Category Archives: Technology Entrepreneurship Course – Stanford University

My learnings from Technology Entrepreneurship course by Charles Eesley of Stanford.

Technology Entrepreneurship – Final Team Presentation

Opportunity Execution Project gave a chance to your team to think about how to take your idea from a business plan on paper and turn it into a real company. For your final team presentation you will submit:

  1. An executive summary: no more than a paragraph
  2. A 10 minute video, or 10 slides

Your video should include a description of your product and the business model, as well as your team and how you got here. For the latter, it is always helpful to tell an appealing personal story.

More specifically your video should include the following:

  • Fundamental Problem. What is the fundamental problem you are solving for the end user of your product? What is the fundamental problem you’re solving for your customer (if it is different from the end user)? Give a quick recap of your OAP – just a reminder of your key points and the takeaway.
  • Product. What are you building or planning to build. A demo of your prototype if you have one.
  • Team. How did you find each other? How did you get here? Try to tell an appealing personal story.

From the following list, you should choose the ones that are applicable:

  • Business Model. You now have had some more time to think about your opportunity. Do you have any additional thoughts/changes about the business model?
  • Sales and Marketing Strategy.How would you sell your product? What distribution channels would you use? How would you create demand for your product?
  • Risk.Regarding financial, technical, people, and market risks; which one is of most concern? Which would you choose to address first and why? How would you manage or minimize each of the high-priority risks going forward?
  • Partners and Allies. Who will be your major partners? How will your product be made? Will your company produce all of the parts, or will it use external suppliers? How would you go about attracting these partners and allies to work with your company?
  • Funding. How would you fund your venture? Would you bootstrap, take money from venture capitalists, take funding from a corporate investor, etc?

Opportunity Execution Project

Opportunity execution project has several components. We anticipate that you will be studying the following components of the execution project in the next month. We do not give a hard deadline for each component and we do not anticipate that all components are applicable to all teams. But you should make sure that you have interim reports for at least two of them in the next two weeks. Similar to OAP, some of these interim reports are going to be attached to your final project report.

Startup teams should think hard about which assumptions in the business model are the most critical and the most risky. What most needs to be true for this to work? Test those assumptions first. I can’t tell you exactly how to experiment on and test each and every aspect and not all business models contain each part of the business model. So you have to use some creative thinking on your own. Below are some guidelines and suggestions to get you started thinking. In general, you should try to be as quantitative and objective as you can in deciding what worked and what didn’t.

You should actually build a prototype or a beta version of your site and see if you can get paying customers to use it if at all possible.

Marketing

As I mentioned on the videos, marketing starts with a thorough understanding of your customers and market segment as well as the type of market (new, growing, mature). First brainstorm several potential ways to reach your target customers. Ideally you can involve potential customers in your brainstorming. Then prioritize these marketing strategies into the cheapest and easiest ones to test out first.

You want to carefully track these marketing campaigns so that you can later calculate your cost of user acquisition. How much did you have to spend on each marketing campaign to get a single customer to buy? Or if they can’t buy yet, how much did you have to spend to get them to leave an email address? Then you can start to track which type of marketing strategies are the most cost effective? You might try a campaign on facebook, hold a raffle, buy some google adwords, etc.

The rubric for grading will fundamentally be about how carefully you thought through your marketing experiments and quantified them. How many different types of marketing campaigns did your team try? Were these generated based on insights into what might work from your customers? Did your team calculate your cost of user acquisition? If so, did you try some new tactics to lower it?

Sales

If you have a consumer web product or if you have a physical product or are selling to other businesses your sales process may look very different. Nonetheless, there will be some type of sales funnel or process. If you’re selling to a business, who are the key decision makers? What does their process look like for approving a sale? How long does it take? Can you brainstorm several possible sales strategies and order them from cheapest and easiest to the most expensive. Start with the cheap or free ones (contacting your network). Can you try to make a few initial sales? Which strategies or tactics seem to work best? Where to potential customers get stuck and why?

