Entrepreneurship and Engineering Management

T h e U n i v e r s i t y

Entrepreneurship and Engineering ManagementSheryl Staub-French, PhD, [email protected] Professor, Civil Engineering Coordinator, Engineering Management Program

o f B r i t i s h C o l u m b i a

Engineers in Law and Business Development February 4, 2004

Introduction

Takeaways1. A broad-based education is essential. 2. Entrepreneurship can you help you to understand the business context. 3. Establish your business philosophy.

Broad1. 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


Some Important Entrepreneurial SkillsOral 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


Who is the entrepreneur?High

Creativity And InnovationLow

Inventor

Entrepreneur Manager / AdministratorHigh

Promoter

General management skills, business know-how, and networks

Reference: Jeffry Timmons New Venture Creation


Entrepreneurship and EducationCommon question: Can entrepreneurship be taught? Asking the wrong question! The right question is.

Can Entrepreneurs Learn?

Reference: Ray Smilor


Engineering Management EducationEngineering Management at UBCBachelor of Science in Engineering with a Minor in Commerce Master of Engineering with a sub-specialization in Engineering Management MBA Programs in CommerceEntrepreneurship, 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 ProgramsMaster of Technology Management (e.g., U. of Waterloo) Master of Engineering Management (e.g., Stanford)


Engineering Management SubspecializationA 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/


Entrepreneurship and EducationEntrepreneurial Education1Revolution in higher education K-12 (30 states offer, 8 states require)

Entrepreneurship at UBC125 invention disclosures, 227 patents, $10.4M royalties2 MBA module on Entrepreneurship Core Course in Engineering Management Subspecialization: APSC 541: Technology Entrepreneurship for Engineers (may be offered to undergraduates in 2004-5)

Stanford Technology Ventures ProgramMission: accelerate high-tech entrepreneurship education and research across top engineering schools worldwide http://stvp.stanford.edu/1Source: 2

Jeffry Timmons New Venture Creation

2. The Entrepreneurial Process

A Model of the Entrepreneurial ProcessCommunication

OpportunityBusiness PlanAmbiguity Creativity

Resources

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Fits and gaps

Exogenous Factors Leadership

TeamSource: Jeffry A. Timmons New Venture Creation


Product IdeaThe world will NOT beat a path to the door of the inventor of the better mousetrap Idea itself does not have value, its 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 &d

R

Source: Mark Leslie Stanford University


The MarketMarket demandWho is the customer? Are they reachable? How will the product or service be priced? Costs to deliver? Market share and growth potential?

CompetitionCurrent competitors, strengths/weaknesses? How will the leaders react and how quickly? Why cant they do the same and put you out of business?

Market structure and sizeEmerging and/or fragmented market? Proprietary barriers to entry?

Margin analysisHelps to differentiate opportunity from idea What is your business model?Source: Jeffry A. Timmons New Venture Creation


TeamEntrepreneurial LeaderLearns and teaches faster, better Deals with adversity, is resilient Exhibits integrity, dependability, honesty Builds entrepreneurial culture and organization

Quality of the teamRelevant experience and track record Motivation to excel Commitment, determination and persistance Tolerance of risk, ambiguity, uncertainty Team focus of control Adaptability Leadership CommunicationSource: Jeffry A. Timmons New Venture Creation


ResourcesYou dont need all the resources in place to succeed Money follows high potential opportunities with a strong management team

$

Minimize and control versus maximize and own

Different types of resourcesFinancial resources Assets People Your business plan

Think cash last!!!!!Understand and marshall resources, dont be driven by them Doing more with less is a powerful competitive weaponSource: Jeffry A. Timmons New Venture Creation


Case Example of Entrepreneurial ProcessOpportunityBusiness Plan Fits and gaps

Resources

$



Yahoo! 1995ProductHierarchical organization of WWW links Builds hand-crafted, intuitive paths Not just a directory but a media property.

MarketCurrent 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

$

ResourcesBusiness plan, use of Netscape network

TeamJerry Yang and David FiloSource: Jeffry A. Timmons New Venture Creation


Yahoo! 1995Opportunity The DealBusiness Plan Fits and gaps Resources $4M valuation VC offers $1M for 25% ownership Assemble a complete management team

$



Social EntrepreneurshipEntrepreneurial approaches to social problems Not a new phenomenon Blurring of sector boundariesInnovative 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 dont work wellValuing social improvements Public goods and harms Benefits for people who cannot afford to payReference: Gregory Dees: The Meaning of Social Entrepreneurship


Hamed Shahbazi in APSC 541Thursday 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 ResponsibilityWhy 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 WayWho 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

Cant have two out of threeReference: Hamed Shahbazi


ChallengesToo 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 SolutionDriving 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 ProcessProcess is just as important as the end game Everyday business negotiations are the very building blocks of value creation Harvard Laws Negotiation Program calls this Mutual Gains Negotiation



Value Creation Inside-outValue Creation internally within a company is just as important as creating value for a corporations 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 PoliciesSevere 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 PoliciesDo 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 NeelemanFounder and CEO of JetBlue

ConclusionsBe 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 Engineering ManagementSheryl Staub-French, PhD, [email protected] Professor, Civil Engineering Coordinator, Engineering Management Program

o f B r i t i s h C o l u m b i a

Engineers in Law and Business Development February 4, 2004

Entrepreneurship and Engineering Management

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