Category Archives: Entrepreneurship

Lessons for student entrepreneurs

Dan Price
Dan Price speaking at the Business Plan Competition Dinner and Awards Ceremony

As a student at Seattle Pacific University, Dan Price won second place in the 2007 UW Business Plan Competition for Gravity Payments. This year he was the keynote speaker at the UW Business Plan Competition Awards Dinner on May 22. Price shared his personal story and the lessons he learned while building Gravity Payments into one the fastest growing credit card processing companies. His advice for student entrepreneurs:

Dive in. One important lesson for all entrepreneurs is to learn how to dive in and get things done—even when you don’t know exactly what you’re doing. Price shared what happened to him in 2008 when the financial collapse hit. First, 20% of his revenue evaporated overnight. Next, two of his major clients filed for bankruptcy leaving him with the prospect of losing $1.3 million, which would have left him with just $200K in the bank. But instead of panicking, he started learning everything he could about bankruptcy law and was appointed to the official committee for unsecured creditors for both bankruptcy cases. In the end, Gravity Payments didn’t lose the entire $1.3 million.

Make incremental progress. He also made the point that building a company is about making incremental progress each day. Instead of focusing on everything that needs to be done, do what you can see today.

Be open to change. You’re not going to follow your business plan exactly like you think you are. He said, “You’re going to shred it. You’re going to redo it.” It’s important to be flexible and open to change to meet demands. He said, “We’re doing things in our business I never imagined we would do.”

Support successful people traits. He concluded with a challenge to the audience. He showed an image depicting successful people versus unsuccessful people. Successful people share information, keep a journal, want others to be successful, while unsuccessful people fear change, secretly hope others fail and criticize others. Price challenged everyone to create a world where the successful people traits thrive.

He also shared his life philosophy that we should enjoy our time on earth as much as possible and be as happy as possible, and have that, not money, represent true happiness. You can also read GeekWire’s coverage of Price’s talk here.

A design framework for innovation

On April 2, the Foster School held its 2nd annual Innovation and Entrepreneurship Symposium, hosted by Neal Dempsey, this year’s Fritzky Chair. Julia Link, principal of the Link Group which offers product and go-to-market strategies for various companies, spoke about the creative process and provided a design framework.

A design framework for innovation:
Julia LinkStep 1: Empathize – In this phase, you’re trying to understand your target customers’ needs, motives, feelings and goals. Your job is to get the story. Don’t go to your potential customer with the solution; instead let them tell you what they want.

Step 2: Define – Take the information and insights you’ve gathered in step one and start to define the user and decide what problem you’re trying to solve. You should ask yourself “so what.” We’ve created this product that solves this problem. So what? Why is it so important to solve that problem? Who needs that problem solved?

Be sure to design your product for individuals, not the industry. Link also made a very important point about designing for the extreme users. Extreme users are not power users, but they are people who have more requirements than the average product user. If you can design for the extreme users, chances are high the regular users will also like what you designed. An example she cited was wheels on suitcases. Now ubiquitous, wheels on suitcases were originally for people who traveled a lot.

Step 3: Ideate – Come up with a lot of ideas for your product. This works best when you can brainstorm with a group which has varying backgrounds. Have everyone suggest ideas. Don’t judge the ideas, just write them down.

Steps 4 and 5: Prototype and Test – Take the ideas generated in step three and go make something. Don’t spend a lot of time or money on the prototype. It’s not sacred. You’re simply trying to create something people can give you feedback on. Don’t take the feedback personally. Repeat this process as often as needed: Prototype > Fail > Learn often.

Learn more about all the Innovation and Entrepreneurship Symposium sessions.

Consider the inevitable

On April 2, the Foster School held its 2nd annual Innovation and Entrepreneurship Symposium, hosted by Neal Dempsey, this year’s Fritzky Chair. Three people spoke about design and innovation trends in business: Ken Denman, president and CEO of Emotient; Bob Paulsen co-founder and CEO of PlayerLync; and Julia Link, principal of the Link Group. Below are highlights from Denman’s and Paulsen’s sessions.

