All posts by UW Foster School of Business

Ben Huh: be weird, practice failure, thank the Internet

Guest post by Alex Diaz, vice president of UW American Marketing Association chapter

“The best things in life are non-linear.” So said, Ben Huh, CEO of Cheezburger Network, at a recent event organized by the University of Washington American Marketing Association in collaboration with the UW Foster School of Business Center for Innovation and Entrepreneurship.  Not surprisingly, his talk, “Making Failure Cheap: Managing Risk to Ensure Success,” was no ordinary bullet-point-filled PowerPoint. Instead, Huh was an amazing speaker who grabbed everyone’s attention by sharing his real-life stories—the kind of tales we (as students) hope we never have to face.  Together, we all learned how he overcame his challenges in the most unconventional of ways.

Ben Huh is a quirky, innovative, natural entrepreneur. He injects fun into everything he does, which helped make something as trivial as sharing cat pictures into an Internet sensation. The audience heard about his successes – like “LOLcats,” but also learned about how to create knowledge through failure and to learn from mistakes. Huh gave a call to action to “hack the system” and follow your vision.

Thinking beyond the great education we are getting here at the UW was another piece of Huh’s advice. While educational institutions do an amazing job teaching us how to strive for success and accomplishment, we can’t forget that a proper education is actually a balance of what we learn from the books and what we are courageous enough to experience in real life. Being courageous enough to consider our failures as good practice, is one example. Huh suggested we not fight failure, but take it in and redefine what motivates us.

Specifically with regard to using the Internet in future ventures, Huh reminded us that users drive it, and that the Internet IS culture. Each user is motivated innately and content is then created by the masses. This means that a different user mindset applies to different mediums. Know your audience.

The gist is this: There are two ways of looking at the future. The first is that you see the future as inevitable, whether good or bad, everything is already set in stone. The second way of looking at the future is to create it the way you want it. Hearing Huh speak helped the audience remember that we each have the ability to do exactly that. Nothing has been determined for us.

Huh’s presentation left us all with the following insights: Being weird doesn’t mean you are alone (thanks to the Internet).  Instead of following the money, be non-linear and follow your dreams. Know what motivates you and strive to make an impact. Take what you can from your dreams and make them as real as anything.

Top 5 tips for succeeding in a business plan competition

Guest post by Chris Rodde, CEO of SeniorHomes.com and 2012 UW Business Plan Competition judge

In April of 2012, I participated as a judge in the screening round for the University of Washington Business Plan Competition. I have never served as a judge before in this competition, nor do I have any personal start-up investing experience (as many judges do). However, as an experienced founder/CEO of a start-up, I have good experience to leverage as a judge. My start-up, SeniorHomes.com, is now in its fourth year. We’ve raised two rounds of financing from angels and institutional investors and now employ more than 25 people.  Based on my experience as a start-up founder and as a judge in this competition, I have a few tips for next year’s entrepreneurs.

My top 5 tips for entering a business plan competition:

    1. Don’t submit a plan until you have traction. My biggest surprise as a judge was the lack of traction demonstrated by many of the teams. Three of the six plans I judged didn’t even have a website. During the investment round of the UW competition, judges are asked to invest a hypothetical $1000. So the same mentality used by investors in the real world comes into play in the competition. Investors in the real world pick companies that have momentum and that demonstrate that they can execute. Execution is everything in a start-up and to stand out in a business plan competition, show more progress than your competitors. Simple things like having a website (even if it just says “coming soon”), a working prototype, a first pilot completed, or actual paying customers will go a long way to make you stand out. Customers using or paying for your product is particularly important as this will help eliminate unknowns and back up the assumptions in your business plan with real world data.
    2. Be complete. There are some critical things every business plan must cover. Make sure that you cover all of these things, even if briefly. There are tons of great sites out there with advice on what to include in a business plan so I won’t elaborate but only suggest that you find out who the current thought leaders are with regards to business plans and make sure you’ve covered everything. Two to three of the plans I read had critical elements missing.
    3. Write like a NY Times reporter. Write in clear, objective language and avoid unsupported claims. Investors pick teams in which they have developed trust. This trust begins with the words you put in your plan. Don’t sound like a playground braggart boasting about your future $1 billion business. Instead build your case piece by piece in an objective fashion using real data.  The key claims that you make in your plan should be well supported with evidence you’ve gathered through experimental learning or research.
    4. Market your team. Investors invest in people not plans. Several plans I read simply listed the names of the people involved, without any bio at all. This gave me no chance to get to know the team. Why should I invest in you? What makes you uniquely positioned for this opportunity? Showing personality is good.
    5. Find mentors to critique and edit your plan. There are two types of editors you should seek. First, and most importantly, find someone that has credibility in reviewing business plans and have them critique it for content and completeness. Find someone who won’t hold back on asking the hard questions. Judges will likely find these same weaknesses so knowing these in advance and doing something about them (even if you simply point the weakness out as a risk) will help inspire further trust that you have thought things fully through. Second, find someone who can help you with writing and tone (this being especially important for techie founders who may have floundered in English 101). A business plan is a marketing document for your business, so you need to ensure you are putting your best foot forward.

