My Entrepreneurship Principles: Leadership

In my first piece on Mindful Entrepreneurship, I laid out several principles to optimize the entrepreneurial process.  In my second piece, I argued that culture is extremely important to startups. In this final (?) piece I will now examine how leadership can create an optimal startup culture and execute the entrepreneurial process.

Entrepreneurial Leadership

• Culture starts at the top; in a startup, all eyes are on the founders and the management team. Mission statements, declarations of values, and pronouncements of "our culture" have little effect on a venture's actual culture, which is determined much more by the actions of its leaders. If a company claims to have a culture of psychological safety but everyone sees a software engineer getting reamed out by the CTO for not doing things his way, then that culture is not actually safe. It is crucial that that startup leaders walk their own talk; however they act, that will be the culture.
• Bring the right people onto the team. Startup hiring can definitely be a challenge; finding people who are not only good but will also succeed in a less stable context isn't easy and many of the hiring best practices used by larger organizations fail at a startup. The best advice I can offer here is to seek out candidates who exhibit both humility and curiosity. These attributes are a perfect storm for contributors who thrive in the highly uncertain, rapid learning environment of a startup.
• Hire for diversity. Recall the effectuation principles from my first post: I was brought into a rapidly scaling startup to talk about how to apply those principles to leadership. One key take away is to prioritize the additional means that new hires bring to the team. Hiring for a very specific skillset is folly at a startup, where everyone wears multiple hats and what you think you need changes on a daily basis. Rather than evaluating candidates purely based on some pre-fab job description, give weight to all the additional skills, experiences, and perspectives they bring to the table.
• Encourage divergent thinking. Instead of asking your employees, "What is the right answer," ask, "What is possible?" Follow up with, "What else is possible?"
• Ask questions. Rather than barking orders, ask employees how they think problems should be solved. This serves the dual purpose of empowering employees with agency while also reinforcing a culture of skepticism. "Why?" "Why not?" "Is that a fact or a hypothesis?"
• Foster collaboration. It can be tempting in a startup to divide and conquer as much work as possible. Remembering that groups make better decisions in the face of uncertainty than do individuals, though, it is beneficial to reduce employees working in isolation as much as is practical. Use techniques like pair programming, team huddles, and strike forces to increase collisions among team members.
• Push employees out of the building. It is also important to increase collisions between team members and the outside world. Bring internal staff along on client visits. Provide incentives for employees to give talks (tech or otherwise) in the appropriate domains of the community. The more your team interacts with the outside world, the higher your venture's chances of benefiting from serendipity.
• Maintain a constant feedback loop. It is hard for startup employees to take big swings if they aren't standing on solid ground. Use 360 feedback to ensure that employees always know where they stand, how they are perceived, and how they can improve.
• Put the fish on the table. Feedback need not be limited to anonymous tools and it is important that it be provided - sensitively - in person. We use the term "fish on the table" to motivate team members to share open, honest feedback with each other. If there is a rotting fish kept under the table, it will start to stink. If it is brought up above the table, however, it can be dealt with. When a team member asks to put a fish on the table, others listen and try to accept the feedback openly because they know it is for the good of the team.
• Be a secure base. As babies learning to walk, we know that, if we fall, Mommy or Daddy or another care giver will be there to pick us up. We develop the confidence to take risks through reliance on these secure bases. This circuitry persists through adulthood such that, if you want your employees to take risks, you need to be a secure base for them. Let them know frequently that you will still love and value them even if they fail - show them rather than just telling them. A major role of being a startup CEO is also being the CPO - Chief Psychology Officer! Joining a startup is scary; being a secure base to your employees emboldens them to be fearless.
• Create meaning for your team. Working at a startup can be daunting. The work can be hard, the hours can be long, the pay and benefits can be below market . . . remind your employees of the purpose of their work. Mission and meaning are like secret weapons for startups; they make up for many other shortcomings so you can't let anyone forget about them. At my startups, we have very visible indicators of our progress toward meaningful metrics and periodically bring in speakers who have been impacted by our mission.
• Keep your integrity. Startups are hard and there is temptation to cheat in some ways even just to keep your venture afloat. At the end of the day, though, the only think you will take with you from one startup to the next is your integrity. If you fail, people will forgive you as long as you were honest. (I know an entrepreneur who lost all of an investor's money but did so honestly and transparently; that same investor then backed the entrepreneur's next venture as well.) If you are dishonest, however, your reputation will be trashed forever. 
• Never stop learning. Leadership is like other skills: it can be practiced. It can be improved. It can be developed. Just as a startup organization should never stop learning, neither should its leaders.

My Entrepreneurship Principles: Culture

While I was hunkered down surviving Hurricane Florence, I had further opportunity to reflect on my principles as an entrepreneur. In the first part of this brief series on Mindful Entrepreneurship, I laid out my keys to the entrepreneurial process. In this second part, I will focus on culture.

