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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-
Broad-based Education

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-
Broad-based Education

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-
Broad-based Education

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-
Broad-based Education

Engineering Management Education


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

‰Engineering Management Programs


ƒ Master of Technology Management (e.g., U. of Waterloo)
ƒ Master of Engineering Management (e.g., Stanford)
1. Broad-
Broad-based Education
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:
ƒ APSC 541: Technology Entrepreneurship for Engineers
ƒ APSC 540: Business Decisions for Engineering
Ventures
‰http://www.civil.ubc.ca/ems/
1. Broad-
Broad-based Education

Entrepreneurship and Education


‰ Entrepreneurial Education1
ƒ Revolution in higher education
ƒ K-12 (30 states offer, 8 states require)
‰ Entrepreneurship at UBC
ƒ 125 invention disclosures, 227 patents, $10.4M royalties2
ƒ MBA module on Entrepreneurship
ƒ 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
ƒ 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”
2. The Entrepreneurial Process

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
2. The Entrepreneurial Process

The Market
‰ Market demand
ƒ Who is the customer? Are they reachable?
ƒ How will the product or service be priced? Costs to deliver?
ƒ Market share and growth potential?
‰ Competition
ƒ Current competitors, strengths/weaknesses?
ƒ How will the leader’s react and how quickly?
ƒ Why can’t they do the same and put you out of business?
‰ Market structure and size
ƒ Emerging and/or fragmented market?
ƒ Proprietary barriers to entry?
‰ Margin analysis
ƒ Helps to differentiate opportunity from idea
ƒ What is your business model?
Source: Jeffry A. Timmons “New Venture Creation”
2. The Entrepreneurial Process

Team
‰Entrepreneurial Leader
ƒ Learns and teaches – faster, better
ƒ Deals with adversity, is resilient
ƒ Exhibits integrity, dependability, honesty
ƒ Builds entrepreneurial culture and organization
‰Quality of the team
ƒ Relevant experience and track record
ƒ Motivation to excel
ƒ Commitment, determination and persistance
ƒ Tolerance of risk, ambiguity, uncertainty
ƒ Team focus of control
ƒ Adaptability
ƒ Leadership
ƒ Communication
Source: Jeffry A. Timmons “New Venture Creation”
2. The Entrepreneurial Process

Resources
$
‰Minimize and control versus maximize and own
ƒ You don’t need all the resources in place to succeed
ƒ Money follows high potential opportunities with a strong
management team

‰Different types of resources


ƒ Financial resources
ƒ Assets
ƒ People
ƒ Your business plan
‰Think cash last!!!!!
ƒ Understand and marshall resources, don’t be driven by them
ƒ Doing more with less is a powerful competitive weapon
Source: Jeffry A. Timmons “New Venture Creation”
2. The Entrepreneurial Process
Case Example of Entrepreneurial Process

Opportunity

Business Plan
$
Resources

Fits and gaps

Team
Source: Jeffry A. Timmons “New Venture Creation”
2. The Entrepreneurial Process

Yahoo! 1995
‰ Product
ƒ Hierarchical organization of WWW links
ƒ Builds hand-crafted, intuitive paths
ƒ “Not just a directory but a media property.”

‰ Market
ƒ Current Demand: 2M users after one year
ƒ Current Market Size: 40M users of internet
ƒ Projected Market Size: 200M users by 2000, $2B in web-based
advertising

$ ‰ Resources
ƒ Business plan, use of Netscape network

‰ Team
ƒ Jerry Yang and David Filo Source: Jeffry A. Timmons “New Venture Creation”
2. The Entrepreneurial Process
Yahoo! 1995

The Deal
Opportunity

Business Plan
$
Resources

ƒ $4M
Fits and gaps valuation
ƒ VC offers
$1M for 25%
ownership

ƒ Assemble a complete
Team management team

Source: Jeffry A. Timmons “New Venture Creation”


2. The Entrepreneurial Process

Social Entrepreneurship
‰Entrepreneurial approaches to social problems
‰Not a new phenomenon
‰Blurring of sector boundaries
ƒ Innovative not-for-profit ventures
ƒ Social purpose ventures
ƒ 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
ƒ Valuing social improvements
ƒ Public goods and harms
ƒ Benefits for people who cannot afford to pay
Reference: Gregory Dees: “The Meaning of Social Entrepreneurship”
2. The Entrepreneurial Process

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?
ƒ Its your name!
ƒ Corporate Optics
ƒ Brand Management
ƒ Corporate Identity
ƒ 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


3. Your Business Philosophy

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.
ƒ INTEGRITY
ƒ ENERGY
ƒ INTELLIGENCE
‰Can’t have two out of three
Reference: Hamed Shahbazi
3. Your Business Philosophy

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

Reference: Hamed Shahbazi


3. Your Business Philosophy

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”

Reference: Hamed Shahbazi


3. Your Business Philosophy

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

Reference: Hamed Shahbazi


3. Your Business Philosophy

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?
ƒ Encouraging personal development
ƒ By helping employees fulfill their personal goals, the
company can realize its greatest ambitions
ƒ Tireless incentive based encouragement of integrity,
respect and innovation contribute to a better working
environment – this enhances productivity.

Reference: Hamed Shahbazi


3. Your Business Philosophy

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.

Reference: Hamed Shahbazi


3. Your Business Philosophy

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

Reference: Hamed Shahbazi


3. Your Business Philosophy

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
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