Good luck!

Former Schwab CMO and “mad woman” illuminates “talk to Chuck” case study in MBA advertising class

 
It’s Thursday afternoon, and in one of the University of Washington Foster School of Business classrooms, former Charles Schwab Chief Marketing Officer Becky Saeger was talking to MBA students about the experience of digging deep to revitalize a major brand. As the architect and marketing protagonist of the integrated “Talk to Chuck” campaign platform, Saeger had plenty to offer the students on this Harvard Schwab Case.
Former Schwab CMO Becky Saeger (middle) with Associate Dean Dan Turner and Senior Lecturer Elizabeth Stearns

She discussed the importance of the big picture marketing process. From there the focus was on the decision metrics, advertising strategy and execution, and ultimately how that contributed to Schwab’s overall brand objectives.

Saeger’s also great in her capacity as guest lecturer, which was her role in Marketing 540, taught by Elizabeth Stearns, senior lecturer. Saeger brings to life the lay of the land at Schwab. The year was 2004 and the CEO who hired her was replaced by Charles “Chuck” Schwab himself, reclaiming his role as CEO of the $4.2 billion company he founded in 1971. Saeger reinforced the problem as described in the Harvard case, on the potential for losses and eroding customer loyalty, as the company struggles to fulfill its promise to the individual investor.

Following Professor Stearns’ lead, Saeger asked as many questions as she answered. One interesting aspect of this class is that Stearns does not play the role of professor—but rather that of a marketing client. Students have formed teams acting as advertising agencies vying for Stearns’ business. There’s very little handholding – and that’s good, because as any marketing agency veteran will attest, clients expect initiative and brilliance. The students demonstrated considerable chutzpah—one memorable moment occurring when a student agency, Drapers’ Disciples, turned down Saeger’s request for an additional $50 million budget with their excellent ROI analysis.

In the end Saeger won out with exceptional rationale; moreover, she proved success.

This teaching model brings intense realism into the classroom, as do guests like Becky Saeger.  There was an exhilarating quality to the session, and an overwhelming sense that Foster MBAs are getting the best of rigor where it intersects relevance to their futures.

As a side note, there was some irony that the ‘agency’ challenging Saeger’s budget request was “Draper’s Disciples.” As it turns out, she began her career at Ogilvy & Mather in NY, where she made a name for herself with global brand campaigns for American Express, among other clients. A true Madison Avenue prodigy.

UW environmental innovation wows judges

Judges were supposed to walk into the Seattle Center Exhibition Hall on March 29, pick up their folders and grab a seat. But the 23 prototypes were simply irresistible.

They caught your eye the minute you walked into the room for the 2012 University of Washington Environmental Innovation Challenge. A bicycle with the electric assist that could transport up to 200 pounds of cargo. Solar windows that would continue to operate even if cracked or broken. The new cooking surface that was nonstick and nontoxic with no coating at all. A tiny helicopter drone that could be used to inspect remote wind turbines. The highway jersey barrier made of recycled tires that were not only cheaper to produce but could also lessen the impact of a direct automotive hit. The earth-bag house that can be built quickly and safely after a natural disaster—and still withstand a category 4 hurricane.

