Timmons New Venture Creation

T h e
U n i v e r s i t y
Entrepreneurship and
Engineering Management
o f
B r i t i s h
Sheryl Staub-French, PhD, ssf@civil.ubc.ca
C o l u m b i a
Assistant Professor, Civil Engineering
Coordinator, Engineering Management Program
Engineers in Law and Business Development

February 4, 2004
Introduction
Takeaways
1. A broad-based education is essential.

2. Entrepreneurship can you help you to
understand the business context.
3. Establish your business philosophy.
1. Broad-
Broad-based Education
What is Entrepreneurship?
“"Entrepreneurship is a management style that

involves pursuing pursuit of opportunity without
regard to resources controlled.”
“Any attempt at new business or new venture
creation, such as self-employment, a new business
organization, or the expansion of an existing
business, by an individual, a team, or an
established business.”
“A way of thinking and acting that is opportunity
obsessed, holistic in approach and leadership
balanced – for the purpose of value creation.”
A Way of Managing and Leading!

Reference: Harvard Business School and Babson College
1. Broad-
Some Important Entrepreneurial Skills
Oral and written communication

Basics of finance and accounting
Teamwork
Creativity and opportunity evaluation
Real-time strategy and decision making
Comfort with change and chaos
Risk-taking
Evangelism, selling, negotiation, and
motivation thru influence and persuasion
1. Broad-
Who is the entrepreneur?
High
Inventor Entrepreneur
Creativity
And
Innovation Manager /
Promoter
Administrator
Low High
General management skills, business
know-how, and networks
Reference: Jeffry Timmons “New Venture Creation”

1. Broad-
Entrepreneurship and Education
Common question: Can entrepreneurship be taught?
Asking the wrong question! The right question is….
Can Entrepreneurs Learn?
Reference: Ray Smilor

1. Broad-
Engineering Management Education

Engineering Management at UBC
Bachelor of Science in Engineering with a Minor in
Commerce
Master of Engineering with a sub-specialization in
MBA Programs in Commerce
Entrepreneurship, Information Technology and Management,
Supply Chain Management, …
Master of Management Program in Commerce
(1) Management Information Systems, (2) Operations Research,
(3) Transportation & Logistics
Engineering Management Programs

Master of Technology Management (e.g., U. of Waterloo)
Master of Engineering Management (e.g., Stanford)
1. Broad-
Engineering Management Sub-
specialization
A program for graduate engineering students
within the Faculty of Applied Science.
Allows students to get a more balanced
education in both technical and managerial
subjects.
Requires 12 credits in management courses,
with the following 2 core courses:
APSC 541: Technology Entrepreneurship for Engineers
APSC 540: Business Decisions for Engineering
Ventures
http://www.civil.ubc.ca/ems/
1. Broad-
Entrepreneurship and Education

Entrepreneurial Education1
Revolution in higher education
K-12 (30 states offer, 8 states require)
Entrepreneurship at UBC
125 invention disclosures, 227 patents, $10.4M royalties2
MBA module on Entrepreneurship
Core Course in Engineering Management Sub-
specialization: APSC 541: Technology Entrepreneurship for
Engineers (may be offered to undergraduates in 2004-5)
Stanford Technology Ventures Program
Mission: accelerate high-tech entrepreneurship education
and research across top engineering schools worldwide
http://stvp.stanford.edu/
1Source: Jeffry Timmons “New Venture Creation”
2Source: University-Industry Liaison Office
2. The Entrepreneurial Process
A Model of the Entrepreneurial Process
Communication
Opportunity
Business Plan
$
Resources
Fits and gaps

Ambiguity Exogenous Factors
Creativity Leadership
Team
Source: Jeffry A. Timmons “New Venture Creation”
Product Idea
The world will NOT beat a path to the door
of the inventor of the better mousetrap
Idea itself does not have value, it’s all about
execution
“Being first” is over-rated
It is one among many relevant variable
factors
Look for Discontinuities
IP rich
How much R, how much D R&d
Source: Mark Leslie – Stanford University
The Market
Market demand
Who is the customer? Are they reachable?
How will the product or service be priced? Costs to deliver?
Market share and growth potential?
Competition
Current competitors, strengths/weaknesses?
How will the leader’s react and how quickly?
Why can’t they do the same and put you out of business?
Market structure and size
Emerging and/or fragmented market?
Proprietary barriers to entry?
Margin analysis
Helps to differentiate opportunity from idea
What is your business model?
Team
Entrepreneurial Leader
Learns and teaches – faster, better
Deals with adversity, is resilient
Exhibits integrity, dependability, honesty
Builds entrepreneurial culture and organization
Quality of the team
Relevant experience and track record
Motivation to excel
Commitment, determination and persistance
Tolerance of risk, ambiguity, uncertainty
Team focus of control
Adaptability
Leadership
Communication
Resources
$
Minimize and control versus maximize and own
You don’t need all the resources in place to succeed
Money follows high potential opportunities with a strong
management team
Different types of resources