Entrepreneurship Culture

• Culture matters a lot. In my experience, ventures don't succeed or fail because of business models or technologies but rather because of people. Creating a culture of exploration and freedom to experiment is key to any learning organization, but especially to a startup.
• A startup's culture must free its employees to take big swings and to risk failure. A startup can't "play scared" but rather must be open to failure. The key is to fail quickly, fail cheaply, and - most importantly - fail mindfully, learning and adapting through the process.
• A startup is a learning organization and learning is its primary function. It is essentially a neural network programming itself and reprogramming itself through interactions with the  market. Learning isn't a black magic buzz word, though; it is a process that can be measured. I find one of the best ways to tune a culture's learning orientation is to use performance metrics to track the rate - hypotheses tested per unit time and cycle time per hypothesis test - and efficacy - hypotheses validated over time - of its learning processes. Fancy people call this "innovation accounting." To me it's just measuring the processes that are vital to the success of the venture.
• An absolutely crucial cultural element of any learning organization is psychological safety. In a psychologically safe environment, team members regardless of level feel free to challenge assumptions, to critique initiatives, and to risk failure. Psychological safety can be measured and I am a proponent of assessing it frequently. 
• Learning organizations need a healthy dose of skepticism, without which it is easy to get caught up in zeitgeist or invest in scaling unvalidated business models. A simple tool I use to foster a culture of skepticism is frequently asking, "Why?" This challenges team members to focus on their evidence - not their conclusions - and demonstrates that it is OK to ask to see that evidence and debate whether it really does lead to that conclusion. Especially with new team members, I will often ask, "Why," about my own ideas to accelerate their onboarding into a skeptical culture. 
• Skepticism goes a long way toward combating groupthink but I also believe in the value of diverse teams. Research shows time and again that diverse teams make better decisions than homogeneous teams and, more importantly for a startup, diversity brings inherent differences in perspective that are crucial for a startup searching for a path through the infinite, unknowable future.
• Contrary to much of the current startup mythos, I believe in a startup culture of work-life harmony rather than hyperwork. Balanced, well rested team members work more productively, stick around longer, and generate better insights than those who are overstretched. I try to foster intentional breaks during the work day, have walking meetings when possible, and adopt very open policies regarding hours, leave, etc. (I've always been inspired by the Netflix culture policy.)
• Finally, I think it's important to have fun in a startup. This can mean different things to different people but the point is that fundamentally working on an exciting venture should be a joy. I try to bring my own fun to the office (high tea in the afternoons if I'm dragging, Formal Friday so our normally casual interns get to dress up occasionally, ad hoc games of Calvinball throughout the office space) but, moreover, I encourage others to bring their own fun, which is often contagious.

Culture doesn't create itself, though, so my next post will be on the leadership necessary to instill such a culture and execute the entrepreneurial process.

My Entrepreneurship Principles: Process

I have recently been reflecting on the principles that I believe make entrepreneurial ventures successful. Today, the 56th anniversary of JFK's famous moon speech, a speech that inspired a nation to accomplish an impossible goal, seems like a good day to try to distill those principles down into a succinct post. I won't claim to have all the answers (On the contrary, one of the aspects of entrepreneurship that attracts me most is that I am learning all day every day.) but I have a track record of one big win ($40M revenue in three years with a nine-figure exit), a few medium wins (eight-figure exits), and a few smaller ventures that never quite achieved our lofty goals but did solve real customer problems and grow to $1M+ revenue with healthy profits.

If I had to describe my set of principles, I might call it "Evidence-based Entrepreneurship" or "Mindful Entrepreneurship." Or, if I were feeling particularly plucky, I might be so bold as to label it "Heroic Entrepreneurship" since I believe so deeply that entrepreneurship is a journey. "Heroic Entrepreneurship" has a connotation that sounds a bit arrogant - but let's not forget that there are many tragic heroes in addition to the triumphant ones!

Entrepreneurial Process

• Startup entrepreneurship is a search. To quote Steve Blank, "A startup is a temporary organization searching for a scalable, repeatable business model." Large, established organizations excute known business models while a startup searches for an unknown business model. This is an incredibly important distinction because searching for the unknown is a very different process - requiring very different skills, culture, and metrics - than executing the known.
• Use the scientific method. In their search for that scalable, repeatable business model, startup entrepreneurs must be honest with themselves about how much they do not know. They have hypotheses about a business opportunity and the startup process comprises rapid iterations of testing those hypotheses, learning from the results of those tests, and generating new hypotheses to test.
• Test efficiently. Hypothesis validation isn't as binary as it sounds. For example, you can "validate" market demand very weakly, a 1 on a scale of 10 ("A couple of my friends said they would buy this."), or very strongly, a 10 on a scale of 10 ("Thousands of online users preordered our product for our desired price."). A 1 isn't always helpful and a 10 isn't always practical. My startups try to push validation as far along the spectrum as we can cheaply and quickly. Cheap and quick tests help us generate more targeted follow-on tests or, if our hypothesis is refuted, test a new direction ASAP.
• Effectuation: start with your means. Steve Blank is great but he is pop science. I put greater stock in real, academically rigorous science about entrepreneurship. Within that category, I have been very impressed with a body of work called effectuation. Effectuation research has demonstrated that the best entrepreneurs don't pre-define a goal and then acquire the means to achieve that end. They actually do the opposite; they start with their means (who they are, what they know, whom they know) and they envision new ends that are only possible through their unique combination of means. This is an important distinction because it requires that entrepreneurs use divergent rather than convergent thinking.
• Effectuation: leverage surprise. The best entrepreneurs expand their means through partnerships but they also have another secret weapon: serendipity. In the startup world, it is a question of when, not if, an entrepreneur will be surprised. To quote Mike Tyson, "Everyone's got a plan until you get punched in the mouth." The best entrepreneurs not only don't fear surprise; they actually take proactive means to embrace it. Serendipity has a strong (and underappreciated by those with large egos) effect on successful ventures and, while you can't control it, you can increase your collision rate with it by meeting other people, continuing your education and encouraging employees to get out from behind their desks. I also increase my serendipity collision rate by being open and transparent about my startups rather than secretive.
• Effectuation: Set affordable loss and increase returns. There is a perception that entrepreneurs are big risk takers but studies show that we are actually more risk-averse than the population as a whole; we simply view risk differently and take more calculated risks. Corporate managers are trained to set a desired return and then take every action to minimize the risk that they won't hit that target. The best entrepreneurs invert this mindset; they set their maximum affordable loss and then, as long as they are within that constraint, they swing for the fences to maximize returns. This mindset allows entrepreneurs to pursue opportunities aggressively rather than playing scared.
• Effectuation: Create the future. The best entrepreneurs don't try to predict the future; the future success of a startup is not only unknown, it is unknowable! Rather, the best entrepreneurs are comfortable with that uncertainty and instead strive to create the future. This attitude that, to quote the Terminator franchise, "The future is not set; there is no fate but what we make for ourselves," is a key reason that I believe entrepreneurship is empowerment.'
• Play by different rules. David would never beat Goliath by going toe-to-toe with him and trading punches. The US would not have won its revolutionary war by standing out in the open according to the typical "rules" of warfare of the time. Similarly, when I am trying to lead a startup to disrupt industry giants, I always seek ways to capitalize on their constraints (and our lack thereof).
• Work smarter not harder. It is easy in a startup to become so focused on what you are doing that you don't pause to consider how you are doing it - or whether you should be doing it at all. This is confounded by startup cultural mythos that encourages bragging about working long, hard hours. When we are missing deadlines, I believe in pulling our heads up to consider how we are working rather than exhorting the team simply to work longer and harder. Working longer and harder is the path to the Dark Side of burnout and is fundamentally unsustainable. I also believe in setting time and scope constraints that motivate the team to work quickly, work smartly, and maintain life balance.
• Disagree and commit. I really like Jeff Bezos's methodology of fostering real conflict and skepticism but then committing 100% to the results of the discussion. A startup will have a hard time building consensus; big, disruptive opportunities are, by their very nature, controversial and contrarian and, again, so much of what people believe about a startup is wholly unproven. A good startup team has diverse perspectives and passionate personalities so it is important to let those perspectives clash. These passionate discussions should be based on evidence but, at the end of the day someone(s) may still disagree. That's OK, but when we make a decision, we need everyone to commit to it, even if they disagree. History will prove us wrong sometimes and that's OK too; it's part of our journey. By committing to our startup's direction, even when some disagree, we keep moving forward rather than bogging ourselves down agonizing over each decision. In so doing we move quickly and agilely. 