The Environmental Innovation Challenge, managed by the Foster School Center for Innovation and Entrepreneurship (in partnership with the UW colleges of engineering and environment), is focused on student-led solutions to environmental problems. More than 120 judges from Seattle’s environmental and entrepreneurial communities evaluated student teams from colleges and universities across Washington on three criteria:

  • a working prototype, designed and built by the team
  • an investor pitch, paired with a solid understanding of the  market opportunity
  • the solution’s potential for impact

Judge Kelly Ogilvie, former president and CEO of Blue Marble Energy, was impressed by the creativity. “People are worried about the economy, but look around. This is cool stuff, and a lot of these concepts have legs.” David Allen, executive VP of McKinstry, agreed. “Every one of these ideas is pushing the green innovation needle forward,” he said. Seattle entrepreneur and Concur CEO Steve Singh was more impressed by how robust the prototypes were. “This is amazing,” he said. “Not one of these teams spent more than $3,000.”

The $10,000 grand-prize-winning team was Green Innovation Safety Technologies (GIST), which has one goal in mind: to eliminate the vast number of auto and truck tires plugging up US landfills. GIST’s jersey barriers use the equivalent of 240 tires (5,000 pounds of rubber mulch) each and have the added benefit, in comparison with concrete barriers, of increasing safety, reducing noise and enhancing water run-off. The team is composed of UW business and engineering undergraduate and PhD students.

See full list of all 5 winning teams and videos.

Learn more about the world of start-ups via the Center for Innovation and Entrepreneurship at the University of Washington Foster School of Business.

For loyalty’s sake: follow the smartphone

How do you convince coffee shop and pizza parlor owners that it’s time to ditch the paper punch card and move to a digital customer loyalty app? Educate them in the ways of today’s savvy smartphone users.

Punchkeeper, an app developed by Seattle University MBA Val Trask and her friends, programmer Jon Ohrt and developer Matty Mitchell, does just that. By providing a simple alternative to the old-fashioned paper punch card for businesses like cafes and salons, Punchkeeper ups customer loyalty and downplays wallet space. But wait, there’s more. In the course of any transaction, the app is also collecting valuable market data, performing target marketing through phone notifications, and using geo-locational technology to create social media buzz. What’s not to like?

It is no surprise that early-adopting university students in urban locations are exactly the customers to convince small businesses of Punchkeeper’s benefits.  Once store owners learn how simple it is for a smartphone owner to scan a QR code and transmit their data, Punchkeeper becomes an obvious solution. Josh Losinger, the owner of Seattle’s Lunchbox Laboratory, only had to observe his lunch-time customers. “We figured that since most people these days are glued to their phones even while chomping down on our crazy burgers, they may as well get value out of it,” he said. “Punchkeeper is the future of loyalty recognition.”

Since participating in the 2011 UW Business Plan Competition, the Punchkeeper team is now seeking Series A funding to scale and add features. The company currently serves merchants in Washington, Texas and Colorado, and is starting to work with retailers in Oregon and on the East Coast. Punchkeeper has 3,000 users. The team expects that number to grow rapidly with the launch of the University of Washington Housing and Food Services program later this spring.

The biggest lesson Trask and her team have learned? Be scrappy. “At the Business Plan Competition we were the team with the homemade sign, the logo-shaped cookies, the cool borrowed props and the donated giveaways,” explains Trask. “It started us on a path of scrappiness and creativity that translated into successful bootstrapping in the real world.”

Learn more about the world of start-ups via the Center for Innovation and Entrepreneurship at the University of Washington Foster School of Business.

Community is the new equity at SURF

Seaton Gras  is a certifiable start-up junkie who has been forming incubators and launching meet-up groups since before those terms became technospeak. Whether it was his upbringing in a 1950s-era cooperative in the woods of Massachusetts or just pure passion for entrepreneurship, collaboration is clearly in Gras’s blood. Even Wizzymouse, the “wiki for kids” business he entered into the 2007 UW Business Plan Competition, was a form of community-building.

So is SURF, Seaton Gras’ newest effort to provide a safe landing spot and creative environment for early-stage entrepreneurs. SURF (Start Up Really Fast) sprang into existence to “help an idea grow into a series of milestones,” Gras says, “because each stage needs different resources. Talent clusters and re-clusters, depending on the need.”

