Course overview

Here is the course overview. We're not quite launched yet, just testing but wanted to get this out there as an overview. The quiz and the 2nd video will be available in a few weeks time hopefully.

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This is a group project-based activity. To begin finding teammates who are enrolled in the class or to tell us your preferences for your existing teammates please go to http://venture-lab.org

The introduction is here: http://eesley.blogspot.com/2012/02/course-introduction.html

Course introduction

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 I recorded a new intro video.

Forbes story on my class

How Much Should You Pay Yourself As An Entrepreneur?

From a "tax perspective", if you are a sole proprietor, all of your profits are your income and your 'technically' do not pay yourself a wage. If you are a Corporation (or an LLC taxed as a Corporation), then you should be paying yourself a wage. And yes, many shareholders (owners) under value their services. However, if IRS audits your business and determines you've done this, they can re-assess some of the company profits as wages and make you pay payroll taxes (and penalties and interest) on the unpaid payroll taxes.

I would recommend that any business owner set up as a Corporation be sure to discuss with their accountant what a "fair" wage is for the services the owner is providing to the company. There are many factors to take into consideration when determining what a fair wage is...and that is not something that you can really compare to other business owners...it is something that matters to what your financial numbers are, what your goals are, what your profit percentage is, and the list goes on. The key is not getting caught in an audit for not paying enough to yourself as the owner of the business.

It really depends what the business can afford.

Your business will ebb and flow particularly at the early stages, at this point the best thing to do is take a very basic salary with a bonus structure which starts as soon as your business reaches the profit stages.

When your business is consistently profitable, you should re-evaluate your salary and take an increase equal in percentage to the business's annual growth rate.
In all circumstances, a regular assessment of your personal finances enables you to adjust accordingly.

Most small businesses work (or should) a business plan that has the following 2 drivers in determining the pay for the founders.

1. The % of ownership in the business based on investment in time and funds as reflected in an operating agreement.

2. The break-even point where the business begins to turn a profit and distribution of the proceeds is possible to the principal(s).

Short of the above, entrepreneurs must face that fact that ones value is driven solely by the success of the enterprise. For anyone to justify a standard quantification of that is "Sky Bluing" it with little meaning.

Experimenting on Someone Else's Dime

Lets face it, losing your angel investor or venture capitalist's money is painful. It's even more painful to lose money from your friends and family. Running your startup experiment using their dollars is incredibly hazardous. So how to fulfill your startup dreams? Run your experiments on someone else's money.

When I was first starting out as an entrepreneur, we were trying to do an agricultural biotech business and had great science and a cool technology, but knew little to nothing about the industry (we had a great team of advisors who saved us from many mistakes). So that meant that we spent an incredible amount of time and energy figuring out all kinds of aspects of our business model that other people pointed out to us over and over again that we really should have already known. We were re-inventing the wheel at almost every turn.

I see the same thing often happening with my students and their startups in my class now. They have a head start when they work on a problem that they have or a technology from their lab. But when they try to search outside of that realm, it's much more difficult. I pair them up with well-matched industry mentors and this helps to some extent. Much like having a cofounder team with some younger and naive entrepreneurs who are willing to experiment and try new things as well as older, experienced entrepreneurs who know everything that's been tried in the industry over the past 30 years.

This video advocates accelerating your learning through strategically gaining work experience. It also relates to at least three of the papers I've written with coauthors. The first talks about the entrepreneurs who have come out of MIT over the past several decades. We again find that while the average age of the entrepreneur has been shrinking, most get some industry experience first.

The second looks at serial entrepreneurs. Here we find that when the industry or technology are completely new, the first time entrepreneur has a much better chance at success. However, when the experienced entrepreneur is using a similar technology and is in the same industry/market as the previous startup, it's hard to beat the benefits of that prior experience and the experiments that he or she already learned from. The third piece of research this is based on is a study of the roles on founding teams. We found that when a team is using a high innovation strategy and will partner with large firms for marketing and distribution, then having an engineering focused team is best. However, when competing in the product market with incumbents or using an imitation strategy, the team needs cofounders who have a variety of skills and roles to cover marketing, sales, and so on. So the area where you need to experiment depends on your business model.

Reid Hoffman at Stanford

While we're waiting for the course videos I thought I'd share this great talk from this Weds. at Stanford's ETL lecture series by Reid Hoffman.

How Do You Manage Your Social Media Marketing?

My advise is to focus on the marketing channels, including social media, which your target market is using. It’s the fish where the fish are thing.

The importance of using, blogs, Twitter, FaceBook, LinkedIn, cannot be overstated as channels to disseminate your content, to create brand awareness, foster loyalty and build trust.

If you have a nice website, use it as the centre of your digital universe to drive traffic towards.