This post on process is long enough already so I will end it here and follow up soon with my principles on entrepreneurial culture and leadership. In the meantime, what do you think of what I have laid out so far?

15 Years An Entrepreneur

15 years ago I cofounded my first startup. Now, with seven startups under my belt, some big successes, some small successes, and some, ahem, "less than successes," it's amazing to think about how pivotal that decision to try the entrepreneurial path was.

It was my junior year in college and I had been working part time and summers for UUNET, the world's largest and fastest growing Internet Access Provider, during the peak of the Internet boom. UUNET was amazing when I started there but had grown so bloated and inefficient that I was interested in exploring other options for my last summer before graduation.

Many tech companies - large and small - recruited Rice computer science and electrical engineering majors so I went to career fairs, had interviews, and received several job offers. The best offers came from tech startups. They flew me out to lavish recruiting weekends, paid high salaries, and offered the chance to work on bleeding-edge technologies. Those weren't the aspects that really appealed to me, though; what really interested me was the opportunity to make a meaningful impact on the success or failure of the business.

While I was mulling over the offers, I reconnected with two Rice CS seniors whom I had met during a programming language theory class. They had both accepted job offers from big companies but they wouldn't be starting those jobs until the Fall. They had a [software-based] business idea and intended to spend the entire summer launching a startup around it. If they weren't successful, no worries, they would just start their jobs. If they were successful, though . . .

Long story short: they invited me to join them in starting the venture, something which had never occurred to me before. Now I had a much more complex decision to make: go with one of the "safe bet" options or help start something from scratch.

Of course I decided to cofound the startup. The way I saw it, this was the perfect time in my life to take a big risk; I didn't have kids to feed or a mortgage to pay. Plus I just felt 100x more inspired about the idea of helping to build something from scratch than I did about being a cog in someone else's wheel.

This is, I think, the essence of why I have always (In hindsight, the warning signs have been present since at least elementary school!) been drawn to entrepreneurship: self-efficacy. When the game is on the line, I want the ball - and entrepreneurship is the career equivalent of exactly that. I don't want my destiny anywhere but in my own hands.

The other aspect of entrepreneurship that I really appreciate is its ability to effect great change with no upper limit. Having grown up in the shadow of the space industry, I have always been inspired by the ad astra mentality of solving huge problems. In a capitalist world, entrepreneurship is the most efficient platform for solving such problems today and scaling those solutions up tomorrow.

That first startup was such a bumpy ride. Funded on credit cards . . . Multiple business model changes without a customer in sight . . . and one of our cofounders got scared and dropped out. But it was a grand adventure - and one with a happy ending. Suffice to say, the self-efficacy and scalability were addicting and I've been [ad]venturing ever since!

Entrepreneurial Leadership

Last week I was invited to give a talk on a topic of my choice to the team of a high-growth startup in Durham. Because leadership challenges often cause friction during times of high growth, I chose to address the topic of entrepreneurial leadership. Check out my video below and let me know what you think!

A Few Days En Suisse

After the grand weekend in Paris I took a detour of just a few days in Lausanne, Switzerland before returning to the States. The trip on the TGV was wonderful as always. There is just something so civilized about traveling by train: plenty of space, Wifi, more than decent meals, and the gorgeous French countryside streaming by at more than 300 kph (200 mph)! Oh how I miss this option when I am in the US.

Upon my arrival I was met at the station by my IMD classmate and host, Mathieu. We wasted very little time before heading up the mountain for something canonically Swiss: fondue! As I have blogged before, Le Chalet Suisse offers not only an authentic "chalet" experience and delicious fondue but incomparable views of Lac Leman as well.

