Entrepreneur

Confused Man Behavioral Innovation

Behavioral Innovation, the Need To Pivot, Why We Don’t and What We Can Do About It

Cool Shit, Entrepreneurs, Free Resources, How to?, Opinion, VC/Advisors, , , , ,

Written by Christine Thong and Evan Shellshear

When was the last time you seriously thought about your blue chip investments going broke? At what point will those shares be worth nothing? Although it may sound ridiculous, the question is serious because at the current rate of disruption, it has been predicted that half of the S&P 500 will be replaced over the next 10 years. Where does that leave your investments?

The need and act of a business pivoting is natural. It can almost be seen as a form of corporate evolution. Over the years, the largest businesses only keep their top spots by evolving and chasing the sunrise markets and leaving the sunsets. Intel famously pivoted from manufacturing memory sticks to microprocessors. HP pivoted from making precision oscillators to computers and peripherals. And Nokia has famously taken its business model from a paper mill to rubber goods and then finally to mobile phones until they crashed, failing to pivot in time.

However, for each success story there are hundreds of other businesses which failed to pivot and stuck with a dying business plan. Why?

In mature businesses there are a myriad of reasons – corporate culture, shareholder inertia, lack of capital, bureaucracy, etc. Many large companies can be forgiven for not having seen the woods for the trees and stuck to their guns in what they thought was a successful market. Companies which have less of an excuse are startups. Businesses with a sole purpose to exploit a single technology. They are portrayed as nimble, agile, market focused but many display characteristics opposite to that, sticking with a dying product until the company dies itself.

In the startup space, one study found around ten percent of all startups die due to a failure to pivot. Many of the most famous startups only exist because of a pivot – Twitter from Odeo, Paypal from Confinity, Instagram from Burbn, etc. Unlike in the large corporation case, it is much easier to hypothesize why a startup didn’t pivot and it has a lot to do with a cutting edge field of research called behavioral innovation.

Behavioral Innovation

Behavioral innovation is a field still in its infancy. At the moment, it suffers from having its main theoretical framework copied and pasted from behavioral economics. People typically take known behavioral biases from economics and simply apply them to an innovation framework. However, it should be more than this. The field should, at a minimum, be looking at the unique psychological shortcuts we take to be innovative and how this affects our innovation efforts both positively and negatively. It could take inspiration from many fields such as behavioral economics, psychology, innovation economics and more. By having a better grasp of these processes we can design better innovation policies, brainstorming activities, investment decisions and much more.

Innovation has become the zeitgeist of the 21st century and if there was one area that researchers should be focusing their efforts to bring about tangible positive change in society, then innovation is it. The fact that the field of behavioral innovation has been left as the ugly duckling of the behavioral economics swan needs to change because a better understanding of this new discipline will have profound effects on everything from macro policy setting to startup decision making.

There are a myriad of techniques and approaches to doing innovation; such as idea generation, co-designing with stakeholders, speaking to users and potential customers, mapping value propositions, collaborating across disciplines. This is widely taught across Universities. For example, at Design Factory Melbourne, Swinburne University, design, engineering and business students are educated to collaborate and use various innovation doing techniques applied to real project briefs with companies for many years.

However the techniques for innovation doing are not enough. We know an open mind-set is necessary for innovation and you are able to see peak creativity when you are happy and having fun, but how much do we really know about achieving this desired state of behavior in a business setting and how does this relate to the hard business decisions that need to be made?

Despite all the training, we still see startups refuse to pivot in spite of a failed product/market fit, a lack of market validation or minimal traction, then we can see an application of behavioral innovation in action. These companies are trying to innovate. They have the goal of successfully developing an innovative product on their agenda and they fail miserably. Why? The sunk cost fallacy of innovation. Although not the only possible cause of this behavior, it is one which interests us here.

In behavioral economics, the sunk cost fallacy of economics occurs when we ascribe an overly optimistic probability to the success of an outcome after we have invested in it. The probability just seems to change. For example, if an individual were to buy a theater ticket but then find out that the performance had changed to one which they no longer wanted to see, then they would be more likely to go to the show and waste their time than if they had not purchased a ticket.

Think about that. Instead of doing something else they enjoyed, people would incur an additional cost by going to watch a show they didn’t want to watch merely because they paid for the ticket!

