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LABORATORY TO MARKET
ENTREPRENEURSHIP FOR ENGINEERS
ENGR 112
Spring 2015, Lecture 1

Schaffer Grimm, M.S., M.B.A.

Lecturer, Henry Samueli School of Engineering and Applied Sciences
Manager of Strategic Business Planning, Institute for Technology Advancement

Nathan M. Wilson, Ph.D., M.B.A.

Visiting Assistant Professor, Anderson School of Management
Visiting Assistant Professor, Department of Mechanical and Aerospace Engineering, Henry Samueli
School of Engineering and Applied Sciences
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Agenda
• Review Syllabus, Discussions, Text, and Logistics
• Course Overview
• Why study entrepreneurship?
• What is entrepreneurship?
• What do entrepreneurs do?
• Background
• Schaffer Grimm
• Institute for Technology Advancement
• National Science Foundation’s Innovation Corps
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Course Objective
• Introduction to entrepreneurship and small business
development from the perspective of the entrepreneur

• Emphasize the inherent experiential nature of entrepreneurship

• CUSTOMER AND ECOSYSTEM INTERVIEWS!

• You will work in teams to turn an idea into a product, service or

process

• Help you understand how to build and manage your own

startup
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Teaching Assistants
• Melissa Forstell
• Dan LaFranchi
• Aly McDonald

Notes:
1. Make sure you are on the class email list!
2. Make sure you sign the attendance sheet
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Goals & Learning Tools

• “This course serves as a rigorous introduction to
entrepreneurship and small business development from the
perspective of the entrepreneur”
• HBR/HBSP articles & textbook

• “While this course will focus extensively on the core

fundamentals of building a business, the class will also
emphasize the inherent experiential nature of
Entrepreneurship”
• Guest speakers

• Working in teams
• Group assignments & presentation
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Business Model Canvas

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Our Curriculum

6 7 1 2
Who are your Key What Key Activities do What customer How will you
4 Who are your most
Partners? you require? problems are you get, keep, important customers?
helping to solve ? and grow
Who are your key Manufacturing? What are their
customers?
suppliers? Software development? What customer needs archetypes?
Personal concierge are you satisfying?
What are you getting What job do they want
service? Etc.
from them…and giving you to get done for
to them? them?

8 3
What Key Resources Through which
do you require? channels (sales,
What are key features
distribution, support)
Financial? Physical? of your product/service
do your customers
Intellectual property? that match customer
want to be reached?
Human resources? problems/needs?

What are most important How will you make

costs inherent in your
business model? 9 money?
What is revenue model?
5
What is mix of fixed and
What are pricing tactics?
variable costs?
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Syllabus: Lectures
Week Session Description
Introduction to Entrepreneurship; Small Business Paths
1
Business Model Canvas
2 Hypothesis-Driven Entrepreneurship; Customer Discovery
3 Markets & Industries; Industry Analysis; Business Model Patterns
4 Legal and IP issues for Startups
5 University Tech Transfer; Technology Assessment
6 Mid-Term Exam & Entrepreneurial Marketing
7 Distribution Channels; Partners; Competitors
8 Revenues & Costs; Entrepreneurial Accounting
9 Raising Capital
Introduction to Business Plans & Elevator Pitches; Business Model
10
Strategy
11 Final Exam
TENTATIVE
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Class Norms
• You will be in class.
• You will participate in class.
• You are encouraged to disagree with me and your fellow
students as much as you like, as long as you are respectful and
there is some logic behind your position.
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Learning Tools
• Background Notes & Articles
• Lectures
• Guest Speakers
• Discussions
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Learning Tools: Background Readings

• Value Proposition Design
• Business Model Generation
• A Perspective on Entrepreneurship
• Experimenting in the Entrepreneurial Venture
• Industry Analysis
• Legal Forms of Organization
• The Protection of Intellectual Property in the United States
• Disruptive Technologies: Catching the Wave
• Blue Ocean Strategy: From Theory to Practice
• Selling and Marketing in the Entrepreneurial Venture
• Segmentation and Targeting
• Overview of Financial Accounting
• Financing Entrepreneurial Ventures
• How Venture Capitalists Evaluate Potential Venture Opportunities
• Developing Business Plans and Pitching Opportunities
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Textbooks
Required Reading:

• Alex Osterwalder, Yves Pigneur, Greg Bernarda, Alan Smith

(2014). Value Proposition Design. Hoboken, New Jersey: John
Wiley & Sons.
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Learning Tools: Frameworks & Strategic Theories