We arrived around sunset and were treated to gorgeous views, a crescent moon over the lake, and a magical twilight in the land of fairy tales before dinner. The magic only intensified as several other IMD classmates joined us for fondue. It has been nearly seven years since I met them all and nearly six since we finished the program but meeting them again makes it seem like it was only yesterday!

As I have blogged before, I have eliminated grains and starches from my diet, which has had a positive effect on my body composition. One doesn't exactly go into a fondue dinner for his health but I at least intended to stick to my nutritional guns. My willpower wore down quickly, though, and it rapidly devolved into a cheat meal. This began with the bread I dipped into the fondue pot, continued with the potato I took along with Mathieu's raclette, and then really hit a new high when I helped Allessandra finish her rösti. It's too bad no one had any spätzle as I would have devoured it since I was already breaking my rules! It was a very Swiss and very perfect way to start my brief trip.

Monday morning I had breakfast with another classmate - one who is trying to launch a startup, incidentally. We had a nice breakfast in Ouchy right along the lake. Unfortunately most of the menu items had grains in them and I was trying to return to my strict diet so guess what I had for breakfast: more cheese - because a huge fondue dinner the night before wasn't enough! Well, there are worse places in the world in which to find yourself eating a metric ton of cheese!

I spent the day at IMD, which was a refreshing homecoming. In the morning I met with many of the MBA staff. I must have looked famished (Not!) because they took pity on me and invited me to lunch at the famous IMD restaurant. It was just as good as I remembered and offered plenty of excellent vegetables and fish so that I could dilute my cheese consumption a little.

After working from the IMD cafe all afternoon, I went back up the mountain and did some trail running. The previous several days of perfect weather were finally at an end and the mountain slopes were shrouded in a misty fog. This made for another fairy tale experience picking my way first through the Parc de l'Hermitage and then the Bois de Sauvabelin - truly magical!

My hosts and I joined another IMD classmate for dinner at a local Italian restaurant. It turns out that on Monday nights they only have pizza available so it became another [delicious] cheat meal for me! Much as my breakfast classmate was launching a new venture, so was this other classmate at dinner. I'm beginning to notice a trend! I suppose alumni of the IMD MBA class of 2008 are nearing their seven year itch at their corporate jobs and starting to explore more entrepreneurial opportunities. It was quite rewarding to learn that my classmate had actually followed my online entrepreneurship lectures and found them very beneficial - glad to help!

Tuesday I began the day with a run along the lake. The fog over the lake and the Chateau d'Ouchy recalled visions of the mists of Avalon. In order to make it back to my apartment, shower, and then return to Ouchy for meetings at IMD in time I took the metro up and back. On the way up I received lots of stares as someone who was clearly out of place. Dressed in Under Armour and wearing Vibrams Fivefingers shoes, I was looking very un-Swiss!

However, on my way back down to IMD I received even more stares - this time because of my Google Glass, which is even less common in Europe than it is the US. Being so blatantly stared at was a really interesting sociological experience. Even as extroverted as I am, even as much as I enjoy the spotlight, I felt uncomfortable by the unapologetic gawking on the metro. I can only imagine how uncomfortable women feel when they are gawked at in public or, worse, catcalled and harassed.

Clearly this wasn't as much of an epiphanous experience as, for example, Dustin Hoffman's character experienced in Tootsie, but it still opened my eyes somewhat to how people in the minority feel when they are clearly out of place within the majority. As a white American male I am more often in the majority in the US so I will try to be more sensitive to those who are not.

Tuesday I got a little work done at IMD but spent most of my time catching up with former professors. I even went to dinner with one (Fondue again - the diet was on full pause by this point!), who was on the verge of taking on a new challenge as dean of another business school. He has been a professor, a mentor, and a friend to me so it is thrilling to see him leave a very comfortable situation at IMD for a new adventure.

Wednesday I followed the path I still know all too well from my time in Lausanne: down to the train station, the train to Geneva Airport, and then the flight back to the US. Wednesday happened to be seven years to the day that I received my call from IMD's fabulous alumni director notifying me of my admission - how poetic!

It was a very short trip but it was wonderful to see so many friends and familiar places. It was a productive trip as well - in more ways than one! Shortly after my departure, my hosts gave birth to their first child (Congratulations!!!!). No need to thank me; I just seem to have that effect when I am a houseguest.

Now I'm back in the US and working hard to complete Smart OES's funding round - big news to report about on that front soon!

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.

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.

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.

Fittest Entrepreneur

Mirror, mirror on the wall, who's the fittest [entrepreneur] of them all . . . ? I am! At least according to the Houston Fittest Entrepreneur Challenge, which was organized by Fit Company, a nonprofit seeking to promote health among business professionals. There were several competitor categories: entrepreneurs, execs, doctors, lawyers, and company teams. All competitors descended on the Houston Dynamo practice facility Sunday, February 23, to compete for our respective category titles.

The competition consisted of three courses, with about 10 minutes of recovery time between each. The first course comprised individual strength exercises, the second course offered several obstacles to overcome, and the third course was a 5k run on the premises. The objective was to finish each event in each course as quickly as possible. Each competitor would then be given a ranking for each event and the best average ranking across all three courses would win the category.

I arrived in Houston Saturday after a business trip to Guatemala (more on that in a subsequent post), but I took things easy Saturday evening and was well rested for the contest Sunday morning. In a touching show of support, I was joined by an entourage of two of my former Rice entrepreneurship students and one of my best friends (who was a real trooper battling a significant hangover!). As I am much more of a team sport guy than an individual sport guy, I found these "teammates" to add a great deal to my motivation.

