforts around a causal grading
rubric (“If you do x, y, and z, then you
will get an A”). However, predictable
causality has no place in the world of
entrepreneurship. We deliberately keep
our grading methodology concealed
from the students in order to increase
their comfort level under conditions of
heightened uncertainty—a critical skill
for entrepreneurs.
At the end of the semester,
student teams pitch their ventures to
evaluators—an audience of venture
capitalists, angel investors, corporate
development officers, academic leaders,
and entrepreneurs.
Each evaluator is given a finite
amount of virtual currency to invest in
as many or as few ventures as he or
she sees fit. RCEL uses this investment
distribution as the primary determiner
of student grades. The final pitch isn’t the
first time evaluators have heard about
the student ventures. Each evaluator
has been introduced to the class over
the course of the semester as a potential
mentor and network connector. Most
evaluators work closely with student
teams for months so they can make a
much more informed final investment
decision than if they had just heard a
pitch for the first time.
Co-Curricular
This approach supplements
nonentrepreneurial academic curricula
with entrepreneurial practicum. There
is a lot of intellectual property being
developed in every lab and every
classroom across the Rice campus
every day. However, the faculty leading
those labs and classes often lack the
entrepreneurial expertise to help
students commercialize their work.
Faculty now have the option of
adding an entrepreneurship module
to each of their courses. In this
entrepreneurship module, RCEL
entrepreneurship faculty present several
guest lectures on entrepreneurship
and work closely with the students
outside class time to ensure that they
take commercial opportunities into
consideration when pursuing their work
in the lab.
For example, in a course titled BIOE
428 (Bio-MEMS [microeletromechanical
systems] and medical microdevices),
several student teams designed and
developed nanoscale biosensors.
Through the course’s entrepreneurship
module, they identified, sized,
and validated target markets, and
honed in on some applications for
their inventions—one of which
ultimately became the basis for a
startup company.
Extracurricular
RCEL also provides entrepreneurial
support that is completely unrelated
to academic coursework. Last
summer, RCEL, in partnership with
the Rice Alliance for Technology
and Entrepreneurship, launched
OwlSpark, an on-campus
technology startup accelerator for
Rice entrepreneurs. OwlSpark—
itself a startup that started in ENGI
540—provides funding, space, and
mentorship for Rice’s most innovative
startup ideas.
There are several student
entrepreneurship organizations RCEL
supports and sponsors. Additionally,
RCEL regularly brings entrepreneurs
and investors on campus where they
hold “open office hours” for students,
faculty, staff, and alumni seeking
entrepreneurship advice.
Results
How will we know if our efforts are
successful? How can we measure
the efficacy of our actions? Most
organizations like RCEL choose
relatively simplistic entrepreneurship
measures—such as number of startups
launched or total dollar amount raised.
However, these metrics gauge activity
levels, not results.
Academic institutions, in particular,
are prone to use metrics such as
the number of students enrolled in
entrepreneurship courses.
Even if we included all the students
impacted by the co-curricular and
extracurricular entrepreneurship
offerings at Rice, we would still be
measuring means to ends and learning
nothing about our efficacy in achieving
those ends. In startup jargon, these
are referred to as “vanity metrics”
because they look pretty but, at best,
offer no real insight and, at worst, give
a false sense of confidence that leads
to complacency.
It will probably be years before
we can really tell if RCEL’s efforts have
been effective.
In the meantime, however, we have
turned to a tool gaining significant use
in the marketing industry: Net Promoter
Score (NPS). Using an extremely simple
question—“How likely would you be
to recommend Product X to your peer
group?”—and a rating system based
on a scale from 1 to 10, the team behind
NPS has had success segmenting
customers into Promoters (9s and 10s),
Passives (7s and 8s), and Detractors
(1 through 6).
NPS is the percentage of a product’s
customers who are Promoters less the
percentage who are Detractors and is
scored on a scale from -100 to 100. An
organization’s goal is to improve the NPS
of its product or service relative to its
competitors’ scores and/or relative to its
historical scores.