Here you will be graded based on how well you experimented with the sales process (if applicable to your startup). Did you outline a few sales strategies and track how well each of them worked, starting with the lowest cost ones? Did you actually make any sales? How clear was it what your team learned from these experiments? Did it cause you to rethink any part of the business model? If you couldn’t make a sale, what did you learn that you need to change? How long is the sales process for your startup from start to finish?

Partnerships

Does your business model require partners? If you need a supplier or a distributor, can you reach out and talk to a few of them? What information do they need? Are they potentially interested in partnering with you? If so, under what terms and conditions? What types of firms seem to be most interested in partnering with you? Do you have bi-directional relevance that Alex Rampell speaks about?

You will be graded here on how well you reached out to potential partners and how much you learned about whether they’d be willing to work with your startup. How many partners did you meet with? DId you learn anything about which types of partners are interested in working with you? Did you learn something about which partners you need to target first to be able to get to others?

Distribution

How will you distribute your product? Are there distribution partners you need to contact? Is your distribution through the web? How much will setting up distribution channels cost you? Should you sell the product directly or through a third party or retailer? What is the best way to reach your customers? Who can you talk with to learn the best way to set up distribution for your company?

Here you will be graded on how well you reached out to potential distribution partners or experimented with a couple of different distribution channels for your product. For a web product the distribution channel is the website along with how you deliver the service, experience or how you get the product to the end consumer. How well did the team track what worked and what didn’t in their experiments and meetings here?

Costs

What are your costs and how can you get them to be as low as possible? See if you can estimate the cost of goods if you’re producing a physical product. If you have a service or a website, then how much will personnel cost you in the first year or two? How much will server space and hosting cost you? Do you need customer support? I don’t want you to spend a ton of time on financial models that will never come true. However, to check whether your business model is viable, you need to get sense for whether the dollars coming in through revenue will be greater than the dollars flowing out in costs.

You will be graded here on how thoughtful you were about your costs. Did your team make clear whether the per unit costs are lower than the per unit revenues? Is your business model currently viable? If not, what needs to change to make the revenues higher than the costs? I don’t necessarily want to see a huge formal financial model out to the 6th year. That would be overkill and these are never correct. But you should be tracking and calculating your costs in terms of materials, hosting, people’s salaries, etc. to know whether your business model is viable

Revenue Model

How will customers pay you and how much are they willing to pay? Is a subscription model better than a one time payment? Is it better to rent to them or sell? Does a freemium model make sense and if so, what features will people pay to upgrade for? Run some tests with customers to see what the best revenue model would be. Are you planning to make money through advertising? If so, contact a few potential advertisers and see if they are interested and how much they would pay you. How many users do you need for them to be interested in advertising on your site. Try to think outside of the box and not just rely on advertising-based business models. It’s great if you can have a few different potential revenue streams to test out. Are there other ways you might charge for the product or service? Which might yield the most revenue? How do you know?

You will be graded here on how well your team tested alternative possible revenue models. How will the team make money? Did you walk through the entire process of how exactly a dollar moves from the customer’s hands to the startup? Did the team brainstorm alternative possibilities? If the team thought advertising was the right model did they actually talk to potential advertisers? If it was a monthly subscription, could they get a few paying subscribers? Are the users and the paying customers different (like for Google)? If so, were both sides tested? If the revenue model is lead generation, did the company actually try to get paid for generating a few leads?

Personal Business Plan

Everyone does an individual “personal business plan”. It’s not about the startup or company project. It’s about your personal career plans over the next 3 years or so. So everyone should do their own. Students in my class find it to be one of the more rewarding assignments and often get really into it.

The entrepreneurial process is at its core concerned with “the pursuit of opportunity without regard to the resources already under control.” This process is as applicable to your career as it is to starting a company. The goal of this assignment is to identify where you want to be and how you will get there. Do not worry about your current resources. Think entrepreneurially!

Your personal business plan should include a long-term vision statement, the “external” opportunities that exist, your “internal” (personal) strengths, and a strategy for yourself and your life over the next two to five years. In addition, please share one “failure” from your past and what you learned from it in terms of maximizing your potential for the future.