Early SURF member Donald Rule, the founder of Translational Software adds,  “Even before its official opening, the SURF Incubator linked me with people that have offered insights, encouragement and most importantly connections that have accelerated my progress. Combine that with the energy created by associating with dynamic and optimistic start-ups, and you have a really compelling environment for incubating a business.”

Functioning for three years as an incubator without walls in random pizza joints and donated spaces, Gras recently landed the perfect physical space for SURF in Seattle’s historic Exchange building. With over 15,000-square feet already designed for the previous tenant’s tech workers, the incubator is fully outfitted to serve as many as 100 entrepreneurs with a variety of desk space and conference room configurations. Night owl entrepreneurs can even rent a desk just for the early morning hours.

By mid-March 2012, the lease was signed and both Geekwire and TechFlash, among others, had run stories. With 19 companies already signed on, Gras has also fielded calls from the mayor of London (yes, in the UK) and interested parties in Denver looking to replicate the SURF model.

What Gras gains from launching the SURF Incubator may not earn him equity in the traditional sense, and he’s just fine with that. Instead, he values a whole different kind of ROI. “I’m driven by the experience and talent and re-clustering of teams,” he says. “I’m in a community of people like me.”

Learn more about the world of start-ups via the Center for Innovation and Entrepreneurship at the University of Washington Foster School of Business.

Meet your new apartment: you’ll love her

Every entrepreneur learns that the company you envision at the outset almost certainly won’t be the same company you own a year or two later. Take Phillip Lee and Spottage, for example. With the help of the high-profile TechStars and greater industry exposure, Lee and his co-founder, Bryan Leptich, have turned their 2007 Business Plan Competition entry, Spottage, into Rentmatch.com, a rental housing “date match” business that is now the largest listing site.

For Lee, the stops, starts and re-grouping came with the economic downturn, which hit just as Spottage found its stride in 2008. Lee discovered that he was actually serving a lessor’s market rather than the previously hot renter’s market. That shift drove a new emphasis on providing real value and more refined search results for users – something akin to the algorithms behind Netflix’s “suggestions.”

This was also when Lee started to see Spottage in a new light. “Instead of just building another listing site, why don’t we become the intelligent layer that sorts through all those listings and efficiently matches them with renters?” he said. “The problem isn’t lack of inventory. The problem is how to quickly and efficiently match vacant units with renters.”

By working with rather than against the likes of Rent.com, Mynewplace.com and Apartments.com, Lee’s company, now using the more descriptive name of Rentmatch.com, has collected the largest number of listings (roughly 1.5 million) of any comparable site. With that expanded listings pool, the dating began. Rentmatch.com now offers greater levels of customization to match housing seekers with exactly the features they want. Furthermore, their cross-competitive partnerships allowed them to expand beyond university campuses into other urban geographic areas.

“What was surprisingly hard to get used to was the reality that, for a start-up, it’s a race to fail quickly, learn quickly and ‘do more faster,’” he explained. “If you’re too afraid of failure, you don’t take those big risks that can turn into big successes.” Lee’s experience in the TechStars process ingrained this “fail faster” theory in his thinking. With a broader perspective and expanded connections, Rentmatch’s start-up journey has helped set up even more successful “dates” between apartment seekers and lessors.

After saying no to an early buyout “marriage” offer at the Real Estate Connect conference in New York City in early 2012, Lee and Leptich have continued to grow Rentmatch.com. Without marketing or press, site visits went from 1,000 to 25,000 from December 2011 through March 20, 2012. And though the company has always had revenue, Lee notes, “most angel investors have told us to not worry about revenue at the seed stage and instead focus on product market fit and building traction.”

The lean, two-man team plans to add five developers and a sales/business development manager by the end of the year. Like dating, the energy they have put into failing has been worth it, now that they have found the perfect entrepreneurial fit.

Learn more about the world of start-ups via the Center for Innovation and Entrepreneurship at the University of Washington Foster School of Business.

MBA Challenge for Charity 2012: sports weekend, 2nd place

Guest post by Jay Winzler (MBA 2013), 2012-2013 Foster School MBA Challenge for Charity president

Dodge ball…last time I played dodge ball was in 5th grade. If my memory serves me right, I was pretty good back then.