Remember your potential customers will consume content from different channels at different times during the day. And they will consume content differently depending upon where in the buying cycle they are. Your content, therefore, should be assessable across and packaged for different platforms and for different audiences types.

As you know all marketing efforts begin with creating content that is remarkable. Share on Twitter, FaceBook, and LinkedIn .... and drive the traffic to a landing page on your website with the appropriate CTA buttons.

1 Create a blog post on subject.

2 Promote it on Twitter

3 Discuss the subject on your FaceBook Page

4 Create a presentation and share on SlideShare

5 Create a video on the subject, post on multiple video channels.

6 Bookmark you post on StumbleUpon

7 Create a Press Release and disseminate (if worthy enough)

8 Repackage your best post in your newsletter / email

9 Create an eBook on the subject

10 Use PPC, Google, FaceBook, LinkedIn ads to drive to a landing page with CTA buttons.

11 Experiment with content on each channel to see what is converting and driving website traffic.

The options are endless on how to promote your content. As we all know Marketing efforts as well as Social Media Marketing efforts are a slow burn that can build into a wildfire if you are persistent, consistent, and determined.

Remember content you create should target different parts of the marketing funnel, depending where in the funnel your prospective customer resides and your content should target different people. C-level need different content then engineers for example.

Google OpenID

We'll be using Google OpenID for authentication for the quizzes. http://code.google.com/apis/accounts/docs/OpenID.html

Also considering posting the course videos and quiz links to a Facebook group as well if we can.

Class today with Fergus Hurley, CEO/Founder of Focal Labs

VC Returns in Silicon Valley versus the rest of the US

I received an interesting question today from an entrepreneur friend who I met a while back at the wedding in NYC of one of my doctoral classmates from MIT Sloan.

He is working on an early stage startup and said that at a Board meeting, they were discussing venture capital and geography and the question was whether there was a higher or lower return on venture capital investments in Silicon Valley compared with other regions?

So he wrote to ask me whether the data back this up. 

This is a very interesting question because it could very well be that due to all the competition for hot deals (startups) in Silicon Valley, this drives up the valuations and thus drives down the venture returns for the VCs. If talent was fairly equally spread geographically,  it could feasibly be a better strategy to look for the less hyped deals that others are not fighting over. Besides the data that coauthors and I have collected from MIT and Stanford alumni, two other papers came to mind. One by a colleague at Stanford:

Robert Hall and Susan Woodward have written one of the most thorough recent examinations of the returns to venture capital and VC-backed entrepreneurs. http://www.nber.org/papers/w13056.pdf

However, it did not address this issue of geography.

The other is coauthored by one of the HBS faculty who I learned from, Josh Lerner and it does address geography directly.

They find that defining success as the proportion of portfolio companies that go public (IPO), VCs in Silicon Valley, NY, and Boston have greater performance and their VC-backed companies in those locations also have higher performance. However, the outperformance of these VC firms comes more from selecting better investments when they invest outside of SV, Boston and NYC! If you think about it, this makes sense. If you are a top entrepreneur outside of one of these startup hubs and a major Silicon Valley VC as well as a local VC both give you term sheets, it's going to be very tempting to take the Silicon Valley VC's termsheet.

However, this still did not answer the direct question of whether Silicon Valley firms outperform those in say Boston, MA or New York City. It also only looks at IPO rates rather than at revenues or employees as alternative performance measures.

For this, I looked at the data from the Stanford Alumni Survey. These are preliminary results, but I do find that when you look at revenues or employees, the Silicon Valley firms (defined as those located 60 miles or less from Stanford) have statistically significantly higher revenues and employees relative to those not in Silicon Valley. [$128M in mean revenues vs. $62M, p<0.05]

Yet, when you compare Silicon Valley firms against those in Boston or New York, there are no significant differences in revenues or employees. It is worth noting that the Silicon Valley firms are bigger on average (the distributions are highly skewed), yet this difference is not statistically significant. [$128M vs. $29M, p<0.17 and 307 employees vs. 51 on average, p<0.27]. Since these distributions are so skewed, the median is perhaps more informative [$300,000 vs. $150,000].

Finally, I looked at the current status of the firms.

For Silicon Valley firms, the breakdown looks like this:
Private firm: 55%
Acquired: 23%
Out of business: 18.4%
IPO: 4.2%

For MA and NYC:
Private firm: 67%
Acquired: 15.5%
Out of business: 16.5%
IPO: 2%

References:

Robert E. Hall, Susan E. Woodward. 2007. The Incentives to Start New Companies: Evidence from Venture Capital. NBER Working Paper No. 13056.

Henry Chen, Paul Gompers, Anna Kovner, Josh Lerner. 2010. Buy local? The geography of venture capital. Journal of Urban Economics.