My students brought a sign to cheer me on. They didn't know whether to put #23 (my high school football number) or #42 (my Rice football number) on it, so they brought stick-on numbers for 4, 2, and 3 to cover both possibilities. When I picked up my race bib, I was astounded to see that I was competitor #423! As if I needed any more motivation, this was surely a harbinger of good things to come.

I ran in the last heat of the day, which started at 11:00 AM. This gave me the advantage of a little extra warmup time and more of a chance to plan for the courses now that I knew what they contained. When we finally got started, though, most of my planning went right out the window!

The first event was 30 bodyweight inverted rows on a suspension trainer. I finished in 28 seconds, #4 among men in that event. Some people finished closer to 20 seconds, which I don't understand unless they weren't fully extending their arms. The second event was 40 plyo box step-ups while carrying a 25-lb sandbell. I wasn't familiar with sandbells before this event, but they're pretty cool: vary malleable, much harder to deal with than a dumbbell of the same weight, but softer and less bouncy than a medicine ball. I tried to keep an even pace with the step-ups and finished in 1:14, #9 in that event.

The third event was 40 chest-to-the-ground push-ups, which I finished in 29 seconds, a tie for #4. The fourth event was 40 35-lb kettlebell swings, which I finished in 52 seconds, #6. The fifth event was 40 arms-behind-your-head to fingers-past-your-toes sit-ups. I slowed down a bit on this event, finishing in 1:18, #12. Individually none of the events were too taxing but stringing them all together with only 30 seconds of rest between each was taking its toll.

The sixth event was 20 burpees, which I finished in 45 seconds, #4. The seventh and final event of this course was a two-minute plank hold. I didn't even make it a full minute, tapping out at 52 seconds. I normally hold a plank easily but my hip flexors were so smoked from the sit-ups and burpees that I just couldn't keep it together. I thought at the time that I might have lost the contest right there but it turns out that other people struggled too and I finished #8 in that event.

Despite bombing the final event, I still finished the first course #8 overall and #1 among entrepreneurs. I wish I had known that then because I was seriously contemplating not finishing the competition. Although the temperature was only in the mid-70s F, the humidity was 90+% and it was becoming abundantly clear that I was no longer in Houston shape! Suddenly competing in the last heat of the day didn't seem like such a good idea . . . Fortunately my team got me water and helped me recover in time to begin the second course.

The first event of the second course was a sequence of agility drills: cones, ropes, ladders, hurdles, etc. Light-headed as I was, I took these pretty conservatively but still finished in 1:23, #4. The second event required me to toss a 15-lb sandbell back and forth over a high barrier 10 times before running suicide sprints. I finished in 60 seconds, #9.

The third event began with slamming a 15-lb sandbell into the ground 20 times before a long out-and-back bear crawl. Bear crawl always slows me down so I finished this event in 1:16, #12. The fourth event required me to start in a push-up position and then pull a 10-ft sandrope all the way under my body with one arm. And then pull it back again with the other arm. 10 times. Then drag the 30-lb rope a distance, pick up a 25-lb sandbell, and reverse toss it out the rest of the distance and back before finally dragging the sandrope back to the start. This was murder! Apparently it only took me 1:12 but it felt like much longer. #7.

The fifth and final event of the second course was a simple out-and-back sprint with a 50-lb sandbell over the shoulder. I finished in 17 seconds, #4. In the end I finished the second course #8 overall and #2 among entrepreneurs. Interestingly, I was starting to regain my energy, though, so I was feeling good heading into the final 5k.

Knowing that I was glycogen-depleted already, I decided to start off easy in the 5k and then speed up if it felt OK. One of my students actually hopped in and ran with me, which helped. My first km was 4:39 and, despite the high-in-the-sky sun, my heart rate was only 166, which is very safely manageable for me. My pacer and I were passing people and not being passed so it didn't seem like it would be necessary to press too much. That pace felt good and so I finished the second and third km at 4:42 and 4:39 respectively at the same steady heart rate.

As I was feeling good, I picked it up just a little bit in the fourth km, finishing in 4:36 at 171 heart rate - just on the other side of anaerobic. I still had plenty of gas in the tank for the final km, which I completed at a 4:28 pace before the final sprint. My final time was 21:54 - which would be very slow for me on a normal 5k but isn't so bad considering how exhausted I was - the #3 time of the day and first among entrepreneurs.

Combining my three course rankings (8, 8, and 3), I finished second overall and first among entrepreneurs. Huzzah! I was pleased with my balanced performance too. Looking at the results, it seems that most competitors were "specialists." Those who did really well on the first course did really poorly on the last course and vice versa. So, all in all, not bad for an old fart who's about to turn a year older in just a couple of days!

I'm really glad to have participated in this event. FitCompany's mission is a worthy one, as too many people sacrifice health for their professional lives. The two are not mutually exclusive and do not require tradeoffs. In fact, I find that the healthier I am, the higher performance I have in my professional life.

I'm also glad I participated in this event because this, combined with the Pump n' Run event earlier in February (I took second place at a 5k in which they subtracted 30 seconds for each rep of bench press bodyweight - it's probably the only chance I'll ever have at running a negative time!), has me hooked on multidisciplinary competitive events. I'm never going to run the world's fastest 5k, nor am I going to set a world record in weight lifting, but putting those types of competitions together tests a much more balanced type of fitness. I'm a fan.

Enderpreneurship Part 3

This is my third and final post in my series on Entrepreneurship lessons from Ender's Game. For the previous posts, see Part 1 and Part 2.

Lead a startup the way Ender leads Dragon Army.