Startups and Behavioral Innovation

For startups we see the sunk cost fallacy of innovation occurring. It occurs when a new business follows an idea over the financial cliff because they have invested our time and effort (and often money!) in exploring it. When a startup fails to pivot, then I believe that a major contributing factor is the sunk cost fallacy of innovation. If we can beat this, then maybe we can save an extra ten percent of our startups. An easy win!

What can we do about this and how does one know that one has reached the point of no return? The answer to this question is something investigated in the forthcoming book “Innovation Tools”, available on Amazon, and it comes down to finding the point where perseverance no longer makes sense. This is the point is not difficult to find. It occurs when a startup asks its mentor or another independent third party, that if they had a choice between investing their time and money in the startup’s opportunity or using that money to do something else, and the advisor says do something else. At this point we are starting to sink. When someone else would not invest in your opportunity given the facts you have presented to them, then by going further you are displaying the sunk cost fallacy of innovation.

A word of warning: although we have framed it as something undesirable, if the psychological mechanisms behind the sunk cost bias cause you to be more resilient and tenacious, then in many startup situations this can be a good thing. It just depends on the context.

The sunk cost fallacy is only one of many biases which people can display and as a starting point to look at behavioral innovation, it is an obviously applicable one. However, as mentioned earlier, the field should be much bigger than this and its elucidation here will hopefully lead to others to explore more.

As stated earlier, the applications of behavioral economics biases to behavioral innovation like the above only scratches the surface of the possibilities in this field. The analysis above, like much previous work, is a direct translation from behavioral economics to innovation but it is clear that if researchers put their head to it, there are amazing possibilities right in front of us. And if the motivation to do some interesting research is not enough, then the trillion dollar imperative to transform the world’s economy to something sustainable should be.

Idea light bulb

Is Your Startup Idea Worth Nothing?

Daily Startup Tip, Entrepreneurs, Opinion, VC/Advisors, , , , ,

The mantra of ideas being worthless can be heard from all corners of the globe. Venture capitalists back founders and not ideas. As mentioned in another blog, in 2009, the entrepreneur and author Seth Godin got the nine of his alternate MBA students to come up with 111 ideas each to create 999 business ideas. The point? To prove that “Ideas are a dime a dozen. The money is in the execution.” But is this correct? Your gut feeling demands that your best ideas are worth more than nothing, right? Right.

There are many reasons why people say ideas are worthless. Some claim that for VCs ideas are worthless so they can pay you less for your business early on. Others have seen so many ideas that they feel like there is an oversupply and so their value is nothing. The most common one, however, is that the value is not in the idea but in its realization. Take two companies with a similar idea, Google and AltaVista, one is the multibillion dollar envy of the tech world, the other a broke, wound up company bought out by Yahoo. The difference? The execution.

On the other hand, sure, lots of businesses fail but a great execution isn’t going to turn a rubbish idea into a success. Bad ideas that are driven to profitable businesses often turn out to be a sham, cheating people of their money and time.

Idea vs Execution

In this dichotomy, idea vs execution, people assume you only have two things you can control, your idea and your team (execution). Other factors such as timing, competition, etc are assumed out of one’s control. With only two things to decide upon, where does this leave us? Are ideas really worthless? The answer is no and it has been clearly demonstrated by a German company called Rocket Internet.

In 2007 three brothers, Marc, Oliver and Alexander Samwer founded the company Rocket Internet in Berlin, Germany. Its business model has been described as a “copycat” by the New York Times and its products would seem to confirm this. In 2012 Rocket Internet started FoodPanda, a food delivery service, copying the GrubHub (established 2004) business model from America. For most other popular business ideas, they have their own version. Uber – EasyTaxi, AirBnB – WidMu, Blue Apron – Hello Fresh, etc. The model is clear, take a successful American business and found a copycat somewhere else in the world where the business is not yet active. Mostly this means in their home country Germany but it can be anywhere else such as Sao Paolo for EasyTaxi.

Rocket Internet has demonstrated that ideas are worth a lot because they take the good ideas and repeat them with another team and a simple execution formula. The execution becomes routine, the teams are composed of whoever is available, so where does it leave the value? In the idea.

So It’s In the Idea?

But clearly ideas without a good team to execute them are worthless. Lacking good people, a good idea is like a stray dog looking for a master. The most famous example of this is the Shockley Semiconductor Laboratory. Started by the Nobel Prize winning William Shockley, the laboratory built some ingenious products in the semiconductor industry that were set to revolutionize the industry. The problem? Shockley himself.