Abstract:

We document geographic concentration by both venture capital firms and venture capital-financed companies in three metropolitan areas: San Francisco, Boston, and New York. We find that venture capital firms locate in regions with high success rates of venture capital-backed investments. Geography is also significantly related to outcomes. Venture capital firms based in locales that are venture capital centers outperform, regardless of the stage of the investment. This outperformance arises from outsized performance outside of the venture capital firms’ office locations, including in peripheral locations. If the goal of state and local policy makers is to encourage venture capital investment, outperformance of non-local investments suggests that policy makers might want to mitigate costs associated with established venture capitalists investing in their geographies rather than encouraging the establishment of new venture

capital firms.

Team Formation

One of the students had a great suggestion. While we're waiting for the class to get kicked off, you all should use the comments and discussion forum here to begin forming teams. Teams should consist of 3-4 people each.

You can start by introducing yourself briefly, where you're located (it's better if teams for in nearby geographical areas) and your idea or the industry sector that you'd like to work on. If you already have a couple of teammates, specify the skills you're looking to bring in on the team. If you can't find a team that's co-located in the same city, you could potentially use Google+ or Skype video conferencing for team meetings.

You can also use the Facebook group or LinkedIn group to form teams.

What Does It Take To Turn Good PR Into A Sale?

It takes strategically planned thought leadership and a carefully crafted image.

PR is great because it creates awareness...but awareness of what? Your brand? Okay, but why, how, what for?

There is value in a good press release and getting a few nice stories "out there" about you. But if you really want to move the needle and convert sales, you need to use PR in all forms (media relations, social media relations, industry visibility, speaking engagements, content marketing, events, etc.) to demonstrate thought leadership and subject matter expertise.

This is especially important for the small businesses you are working with because they can't afford the big budget mass promotion the large companies can. But, a small company can get involved with key associations, speak on panels, write white papers and share video, blog and twitter content that demonstrates not only their knowledge but that they are keeping up with trends and hot industry topics.

The biggest mistake people make in PR is to think it's just about one function (i.e. press release/media pitching) and they forget that is just one spoke in a very large wheel.



Good PR - This seems like an obvious, but most of what passes for good PR, isn't. PR is so frequently banal, condescending, untargeted or merely plain old bad, that I find myself boggling at what comes across my desk.

Good Product - This also seems obvious but, like good PR, is often not the case.

Good Targeting - You may have good PR and a great product, but if it's not something I'll ever care about...no sale.

Need/Opportunity - You can't manufacture this, despite what marketing tells you. You might convince me I need something, but that only works once and I'd better actually need it, or really want it.

When these work in tandem, you get a sale, otherwise, not.

The Future of Technology Entrepreneurship Education

Unfortunately, the launch of my Technology Entrepreneurship online course has been placed on hold, due to delays surrounding copyright and intellectual property clearance issues. We are working on this and I anticipate providing you with an update within the next few months. Until the course launches, I encourage you to explore the material that is available on Stanford University's Entrepreneurship Corner website (http://ecorner.stanford.edu/). ECorner offers over 2,000 videos and podcasts, featuring entrepreneurial thought leaders. Also, please check my personal website (http://eesley.blogspot.com) for additional updates.

• Also see Steve Blank's course at steveblank.com 
• Frequently Asked Questions about the course are here.
• Sign up for the mailing list here: https://mailman.stanford.edu/mailman/listinfo/venture-class

Description: 

Technology Entrepreneurship examines the fundamentals of technology entrepreneurship.

How do you create a successful start-up? What is entrepreneurial leadership in a large firm? What are the differences between an idea and true opportunity? How does an entrepreneur form a team and gather the resources necessary to create a great enterprise? This class mixes mentor-guided team projects, in-depth case studies, research on the entrepreneurial process, and the opportunity to network and ask questions of Silicon Valley's top entrepreneurs and venture capitalists. For undergraduates of all majors who seek to understand the formation and growth of high-impact start-ups in areas such as information, green/clean, medical and consumer technologies. No prerequisites are necessary.


Also see Steve Blank's course at steveblank.com

Bio:

I'm a professor in Stanford University's Management Science & Engineering group, teaching and doing research on technology entrepreneurship so that the next generation of entrepreneurs can have the greatest chances of success possible. Before Stanford, I earned my Ph.D. at the MIT Sloan School of Management and a B.S. in Biological Basis of Behavior at Duke University. I've spent the past 10 years in and around startups, founding 3 of my own, worked in a Duke neuroscience lab, started a biotech consulting firm, worked with numerous pharmaceutical companies and two venture capital firms and mentored startups in the MIT 100K and Clean Energy competitions.