Ken DenmanDenman focused on innovation and relayed his experiences with Emotient, a facial expression recognition and analysis company. Main points included:

  • When established companies are trying to innovate, they tend to make existing products only incrementally better. This works for awhile, but then smaller companies start to catch up and offer more innovative products that grab more and more market share. The example Denman cited was the iPhone. When it came out, it was a product category maker or re-maker. It started taking market share away from existing markets such as GPS and personal cameras.
  • Study up on the industry you’re in so you know who the competitors are and where the market is heading. Knowing this information allows you get beyond the basics in conversations.
  • As an entrepreneur, you’re always raising money while you’re doing everything else. It’s exhausting, but it’s part of the job.
  • As an entrepreneur you have to be able to overcome your fears. You must have the confidence to say, “I can do this.” And you have to be able to project that confidence.
  • Uncertainty is a given in entrepreneurship. You don’t know what you don’t know, but you’ll learn it when you need to know it.
  • Product philosophy: Before you start, think about the inevitable. What’s inevitable given the technology available, customer needs and status of the market? Use the answers to these questions to decide whether or not to pursue an idea. If you can identify those areas in the market where something big is going to happen, you’re positioning yourself for success.
  • One of the most challenging aspects of innovation is to take big complex ideas and make them stupid simple—so simple anyone can understand them.
  • To innovate, be disciplined and methodical in your thinking. Try something, measure it and iterate. Repeat that process over and over.

Learn more about Ken Denman and his company Emotient, formerly Machine Perception Technologies.

Bob Paulsen, co-founder and CEO of PlayerLync, shared his innovation best practices. PlayerLync creates an enterprise platform that provides a secure and easy way to control content and offers tablet-based collaboration. Their clients include large restaurant chains and NFL football teams.

Bob PaulsenPaulsen shared several keys to success:

  • PlayerLync takes a very user-focused approach to their product, and Paulsen reinforced that mentality throughout his presentation. He said you have to make it easy for someone to use your product. If their first experience with it isn’t positive, they’ll look for something else.
  • When developing PlayerLync, they considered what their customer would want in their product by anticipating their needs. The customer gave them a few initial requirements, and they took those requirements and ran with them. The result was a product that exceeded the customers’ expectations.
  • Ideas are great, but businesses are based on who will pay for your product, service or software. Don’t overlook this when starting a new venture.
  • He also recommended three business books: The E Myth by Michael E. Gerber, Crossing the Chasm by Geoffrey A. Moore and The Discipline of Market Leaders by Michael Treacy and Fred Wiersema.

Learn more about all the Innovation and Entrepreneurship Symposium sessions.

Innovation and Entrepreneurship Symposium

InnovEntreSymposiumOn Wednesday, April 2, the Foster School of Business held its 2nd annual Innovation and Entrepreneurship Symposium. Neal Dempsey, the visiting 2013-2014 Edward V. Fritzky Chair in Leadership, hosted an interactive day where students and business representatives came together to discuss the latest challenges in design and innovation.

The symposium started with Christian Chabot, founder CEO of Tableau Software. Next, Salman Ullah of Merus Capital and Neal Dempsey gave an insightful talk and provided advice to aspiring entrepreneurs. Highlights included:

  • It’s hard to be an entrepreneur. You have to fail to succeed. And after you fail, you have to get up and do it again.
  •  To be successful today, you have to work really, really hard—harder than those in previous generations. Why? Because the world is full of people who are also working really, really hard, and you’re competing against them.
  • Raising money.
    • There are many sources from which to raise money. Ullah made the point, however, that it’s good to raise money from traditional sources (venture capitalists) because they have a high bar, which is good for you and your business.
    • The real work of an entrepreneur starts after you’ve raised money. Ullah said, “Have enough psychic energy to get past the initial euphoria of raising money.”
  • Take responsibility for your own career path. Regularly evaluate your career to ensure it’s what you want. If it isn’t, make a change.
  • In every job you have figure out who will give you air cover. In this context air cover refers to a person who will back you and your ideas up when you need it. This person could be someone you’ve done a favor for, your mentor or a colleague.

Learn more about all the Innovation and Entrepreneurship Symposium sessions.

The journey of Tableau

Christian Chabot, CEO and co-founder of Tableau, spoke at the Leaders to Legends Breakfast Lecture Series on April 2. He outlined how Tableau, a business intelligence* software company, went from a small start-up in his Capitol Hill apartment to a publicly traded company (NYSE: DATA).

Chabot drew parallels between the rise of Tableau and the pattern that all disruptive companies follow as outlined in the book Innovator’s Dilemma by Clayton M. Christensen. That pattern is outlined below.

1. Disruptive technology comes along that is written off as low-end.
Initially, industry experts dismissed Tableau’s software even though it made it much easier for people to analyze data. Its software democratized people’s ability to work with and analyze data.

2. Market share captains write off the disruptive technology.
Gartner, an industry research firm, wouldn’t give Tableau the time of day from 2004-2006, and from 2007-2009, Gartner referred to Tableau as an interesting little data visualization start-up that is part of a niche market.