Financial resources
Assets
People
Your business plan
Think cash last!!!!!
Understand and marshall resources, don’t be driven by them
Doing more with less is a powerful competitive weapon
Case Example of Entrepreneurial Process
Opportunity
Business Plan
$
Resources
Fits and gaps
Team
Yahoo! 1995
Product
Hierarchical organization of WWW links
Builds hand-crafted, intuitive paths
“Not just a directory but a media property.”
Market
Current Demand: 2M users after one year
Current Market Size: 40M users of internet
Projected Market Size: 200M users by 2000, $2B in web-based
advertising
$ Resources
Business plan, use of Netscape network
Team
Jerry Yang and David Filo Source: Jeffry A. Timmons “New Venture Creation”
Yahoo! 1995
The Deal
Opportunity
Business Plan
$
Resources
$4M
Fits and gaps valuation
VC offers
$1M for 25%
ownership
Assemble a complete
Team management team

Social Entrepreneurship
Entrepreneurial approaches to social problems
Not a new phenomenon
Blurring of sector boundaries
Innovative not-for-profit ventures
Social purpose ventures
Hybrid organizations: for-profit and not-for-profit
Mission-related impact becomes the central
criterion, not wealth creation
Difficult to assess value: markets don’t work well
Valuing social improvements
Public goods and harms
Benefits for people who cannot afford to pay
Reference: Gregory Dees: “The Meaning of Social Entrepreneurship”
Hamed Shahbazi in APSC 541

Thursday February 5 from
5-6:30 in CEME 1202
Founder and CEO of
InfoTouch
UBC Civil Engineering
graduate of 1997
Top 50 Canadian
technology growth
companies
Deloitte and Touche Fast
50 award
3. Your Business Philosophy
Ethics and Corporate Responsibility

Why is it important?
Its your name!
Corporate Optics
Brand Management
Corporate Identity
There are many reasons - Its good business!!
Its not just good to be profitable, its very
profitable to be good.
Can you be successful without it?
Reference: Hamed Shahbazi

The Warren Buffett Way

Who is Warren Buffett?
The greatest investor in the world ($36B
worth)
Renowned for recognizing and picking great
leaders to drive his companies
His overall business philosophy on
leadership is based on I.E.I.
INTEGRITY
ENERGY
INTELLIGENCE
Can’t have two out of three
Challenges
Too much emphasis on making a “Fast
Buck”
Not enough focus on value creation
Compensation without value creation leads
to issues with commercial sustainability
which eventually lead to LOSS
Usually business transactions that are not
win-win

The Solution
Driving real value for fair compensation
“Fair” is not only based on customer
perception (micro-viewpoint) but also the big
picture – supply and demand as well as other
elements.
Value is always proportional to compensation
Call it “business homeostasis”

The Process
Process is just as important as the end
game
Everyday business negotiations are the very
building blocks of value creation
Harvard Law’s Negotiation Program calls
this Mutual Gains Negotiation

Value Creation Inside-out

Value Creation internally within a company
is just as important as creating value for a
corporation’s external stakeholders
What does this mean?
Encouraging personal development
By helping employees fulfill their personal goals, the
company can realize its greatest ambitions
Tireless incentive based encouragement of integrity,
respect and innovation contribute to a better working
environment – this enhances productivity.

Ethics Policies
Severe forms of frustration in the
organization are symptoms of culture failure.
Managerial action to merely deal with
symptoms of frustration instead of
preventing its causes deepens the existing
culture failure.
Culture failure is a leading cause of failing to
meet one's corporate responsibilities.

Ethics Policies
Do you want to just appear to have
corporate responsibility, or do you want to
truly have corporate responsibility?
It takes more than words and policies. It
takes a commitment to ethical reasoning
skills and an ethical operating culture.
However, long term sustainable success is
just not possible without it

Video of David Neeleman

Founder and CEO of JetBlue
Conclusions
Be patient
Treat people with respect
Find a job that you enjoy
Think Big!
T h e
U n i v e r s i t y
Entrepreneurship and
o f
B r i t i s h
Sheryl Staub-French, PhD, ssf@civil.ubc.ca
C o l u m b i a
Assistant Professor, Civil Engineering
Coordinator, Engineering Management Program
Engineers in Law and Business Development

February 4, 2004

Timmons New Venture Creation

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T h e

Engineers in Law and Business Development

1. A broad-based education is essential.

“"Entrepreneurship is a management style that

A Way of Managing and Leading!

Some Important Entrepreneurial Skills

Oral and written communication

Who is the entrepreneur?

Reference: Jeffry Timmons “New Venture Creation”

Entrepreneurship and Education

Common question: Can entrepreneurship be taught?

Asking the wrong question! The right question is….

Can Entrepreneurs Learn?

Reference: Ray Smilor

Engineering Management Education

Engineering Management Programs

Entrepreneurship and Education

Fits and gaps

Different types of resources

Fits and gaps

Source: Jeffry A. Timmons “New Venture Creation”

Hamed Shahbazi in APSC 541

Ethics and Corporate Responsibility

Reference: Hamed Shahbazi

The Warren Buffett Way

Reference: Hamed Shahbazi

Reference: Hamed Shahbazi

Reference: Hamed Shahbazi

Value Creation Inside-out

Reference: Hamed Shahbazi

Reference: Hamed Shahbazi

Reference: Hamed Shahbazi

Video of David Neeleman

Engineers in Law and Business Development

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Oral and written communication

Engineering Management Programs

Different types of resources