The assignment should consist of a succinct essay (up to 750 words in bullet points or prose) that summarizes the areas discussed below, as well as the one “failure” wherever you feel it best fits.

Vision and Opportunity
  • What are your goals (career and/or educational) after this class?
  • What is your purpose, your values and your mission? List the 3 key questions that guide your choices. These should be essential questions that serve as touchstones to direct your life and work. For instance, how can I have impact? What do I love? What do I fear? What engages my passions? How do I want to be remembered? The answers to these questions may well change over time, but when the questions themselves are fundamental they tend to last a lifetime.
  • What is the market and opportunity that align with your goals? Don’t restrict yourself to matters of career or work; think more broadly about your opportunities to make a difference.

Marketing and Implementation Strategy
  • Create your market positioning statement. This may be directed at a hypothetical employer, industry, organization, or the world at large.
  • What compelling value will you offer to your employers and society?
  • How will you differentiate from other Stanford students? How about from the broader populace?

Risks and Mitigation
  • What are the key milestones and checkpoints in your plan?
  • How will you measure/determine if you have successfully attained these milestones? How do you define success?
  • What external factors might affect (positively or adversely) your attaining success?
  • Develop contingency and risk mitigation strategies.

Personal Board of Directors
  • If you could assemble any 2 or 3 people to advise and mentor you, who would they be? They may be alive or dead, family or world leaders, friends or strangers.
  • Why would you choose each of them? Is it their wisdom, their accomplishments, their words, their creativity, their character, their heroic deeds or something else?

 

Evaluation Criteria and Rubrics

Peer evaluations for demo deck are different from the OAP reviews. This time you will evaluate each other more equivalent to the way investors evaluate your work (Check out video on Acid Test for more information). You should use the push button on your team’s demo deck to push your demo deck for peer evaluations. Note: you will not be able to edit your final presentations after your push them for peer reviews. You will have a second chance to edit your presentation and demo deck once the peer evaluations are over.

The Quality of the Presentation

Is the presentation engaging? Does it present a compelling and interesting story about the team? Does the team give a convincing presentation that makes you excited about what they’re doing? If you
could invest or join them, would you?

1-10 scale with 10 being the best, where you found the presentation to be very high quality, engaging and convincing.
A 1 would indicate a poor quality presentation where key information was left out.

The Market

Has the team shown in a convincing way that this is a larger and growing market that they are pursuing? Did they analyze the market that they are selling into? Do they rely on secondary sources or did they also collect some of their own data?

Here a 10 would have estimated the market size in a thorough way and would be addressing a large and quickly growing market.
A 1 would have skipped the market size analysis altogether.

Quality of the Business Model

Did the team clearly explain how their business model works and how they would make money? Did the team appear to have tested their business model in the real world? Are they already making sales? Do you believe they could make sufficient money to earn good profits and cover their costs?

A 10 would have a clear, easy to understand business model where it is clear that they’ve been testing each aspect and moving towards a model where the money flowing in would clearly be significantly more than the money flowing out in costs.
A 1 would be a case where they did not clearly explain how the business model works or where they hadn’t done anything to test key risky assumptions.

The Marketing Strategy and Marketing Page

Does the team appear to have the right marketing strategy? Have they narrowed in on the appropriate target market? Are they running marketing experiments and tracking their results? What is the quality of the marketing page?

A 10 in this case would have run several marketing experiments that were informed by their tests and where they were able to track their results and are getting a good return on their marketing efforts.
A 1 would be a case where they clearly haven’t thought much about marketing yet, or haven’t really done anything to try out a marketing strategy or use their marketing page.

Prototype

Does the team already have a working prototype? Does it already have users or customers?

A 10 would be a case where there is a working prototype with a sizable number of users and paying customers.
A 1 would be a case where they haven’t created a prototype despite the fact that they have a web or mobile app. If they have a physical product then it is acceptable to not have a prototype yet since those can be costly to build.