A startup is very much like Ender's Dragon Army: newly formed, constantly learning, and searching for patterns that work in a complex, rapidly changing environment. Ender's Game provides many examples of poor leadership in this circumstance, most especially that of Bonzo Madrid. Bonzo uses bullying and command-and-control to lead his Salamander Army. Ender senses the suboptimality in this approach immediately, noting that a good commander doesn't need to make stupid threats. Dink reinforces it when he posits that commanders have just as much authority as you let them have. Ultimately Bonzo's "orders are orders; obey or die" style leads to unnecessary losses when Ender is prohibited from firing. His fiery temper not only gets in the way of rational decision-making, it ultimately gets him killed.

Ender's leadership style is much softer and it would be an oversimplification to claim that it is the "right" or "best" style for every situation. However, it clearly works in he novel and I have seen similar styles be very effective in the startup environment. Ender's leadership journey begins before he is ever given formal authority, as soon as he starts the free time practice sessions. In these, Ender leads by example (As founders must - there is no cushy corner office in a startup!) and by inclusion (Founders must be open to ideas from their employees.).

As Ender gets his own army, he exemplifies the leadership skills of trust and empowerment. He trains his teammates, and especially the toon leaders, to think on their own and gives them the authority to make the best decisions in the heat of the moment in the battle room. This is most evident with Bean, whom he trusts to innovate completely new battle tactics. Startup founders who try to hold onto too much control find themselves as bottlenecks stifling innovation and forward progress. The best startup founders hire people whom they believe to be better than they are, co-create clear visions with them, and let them work the way they best see fit. Additionally, Ender shares his vulnerability with Bean; the best startup leaders know how to share not only their confidence and optimism but also their fears sometimes - it makes them more human.

Perhaps most importantly, Ender realizes as he grows from practice session leader to army commander to admiral of the entire IF fleet that a different leadership style is needed in each scenario. It is also true that the same leadership qualities that help a leader get from nothing to a small startup are usually different than those necessary to get from a small startup to a thriving, expanding business. One of a startup leader's greatest assets is adaptability to these changing circumstances - and awareness to know when and how to adapt.

Empathy is a critical skill for entrepreneurs.
Ender's greatest "weapon" by far is his empathy. His empathy for opponents helps him find ways to beat them - and ultimately resurrect them, in the case of the Formics - while his empathy for peers helps him lead them more skillfully. Entrepreneurship is a constant exercise in understanding people so empathy is incredibly valuable for ascertaining client needs, working well with teammates, inspiring people to join your team in the first place, negotiating with business partners, and staying one step ahead of your competition.

Luck plays a strong role in entrepreneurship.
This final lesson is isn't from the content of the book so much as it is from the book itself. Ender's Game is a phenomenal novel so it is easy to assume that Orson Scott Card is an amazing author. However, 30 years after Ender's Game he still hasn't produced anything of remotely that caliber again. The Shadow series was pretty good but all the rest of the Enderverse offerings range from so-so to downright bad.

This happens in entrepreneurship as well: sometimes people are just in the right place at the right time and they succeed in spite of - rather than because of - themselves. Similarly, sometimes people do everything right and it still doesn't work out for them. Orson Scott Card may not be that great of an author; he may have just kind of "lucked out" with Ender's Game. However, he would never have had the chance to luck out that way if he hadn't picked up his [metaphorical] pen and given it a go. And so it is with entrepreneurship: you can't hit it out of the park without stepping up to the plate and taking a swing. Luck plays a strong role in entrepreneurship but you've got to put yourself in positions to take advantage of it.

These were the entrepreneurship messages that resonated with me from Ender's Game. What do you think? Best of luck to all the budding entrepreneurs out there and remember, the enemy's gate is down!

Enderpreneurship Part 2

This is Part 2 of my series on entrepreneurship lessons from the Ender's Game novel. If you haven't already read it, start with Part 1.

The best entrepreneurs don't play the game; they create a new game by playing by different rules

Throughout the novel, Ender turns disadvantageous situations to his advantage by bending, breaking, or completely reinventing the rules of the game - starting near the very beginning in his fight with Stilson. First Ender changes a many-against-one hopeless battle to a one-on-one fight, neutralizing his enemy's strength in numbers. Then he gains the upper hand with a surprise attack and keeps it by explicitly ignoring "the rules of the playground" with a crotch shot. He does the same thing against Bonzo (shaming him into a one-on-one fight then using soap and hot water to thwart his grappling), in the battle room (freezing legs to use as body shields, giving toon leaders autonomy, launching immediately into the room rather than waiting to size up the situation, letting Bean experiment with, e.g., string), against the Formics, and even in the mind game, as he completely transforms the Giant's Drink minigame - previously unwinnable - into one he can win. I explain this game-changing habit of entrepreneurs in greater detail in slides 34-36 of my Entrepreneurship 101 lecture:

Entrepreneurship 101 from Bryan Hassin

Play to your strengths.
The best entrepreneurs don't simply change the rules of the game haphazardly; they change them so as to match up their strengths with their opponents' weaknesses. Ender's most common disadvantage is size - be it his own physical size when confronting a gang of bullies or be it the size of his fleet/army when hopelessly outnumbered. Startups often face similar scenarios, squaring off against large, well established companies with strong brands and loyal customers. Trying to beat such competitors on their own terms, playing by the very rules that have made them successful, is folly. Ender knows he can't win the open war against a bully like Bernard, for example, so he takes the war to the desks, where he is stronger by far. History is full of examples of disruptive startups (like Square, AirBNB, Uber) that have used their small, innovative, agile approaches to disrupt huge industry incumbents.