Although his ideas were revolutionary, William’s management style has been described as abrasive and paranoid in many articles and books. He routinely insulted and belittled his staff making working with him near to impossible. As to be expected, his relationship with his initial backer disintegrated and Shockley was left to his own devices with the company floundering in 1969 as the transistor industry flourished.

If our ideas are worth something then how do we value them? TED speaker and author, Derek Sivers has suggested a tongue in cheek formula to compute the worth of an idea but convincing propositions are hard to come by. As we now know, a billion dollar idea in right hands is worth a billion dollars. In the wrong hands nothing.

What To Do?

My suggestion is the following: If you have a great team who can execute on your billion idea, then it is worth exactly that. Companies such as Rocket Internet have shown us that a good execution can be orchestrated. The wide range of businesses they have entered also show that being an expert in the given field is not necessary and so the value of the team is less. Once we realize that all the different parts can simply be clipped on to generate success, then all that is left to drive value is the idea. Each part of the business becomes a commodity apart from the one thing which isn’t formulaic.

A good idea is exactly that, good. People can create hundreds of ideas but this doesn’t mean any of them are good. Because so many of the parts of a startup have become systematic, the most valuable thing now is a tool to determine the value of an idea. What we need is an idea to value ideas. Now that is something valuable and worth much more than any single idea. It is something VCs have struggled with for years and still seem not to have cracked it. If you have one great idea, then this should be it. Any takers?

image credit: Flickr – Ramunas Geciauskas

kicking ass

The 5 Tricks To Build A Startup In 6 Months Like A Pro

Business Hacks, Cool Shit, Daily Startup Tip, Entrepreneurs, How I did it, How to?, Maker/Grower, Opinion, , , , , ,

I wanted to reach out to everyone in this blog post and share with everyone some awesome tricks to build a startup lightning fast, validate your idea within six months and have a growth-ready startup or die trying. Ok so not the latter, just the former.

What I want to discuss here are the great things you can take advantage of because you live in Australia. We have an amazing safety net to catch fallen entrepreneurs and a startup environment which now has pretty good infrastructure. So let’s get to it, what should you do? Well the first thing is to have an idea and assuming you have one, let’s get to the first step:

  1. If you are new to the startup game, time to get a business plan for your idea. So to get some free advice to put together a powerful business plan, go to the government’s business websites and look at the new enterprise incentive scheme or the grow your business development plan if you are anywhere, the small business bus if you are in VIC or the small biz connect if you are in NSW.

This is important because you are going to use your business plan for the next step. And in any case, it doesn’t hurt to have a roadmap to try and avoid taking the road to bankruptcy.

  1. The next thing to do is, if you are eligible, go on NewStart Allowance – yes, the dole. If you are a recently graduated student over 22, go on NewStart right now if you haven’t started working. You will use your business plan from 1 to qualify for this!

For those of you with a lot of pride this step can be hard. But trust me it is the way to go. However, care is needed if you currently work as quitting your job may disqualify you for NewStart. There is no point in lacking a cash flow while you a building a startup, so swallow your pride and open your bank account.

  1. Get all the benefits you deserve: rental assistance, concession health care cards, etc. Check out Centrelink for more info on what’s available to you.

This step is all about reducing costs to a minimum so that your NewStart goes as far as possible. Once we’ve got you living and able to have the food tank full so the sparks keep flying in your idea factory upstairs, it’s time to start supercharging that idea and taking it to the next level. How? With someone else’s money.

  1. Go find an incubator and use your wonderful business plan from 1 to trade 10% or so of your company for at least $20,000.

This step is essential. Basically you should be getting office space, more mentoring, access to a network of other likeminded individuals and more. There are many incubators around Australia which offer this, e.g. IgnitionLabs. A great blog at the fetch lists a longer list. This step is critical because it will fund step 5:

  1. Use your incubator money to hire your gun programming mate for 6 months.

Here you will be giving employee number one $20,000 and equity in your company to get the rocket primed for launch. The point of doing this is so both of you now have a wage, so that you can both be laser focused on your business idea and don’t need to work on the side. You now have two of you to develop twice as fast and discover twice as quickly if your idea is going to work.