In 2012, RCEL began using the
NPS system to gauge the perceptions
of its entrepreneurship constituents:
Rice students, faculty/staff, alumni,
entrepreneurs, investors, and
even people with no Rice affiliation
whatsoever. Our hypothesis was that,
if we were effective in our efforts to
improve entrepreneurship at Rice, that
would be reflected in an increase in our
entrepreneurship NPS.
Over 12 months we conducted five
NPS assessments asking, “How likely
would you be to recommend Rice for
entrepreneurship to your fellow [peer
group members]?”
In 1 year the three-period moving
average of Rice’s entrepreneurship
NPS improved overall by 9 points. It
improved most significantly with oncampus
constituents (students, faculty,
and staff) but also improved consistently
among alumni, entrepreneurs, and the
community at large.
There is no NPS industry benchmark
for entrepreneurship at academic
institutions; however, we interpret these
relative score increases as an indicator
that RCEL is having a positive impact on
entrepreneurship at Rice.
While we have launched dozens
of startups since RCEL began its
entrepreneurship efforts, we should be
clear that our goal is not for students
to drop out of college to launch what
they hope might be the next Microsoft
or Facebook.
We do believe, however, that many of
the hardest and most worthy problems
entrepreneurship can address require
entrepreneurs to have spent significant
time in the “real” world. Industries
as complex as energy, aerospace,
and healthcare need entrepreneurs
who have been to the front lines and
experienced their industry’s actual,
functioning state of the art.
Our hope is that, by preparing
students today to take the problem
solving and design skills they hone in
their engineering coursework and focus
them on engineering startup companies,
they will be better equipped to
make significant contributions
tomorrow as entrepreneurial
founders, commercialization-oriented
academics, and
“intrapraneurs” effectively solving
meaningful problems within
established corporations.
2014-06-09
Startups Should Never Pay to Pitch
Several times a week my startup is solicited to participate in pay-to-pitch events at which we are promised access to a smorgasbord of wealthy, capable investors who are just chomping at the bit to invest in companies like mine. Sounds too good to be true, right? Well, it is.
This has been covered by many other posts, such as from this startup lawyer and from this angel investor but here is my $0.02 to add as well.
These pay-to-pitch scams start off innocently enough. There is often no mention of a fee up front. Then, if you "apply" (a classic sales/manipulation trick: making YOU apply to THEM so that you want them to take your money in order for you not to feel rejected), you make it to the "next round," and then they casually drop the bomb that, oh by the way, there will be a fee of several thousand dollars to present.
If you object, it is often glossed over as, "We have to charge the fee to filter out the startups that aren't serious." I see, because the "application process" I've been going through doesn't help you filter any startups out? What exactly is the application process for then? Oh, right, see the above note about the sales technique!
Imagine that: the hoards of rich investors want the cash-poor startups to pay substantial fees just for the right to talk to them - makes sense, right?? Seriously, no investor worth his/her salt needs a forum of curated startup presentations to get access to dealflow. Likewise, no entrepreneur worth his salt needs to pay to have access to a group of such C-list [non-]investors. Or put another way: if investors don't even see enough value in the event to fund it completely, how likely do you think they will be to invest in the presenting companies? The result is an event consisting of lackluster startups, lackluster investors, and very, very little actual investment activity.
Think about it: how many successful startups do you know whose story starts with, "Well we had this game changing idea and a great team but we were so unresourceful that we had to pay just to get access to some potential investors?" Google? Facebook? Paypal? Nest? Exactly.
The practice of charging entrepreneurs to present is, at best, naive on the parts of the angel groups and, at worst, straight up predatory. I have to admit that, when I first started Smart OES and was raising capital for the first time in my life, I fell prey to one of these events. Fortunately it was a relatively small fee and the damage was minimal.