3. Massive numbers of people start to adapt the new technology.
The company’s revenue has roughly doubled every year since 2005, except for in 2009, the year of the financial collapse. Today, Tableau is the fastest growing software company in the world.

4. Technology moves up market and replaces the high-end technology.
Gartner visited Tableau in 2013 and said traditional business intelligence is dying and the world is moving toward the way Tableau operates.

5. Traditional providers start to struggle financially.
While Tableau is experiencing rapid growth, companies such as SAP and IBM, former leaders in the business intelligence industry, are reducing the size of their business intelligence divisions.

To learn more about Tableau and hear Chabot’s two pieces of advice for entrepreneurs and why he thinks Seattle is a better place for start-ups than Silicon Valley, watch the video below.

* Business intelligence (BI) refers to software applications that are used to analyze an organization’s raw data. BI includes data mining, processing, querying and reporting.

Christian Chabot was one of UW Foster School of Business Dean Jim Jiambalvo’s guest speakers at the annual Leaders to Legends Breakfast Lecture Series, which include notable leaders in an array of industries from greater Seattle and around the country.

$27,500 Awarded to Entrepreneurial Student Innovators

UW EIC 2014 Winners Korvata and NOVA Solar Window
UW EIC 2014 Winners Korvata and NOVA Solar Window

 

The annual UW Environmental Innovation Challenge (EIC), now in its sixth year, challenges interdisciplinary student teams to define an environmental problem, develop a solution, produce a prototype, and create a business summary that demonstrates the commercial viability of their product, process or service.

23 teams were selected to compete in the 2014 UW EIC. Each of these teams proved that students have the potential to address our most pressing environmental needs—alternative fuels,  recycling, solar power, water treatment—with novel solutions that have market potential. After pitching their innovations to a group of 170+ judges—investors, entrepreneurs, policy-makers, and experts from across sectors—the six teams with the highest scores were awarded up to $10,000 in prize money. Congratulations to this year’s winners:


$10,000 Grand Prize
Korvata (University of Washington)
Korvata has created a cutting edge alternative energy product that allows companies to mitigate their environmental impact by replacing the use of nitrous oxide as a whipped cream propellant.
(sponsored by the UW Center for Commercialization)
 
$5,000 Second Place Prize and $5,000 Clean Energy Prize
NOVA Solar Window (Western Washington University)
NOVA Solar Window combines the power producing capabilities of a solar panel with the utility of a traditional window. The utilization of transparent solar energy technology allows solar windows to provide renewable energy where traditional solar panels cannot.
(sponsored by Puget Sound Energy the UW Clean Energy Institute)
 
$2,500 Honorable Mentions
Loopool (Bainbridge Graduate Institute, Seattle Central Community College, University of Washington)
Loopool is reinventing the garment industry business model by creating a closed-loop supply chain, transforming reclaimed cotton garments and textiles into high-quality, bio-based fiber.
(sponsored by Starbucks) 

Salon Solids (University of Washington)
Salon Solids reduces the amount of plastic waste and hazardous chemical consumption that occurs with most hair products. Its six-ingredient shampoo and conditioner comes in solid form, eliminating the need for the preservatives necessary for a product with water in it, and its packaging is recyclable, biodegradable and does not contain plastic, further reducing waste.
(sponsored by Fenwick & West) 

Ionometal Technologies (University of Washington)
Ionometal Technologies has created a metal plating technique that allows for precise metal-on-metal deposition which can be used to repair gold test boards. The Ionometal printer prints metal plates that are smaller than can be seen with the naked eye.
(sponsored by WRF Capital)

 

Check out what guests, judges, and teams had to say about the 2014 UW EIC on Twitter: #UWEIC2014

CEOs and investment bankers give a rare glimpse into the IPO and M&A process

This event was hosted by Neal Dempsey, the Foster School’s visiting 2013-2014 Edward V. Fritzky Chair in Leadership.

You’ve probably seen the headline; “Major company goes public.” Perhaps you’ve even heard the breathless analysis that follows when said company’s stock prices decrease. What you’re probably less likely to hear or read in the news are the debates between CEOs and investment bankers, the strategy CEOs use to discuss going public with their employees, and how bankers negotiate stock price. These are the exact conversations current Fritzky Chair Neal Dempsey had in mind when he invited Vice Chair of JP Morgan Chase Cristina Morgan, former Eloqua CEO Joe Payne, Guidewire CEO Marcus Ryu and Head of Capital Markets at JP Morgan Chase Mike Millman to participate in a panel discussion on the IPO and M&A process. Moderated by Foster Professor Jennifer Koski, the panelists gave what is probably the most inside view possible of going public. Below are a few of the questions they tackled:

How do companies decide they’re ready to go public?
All of the panelists agreed that there are several things you must take in to consideration before making a final decision. For Ryu, it is asking one’s self, “Why do you want to go public?” Payne agreed, adding “Going public as a sole goal is an empty goal.” When preparing to take Eloqua public, Payne said that he and his colleagues spent a lot of time thinking about their customers and how they would feel about the move. Speaking from the investment bank perspective, Morgan argued that “the worst thing you can do is take a company public before they’re ready.” Furthering this point, Millman said that companies must consider three points before they go public; 1) Currency 2) Branding and 3) Capitol.