Obviously you’ll use best practices to refine your product, lean startup methodology, design led innovation, etc. However, the point is, you’ve got your money, office space and team to start kicking some butt. Doing it this way means that instead of knowing if something will work in 12 months, you’ve got double the man power to do it in 6. So if you haven’t done it yet, get out there and do this and launch your business in 6 months and know whether it will work or not instead of wondering what if…

Conscious Step

Get Rich or Save the World Trying: Social Entrepreneurs

Entrepreneurs, , , , , ,

There has been a lot of buzz around “social entrepreneurship” and social startups over the last few years and with it a lot of confusion over what a “social startup” actually is. Whilst some camps define social startups as not dissimilar to a charity or NPO, others dismiss them as businesses using a social cause for pure marketing and differentiation purposes.

Among the 215 or so student entrepreneurs and startups coming out of UNSW in the last few years we have had an impressive batch of social entrepreneurs with varying takes on social entrepreneurship, interesting social impact strategies and with impressive degrees of success.

FoodBank Local is a food aid logistics software company run by current UNSW Computer Science student, Brad Lorge.

Foodbank-Local

Foodbank Local

Chuffed is a crowdfunding platform for social causes run by UNSW Biomedical Engineering alumni, Prashan Paramanathan.

 

Chuffed Crowdfunding for Charity & Social Causes

Chuffed Crowdfunding for Charity & Social Causes

Conscious Step is an e-commerce platform aligned with UN causes headed up by UNSW Medical PhD graduate Hassan Ahmad and UNSW Business School Finance major, Prashant Mehta (on exchange student from the US).

NewSouth Innovations has had the pleasure of working with both Brad and Prashant via the Student Entrepreneur Development program and more recently with Prashan who is looking to pull together a UNSW social entrepreneur community.

To dig deeper into how and why social startups like these work and what makes a social entrepreneur tick, I asked these co-founders 5 questions regarding perceptions, motivations, challenges, success and future plans.

ED: I saw Hassan pitch at the original Startup Games 18 months ago and thought the guy could sell Ice to Eskimos, very talented at getting his message across and convincing people to get involved, I have also worked with Brad and from the early days found him organising events, arranging competitions, getting sponsorships from companies to support the University Clubs he is involved with, it wasn’t a surprise to me to see his team win.

1. What is your definition of “social entrepreneurship / social startups”

Brad Lorge, FoodBank Local:

Brad-Lorge-Imagine Cup-77_0

The UNSW Imagine Cup Team – Brad Lorge on the right

I see it as redefining profit to include something important to both the entrepreneurs and other members of the community. I think the best social startups have their impact and core business directly aligned.

Prashan Paramanathan, Chuffed:

Prashan Paramanathan - Chuffed

Prashan Paramanathan – Chuffed

There seems to be a whole industry of people who spend time trying to come up with a definition for ‘social enterprise’ – I’m hesitant to add to the muddle. Generally what I find is that there are two types of organisations that call themselves social enterprises:

1. Businesses that have a social purpose embedded into their actual trading activity (most commonly commercial businesses that employ some category of disadvantaged people or businesses that service the not-for-profit sector); and

2. Businesses that redistribute (a portion of) their profit to social causes (eg. charity water, who gives a crap, tom’s shoes)

Prashant Mehta, Conscious Step

Prashant Mehta - Conscious Step

Prashant Mehta – Conscious Step

Social Entrepreneurship allows for a company to have a primary mission or focus on giving back or making the world a better place, while leveraging the advantages of being a for-profit company. Allowing advantages for developing better products, paying for better employees, and having additional funds to test and develop stronger and more unique marketing campaigns.

Concious-Steps-Promo2

2. What motivates you as a social entrepreneur

Brad Lorge, FoodBank Local:

The same things that motivate me as a social entrepreneur motivate me as an engineer – we want to build something that has an impact for others. We want to make a contribution to our profession.

Prashan Paramanathan, Chuffed:

Tech in the non-profit sector is very often done very badly. Much of this is due to non-profits deprioritising tech spending, but it’s also due to a lack of tailoring of products to the sector. Most often people assume that giving non-profits a free version of the software design for commercial customers will lead to a good outcome – it very rarely does. The sector needs products designed for the sector, by people who understand the sector – and understand tech. That’s where I want to play.

Prashant Mehta, Conscious Step:

Motivation comes from delivering a better product than anything available in today’s market, while creating awareness for the changes I’d like to see in the world. In the case of Conscious Step, providing people with fun solutions for the problems that affect our day to day lives.