Final Team Presentation

Opportunity Execution Project gave a chance to your team to think about how to take your idea from a business plan on paper and turn it into a real company. For your final team presentation you will submit:

  1. An executive summary: no more than a paragraph
  2. A 10 minute video, or 10 slides

Your video should include a description of your product and the business model, as well as your team and how you got here. For the latter, it is always helpful to tell an appealing personal story.

More specifically your video should include the following:

  • Fundamental Problem. What is the fundamental problem you are solving for the end user of your product? What is the fundamental problem you’re solving for your customer (if it is different from the end user)? Give a quick recap of your OAP – just a reminder of your key points and the takeaway.
  • Product. What are you building or planning to build. A demo of your prototype if you have one.
  • Team. How did you find each other? How did you get here? Try to tell an appealing personal story.

From the following list, you should choose the ones that are applicable:

  • Business Model. You now have had some more time to think about your opportunity. Do you have any additional thoughts/changes about the business model?
  • Sales and Marketing Strategy.How would you sell your product? What distribution channels would you use? How would you create demand for your product?
  • Risk.Regarding financial, technical, people, and market risks; which one is of most concern? Which would you choose to address first and why? How would you manage or minimize each of the high-priority risks going forward?
  • Partners and Allies. Who will be your major partners? How will your product be made? Will your company produce all of the parts, or will it use external suppliers? How would you go about attracting these partners and allies to work with your company?
  • Funding. How would you fund your venture? Would you bootstrap, take money from venture capitalists, take funding from a corporate investor, etc?

Note that you can create multiple reports, the one you publish on your team blog will be used for your demo page. The details about the demo page format and specifics will be available early next week.

Opportunity Analysis Project

Business Model Canvas

s you go about developing your startup idea by testing the assumptions and hypotheses in each aspect of the business model (value proposition, key partners, revenue model, etc.) you should keep it up to date. If you find from the feedback that you get that you need to change or pivot one aspect of the business model, you should make that change on the business model canvas so that it stays up to date.

While a few entrepreneurs stumble across exactly the right idea and way to bring it to the market right away, most wind up having to iterate and change their strategy a lot early on. The business model canvas is the way for you to keep track of these changes and to organize your thoughts and the feedback from others. It’s best if you do not change your idea entirely since that throws away the value in the experiments and learning you’ve already done. However, you are also permitted to change the idea entirely if you feel you must.

All members of a group can edit the business canvas model. We keep your ten latest revisions, and you can revert back to any of them whenever you want. The team leader can “lock” an model meaning that none of the members can no longer edit it.
Here is a reminder on the description of business canvas model.

Testing Value Proposition

Your first task in opportunity analysis project is to test your hypothesis about your value proposition. You should begin by

  • Testing your “value proposition” with potential customers by talking with them face to face, the more face to face interviews with users/customers the better.
    The people with a “technical” background on the team should focus on setting up and running these meetings.
  • Estimating the market size in dollars (or your local currency).
  • Potentially doing a survey to gain more information about your target customers.

You should enter the results of your research in the system which will appear on the team page. You should also write about your meetings, ideas, and other activities on a regular basis.

You can submit as many reports as you want for each task. All members of a group can edit the team submission, we keep your ten latest revisions, and you can revert back to any of them whenever you want. The team leader can “lock” a report meaning that none of the members can no longer edit it. Note that the team leader can unlock a report whenever they would like to.

Visit the venture-lab on May 7th when tools for reporting, blogging and keeping your business canvas model are going to be deployed.

Final Report for OAP

By the end of the OAP deadline, we would like to see a complete team page with the name of the team, a short description plus a few (at least one) reports corresponding to your surveys and experiments for testing your value proposition.

You should also write up one page report on your startup idea, focusing on what you have done to test whether this is a viable opportunity for a business. We want a summary of how many face to face interviews you did with customers and what you learned from the customer feedback. Do customers have the problem that you think they do? If so, how are they currently solving it and how much do they pay for that solution? Are they interested in your solution? Are they willing to pay you for it? Is there a different problem that they are much more interested in having you solve for them? Let us know if you are still pursuing the same idea or if you are changing to a new idea based on customer feedback.