Seek out weaknesses in clients too.
Playing your strengths to others' weaknesses shouldn't be limited to competition; it is important for clients as well. Bernard kisses up to some launchees but mistreats and bullies others. Ender finds those who are mistreated, like Shen, and begins to form an alliance. Clients in every industry are mistreated by their vendors and business partners, often believing that there are no alternatives. The best entrepreneurs often start by working with the most abused clients, those most motivated to help a startup create a better offering for them. When a startup establishes a reputation as a hero and savior to even a small group of clients, that can be the foundation of a very strong brand!

There are no parents to save you in entrepreneurship.

Graff spends much of his focus cultivating the sense in Ender that there will be no parents to save him in a dire situation - the sense that sometimes it even feels like "God is a Bugger!" Whether fighting Stilson or Bonzo or the Formics, Ender is on his own. This is true in entrepreneurship as well; there is no greater power waiting in the wings to swoop in and save the entrepreneur if things get too tough. And that's OK; hardships and trials lead not only to better IF commanders but also to better entrepreneurs. Entrepreneurs aren't totally alone, though; as I've said before, they derive a great deal of strength from their secure bases.

In Part 3 of this series I propose some lessons in startup leadership from Ender's own leadership journey.

Enderpreneurship: What Andrew Wiggin Can Teach Us About Winning the Game of Entrepreneurship

This weekend's release of the cinematic adaptation of Ender's Game (and rereading the novel before going to see the movie) got me thinking about how many of Ender's experiences can be translated into lessons on entrepreneurship. As I stated in my TEDx talk:

we can take MANY lessons on entrepreneurship from popular myths and I even singled out Ender's Game in particular for one of those lessons:

The Entrepreneur's Journey from Bryan Hassin

Rereading the novel, I was inspired by many more such lessons; here are some of the first:

The Entrepreneurship "game" is exhausting, exhilarating, and profoundly impactful.

The battle room game, around which most of the novel is centered, is an excellent metaphor for the practice of entrepreneurship and entrepreneurial development. There are many aspects to Battle School: classes, combat training, free time, dining, etc. but the games are what the boys live for. Entrepreneurship is itself a game with rewards and payoffs and penalties and skill and chance just like any other game. The best entrepreneurs live for the game and thrive when playing it.

Entrepreneurship must be developed experientially.

As Colonel Graff explains, though, the calculus of what makes someone succeed in the game is very poorly understood: choosing the right launchees is only so good because the tests are only so good; you've got to start putting them through the paces ASAP. And so it is with entrepreneurship, which cannot be taught in classrooms or learned in books; it must be developed experientially.

Strategic agility is crucial to a startup.

As in the battle room game, rapid experimentation, a willingness to fail, and a propensity for learning from failure is key to entrepreneurial success. Through Ender's experimentation in the battle room, he accidentally discovers how to rebound off walls, which turns out to be a crucial tactic. He similarly learns that command-and-execute toon formations are too rigid and inflexible to beat an agile, innovative opponent. So it is with entrepreneurship. As Steve Blank is fond of saying, "Big companies execute known business models," like toons executing formations, "while startups search for unknown business models," like autonomous toons able to learn from their environment (market) and react to it. Ender also finds that he must constantly adapt and innovate his strategy to keep winning games - both in the battle room and against the Formics. So, too, with startups: yesterday's winning strategy is today's losing strategy.

Measure and optimize the right metrics.

Initially Ender's individual battle room metrics are outstanding due to his limited participation. Once he becomes truly engaged in battles, those metrics go down. That's OK because they are vanity metrics - like website hits, facebook likes, or any other metric that conveys a sense of success but doesn't actually move the needle for your startup. The metric that counts for Ender - wins vs losses - keeps going up, up, up!

This is Part 1 of a three-part series. See Part 2 for more thoughts on Enderpreneurship.

Rice Named Top University Incubator

Rice University has selected as having the top university business incubator in the world according to a just-released study by UBI. I have been working for more than a year now to support/enhance/catalyze entrepreneurship at Rice by teaching, mentoring, and helping to launch the OwlSpark Accelerator, which received special mention in the announcement. It feels great when hard work is recognized and my hearty congratulations go out to all the others who are helping to propel Rice into the future of being an entrepreneurial university.

http://news.rice.edu/2013/06/10/rice-alliance-named-top-global-university-business-incubator-2/

A Spark of Entrepreneurship at Rice

Although I haven't posted much about it on this blog, many of you know that I have spent the last year and a half helping to foster more/better entrepreneurship at my alma mater, Rice University. Six months ago I officially accepted the role of Entrepreneur in Residence at the Rice Center for Engineering Leadership, an organization funded by legendary venture capitalist (and Rice alum) John Doerr.

Since almost the moment I started in 2012, it became evident that Rice was underserved in entrepreneurship. The MBAs had some coursework available to them and a big business plan competition but the undergrads had nothing, academic grad students even less, and faculty were frustrated with the process of IP commercialization.

Around that time I connected with four students who wanted to do something about it. Over the last 18 months we spent a lot of time figuring out the highest-impact initiative we could take, selling it within the university administration, gathering resources for it, and making it happen.

Last Thursday this vision became a reality with the official launch of OwlSpark, the Rice University startup accelerator. Eight teams of Rice undergrads, grad students, MBAs, and alumni are spending the summer working side by side in the Rice BRC to launch their startups. The program provides funding, mentorship, learning, and networking opportunities for the 37 members of these eight teams.

Thursday night's launch event attracted more than 100 attendees and was a really fantastic way to kick off the program. This is such an exciting initiative for Rice but what really makes me proud is that OwlSpark was created entrepreneurially by students, not by a top-down decree.

OwlSpark is itself a startup so it will have to be agile and reactive to feedback from its participants, mentors, investors, etc. It's way too early to tell what we will have accomplished by Demo Day in August  but it's a worthwhile shot and I'm very excited about the possibilities!