3. What are some of the challenges and misconceptions for social entrepreneurs?

Brad Lorge, FoodBank Local:

Identity crisis is a challenge, and knowing the difference between good and bad ideas and practice. A misconception is that you need to give up on growth of investment because a social startup has a social objective. Social startups with the right business acumen grow faster, have stronger support and break through barriers better than any other.

Prashan Paramanathan, Chuffed:

The two that I worry about are:

1. Social entrepreneurs not focusing enough attention on whether there’s a commercially-viable business case behind their venture. There’s not enough focus on delivering a great product or service for your customer, which manifests in several ways including: directly copying businesses from the commercial sector and assuming they’ll work for the non-profit sector; focusing too much on servicing a beneficiary, instead of a customer; or assuming that being a ‘social enterprise’ gives them slack in the market on delivering an excellent product.

2. As a social sector, we need to do a better job of attracting smart startup brains from the commercial startup sector. There is a very large bank of knowledge on how to run a startup well which needs to be imported into the social enterprise scene. I think we confound these startup skills with general ‘commercial’ skills and seek them out from experienced corporate types – this isn’t the best place to get them.

Hassan pitching Concious Step at the Startup Games - Credit Startup Games Bart Jelema

Hassan pitching Concious Step at the Startup Games – Credit Startup Games Bart Jelema

Prashant Mehta, Conscious Step:

Some of the challenges as a social entrepreneur include:

a) Financial Constrains – Most startups do not have a lot of financial backing. This forces you to really work to prioritize how money can be best spent to continue growth, but continually improving the back end of any business.

b) Testing- Getting out of your head and getting feedback on whether your idea is viable, learning the best ways to generate profits and revenues, and understanding the main reason people are interested in your product or service.

c) Networking- Networking is so important and can sometimes even be a bit costly. Meeting people in the same industry or working on similar projects can provide advise or knowledge that can save a lot of time, energy, and resources. More importantly, teams can usually accomplish more than individuals. More importantly the skills of meeting people and presenting can take one far in life.

As for misconceptions, one of the biggest misconceptions among social entrepreneurs is that there social mission will be its primary driver. The truth is your product has to be superior to the rest of the market, offer competitive advantages, and a social mission and presence is the cherry on top. Mission driven companies, whether startups or major corporation are becoming more and more common, and almost now an expectation with increased awareness of the many issues around the world.

4. How would you summarise your success so far?

Brad Lorge, FoodBank Local:

We achieved a 70% efficiency increase for food distribution. We have partnerships with some of the biggest brands in the world as well as the biggest charities.

Prashan Paramanathan, Chuffed:

Since launching Chuffed.org in October 2013, we’ve grown by about 30% every month and will soon have raised over $1 million for over 200 social cause organisations in Australia. The biggest of these campaigns was for a sanctuary for rescued farm animals – Edgar’s Mission – which raised over $162,000 from 1,785 donors in 14 countries, making it the largest Australian social cause campaign to run on any major crowdfunding platform. To support this growth, we have raised $460,000 in seed funding from the Telstra Foundation.

Prashant Mehta, Conscious Step:

Some of the press we’ve received early on includes our Indiegogo Campaign/Commercial , United Nations coverage, exposure during the Business for Good Competition, success in the BFG Pitch, Sydney SEED Fund Competition , Top 50 Social Entrepreneurs in Australia and finally a feature in the Women’s Wear Daily/ Footwear News .

5. So where to from here?

Brad Lorge, FoodBank Local:

We will keep building momentum behind a movement to push technology forward and end hunger.

Prashan Paramanathan, Chuffed:

We believe there is still a very large amount of room for growth in the Australian market, both in the rapidly growing not-for-profit and social enterprise sector, but also for crowdfunding in the school and university sector as well as for personal cause campaigns. We are also likely to expand internationally as broaden our product line to support more tailored online donation products for the social enterprise and not-for-profit sector.

Prashant Metha, Conscious Step:

Conscious Step intends to continue to raise money spread awareness for additional causes, while growing its presence in the U.S and Australian market. We plan to continue to educate people on the causes that are resulting in the most issues around the world, and simple ways they can get more involved and help create more solutions. More importantly, we intend to use organic materials and promote the values in fair-trade working condition to provide our customers with a superior sock experience.

It’s inspiring to work with and be supported by people like Prashan, Brad and Prashant and exciting to know they are in talks about potential collaboration based on a shared desire to foster a really strong social entrepreneur community around the university and within the broader Australian startup and business community.