In addition to the report, we encourage you to also submit either a link to your video presentation on YouTube (tagged with “Venture Lab 2012”) or a link to your presentation on Slideshare.

For the youtube video, imagine you are giving a short presentation on what you did for OAP project for the class. Start with a brief description of your idea. Explain what you learned from customers and whether you modified the idea as a result of this feedback. Finally, whether you think this opportunity is worth pursuing for the OEP.

Takeaways and Lessons from OAP

The Opportunity Assessment Project (OAP) is meant to serve several purposes but the primary one is to force the startup teams that you’ve formed to go through a process of brainstorming an entrepreneurial opportunity and then determining whether it is worth pursuing as a startup. Many of you appear to have actually found something that you want to continue building a business around, which is very exciting!

If you decide that it is not worth pursuing this particular idea, then the OAP project should have helped to shed light on which aspects of the idea should be change or what other big problems your potential customers have that they would like you to solve. This should have led you to some potential avenues for a more promising startup.

  1. Approach potential customers and users face to face and ask them open-ended questions.

    If you try to only survey customers (and do not talk to them face to face) then you gain significantly less insight into what their problems are and how they think about your potential product or service. Too often the students I ask to do surveys just end up with what I call “glory metrics” where they ask not very insightful questions and get not very insightful answers. They get to claim that 90% of the people they surveyed want their product, but how much do they really learn? I still asked you all to do a survey because it is important to determine whether it is only the few people that you spoke with face to face that have this problem or whether there are a broader set of people who also have this problem and really badly want it solved.

    If you talk to potential customers but ask them closed-ended questions or quickly narrow them down on your particular product idea, then you get much less useful feedback.

  2. After you’ve spoken with potential customers face to face, you want to incorporate what you learned and check whether there is a broader set of people who seem to have this problem and want your solution.

    Here is where the guidance depends on your specific industry and product. If it’s very cheap, easy and fast to build and distribute a basic version of your product/service then this is the best way to get real world feedback from a broader set of potential users.

    However, in some cases (biotech, medical devices, physical products), it often requires a sizable investment. Here you may decide to gather more information via a survey before proceeding with building a prototype.

  3. Entrepreneurs never have sufficient information.

    Andrew Chen has an interesting post on the difference between being data-informed and data-driven.

    • In interviews people will sometimes be lead to certain answers or tell you what they think you want to hear.
    • A survey is imperfect because the sample size is going to be limited and potentially biased and people will act different than they respond.
    • Launching a beta version or building a prototype of the product gets you a little closer to real user behavior and response. However your beta version will be just that . . . beta and customer feedback will be diverse on what it needs exactly.
    • Yet, sitting and brainstorming or theorizing or trying to dream up a vision doesn’t get you very far either.

    This is the challenge of entrepreneurship. You have to act on extremely limited information. Yet, the best entrepreneurs will think through how closely they can get an approximation for the real user response at the cheapest cost to the firm in time and money.

  4. It’s very hard to calculate market size, especially for a new market. It’s also very important to have an understanding of whether you’re going after a potential 5M dollars market or a potential 5B dollars market.

    Yet, many people think that they’ve created a brand new market when in fact they are in an existing or growth stage market.

  5. When you get out and talk with potential customers, you’re going to get feedback that what you had in mind initially isn’t quite the right thing to pursue.

    Part of the art of entrepreneurship is then knowing what to change. Whether to change part of the business model, go after a different, bigger problem that the customers have, or stick with it and alter the target customer.

Technology Entrepreneurship – Stanford University

Technology Entrepreneurship,

Charles Eesley , Assistant Professor, Stanford University

Introduction : http://e145.stanford.edu/session1

Stanford University offered a free online classes for interested people around the globe. I was fortunate to take this course and participate in the entrepreneurship project and thought to share my learning’s.