Class Description

Technology Entrepreneurship, 2012
Charles Eesley, Assistant Professor, Stanford University

Module	Session	Date	Class Topic	Guests	Case	Term Projects	Textbook Chapter
I I I I	1 2 3 4		Course Overview: Silicon Valley and Key Frameworks (Cases) Creativity and Improvisation From Idea to Opportunity: Business Models Customer Dev. & Lean Startups	Tina Seelig/Kirsten Leute	LinkedIn Facebook	Form Study Teams	1-4 5-6 16-17
II II II II II II	5 6 7 8 9 10		Entrepreneurial Sales & Marketing Break: Work on OAP OAP Presentations I OAP Presentations II Partnerships and Negotiations Legal Essentials	Alex Rampell	Zynga WebTV	OAP Pres. and Paper	7, 19 9 11, 15 10
III III III III III	11 12 13 14 15		Acid Test for Entrepreneurs Venture Finance Workshop Building the Startup Team Financings and Teams Social Entrepreneurship	Henry Wong Clint Korver Fergus Hurley	Nanogene Wily Tech.		12-14 18, 20 4.8, 8.2, 12.8
IV	16		OEP Office hours
IV IV IV IV	17 18 19 20		OEP Team Presentations I OEP Team Presentations II Stock Options Course Summary Personal Business Plan due		Barbara’s Options	OEP Pres. OEP Paper

Module Legend
I – The Entrepreneurial Perspective
II – Opportunity Recognition and Evaluation
III – Assembling Resources and Managing Growth
IV – Entrepreneurship and You
Textbook: Dorf and Byers, Technology Ventures: From Idea to Enterprise, 3rd Edition, McGraw-Hill.
Revised: Feb. 10, 2012

Admissions & General Information

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

The class demonstrates the entrepreneurial mindset ... when others see insurmountable problems, people look for opportunities in technology and business solutions. A technology entrepreneurial perspective is also a wonderful way of thinking in order to tackle new opportunities in social entrepreneurship, whether it is in government or NGOs.

By the conclusion of the course, it is our hope you understanding more specifically how to:

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

Who is this Course For?
This course is designed for undergraduates (and co-terminal students) from all majors, including science, engineering, and humanities students who seek to understand what the entrepreneurial mindset and its key processes are about. Topics introduced in this course are relevant for future founders of enterprises, as well as the future employees of a independent or corporate startup.
How Do We Teach this Course?
Through case studies, lectures, workshops, and projects that cover high-growth ventures in information technology, electronics, life sciences, green technology and other industries, this course provides the student with the tools necessary to successfully identify a true business opportunity and to start, grow and maintain a technology enterprise.

We will cover material organized in four modules:

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

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

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

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

Course Materials
Primary Readings

• Cases - Electronic Course Reader (http://cb.hbsp.harvard.edu/cb/access/13092866)
• Byers, Dorf & Nelson, Technology Ventures, McGraw-Hill, Third Edition, 2010
• click here for 'Where to Buy'
• you can also purchase an electronic eBook version of this title by visiting www.coursesmart.com (ISBN 0077305914) , a direct link is available from the 'Where to Buy' Link
• Assigned Reading Links on the Web

Recommended Reading

• Blank, Four Steps to the Epiphany
• Meyer, M., Crane, F. (2011). Entrepreneurship: An Innovator's Guide to Startups and Corporate Ventures (pp. 500). Sage Publications.
• Komisar, Randy with Kent Lineback, The Monk and the Riddle, HBS Press, 2000
• Seelig, Tina, What I Wish I Knew When I Was 20, HarperOne, 2009

Recommended Entrepreneurship Seminar Series

• MS&E472. Entrepreneurial Thought Leaders (ETL) Seminar, 1 unit, auditors OK, Wednesdays 4:30-5:30PM, Huang Auditorium
• ETL offers an amazing opportunity to learn from the people who are leading technology innovation in the valley and beyond. While not required, we strongly encourage you to attend these weekly seminars.

Policies
Think of this as an opportunity to stretch yourself and learn skills like teamwork, public speaking, persuasive writing, and defending your ideas, as well as the fundamentals of the entrepreneurial process. The teaching team will endeavor to create a supportive environment, where there is no penalty for taking a definite stance and expressing new ideas. 

Grading Policy and Assignments
Grading will be determined based on the auto-scored quizzes and via students voting up other students' presentation links. Completing quizzes will requiring logging in with Google OpenID.