• Rogers: Diffusion of Innovations (1962)
• Porter: Five Competitive Forces That Shape Strategy (1979)
• Moore: Crossing the Chasm (1991)
• Christensen: Disruptive Technologies (1995)
• Kim & Mauborgne: Blue Ocean Strategy (2005)
• Osterwalder & Pigneur: Business Model Canvas (2010)
• Blank & Reis: Hypothesis-Driven Entrepreneurship (2011)
• Osterwalder & Pigneur: Value Proposition Canvas (2014)
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Grading

Contribution
Components of Final Course Grade
to Grade
Attendance & Class Discussion (individual)
15%
- Including On-line Feedback to teams
Midterm Exam (individual) 20%
Group Homework & Presentations
25%
- 40 Interviews per team
Final Exam (individual) 40%

TOTAL 100%
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Syllabus: Discussions
Week Session Description
1 60 Second Pitch
2 LaunchPad Central Introduction & Training
3 Team: Business Model Canvas: Assumptions
4 Team: Business Model Canvas: Customer Discovery
5 Team: Business Model Canvas: Value Propositions
Team: MID-POINT REVIEW
6
Business Model Canvas: Customer Segmentation
7 Team: Business Model Canvas: Distribution Channels
8 Team: Business Model Canvas: Partnerships
9 Team: Business Model Canvas: Financial Assumptions
10 Final Team Presentation
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Discussion 1: 60 Second Pitch

• Create elevator pitch for an original business idea (individual)
and present in discussion
• Focus on:
• Succinct Summary of the idea
• Potential Customers
• Value to those customers
• GOAL: To attract teammates to your idea!

• Teams of 4 to 5 to be self selected by end of Week 2

• Entire team must attend the same discussion session
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Discussion 2: LaunchPad Central Training

LaunchPad Central is an On-line tool that allows teams to:

• Modify their Business Model Canvas
• Upload Customer Interview logs
• Comment on other teams’ Business Models
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Why Study Entrepreneurship?

• Why study entrepreneurship?
• Isn’t entrepreneurship innate?
• Why take a class?
• Can’t I get everything from reading a book?
• What are we here?
• Isn’t it a new world - do any of the old rules apply?
• Why should I care what Alfred Sloan, Bill Gates, etc. did?
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Can Entrepreneurship Be Taught?

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Entrepreneurs Do Three Things

https://www.youtube.com/watch?feature=player_detailpage&v=M7VZIbeUrSU
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New Firm Formation*

* Kuaffman Foundation, “The Return of Business Creation,” July 2013.

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New Firms with 1 to 4 employees*

* Kuaffman Foundation, “The Return of Business Creation,” July 2013.

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Job Creation in New Small Firms*

* Kuaffman Foundation, “The Return of Business Creation,” July 2013.

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Prelude to Course
• What is “entrepreneurship”?
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Original Definitions of Entrepreneurship?

• Two “Schools of Thought”*
• Economic Function: entrepreneurship is defined as an economic function
and entrepreneur is defined by the role in society
• “Entrepreneurship entails bearing the risk of buying at certain prices and
selling at uncertain prices” (18th century)
• Definition broadened to add “innovation” (early 20th century)
• Process innovation, market innovation, product innovation, organizational
innovation, etc.
• Entrepreneur central to creating and responding to economic discontinuities
• Major Flaw: doesn’t make sense to decide what economic functions are
“entrepreneurial”.
• Entrepreneurs have a common sets of individual traits
• Entrepreneurship is then defined as activities of entrepreneurs
• Common traits include need for achievement, risk-taking propensity, etc.
• Major flaw: single psychological profile of an entrepreneur doesn’t exist.

* HH Stevenson, “A Perspective on Entrepreneurship,” HBS 9-384-131.

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Entrepreneurship as a Behavioral Phenomenon*

• Definition of Entrepreneurship: the pursuit of opportunity
without regard to resources currently controlled.

• Strategic orientation
• Promoter: driven by perception of opportunity
• Trustee: driven by resources currently controlled

“promoter” “trustee”
increasing level of
control of
resources

* HH Stevenson, “A Perspective on Entrepreneurship,” HBS 9-384-131.

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Six Critical Dimensions of Business Practice

• Strategic Orientation
• Commitment to Opportunity (What is an opportunity?)
• Entrepreneurs willing to act in short time frame and chase opportunity quickly
• Resource commitment process (What resources are necessary?)
• Entrepreneur maximizes value creation by minimizing the resource set and
accepting more risk in the process
• Control of resources (What do I need to own, borrow, or steal?)
• Entrepreneurs learn to use other people’s resources well
• Management structure (How do we manage the operation?)
• Entrepreneurial management driven by several pressures:
• Need for coordination of key uncontrolled resources (i.e. outside of the firm)
• Flexibility is maximized with a flat structure
• Employees desire for independence
• Reward Philosophy (How and when do we harvest?)
• Entrepreneurial firms are more focused on the creation and harvesting of value
• Entrepreneurial firms tend to base compensation on performance
* HH Stevenson, “A Perspective on Entrepreneurship,” HBS 9-384-131.
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Entrepreneurial Finance Framework

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Small Businesses vs. High-Growth Ventures

Source: ESB 3rd Edition, Katz & Green.