Well, this course introduces the fundamentals of technology entrepreneurship, pioneered in Silicon Valley and now spreading across the world. You will learn the process technology entrepreneurs use to start companies. It involves taking a technology idea and finding a high-potential commercial opportunity, gathering resources such as talent and capital, figuring out how to sell and market the idea, and managing rapid growth.

By the conclusion of the course, it is our hope that you understand how to:

  1. Articulate a process for taking a technology idea and finding a high-potential commercial opportunity (high performing students will be able to discuss the pros and cons of alternative theoretical models).
  2. Create and verify a plan for gathering resources such as talent and capital.
  3. Create and verify a business model for how to sell and market an entrepreneurial idea.
  4. Generalize this process to an entrepreneurial mindset of turning problems into opportunities that can be used in larger companies and other settings.

Who is this Course For?

This course is designed for all backgrounds and majors, including science, engineering, and humanities students who seek to understand what the entrepreneurial mindset and its key processes are about. Topics introduced in this course are relevant for future founders of enterprises, as well as the future employees of a independent or corporate startup.


How Do We Teach this Course?

Through lectures and projects that cover high-growth ventures in information technology, electronics, life sciences, green technology and other industries, this course provides the student with the tools necessary to successfully identify a true business opportunity and to start, grow and maintain a technology enterprise. We will cover material organized in four modules:

  1. The Entrepreneurial Perspective
  2. Opportunity Recognition and Evaluation
  3. Assembling Resources and Managing Growth
  4. Entrepreneurship and You

How Will You Learn?

Entrepreneurship is both an individual and team activity. Therefore this course incorporates both individual and group efforts. Students form project teams early in the quarter and meet regularly to prepare for class discussion. We encourage students to build groups with people from a diversity of majors and from the U.S. and abroad.

Each team will be required to complete written case analyses throughout the quarter. Teams are also required to complete two papers and class presentations regarding an “Opportunity Analysis Plan” as well as an “Opportunity Execution Plan.” In addition, students complete a “Personal Business Plan” using methods learned in the course.

Group discussion is encouraged in preparing for both the team and individual assignments. Note that learning to successfully manage group dynamics, including conflicts and roles, is a key educational component of the course.

More about the course at http://www.eesley.blogspot.com/p/class-description.html

Startup Team: Instructions

Please read these instructions very carefully. In this stage, you will form teams for the main class (startup) project. Note that the composition of your team is one of the most important factors in its success.

  1. Watch the video on team composition on Professor Eesley’s Blog. You can also read Chapter 12 in Technology Ventures for more information.
  2. From the startup teams menu click on the button next to team designation: here you will specify whether you wish to participate in the project, and whether or not you are already in a complete team. If you do not have a team, or your team is open to having new members you will be able to search other members’ profiles and contact them.
  3. Edit your profile: make sure that you give enough information about yourself, about your ideal team, and the project you wish to work on. By sharing more information, you will increase the likelihood of finding good teammates.
  4. Search: you will be able to search on other member’s profile using their Country, career aspiration, industry sector, hours, and keywords (including name and personal statement). You can take a look at their profiles and send them a request to explore the possibility of becoming teammates. Note that you can only send a request to a person once! Your request will include a link to your profile and your email address. You can also include a message with more information about yourself. You can contact at most 50 people to form a team.
  5. Follow up, get to know, and possibly meet your teammates: adding someone as a teammate is far more consequential than friending them on facebook or adding them as a contact on Linkedin. You will be working with your teammate on a project that you may be (or become passionate) about. It is very important that you become familiar with your teammate and you get the sense that you will enjoy working with them. Talk to them over the phone, hangout on G+, meet (in a public place, use your judgment)! Do not restrict yourself to the search feature. Participate in meet ups or organize one!
  6. Form a team, and choose a team leader: your team leader will be like the CEO of the company: he or she will be responsible for adding members, dividing the responsibilities, and entering the reports. You can only designate one team leader. The team leader enters the name of the team, and the names of other team members. Our system will send the team members an invitation and they can join the team by accepting it.

    We are looking forward to working with the strong teams you will be forming and to your projects!

The Venture-lab team