Class Sessions
Students will be evaluated on their participation in "classroom" discussions via the forum and commenting system, whether about the case under consideration or about the topic of the lecture. The grading of classroom participation is difficult because of an element of subjectivity not present in grading written assignments. Nevertheless, it is a vital part of the course. Most students feel comfortable in speaking up with thoughtful comments and questions, but some do not, and we wish to be fair to everyone. We will not be grading on "air time", but rather on the quality of the question or comment.  Participating in classroom discussions, freely and without fear, is strongly urged.  No opinion is held in disregard, and only through active discussion can we arrive at some consensus of reasonable action. It is never our intention to embarrass anyone -- if you are not prepared, let one of us know before class and we will not call on you. Being prepared for our class sessions is an important part of contributing to the class learning community. Thanks for your commitment to be an active contributor to the class discussions.
Required Readings
All assigned readings are to be completed before the session. Each required reading has been specifically chosen to provide a certain insight or skill; thus, every assignment is mandatory.  Though there is no way to verify that students have read the material before class, all lectures, study questions, assignments, and exams assume a fundamental understanding of many concepts provided by the readings.  Consequently, failure to keep up with the assignments will have an adverse effect on a student's grade.

Recommended Readings
Supplementary readings are suggested that provide additional depth and richness for the topics considered each day. These readings are not required. While we hope that you will return to these readings as time permits, you are not expected to have completed the readings prior to class. As your time permits, we highly recommend skimming the recommended readings - an investment that we believe can be very rewarding.

Study Questions
You are required to form a study group consisting of four students and then meet regularly before each class. These study groups will be formed in the second class session. The study questions are helpful preparation aids for each case while meeting with your study partners. You are required to answer these study questions in your team writeup.
Team Assignments
Unless stated otherwise, assignments are to be submitted via the discussion comment/forum section for that class by 9 AM PST the day of the session.

• Team Writeups - Team case writeups are to be discussed as a team and then contribute towards the comments and discussion.

Social Networks

Most of the class discussion should occur via the commenting / discussion forum below. If you would like to discuss further on Twitter, use the following hashtag #tech_eship2012

Style Guidelines for Assignment Submissions
Avoid common errors in team writeups, individual analyses and other submissions, such as:

• Focusing too heavily on minor issues or those on which there are little data.
• Lamenting because of insufficient data in the case and ignoring creative alternatives.
• Rehashing of case data -- assume the reader knows the case.
• Not appropriately evaluating the quality of the case's data.
• Obscuring the quantitative analysis, making it difficult to understand.

Typical "minus(-)" grades result from submissions that

• are late
• exceed the page limit
• are not well integrated and lack clarity
• do not address all study questions
• do not recognize the cost implications or are not practical
• get carried away with personal biases and are not pertinent to the key issues
• are not thoroughly proofread and corrected. 

Term Projects Descriptions

Key Deliverables

Each team (4 person) will create and maintain a website on which you will present your opportunity analysis and execution projects as they evolve.  You should post your key deliverables to your website as they become due. The key deliverables for the two projects are:

Opportunity Analysis Project (OAP):  For this assignment you will upload a 2-5 minute video to YouTube and tag it with "Chuck Eesley Technology Entrepreneurship class OAP" and then post the link to the video so that other students can watch these.

You will learn how to tell the difference between a good idea in a dorm or a lab and a great scalable business opportunity.  You will identify and define a market opportunity and pitch the opportunity in 5 minutes to your classmates and the teaching team.

You and your team should pick an opportunity and perform a first analysis to understand whether your opportunity can be turned into a scalable business. In your presentation and written analysis you should tell the "story" of your proposed venture by addressing the following:

• Concept. Where did your idea come from (e.g., a Stanford lab)? Explain what the market opportunity is and what your solution might be. What makes your solution particularly compelling? How does it make meaning? Do you have personal experiences with this market? Is there existing intellectual property that you must license or new intellectual property you must develop in order to pursue this opportunity? Has anyone tried something like this before? If so, why did they fail or succeed, and why is the opportunity still attractive?
• Market. What industry are you addressing? Why is this market attractive? What segment of the overall market are you pursuing? What market research data can be gathered to describe this market need? What are the total industry or category sales over the past three years? What is the anticipated growth for this industry? If this is a new market, what is the best analogous market data that illustrates the opportunity? Project the potential market size and growth for your opportunity.
• Customers.  This is extremely important. You need to have a clear idea of who your target customer is. The only way for you to be able to do this is to "get out of the building" and speak with your potential customers. You will need to answer questions such as: What does the customer need? Why does the customer need it? What is the customer using today?  What is the customer willing to pay for your solution? Why? How will you reach this customer? You should include both primary (or first-hand) research and secondary research, emphasizing primary over secondary.
• Business Model. Now that you have discovered an opportunity and talked to potential customers, how will you turn it into a business? How will you make money and when do you expect your venture to be profitable?   (You will get to think about this more in the Opportunity Execution Project.)
• Competition. Who else serves this customer need? Who might attempt to serve this market in the future? What advantages and weaknesses do these competitors and would-be competitors have? What share of the market do specific competitors serve? Are the major competitors' sales growing, declining, or steady? What are the barriers to entry for you? What are the barriers to entry for additional competitors?
  
  The list above has no implied order. Some entrepreneurs start with a well-defined concept and then try to identify a market for their idea; others start by studying a market and then stumble upon an idea. Also, please keep in mind that the specific data and information you provide will vary according to the type of opportunity you choose to analyze.

We recommend five basic steps in the process of analyzing an opportunity:

1. Identify potential opportunities. Combine your own personal experiences and creativity with external forecasts and trend analysis. How is the world changing with respect to new technologies? What is the impact of globalization on current solutions? What new requirements will those changes produce? Recent media articles on trends are often a good place to start. Additionally, you may want to look through Stanford's Office of Technology and Licensing for new technologies that have been developed at the University.
2. Define your purpose and objectives. Identify your most promising opportunity, being careful to discriminate between an interesting technological idea and a viable market opportunity. Prepare an outline which will help you to determine what types of data and information you need to demonstrate the attractiveness of your chosen opportunity.
3. Gather data from primary sources. It is crucial for you to obtain data from primary sources. Potential investors will place more trust in well conducted primary research than in stacks of data from secondary sources. There is simply no substitute for talking to potential customers from the target market in order to validate the opportunity you have identified. Consequently, we prefer that you spend time gathering data from primary, not just secondary, sources. Check out SurveyMonkey as well.
4. Gather data from secondary sources. Countless secondary sources exist on the web and in Stanford's various library resources. The Jackson Library GSB Database Resources and the GSB librarians are especially helpful. Appendix C of the Dorf and Byers textbook offers a good summary of secondary research sources. Try not to get too bogged down in financial and accounting data.
5. Analyze and interpret the results. Persuasively summarize your results.

Milestones
Session 3
Team Formation Deadline. This team will serve as both your study group and your term project team.
Initial Positioning Statement. Fill in Geoff Moore's two-sentence positioning template for your OAP product or service concept. The template is:

Sentence #1
For (target customer)
who (statement of the need or opportunity),
the (product/service name) is a (product/service category)
that (statement of benefit).

Sentence #2
Unlike (primary competitive alternative),
our product (statement of primary differentiation).

Create two PowerPoint slides. One slide should simply list the name of your project team with all the team members and their majors. The second slide should have a succinct draft of your positioning statement above.  Post it in the comments/discussion forum.  Also post the slides to your team's website if you created one. For extra credit, please share how your potential venture will make meaning and not just money.
Opportunity Analysis Presentation and Written Analysis. By 9 AM, post your presentation and 750-word written analysis to the website. Your team is strongly encouraged to keep your written analysis to 750 words, as this is a good opportunity to learn how to be succinct in business communications.  However, if it is absolutely necessary, the word count may be increased 20%, up to 900 words.  Your team will have 5 minutes to present your opportunity and this time limit will be strictly enforced.

Opportunity Execution Project (OEP): Due during sessions 17, 18 & 20 :

For this assignment you will upload a 5-10 minute video to YouTube and tag it with "Chuck Eesley Technology Entrepreneurship class OEP" and then post the link to the video so that other students can watch these.

You will explore how to actually assemble a company – thinking through how your team would sell, create demand, attract a team, and fund the product. Then you will pitch the opportunity in 10 minutes to your classmates and the teaching team.

The Opportunity Execution Project is a chance for your team to think about how to take your idea from a business plan on paper and turn it into a real company. For this part, your analysis should include the following:

• Fundamental Problem. What is the fundamental problem you are solving for the end user of your product?  What is the fundamental problem you're solving for your customer (if it is different from the end user)? Give a quick recap of your OAP - just a reminder of your key points and the takeaway.
• Business Model. You now have had some more time to think about your opportunity.  Do you have any additional thoughts/changes about the business model?
• Sales & Marketing Strategy. How would you sell your product? What distribution channels would you use? How would you create demand for your product?
• Risk. Regarding financial, technical, people, and market risks; which one is of most concern?  Which would you choose to address first and why? How would you manage or minimize each of the high-priority risks going forward?
• Partners and Allies. Who will be your major partners? How will your product be made? Will your company produce all of the parts, or will it use external suppliers? How would you go about attracting these partners and allies to work with your company?
• Funding. How would you fund your venture? Would you bootstrap, take money from venture capitalists, take funding from a corporate investor, etc?
• Team. Who would you need on your team in order to make this venture a success? What kind of experience and skills would your team need? How would you go about attracting them to your company?

Milestones

Sessions 17 & 18: Opportunity Execution Presentation. Presentations are limited to 10 minutes per team including Q&A. Slides should be in standard PowerPoint format, with a recommended maximum of 8 slides per team. The best presentations are often the shortest and most succinct. A summary at the end of the presentation is often very powerful.
 Deliverables: All teams, regardless of which day they are presenting, must post their PowerPoint deck or presentation video in the comments and/or to their website by 9 AM before Session 17.
 Session 20 Post your OEP written analysis (1500 words) to your team website and link in the discussion comments.  Your team is strongly encouraged to keep your written analysis to 1500 words, as this is a good opportunity to learn how to be succinct in business communications. 

REMINDER: As has been mentioned in class, the key to the OEP is the depth of your analysis and what you learned from it. If after careful research you have determined that your business idea is not as promising as you originally thought, it is totally acceptable to present an OEP that describes why your idea WON'T work rather than why it is the next big thing. An honest, rigorous analysis of an idea that didn't survive further  scrutiny is preferable to either (a) a half-baked  presentation of an idea you're unsure of, or (b) an enthusiastic pitch for your current idea, even though you know it is problematic.

Mentors

At Stanford, the instructors have assembled a group of professional mentors from all over Silicon Valley -- venture capitalists, entrepreneurs, and others -- to work with teams in defining, developing, and honing the two term projects. Each team at Stanford is assigned one mentor "relationship," and that relationship will consist of either one or possibly two people, depending on whether a mentor is working alone or has chosen to work with another individual. 

It is impossible for me to coordinate mentors in an online course environment, so I encourage you to find your own mentor(s) locally for your team.

Suggested Resources

Video Links:Online at STVP’s Entrepreneurship Corner there is a wealth of film clips of entrepreneurial thought leaders discussing relevant themes. Feel free to scroll through ecorner.stanford.edu for insights and inspiration.  The following are just a sample:Textbooks and Readings:
    Technology Ventures , Dorf & Byers. 3rd Edition Chapter 2-5, 7, 11, 19
    Four Steps to the Epiphany, by Steve Blank.  Chapters 1-3

Startup Owner's Manual by Steve Blank (2012)
    The Monk and the Riddle, Randy Komisar.  Chapter 6, pp. 80-83, pp. 118-121.
    "How to Write a Great Business Plan," Sahlman, HBS Case #97409.
Hot technologies and trends:
    Top 10 Strategic Technologies 2010
    Entrepreneur.com Trends for 2010
    PC World Tech Trends 2010
    WSJ 2010 Technology Innovation Awards
    JWT Intelligence 10 Trends 2010
SurveyMonkey: Past teams have found SurveyMonkey to be helpful in gathering primary data. The basic service is free and provides most of the features you’ll need. Visit SurveyMonkey at: http://www.surveymonkey.com/ 

Personal Business Plan Assignment

The Personal Business Plan assignment is due on the last day of the class. Again, this is ungraded but you should consider sharing it or a link to your personal business plan if you are comfortable doing so on the forum.

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

Your personal business plan should include a long-term vision statement, the "external" opportunities that exist, your "internal" (personal) strengths, and a strategy for yourself and your life over the next two to three years. In addition, please share one "failure" from your past and what you learned from it in terms of maximizing your potential for the future. 
The assignment should consist of a one-page Executive Summary (up to 600 words in bullet points or prose) that summarizes the areas discussed below, as well as the one "failure" wherever you feel it best fits. 

• Vision and Opportunity
1. What are your goals (career and/or educational) after you leave Stanford?
2. What is your purpose, your values and your mission? List the 3 key questions that guide your choices. These should be essential questions that serve as touchstones to direct your life and work. For instance, how can I have impact? What do I love? What do I fear? What engages my passions? How do I want to be remembered? The answers to these questions may well change over time, but when the questions themselves are fundamental they tend to last a lifetime.
3. What is the market and opportunity that align with your goals? Don't restrict yourself to matters of career or work; think more broadly about your opportunities to make a difference.
• Marketing and Implementation Strategy
  
• Create your market positioning statement. This may be directed at a hypothetical employer, industry, organization, or the world at large.

1. What compelling value will you offer to your employers and society?
2. How will you differentiate from other Stanford students? How about from the broader populace?
1. Risks and Mitigation
1. What are the key milestones and checkpoints in your plan?
2. How will you measure/determine if you have successfully attained these milestones? How do you define success?
3. What external factors might affect (positively or adversely) your attaining success?
4. Develop contingency and risk mitigation strategies.
1. Personal "Board of Directors"
1. If you could assemble any 3 people to advise and mentor you who would they be? They may be alive or dead, family or world leaders, friends or strangers. Why would you choose each? Is it their wisdom, their accomplishments, their words, their creativity, their character, their heroic deeds………..?