ZING! I managed to avoid the first ball, but the second one knocked me out of the game. The next three games were no different. Apparently I’m not as quick as I used to be. That’s okay, the women’s basketball game was about to start and I wanted to join the Dawg Pack as we cheered them in the championship game against Stanford.

Sports Weekend is an annual event in which Foster students join students from 8 other MBA programs including Stanford, UCLA, USC and Berkeley to celebrate our year of hard work in volunteering and fundraising for local charity organizations. The weekend is filled with sunshine, new friends, school spirit and competitions in every type of event imaginable. Team sports – football, ultimate, volleyball, trivia. Individual sports – swimming, running, spelling bee and just for fun – cheerleading, battle of the bands and challenge races. At the end of the weekend, there is an epic celebration and the program that has raised the most money, volunteered the most hours and successfully competed in the most sports is announced as the winner of the coveted Golden Briefcase.

Foster is famous at Sports Weekend. We are known for our terrific student turnout, fun-loving personalities and because the men arrive with creative and sometimes hilarious facial hair. After a sun-filled Saturday of sports, new friends and school spirit, we ended with the annual Battle of the Bands. Death Spiral, the favorite UW band, got the party started with a rousing song by Seattle favorite Nirvana before following up with the entire crowd singing along to Cee-Lo’s “Forget You.”

2nd place among 9 West Coast universities

UW has a history of winning the Golden Briefcase and yet again we were in the hunt! Everybody was on edge as the final announcement was made. UW took 2nd place in both volunteer hours and fundraising efforts and took 2nd place overall. WHOO HOO! Although we didn’t win Sports Weekend this year, our hard work (over 1,600 volunteer hours) and effort was justified with a 2nd place finish.

On Sunday, we took one last chance to sit by the pool and top off our tans, said goodbye to our new friends, traded business cards (we are MBA students after all) and shared a few more stories. It was hard to leave California, but I, for one, was excited to get back to Seattle. I had a speech to prepare. I finished my quantitative methods homework on the plane and after landing checked a voicemail from my friend and co-president:

“Hey Jay, it’s Jessica. I had a great weekend, so much fun. That football game was intense! We need to talk. It’s time to start strategizing about how we are going to win the Golden Briefcase next year. Oh yeah, one other thing. Please shave, your mustache is scaring the little kids.”

Undergrad learns from losing and winning a competition

Guest post by James Barger, UW engineering senior and UW Environmental Innovation Challenge co-chair, 2012, Grand Prize team member, UW Environmental Innovation Challenge 2011

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood…who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” – Theodore Roosevelt, France, 1910

Completing the University of Washington Environmental Innovation Challenge (EIC) is a big arena for many people that enter each year. But it is actually a milestone on the way to becoming a successful entrepreneur.

When I came to the UW EIC as a sophomore I had no training, no experience, and no clue how to build world-class technology; along with the other members of my team, I just had a lot of passion for changing the way the world uses energy. In the beginning we believed we would be able to do everything, but it turns out that only three months of passion and blind experimenting isn’t enough to compete with PhD and MBA students with years of time invested. At the competition our prototype leaked and we had to shut down the demo after we got one of the judges’ shoes wet. After the competition we disagreed on the future of the technology and went our separate ways.

The following year I had no intention of entering the UW EIC and focused on being involved with class research at the UW. However, I became involved with a project in the Mechanical Engineering Department to convert a Honda Accord to an electric vehicle at a low cost. I met incredible people who were just as passionate as I, and we worked hard as a team to create a technology business that could make an impact in people’s lives. The judges thought so too, and we won the Grand Prize. Though, what we gained from the competition went far beyond any prize money.

Each year I competed, I began to see the common threads that made teams stand out and be successful. The experience of going through the entire competition once taught me so well, that by the second year I understood how a successful business plan was put together and how much development a prototype would need before being ready. A great businessman once said to me, “You learn business by doing business, the classroom can only teach you so much.” As EIC advisor and chemical engineering professor, Daniel Schwartz mentioned when he spoke at this year’s Challenge, it is experiences like the EIC that add enormous value to a college education. The UW EIC has given me a solid foundation to build on, so that when I start my own company, I will have the confidence and experience to go forward daring greatly.