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SCHAFFER GRIMM
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Education (the formal kind)

BA & BS, Electrical Engineering

MS, Electrical Engineering

Communications

MBA, Entrepreneurship
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Corporate entrepreneurship

Small Commercial Sales Division

Multi-Billion $ Defense Contractor
Focus:
High frequency Semiconductor chips
Foundry Services in GaAs, InP and GaN

Role was to:

• Find new customers
• Identify and develop new products
• Manage Sales & Marketing
• Manage Operations to existing customers
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Startup consulting at UCLA

• Joined UCLA’s Institute for Technology Advancement in 2011

• Worked with 30+ teams / companies

• Med Device
• Mobile Apps
• Materials
• Clean Tech

• Started Student Entrepreneur Venture Competition

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ITA Startup Companies

• ITA investment in UCLA technology for startups
• Business plans, market research, financial models and presentations
• Guidance on prototype development and IP protection
• Angel and VC connections
• Help in finding management personnel

Discovery Laboratory
IP Industry
by Faculty Proof of Startup
Protection Prototype
or Student Concept

VC Funding
Research
Funding ITA Support Bridges the Gap and Market
Scale Up
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INTRODUCTION TO THE
NSF INNOVATION CORPS (I-CORPS)
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“How can we increase the

economic impact of our
$7 B+
annual research
investment?”
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Intellectual Property and Output

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Firm Age and Jobs

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NSF vision

Jobs in
IP
young
multiplier
companies

Support
R&D
local
investment NSF help economy
launch
tech
startups
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I-Corp Mission Statement

Goal of NSF I-Corps is to foster entrepreneurship that will lead to

the commercialization of technology that has been supported
previously by NSF-funded research.
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National Innovation-Corps “Fabric”

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NSF I-Corps “Home”

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Why are we here?

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Pick Winners
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Improve Odds
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Create More Winners

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Shift the Curve

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Reduce Risk

Fewer Strikeouts…
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Reduce Risk

Fewer Strikeouts…

More Base Hits and

Home Runs!
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National Innovation-Corps “Fabric”

I-Corps Node
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I-Corps Nodes
The I-Corps Regional Nodes:
• Deliver Curriculum
• Regionally
• For nationally selected I-Corps Teams
• Foster Understanding about how to:
• ID, Develop & Support promising ideas
• Enhance Innovation Capacity
• Track, Analyze & Evaluate participants
• Share Best practices across the nation
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National Innovation Network

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USC/UCLA/Caltech “LA” Node (Award Date: Nov. 1, 2014)

• UCLA (ITA)
• PI: Dwight Streit, Ph.D. (Chair, Materials Science and Engineering)
• Coordinator: Schaffer Grimm, M.S., M.B.A. (ITA)

• USC School of Engineering & USC Marshall

• Official PI: Yannis Yortsos, Ph.D. (Dean of the USC Viterbi School of Engineering)
• Program Director: Andrea Belz, Ph.D., M.B.A. (Marshall & Engineering)

• Caltech (OTTCP)
• PI: Morteza Gharib, Vice Provost of Research
• Mary Beth Campbell, Assistant Director, Technology Transfer

• I-Corps Nationally Trained Faculty

• Andrea Belz, Ph.D., M.B.A. (USC)
• Tommy Knapp*, M.B.A. (USC)
• Nathan M. Wilson, Ph.D., M.B.A. (UCLA)
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Innovation Node – Los Angeles

(IN-LA) Programs
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UCLA ZAPs!
• 1st ZAP held in conjunction with Blackstone Launchpad

• ZAP planned in collaboration with OIP

• Prepare teams for First Look LA
• April 1st and 15th

• More ZAPs planned!

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Innovation Node - Los Angeles

Website: www.lanode.org
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National Innovation-Corps “Fabric”

I-Corps Sites
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I-Corps Sites
The I-Corps Regional Sites:
• At Universities with existing entrepreneurial units
• Purpose
• Support local teams transition ideas to market
• Support includes:
• Training / mentorship
• $1,000 to $3,000 for teams

UCLA Awarded an I-Site on March 1st 2015!!

Led by Anderson – Nathan Wilson & Dean Al Osborne
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National Innovation-Corps “Fabric”

I-Corps Teams
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I-Corps Teams
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I-Corps Team Program Details – Team Budget

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I-Corps Team Curriculum Delivery