Of the nearly $1M of angel capital my startup has raised, not a dime of it has come from events like that. It has come from hustling and networking, which are key entrepreneurial skillsets. My advice to entrepreneurs: forget the pay-to-pitch scams. If you're having a hard time raising money, get out and start networking or, though it may be challenging, take a look in the mirror and evaluate why the people you are pitching aren't buying in.
This has been covered by many other posts, such as from this startup lawyer and from this angel investor but here is my $0.02 to add as well.
These pay-to-pitch scams start off innocently enough. There is often no mention of a fee up front. Then, if you "apply" (a classic sales/manipulation trick: making YOU apply to THEM so that you want them to take your money in order for you not to feel rejected), you make it to the "next round," and then they casually drop the bomb that, oh by the way, there will be a fee of several thousand dollars to present.
If you object, it is often glossed over as, "We have to charge the fee to filter out the startups that aren't serious." I see, because the "application process" I've been going through doesn't help you filter any startups out? What exactly is the application process for then? Oh, right, see the above note about the sales technique!
Imagine that: the hoards of rich investors want the cash-poor startups to pay substantial fees just for the right to talk to them - makes sense, right?? Seriously, no investor worth his/her salt needs a forum of curated startup presentations to get access to dealflow. Likewise, no entrepreneur worth his salt needs to pay to have access to a group of such C-list [non-]investors. Or put another way: if investors don't even see enough value in the event to fund it completely, how likely do you think they will be to invest in the presenting companies? The result is an event consisting of lackluster startups, lackluster investors, and very, very little actual investment activity.
Think about it: how many successful startups do you know whose story starts with, "Well we had this game changing idea and a great team but we were so unresourceful that we had to pay just to get access to some potential investors?" Google? Facebook? Paypal? Nest?
The practice of charging entrepreneurs to present is, at best, naive on the parts of the angel groups and, at worst, straight up predatory. I have to admit that, when I first started Smart OES and was raising capital for the first time in my life, I fell prey to one of these events. Fortunately it was a relatively small fee and the damage was minimal.
Of the nearly $1M of angel capital my startup has raised, not a dime of it has come from events like that. It has come from hustling and networking, which are key entrepreneurial skillsets. My advice to entrepreneurs: forget the pay-to-pitch scams. If you're having a hard time raising money, get out and start networking or, though it may be challenging, take a look in the mirror and evaluate why the people you are pitching aren't buying in.
The Vibram Five Fingers Lawsuit
Last month it was reported that Vibram, the company that makes the Five Fingers minimalist footwear in which I run, decided to settle a class action lawsuit against it rather than take it to trial. Many of my Facebook friends posted incendiary sensational articles about it on my wall as if to say, "I told you so," about my goofy shoes.
The lawsuit alleges that Vibram used deceptive marketing messages to imply health benefits that would come from wearing their product and that those health benefits were not proven to exist. In settling the lawsuit, Vibram has not admitted guilt; rather it has admitted that going to trial would probably cost substantially more than the $3.75M settlement.
Imagine that: a marketing message may have its validity disputed. You might as well sue Axe body spray for not delivering on its promise of attracting hoards of attractive girls every time you use it - or every beer company ever for not magically transporting the consumer to Rocky Mountain streams with his best buds.
For a pretty fair and balanced assessment of the lawsuit, the research that is and isn't behind it, and its implications, see this post from The Science of Sport.
As for me, I'm planning to collect my settlement refund, viewing it as a discount on future Vibram purchases!
The lawsuit alleges that Vibram used deceptive marketing messages to imply health benefits that would come from wearing their product and that those health benefits were not proven to exist. In settling the lawsuit, Vibram has not admitted guilt; rather it has admitted that going to trial would probably cost substantially more than the $3.75M settlement.
Imagine that: a marketing message may have its validity disputed. You might as well sue Axe body spray for not delivering on its promise of attracting hoards of attractive girls every time you use it - or every beer company ever for not magically transporting the consumer to Rocky Mountain streams with his best buds.
For a pretty fair and balanced assessment of the lawsuit, the research that is and isn't behind it, and its implications, see this post from The Science of Sport.