How do you maintain enthusiasm among your employees during the IPO process?
Ryu believes it is important for companies to operate with a long-term outlook. Since the stock market isn’t exactly the most steadfast entity, he came up with a two-pronged strategy for communicating with his employees about the IPO process: 1) Talk down the IPO and 2) Get everyone to understand the fickleness of the stock market. Having survived the dot com bubble of the 90s, when CEOs gained —and lost— millions of dollars in a matter of months, Payne had a similar revelation. “The issue of stock prices and IPO is only as important as you make it,” he stated in agreement with Ryu.  In fact, Payne and Ryu said that they both designated a few minutes during staff meetings to answer questions about the IPO.

What is the biggest source of contention when going public?
When discussing the relationship between investment bankers and entrepreneurs, Morgan said “We’re [the investment bankers] representing the buyers as well as the sellers” and that all involved parties act as each other’s “checks and balances.”  Adding, “[There’s a] natural suspicion that the investment bank is slightly more in league with the other side than with the company.” Simply put, bankers are predisposed to believe that the company is trying to get the stock prices higher while the company believes investment bankers are trying to get the price lower.
For Millman, there are three sources of contention:

1)      Evaluation- It’s difficult to educate the company’s board on the IPO.

2)      Employee selling- It can be very confusing for employees to know when and if they should sell.

3)      Fees- Banks will argue with each other on the best way to “divide the pie.”

Speaking to Morgan’s “natural suspicion” comment, Ryu admitted that he was initially skeptical of investment bankers. However, having gone through the IPO process, he now understands the importance of the work they do. Looking to Millman, whom he worked with when Guidewire went public, Ryu stated “I can say emphatically that the fee is well-earned.”

Watch the discussion in its entirety below:

)

The 2014 UW EIC challenges student innovators to think like entrepreneurs

The U.S. Department of Energy recently held its fifth Advanced Research Projects Agency-Energy  (ARPA-E) Innovation Summit—an annual event that brings together academics, entrepreneurs, innovators, and thought-leaders to discuss our most pressing energy issues, the technologies being developed to address them, and the market potential of innovative energy technologies.

A central message of the three-day summit was the importance of entrepreneurship. Keynote speakers like U.S. Secretary of Energy Ernest Moniz and Pulitzer Prize-winning author Thomas Friedman stressed the importance of commercializing new technologies. Their message was clear: it’s one thing to develop a breakthrough technology. It’s another thing to turn that brilliant technology into something commercially viable. If you want to advance energy innovation and solve our energy crises, you have to think and act like an entrepreneur.

Pure Blue Adam Greenberg
Pure Blue Technologies, UW EIC 2013

For the past five years, the UW Environmental Innovation Challenge (EIC) has been delivering that same message to innovative and entrepreneurial students from colleges and universities throughout the Pacific Northwest. Each year, interdisciplinary student teams are challenged to define an environmental problem, develop a solution, produce a prototype, and create a business summary that demonstrates market potential. The quarter-long process culminates in a large, DemoDay-like event where a select group of teams pitch to a group of 150+ judges—investors, entrepreneurs, policy-makers, and experts from across sectors. The top teams are awarded up to $10,000 in prize money, and everyone comes away with valuable feedback and experience to help them realize the market potential of their innovations.

The 23 teams selected for this year’s UW EIC run the gamut of clean technology and environmental innovation: Loopool is addressing waste in the garment industry by creating a closed-loop supply chain that transforms reclaimed cotton garments and textiles into high quality, bio-based fiber; NOVA Solar Window combines the power-producing capabilities of a solar panel with the utility of a traditional window, providing renewable energy where traditional solar panels cannot. Korvata, in response to the harmful environmental effects of greenhouse gas emissions, has created a mixture of proprietary gasses to replace the use of nitrous oxide as a whipped cream propellant.

For the next month, these competitors, along with 20 others, will refine their prototypes, perform market analyses, hone their pitches, and prepare to prove that their innovation has the potential to succeed in the marketplace—and transform our world.

Follow the progress of the 2014 UW Environmental Innovation Challenge: