International Opportunities

In addition to the myriad of opportunities TI:GER students have to get involved with the local start-up community, international offerings are a great way to broaden our view of the global market. Our program entered into an exciting partnership with Copenhagen Business School's BBIP program and participated in a week long exchange with 8 of their students. The program involved two teams (4 from Copenhagen and 2 TI:GER students each ) working to commercialize life sciences research. Our four TI:GER students flew to Denmark earlier in the semester to meet the rest of their teams and learn more about the science they would be working with.

After this initial week trip, the TI:GER students kept in touch with their Danish teammates and worked on developing business and commercialization plans remotely. Using video conferencing and collaborative software, they were able to continue their work despite geographic limitations.

In late November it was the TI:GER program's turn to play host as the eight Danish students came to Atlanta for a week to continue work on their business plans in person as well as learn about the local life sciences start-up community. They went on tours of nearby businesses, Georgia Tech laboratory facilities, and even made it out to a Hawks game to have some fun. All the while they were working diligently on their business plan presentations between tours and events. We even got some of them to join us at Mary Mac's to eat traditional southern fare - It was a hectic (but productive) week!

I was able to attend their presentations at the end of the week and was truly impressed by how much work these teams had accomplished during the semester, especially given the challenging distance. Both groups utilized the business model canvass and received feedback on their current go-to-market strategies. They received some good notes from the faculty in attendance and will be incorporating these suggestions into a written business plan in the coming weeks.

This partnership was a great way for TI:GER students to get international experience, work with an even more diverse team, and delve into a new product offering. New opportunities like this keep the TI:GER program fresh and the students engaged throughout their graduate school experiences.

Barriers to Entry

In last week's TI:GER class we were treated to a panel discussion from four local entrepreneurs. They shared their start-up experiences with the class and then took questions for an hour on a variety of topics from funding to the importance of patent protection. The aspect of the discussion that stood out the most to me was their approach to barriers to entry.

As the TI:GER program is based PhD's technologies, our projects are focused on products that are very novel and difficult to replicate. These high barriers to entry give our projects the ability to have intellectual property protection and create temporary monopolies around our technology.

The entrepreneurs offered a different perspective and suggested that founding a successful business was predicated more by finding a large market than finding a unique technology. They believed that our strategy was forcing our businesses into smaller market niches that were not always as profitable as larger markets, even adjusting for competition.

It reminded me of discussions our TI:GER team had last year when we were attempting to find a product to build using our technology. We were searching frantically for competitors and if we found that another group was first to market, we would either cross the idea off the list or, at the very least, strongly discourage the use of that product. We were intensely focused on finding a novel application to fit our new technology.

The panel was very informative and provided an interesting perspective. It is important to remember that there are two components to total potential customers for a start-up company: market share and market size. While it's easy to get focused on owning market share with a new technology, it needs to be balanced with understanding the potential size of the market. Barriers to entry, while important, is not the most important aspect to consider when launching a start-up.

Year 2 TI:GER Blog Kickoff!

Finally the crazy start to the 2nd year of MBA school has calmed down and I've been able to write a catch-up post in the TI:GER Tales blog.

This summer I took off to Charlotte, NC for an internship at Duke Energy. While this may seem like an odd choice after a full year of Entrepreneurial studies, it was a great opportunity to see how the utilities industry worked at scale. I got to take a few trips to the test solar farm of Duke Energy where they perform extensive trials of various panels to make large scale purchasing decisions. My TI:GER project helped me get this internship and even more so helped me contribute from day one at the job.

Now for some bad news: our TI:GER project on next generation solar has come to an end. The current level of efficiency and the necessary research needed to make a commercially viable product combined to make our start-up nonviable in the marketplace. Our team really wanted to stay together and continue work but we would need a new project to fill our time.

Through the resources at the TI:GER office, our team was able to connect with an ATDC start-up named NextInput. They have offered our team a consulting project that will replace our PhD project, allow us to work on a more commercializable device, and continue working as a team throughout the fall semester.

I'll be writing more about our work with NextInput and various projects for class (business model canvass and our annual pitch-off competition vs UGA are sure to be highlights).

Thanks for bearing with me during my summer absence- look forward to more frequent updates now!

Business Plan Competition

Note! Our team has changed names to DynaGlass after some mentor feedback about our previous name. 

This year, I was asked to assist with the Georgia Tech Business Plan Competition (BPC). My TI:GER team decided not to enter due to our length of time to commercialization but I still wanted to be involved. Time keeping at the BPC was an amazing experience and hearing the wide variety of pitches and

judges’ comments helped mold our TI:GER team’s commercialization plan presentation. 

There were several traps that teams fell into most frequently:

1. Many teams focused too much on their valuation. They provided detailed pro formas for 5-10 years out and explained all of their assumptions. This took a long time and in a time-constrained presentation format, this can be dangerous. The judges did not seem to take these pro formas very seriously because they were so far out and many of these teams had failed to make a single initial sale. What these slides did do was invite questions from the judges that were often difficult for the teams to answer which leads to trap number 2.
2.  There were several attempts during Q&A for teams to answer questions about assumptions that were simple guesses. These assumptions were often difficult to find accurate numbers around and thus the teams would simply estimate or make up a number to make their financials work. When the judges would question these assumptions, teams would often just “make-up” a justification. This was fairly obvious to the judges and they would harp on that point until the team finally admitted they didn't have a reason. It’s always better to admit you don’t know the answer than to make one up.
3. Teams often did a poor job explaining their technology in appropriate detail and language. Some teams used highly technical language and went into great detail on how, exactly, their product worked. In contrast, there were teams that glossed over their product and focused entirely on their business model. The judges wanted a detailed description that they could understand. Even if they do not understand all the science, it needs to be presented in a relatable way. Without a detailed description of how the product works, it makes the project seem less developed. The question then must be asked “why you?” if you do not have a specific way of solving the problem.

4. Pricing seemed to be fairly random and the judges wanted to see value based pricing. While value creation is often difficult to quantify, most other pricing models were perceived as being more “random”. The teams that were able to determine and demonstrate the value they were providing their customers generally performed better than those that offered vague “savings”.

These four key lessons provided great insight into what judges at business plan competitions are looking for and common mistakes teams make. Often teams seemed so involved in communicating the value of their idea, they forgot to communicate the value of the product that their company was selling. All companies are driven by sales and these judges seemed to take a simplistic view of start-ups. If you’re selling a product that offers greater value to the customer than it costs you to make it, you have a good chance of being successful. For DynaGlass, we need to really focus on the large value we are providing the customers and quantify that value as much as possible. That way our team will be able to overcome the relatively high price of our product. We also need to come up with justifications (written and sourced) for each of our assumptions and be quick to admit what we don’t know (but will find out) during our Q&A sessions.

Valuation Part 1

The first year TI:GER course has shifted focus from customer discovery (although those interviews are still on-going, we have one on Monday with a solar panel installation start-up in the Atlanta area) to valuation.

Valuation is being taught by guest lecturer Mark Buffington who works as a venture capitalist in Atlanta. He provides great insight into how start-ups, specifically tech start-ups, are valued in the market. Since a large majority of entrepreneurial ventures require outside capital, learning how firm value is derived is important not just to VC's but to the entrepreneurs themselves.

So far, we have learned several different valuation methods: comparable transactions, revenue multiples, and discounted cash flow. We are now moving in to monte carlo simulation modeling that will allow us to assign weights and probabilities to a variety of success levels. This is particularly important when valuing start-ups because their chance for early exit is very high. Specifically in the medical device industry, the probability of achieving FDA approval and passing clinical trials must be included in any pre-approval firm.

Learning more about how firms are valued will allow us (over the next two weeks) to create a valuation for our start-up. We're at work practicing the monte carlo simulation tools this week, then it's time to assign weights to our on probability of success. I'm looking forward to really seeing how much of an impact our choices today will affect future value.

Customer Discovery Round 2

Our first year TI:GER teams are now in the middle of customer discovery interviews. This has been an incredibly interesting process and has been my favorite TI:GER experience so far. It's interesting to see ideas and concepts formed within a small group get such varied reactions when explained to the people whom would actually use our product. 

We met on Friday with Campus Services at Emory University. Both an environmental engineer and the director were on hand to answer questions from our team about sustainable design at Emory. The campus already hosts the highest number of LEED certified buildings on any campus in the nation, so our team decided they'd be a great place to start. 

What came out of our interview was that one of our more minor "customer value propositions" (aesthetic appeal) was, for Emory, a major concern. They believe current solar technology is being held back by appearance as well as costs. This finding has certainly shifted our group's focus to aesthetic design in a strong way. 

That is, at its core, what the customer discovery process is all about. We are working towards creating a prototype that is tailored to customer needs and that involves getting out of the office to talk to customers! We have several interviews left with folks further on the construction side of the industry. Emory provided some great contacts with various links in the building materials supply chain. Hopefully understanding more about this process will allow our team to target the correct channel as well as customer to get our product to market. 

TI:GER Integration with MBA program

Our TI:GER team is still hard at work interviewing potential customers and industry players. We have found some early success in reaching out to these decision makers and influencers but still have several more to go to complete our customer discovery assignment. 

For this blog post, I'd like to talk about the TI:GER program as a whole and how it fits in with the MBA program. We're about to start the 2013 recruiting season and having spent a semester and change in the program, it seemed like a good idea to reflect about the experience. 

I see the TI:GER project as an integrative complement to my other classes. Many business school classes are case-based which provide an excellent opportunity to analyze how companies addressed various subject specific challenges. The TI:GER project is different in two main ways. First, the project is entirely new. Instead of critiquing an unsuccessful plan or praising a successful idea, the project requires more imaginative thinking to create an answer when none exists. Similar to the difference between multiple choice tests and short answer, this is an alternative way of thinking and helps reinforce concepts learned in core classes. For example, we have spent time in our Marketing class critiquing other company's plans and advertisements. This information has been used fully with our TI:GER project as we generate target segments and value propositions for our product. 

Secondly, the TI:GER project reaches across subject area. Between IP law lectures, finance valuation practice, and the economics-of-cost, we are learning the basics of all facets of a start-up company. Using a single core idea and seeing how each of the concepts relate to it allow us to understand how all the pieces fit together and influence each other. Very few jobs are "finance" or "operations" and require an integrated understanding that is often hard to learn in core classes. 

So far I have really enjoyed our project, the team dynamics, and the learnings of the TI:GER class. It provides a nice complement to the more subject specific core classes in addition to the entrepreneurship content. 

Customer Interviews

At the end of the 1st semester of the TI:GER program, my team had assembled a detailed Industry Analysis of the Solar industry. This report addressed the competitive forces, the major players, and the diverse markets of the industry.

Now comes the challenge of our second semester- picking the best of these markets to target for our business model canvas. The business model canvas (http://www.businessmodelgeneration.com/canvas) will provide a framework for our go-to market strategy this semester. This requires two steps:  identify and understand potential customers for our solar cell and discover how to best reach them.

Rule No.1 of customer development is that you must get outside your building to find any worthwhile facts. For us, this means that we need to do detailed interviews with at least 10 potential customers to fully understand what the market needs and how customers would be most apt to address their pain. This is not a sales pitch, but a great opportunity to have a dialogue with potential customers (and industry experts) to gain insight into what the market views as important.

Today we had our first interview and already we're finding out about new opportunities and customer needs that we had never thought of in our group.

I'm looking forward to this process and this semester, I'll keep you posted!