TEDx Talk About Entrepreneurship

Last year I was honored to be asked to speak about entrepreneurship at Rice's "Unconvention" in celebration of its centennial year. Instead of talking about lean startup, customer development, fundraising, or many of the other very well covered topics out there, I chose to focus on framework for entrepreneurship that is, well, unconventional.

My talk, entitled The Entrepreneur's Journey, proposes entrepreneurship lessons embedded in our most popular myths, legends, stories, and fairy tales. Finally this weekend, as a birthday gift to myself, I crossed "Publish my TEDx talk" off my to-do list.

Take a look at the video and the powerpoint slides (synced with audio) and tell me what you think! And please Like and share both links - after all, we need more yoda references in our global discussion of entrepreneurship!

Entrepreneurship for Value Creation

This morning I read a blog post about "the problem with Silicon Valley."

The author contends that the pace of innovation in the Valley is amazing but that it is often somewhat insulated from solving problems that "matter." Clearly much debate can be had about what "matters" but the topic resonates with me. Two years ago I even presented at the Academy Of Management my own quest to use entrepreneurship for meaningful value creation.

Reading this article motivated me to post it in the facebook group for Houston entrepreneurs with the following exhortation:

Something to think about, people. As we develop Houston's entrepreneurial community, let's focus our energies and efforts on solving real problems rather than just stuff we think would be sexy/cool. This is one reason I came to Houston to launch my current venture; Houston has real industry and here - and I'll argue that Houston's biggest industries are some of the most impactful ones in the world: energy, healthcare, aerospace, nano/petro/chemical... What's "Made In Houston" runs the world - so let's embrace that and leverage it to foster a unique community for truly value creating, transformational startups. My wish/goal for 2013 - happy venturing everyone!

A Meaningful Award for Smart OES

Yesterday we were honored to receive first place in the Goradia Innovation Prize competition!

When I first announced that I would move back to Houston from Switzerland to launch Smart Office Energy Solutions, people thought I was crazy. "Why Houston?" "They don't have startups there - just big oil companies!"

I assured them - or maybe I was just assuring myself - that Houston was a great place for starting up a venture. There's a talented workforce here, a business-friendly political context, and the cost of living is just so, so, low. Plus, I contended, there is a nascent but growing support ecosystem for startups.

Well this award is proof of that. Smart OES has won many awards in the past but I have often been somewhat cynical of their value. The recognition has been nice but they haven't done anything to advance our venture. Our joke has been that, if our company completely fails, we'll dole out one award to each investor - those would be some expensive plaques!

This award, however, came with a cash prize, making it very helpful in advancing our venture! This shows how Houston is taking entrepreneurship seriously and literally putting its money where its mouth is. As I stated in my presentation, we have grand ambitions to create a massive worldwide market but we need help to achieve our lofty goals. Well, this helps.

So I offer my sincere thanks to the Houston Technology Center, its staff, the Goradia family who funded the prize, and the judges who selected us. You are helping foster entrepreneurship in Houston in very meaningful ways! And I offer my congratulations to the other Goradia Innovation Prize finalists. It is an honor to be counted among you and I hope that we will all become resounding success stories!

Now . . . back to working hard to live up to the hype!

How Do Entrepreneurs Face Their Fears?

Someone asked the following question on LinkedIn:

"Everyone has a fear of something. Being an entrepreneur there are so many unknowns and big risks that have to be taken in order to grow. How have you been able to take the leep of faith?"

My response:

"Many of the answers so far are quite rational, but fear is an irrational, emotional phenomenon. The best work I've seen on dealing with fear is from Leadership Professor (and former hostage negotiator) George Kohlrieser.

His research shows that, as children, we learn to overcome our fears by relying on Secure Bases. For example, we can take risks while learning to walk because we know that Mom, a Secure Base, will be there to pick us up when we fall. This pattern sticks with us through adulthood.

Therefore one of the best ways to address your own fears is to identify and leverage your secure bases.
They can be people who will still love you even if you fail, places that give you a sense of comfort and solidarity, physical objects, values you have, even pets. When you lean on your secure bases, taking the entrepreneurial plunge seems less risky - or at least the prospect of failure seems less dire.

It goes the other way as well. As you grow your business, it is important for you to lead as a secure base to your employees, giving them confidence to push the envelope and take [calculated] risks."

I've been so impressed with George's work that I'm taking his top-rated High Performance Leadership course, which is available for the first time in the US next year!

Sales Forecasting For a Mobile Startup

I recently answered a LinkedIn question about sales forecasting for a mobile startup.

The question:
"Mobile Start-ups are not as easy to forecast, at least in my opinion, as some other types of businesses. Obviously VCs and investors understand your projections are essentially fabricated and pure guesses, but how would you go about forecasting sales of a mobile application, especially given the environment of the app store hiding number of downloads for potential competitors?"

My response:
"Actually I'll argue that mobile startups are much easier to forecast than most other types of businesses. When you start a business all you have are guesses/hypotheses about who your target market will be, what they want in a product, how you will reach them, how much they will pay for it, etc. In a mobile startup the barriers to test those hypotheses are much lower than in most other types of businesses. In a few months and for a few thousands-not-millions of dollars you can develop a minimum viable product,and begin experimenting with different techniques to drive conversions/sales. This type of validated sales forecasting is worth infinitely more than made-up numbers (wishes which will be thrown out by any investor anyway) and will put you in much stronger negotiating position if indeed you do seek investment.

If you are desperate for comparables, though, check out the Google Play Store, which does publish download numbers."

What do you think, is this a useful answer or just lean startup soap boxing?