I tend to think social startups are neither a fad, marketing ploy nor driven by a simple NPO charity goal but are the tip of the iceberg for what will become a normal part of corporate ethics for most successful companies. At some point, those companies that do not include social related considerations – across the supply chain – will fall behind those that do.

Thomas Edison - Inventor, Engineer & Entrepreneur

Engineer to Entrepreneur – What you need to know to make the change

How to?, , , ,

 

Debasish Bose

Debasish Bose

Debashish Bose was the Principle Software Engineer at Zynga during its meteoritic growth where he won Most Valuable Player award in 2010. After leaving Zynga he launched BeyondCalories.co an Smart Diet Tracking App that uses NLP and Machine Learning combined with the US & Australian Food Databases to give you calorie consumption tracking that actually works. This post was originally published on his Linkedin Profile

As engineers we are gifted to build wonderful & innovative products and possess a cognitive bias towards this building-step or prototyping step. For entrepreneur, often more important and far more riskier step is to take this product into market, achieve a product-market fitness and attain business scalability.

Having IP-grade technology and technological innovation in repertoire is necessary to build competitive businesses today, but it’s not sufficient. It takes something more to transform into an entrepreneur.

1. De-risk “Cool” Ideas

As engineer “cool ideas” in our lifeblood and we all have some kind of side projects going on keeping our builder-DNA fresh. But an entrepreneur is more interested in the commercial viability and product-market fitness of this “cool” product, systematically mitigating his/her risks.

One simple approach towards building “what sells” would be to start drawing “Lean Canvas” (http://leanstack.com/) for the most promising of these side projects to assert its commercial viability.

2. Seek diversity in team composition

As an engineer we tend to deprioritize business issues as something that can be deferred. In our cosy, introverted den we love building next earth-shaking algorithms and geeky prototypes. This is important as the “craft” phase demands minimal distraction and maximum collaboration with other like-minded nerds. However it has been analysed over and over again that, team composition and diversity is an important ingredient of building a scalable business. Startup Genome has observed that –

Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams

3. Get out of the building

As mentioned earlier we, as engineers, love our “hacker’s corner” and like to build something that fulfils one of our needs. Although Paul Graham has observed otherwise, getting out of the building, talking to potential customers and validating the solution goes a long way towards building something useful. Complete agreement with Steve Blank here – http://steveblank.com/2013/09/05/why-real-learning-is-outside-the-building-not-demo-day/

As Ash Maurya has observed,

Life’s too short to build something nobody wants

4. Love puzzles a bit less, problem a bit more

There is a subtle difference between a puzzle and a problem. Problems tend to be not so well-defined, whereas Puzzles are more algorithmic and analytical in nature. As engineers we are in deep love with puzzles having well-defined constraints and boundaries. However the real-world is far more messy and littered with not-so-well-defined problems with substantial risks attached.

Entrepreneurs love solving these risky problems with a clear focus on monetization and scalability. Additionally “diversity” (covered earlier) helps in problem solving as opposed to solving a puzzle which is mostly considered a solo activity.

5. Disown the “If we build it, they will come” mantra

Marketing & Selling is the most critical aspect of a startup, and entrepreneur is always busy in selling products that connect with customers and add value to their lives while remaining profitable. Entire Lean Startup movement has been created to systematically deconstruct patterns of successful startups building products that people need.

One of simplest way to build a product that people need is to create a continuous learning loop (Build – Measure – Learn) guided by marketing and UX principles. Release a the MUVP (Minimal Usable & Viable Product), measure key metrics and optimize.

6. Prefer simple solution over complex ones

This perhaps is the toughest of all transformations. As engineer, we love solving complex problems which often have complex solutions (although KISS is a cliche even in engineering world), complex lingo and complex architectures. Or even worse, a solution that’s over-engineered and carries unnecessary features. Over-engineering is the worst kind of “Premature Scaling” (others can happen at Team or Financial level) observed in startups. Let’s cut the fat and let’s uphold simplicity as the facade over complex engineering magic. This simplicity should pervade beyond engineering – from product landing page, design, UX to marketing and packaging. Instead of saying “Arduino powered DSP-enabled electro-chromatic sunglasses”, just say “Automatic Colored Goggles” (well, something like that !)