The Case Method of Instruction


We will not be able to hold live case discussions in the course. Instead we will rely on the comments in the forum for discussion. But we should use similar notions of how to have a useful discussion.


The case method of management instruction is based upon the belief that management is a skill rather than a collection of techniques and concepts. The best way to learn this skill is is to experience it in a simulation-like process. The class is conducted using the dynamics of a team meeting where the objective is to determine the best course of action and how to implement it. Students are the team members and the lecturer is the facilitator. The collective knowledge of the team determines the outcome of each class not the lecturer. The students decide what's "the right answer" in the heat of their deliberations, debate, and discussions.

Our purpose in this class is to understand how managers make decisions. To do this requires direct exposure to the decision-making process. Unfortunately, we cannot project ourselves into actual business situations. As a substitute, we can read descriptions of particular business situations and make decisions based upon the data we find there. By doing so, we simulate the functioning of a manager. Descriptions of business situations are frequently referred to as cases.
A case is a statement of conditions, attitudes and practices existing at some particular time in a company's history. It usually describes a situation in which the company is facing, or has resolved, some challenging problem or problems. Cases are not written to illustrate good or bad management. They are written about interesting business situations that are particularly useful in illustrating a specific set of management issues.

A case provides some, but usually not all, of the information that was available to executives at the time they had to resolve a challenging problem. It frequently includes data on alternative courses of action. Because it is an attempt to reconstitute a real life situation, a case is purposely written in a manner that requires the rearrangement of facts and interpretation of these facts, including the evaluation of opinions, behavior and intentions. Many of the facts available are relevant to the solution of the problem presented in the case, but some may be irrelevant.

This arrangement of the descriptive material, on a somewhat unstructured basis, in itself, simulates experiences of the business executive. On first reading a case, you may well ask yourself, "What's all this about?" One of your first adjustments to the case method of instruction will be getting used to the manner in which case material is presented. It will be up to you to develop your analytical ability by reorganizing the particular problems involved. You will have to develop the alternative solutions, gather the appropriate data, evaluate them, and finally make a decision.

To realize the maximum benefits when studying under the case method, you should recognize that:
• This method of learning calls for the maximum individual participation in class discussion.
• Effective classroom case discussion and analysis can be realized only if each participant has the "facts" of the case and his or her analysis well in hand. One does not seek to uncover facts or make the analysis during the discussion, although modifications of both facts and analysis will evolve through the insights provided by the group's effort.
• Intelligent analysis calls for the recognition and identification of assumptions.
• Decisions have to be made without all the data one would desire, and this is an asset, not a liability, in case analysis. It reflects the condition management often faces.
• There may be several acceptable solutions to a problem in a case. Definitive answers are rarely, if ever, available. In our learning environment, as opposed to real business situations, the solution is not as significant as the basis on which it is derived.
• Though learning under the case method is a group process, this does not imply conformity to group opinion.
• The teacher is a discussion leader, not a lecturer or major contributor of facts and analysis.
• Learning by the case method, or any other educational approach, is in the final analysis an individual proposition, calling for a maximum of personal effort and responsibility.
• Each person will not necessarily speak every day. There is still ample opportunity to benefit from the classroom experience, by comparing your analysis with that being presented and discussed.
• You must accept a critical atmosphere and be willing to submit your conclusions to rebuttal. You must be willing to accept the risks of stating your conclusions and overcome the fear of making and admitting a mistake.

- Reference: Fred Gibbons
 
Case Analysis Guidelines
The case study is intended to give you an opportunity to apply the concepts of the course in the context of a "real" business situation. Each of the cases are based on a key situation or event in the history of a high tech company. The cases we will cover in E145 are: 
• LinkedIn
• Facebook
• Zynga
• WebTV
• Nanogene
• Wily Technologies
Submissions should reflect an understanding of the critical issues of the case, integrate the material covered in class and present concise and well reasoned justification for the stance that the group takes. Each case analysis should consist of:
• A response to the question(s) under "Study Questions" on the relevant session page of the Course description (this is not necessarily what is shown at the end of the case itself - please defer to the course description).  Clearly state the decision or recommendation for action, with the appropriate supporting arguments.
• A brief analysis of the situation and pending decision problem, as presented in the case, and as relevant to your answer. This should be exceptionally brief and you should assume the person reading the assignment is familiar with the details of the case.


The total length of each case analysis should be no more than two pages, with one page greatly preferred. Team case assignments should be prepared as a team, but only one submission is required per group. Students may discuss individual case assignments with their group (and are encouraged to), but should do their own work. These case write-ups will not be graded, but can be added to a new thread in the forum discussions so that you can share and comment on write-ups with other students. In general, keep the text short and concise.