As for me, I'm planning to collect my settlement refund, viewing it as a discount on future Vibram purchases!
2014-06-08
Moving Pains
For 10 months I have been meaning to write about our move from Houston to Chapel Hill, which was filled with both [surprising] highs and [expected] lows.
As always seems to be the case, we A. were moving during the hottest, most miserable part of the year, and B. found ourselves with way too much stuff. We couldn't do much about A but we spent months addressing B by pruning our inventory of clothes, furniture, and various things we hadn't used in years. We took car load after car load of donations to Good Will but, when it came time to start packing, we were astounded by how much stuff we still had.
When I lived in Switzerland I became very enamored of my asset-light lifestyle. Having few things with me made it very easy to move from one place to another (especially including back to the US!) and I rarely devoted any brain cycles to my stuff or anything related to it. It was freeing!
Back in the US I have clearly done a worse job of acquiring things but at least this move was a good impetus to reduce the collection substantially.
We decided to hire professionals for the move. It would cost more than doing it ourselves but we thought it would be worth it.
Our move started off on the wrong foot, however, when the company we had hired showed up with a truck that was too small. As a consequence, they had to wait some hours for a bigger truck to show up and then completely unload the smaller one, reloading the items onto the new truck.
They also told us it would cost more since we had more stuff than they had estimated. There is a lesson learned here: only hire movers who actually come out to your house to inventory your items, not ones who give you a low ball estimate over the phone with every intention of upping the price on you, knowing that you have to move out on a deadline.
For weeks leading up to the move we had been watching Season 4 of Arrested Development with some good friends. We would get together in the evening, power our way through a few episodes, and feast on frozen, chocolate-dipped bananas that were absolutely divine. We were just a couple of episodes away from finishing the season so we had intended to head over to their house for one last hurrah once the movers were done.
Unfortunately the movers took longer and longer and finally we had to notify our friends that there was no realistic way that we would be done overseeing the movers until way past everyone's bedtime. Between the wrenches in the gears with the movers and not getting to say our goodbyes as planned, we were bummed. Imagine our surprise, then, when those friends showed up at our door unannounced, delivering frozen bananas, champagne, and good cheer! Talk about turning our frowns upside down!
Eventually the movers finished (Not quite; they actually had to come back in the morning for a few more things that they hadn't loaded.) and we spent the night at a friend's house before hitting the road ourselves. We broke up the trip by stopping to spend a couple of days in my childhood home of Huntsville, Alabama. Huntsville has changed a great deal but there was still plenty of nostalgia to be had.
The drama with the movers wasn't over, though, as they called to increase the price on us again. Now that they had many of our worldly possession on their truck, they were holding them hostage and were clearly in a powerful negotiating position. It was straight up extortion. We felt betrayed by the movers and angry at ourselves for naively getting ourselves into such a situation.
Fortunately, it turns out that we are not the first victims of such a scam. Mover scams are apparently so common that there is an entire office (The Federal Motor Carrier Safety Administration) within the Department of Transportation devoted to protecting consumers from such fraudulent behavior on interstate moves.
We did a little research, talked with a representative of the FMCSA just to confirm that we were in the right, and then talked tough on our next call with the movers. The person on the other end of the line changed his tune pretty quickly when Katie started dropping terms like "federal fraud charges" and, wouldn't you know it, they agreed to deliver our goods on time for the price agreed to in their binding quote.
At the end of the day our goods arrived, largely unscathed, and we paid the agreed upon price. However, for every one of us who fights back, I wonder how many families give in to the demands - very many, I would guess. Ugh, I feel dirty just having dealt with them.
The irony of the situation is that we actually have a good friend who runs an interstate moving company. We completely forgot about that when we went out shopping for quotes and, in hindsight, would obviously have preferred to deal with a trusted (and trustworthy) business owner.
With 10 months of distance from the move, it no longer seems as painful. At the time, however, it was pretty stressful - and moves are already stressful enough without piling more on top! Let our experience be valuable for you, though: if you are considering a major move, feel free to reach out to me to learn more from our move and I would be glad to put you in touch with my friend who owns the good moving company!
As always seems to be the case, we A. were moving during the hottest, most miserable part of the year, and B. found ourselves with way too much stuff. We couldn't do much about A but we spent months addressing B by pruning our inventory of clothes, furniture, and various things we hadn't used in years. We took car load after car load of donations to Good Will but, when it came time to start packing, we were astounded by how much stuff we still had.
When I lived in Switzerland I became very enamored of my asset-light lifestyle. Having few things with me made it very easy to move from one place to another (especially including back to the US!) and I rarely devoted any brain cycles to my stuff or anything related to it. It was freeing!
Back in the US I have clearly done a worse job of acquiring things but at least this move was a good impetus to reduce the collection substantially.
We decided to hire professionals for the move. It would cost more than doing it ourselves but we thought it would be worth it.
Our move started off on the wrong foot, however, when the company we had hired showed up with a truck that was too small. As a consequence, they had to wait some hours for a bigger truck to show up and then completely unload the smaller one, reloading the items onto the new truck.
They also told us it would cost more since we had more stuff than they had estimated. There is a lesson learned here: only hire movers who actually come out to your house to inventory your items, not ones who give you a low ball estimate over the phone with every intention of upping the price on you, knowing that you have to move out on a deadline.
For weeks leading up to the move we had been watching Season 4 of Arrested Development with some good friends. We would get together in the evening, power our way through a few episodes, and feast on frozen, chocolate-dipped bananas that were absolutely divine. We were just a couple of episodes away from finishing the season so we had intended to head over to their house for one last hurrah once the movers were done.
Unfortunately the movers took longer and longer and finally we had to notify our friends that there was no realistic way that we would be done overseeing the movers until way past everyone's bedtime. Between the wrenches in the gears with the movers and not getting to say our goodbyes as planned, we were bummed. Imagine our surprise, then, when those friends showed up at our door unannounced, delivering frozen bananas, champagne, and good cheer! Talk about turning our frowns upside down!
Eventually the movers finished (Not quite; they actually had to come back in the morning for a few more things that they hadn't loaded.) and we spent the night at a friend's house before hitting the road ourselves. We broke up the trip by stopping to spend a couple of days in my childhood home of Huntsville, Alabama. Huntsville has changed a great deal but there was still plenty of nostalgia to be had.
The drama with the movers wasn't over, though, as they called to increase the price on us again. Now that they had many of our worldly possession on their truck, they were holding them hostage and were clearly in a powerful negotiating position. It was straight up extortion. We felt betrayed by the movers and angry at ourselves for naively getting ourselves into such a situation.
Fortunately, it turns out that we are not the first victims of such a scam. Mover scams are apparently so common that there is an entire office (The Federal Motor Carrier Safety Administration) within the Department of Transportation devoted to protecting consumers from such fraudulent behavior on interstate moves.
We did a little research, talked with a representative of the FMCSA just to confirm that we were in the right, and then talked tough on our next call with the movers. The person on the other end of the line changed his tune pretty quickly when Katie started dropping terms like "federal fraud charges" and, wouldn't you know it, they agreed to deliver our goods on time for the price agreed to in their binding quote.
At the end of the day our goods arrived, largely unscathed, and we paid the agreed upon price. However, for every one of us who fights back, I wonder how many families give in to the demands - very many, I would guess. Ugh, I feel dirty just having dealt with them.
The irony of the situation is that we actually have a good friend who runs an interstate moving company. We completely forgot about that when we went out shopping for quotes and, in hindsight, would obviously have preferred to deal with a trusted (and trustworthy) business owner.
With 10 months of distance from the move, it no longer seems as painful. At the time, however, it was pretty stressful - and moves are already stressful enough without piling more on top! Let our experience be valuable for you, though: if you are considering a major move, feel free to reach out to me to learn more from our move and I would be glad to put you in touch with my friend who owns the good moving company!
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