7. User eXperience can make or break it

As engineer we care about solutions that are elegant and high-performing. Designing a good UX is not one of our top priorities. However it’s fun to start learning UX and design something people would love to use. Along with more analytical skills like User Research and A/B testing, UX can throw a steep learning curve to engineers by presenting relatively unknown territories of –

  • psychology
  • visual design (Deference, Depth and Clarity as far as Apple Standards)
  • interaction design
  • empathy
  • persuasion

Unless working on LHC or Computation Genomics (or similar high R&D verticals), UX is one of the top 3 areas an entrepreneur would focus on, along with marketing and cash-flows.

8. Be concerned about finding a scalable business model, not just TDD

I find qualities those define a good engineer often diverge significantly from that of a good entrepreneur. To remain employable an engineer is expected to pursue TDD (Test Driven Development, I’m not a huge fan of TDD personally, but that’s a different discussion). When dealing with the tough task of discovering a scalable business model, TDD is the least concern of an entrepreneur.

When the whole business can pivot, problems are not well-defined, requirements are changing every other week, it’s wasteful to write elaborate TDD specs. TDD definitely adds a value only when product-market fitness (2nd phase of a startup’s life-cycle) is achieved and the business is on a growth-curve. So please don’t ask an entrepreneur – “These are awesome, but where are your selenium / capybara specs?” in any context !!

9. Be a generalist

Sure, engineering is our background, but to successfully transform to an entrepreneur we need to hustle through a lot of areas like product design (UX is the core of it), financial knowledge, sales & marketing and customer development (upon which everything else stands). We should still retain our expertise (builder DNA), but a basic foundation knowledge of these dimensions are indispensable.

Employable engineer and growth-hungry entrepreneur are indeed two very different characters. Few engineers make the transition easily, a large portion don’t. The metamorphosis is much more inner rather than outer. And that’s why we engineers need to consider something else.

Just like biologists has discovered that each one of us has a unique DNA slightly different from the rest, an entrepreneur has his/her own unique entrepreneurial-DNA (Measured by BOSI).

Guided by those above-mentioned nine principles, coupled with traditional MBTI assessment, BOSI DNA has potential to craft a unique and personalized journey for an awesome engineer in order to transform into a great entrepreneur.

$50k up for grabs for UNSW Student Entrepreneurs

Universities, , ,
Trey Zagante

Trey Zagante

UNSW student-led startups will be offered up to $50,000 in seed funding through a partnership struck between Venturetec Accelerator and UNSW’s NewSouth Innovations.

Venturetec Accelerator is on the hunt for enterprise technology startups in the Asia Pacific region. In addition to access to funding, the accelerator also offers to connect startups with Fortune500 executives regionally.

Founder Trey Zagante is a Masters of Business and Technology student and AGSM alumnus.

He is also a beneficiary of the Student Entrepreneur Development program at NewSouth Innovations (NSi), which helps UNSW students bring their startup plans to life.

Venturetec is one of more than 200 startups that NSi is currently assisting.

Now, the relationship between NSi and Venturetec Accelerator has expanded to benefit other UNSW student-led startups.

“This is an important partnership as it supports Trey as a current student and alumni entrepreneur and also enables our wider student entrepreneur community a chance of accessing amazing high-level networks across Asia and up to $50,000 in seed funding if accepted by Venturetec,” NSi’s Student Entrepreneur Development Manager Joshua Flannery says.

Zagante says he has already started meeting UNSW student teams vying for a place on the Venturetec Accelerator program, and invited more to apply.

“Enterprise software can include financial, logistics, operations, HR, telecommunications and media-related applications that aim to solve problems for large businesses – typically targeting Fortune500 companies,” Zagante says.

He sees huge market potential for enterprise – rather than consumer – focused apps.

“The appetite for new technology solutions from industry is now more than double that for applications that service consumers,” Zagante says.

UNSW students interested in the program should send an email to:student.enterprise@nsinnovations.com.au

From 0 to 200 start-ups in 24 months at UNSW

Universities, , , , , ,

Guest post by Josh Flannery, Manager, Student Entrepreneur Development , University of NSW. Josh has a Master of Business & Technology (AGSM), a degree in Communications and has worked across Asia in both Startups and Commercialisation roles including 6 years in Japan, and 2 years in China & Hong Kong as Senior Regional Manager, China for Macquarie University. In 2005 Joshua Co-founded edtech company StudyLink株式会社, the Asia based sister company to Learning Information Systems Pty Ltd and also ran a boutique education consultancy in Japan, InterCreations, with fellow Japan guru Jeremy Breaden.

Josh has developed and launched the student enterprise program at UNSW which has helped launch early-stage start-up ventures for ~200 student entrepreneurs. If you want to get involved as a mentor, industry partner or a sponsor you can connect with Josh on Linkedin.

Introduction

The title of this article is a little misleading as start-ups have been coming out of UNSW for many years prior, however, in the last 2 years something different has been going on at UNSW to encourage, support and champion over 200 new start-up projects led by students or recent alumni.

There is no solid data to know for sure, but we have a hunch that this is the highest number of start-ups from any university during a 2 year period nation wide. It’s almost certainly more than any other 2 year period in the history of UNSW.

So what are we doing differently?

UNSW Startup - Smart Sparrow

UNSW Startup – Smart Sparrow

Know the role of the university within the start-up ecosystem

There is a trend in Australia to take a proven or traditional accelerator program model and replicate it on a university campus. Now this model certainly has merit and has its place in the ecosystem. In our case, we saw an abundance of excellent accelerator programs within 15 minutes drive of our campus so recreating the same model on campus would not be creating a new value proposition for our student entrepreneurs. More likely it would attract the start-ups who did not get into the city based brand name programs and the mentors that did not get chosen by the well established programs using the same model.

We see the role of the university in this ecosystem as primarily for providing cross-faculty (read complimentary skill sets), “learning by doing” experiences for self-selected students with a real interest in entrepreneurship. It is to fill the gap between first time entrepreneurs still studying (or recently graduated) and teams with validated ideas who are at the point where they are finally ready to pitch for entry into an accelerator program.

No one is knocking an on campus accelerator, but if a university doesn’t have resources and programs in the “pre-accelerator” space I describe above then the university is trying to pick winners and focus on the 6 or 12 start-ups that win entry into the accelerator model program each year whilst excluding the hundreds – or thousands – of other students from much more than an invitation to Demo Day.

First time student entrepreneurs need a few basic but solid things to work towards their first failure aka real learning:

(a) A sounding board (not consultant) with a network to introduce mentors, service providers or other useful people and organisations

Bart Jellema runs the Startup Games at UNSW

Bart Jellema runs the Startup Games at UNSW

(b) To feel part of a larger community, a micro-ecosystem that is full of students at the very same stage, facing similar challenges along the entrepreneur journey but also some a little behind or further ahead in this journey for casual communication of real value to take place.

Student entrepreneur wins and challenges need to be celebrated as a group

One of the best things we ever did was create a closed social media group exclusively for student entrepreneurs currently working on live projects. We are participants more than administrators and with a few hundred members the group is now a go to place for help requests, co-founder hunting, mentor requests and other exchanges that may not be as appropriate in more public forums. It took some encouragement but now the group has a life of its own.

This list is just touching the surface, but it’s where we started. It’s an experiment for us that is working well and it feels like we are just warming up.

Watch this space!

Josh

 

Related articles

Clerky helps startups get legal stuff done right – Cool #Startups

Pitch your Startup, , , , , ,

Clerky.com automates all the legal paperwork that startups need to get incorporated, staffed up and funded. Incubated by Ycombinator the team includes a number of veteran Startup Attorneys and Y Combinator’s General Counsel.

They have been running in stealth mode for a few Y Combinator intakes and as a result has got a great group of early customers including one of my old #entrepreneur Organisation mates David Hassell and his #company 15five.com.

Frankly #incorporation, employment docs, connotes are boring and expensive aspects of launching a business but have to be done properly.

For many years I have held the opinion that much of this is done straight off a form letter that resides on the Lawyers assistants hard drive.

Whilst more specialised work like later rounds of funding with multiple parties and detailed terms that are likely to result in major consequences absolutely need a Lawyers full attention, a lot of the grunt work probably doesn’t.

Given a body of Lawyers there is every chance the less able amongst them is producing sub standard documents, so assuming Clerky managed to get a top Lawyer to write the first version, it’s probably that many startups might be better off using Clerky.

This space is ripe for automation for the basic work and whilst Lawyers are absolutely required for important deals, to sue or when you are being sued (don’t get cranky with me guys) there are aspects of their trade that are really form letter templates that don’t have a lot of legal smarts to re-produce once the original has been created.

I like the concept a lot, I wish them good luck

 

www.clerky.com

Related articles