Dear Colleagues
If you have ever been involved with building a start-up firm you will probably realize that a lot of the stuff from business school is next to useless. Start-ups are not simply smaller versions of a standard business but something completely different. Universities have had a mixed record in transferring technology to the market.
It is my sincere belief that driving the creation of start-up firms – particularly in engineering are a critical part of our lives to create new products and services and to improve overall productivity. And we need to nurture and build these “animals”.
Driven only by passion and the smell of an oily rag
Engineering start up firms are driven by passion and belief. Business plans, while nice to have, often change dramatically once you have launched the product and come into contact with your first customer. For every venture that makes it to established small business (or bigger) status, there are hundreds of others that have gone bust. Leaving broken hearts and much financial loss.
There must be ways to improve the success rate of start-ups. Particularly in the critical engineering and technology areas.
We can’t only be focussed on the technology
It is vital to avoid being 100% focussed on the technology we have created with a start-up but to ensure we put solid (and competent) effort into finding customers, working out effective distribution channels, pricing and joint-venture partners. And to handle a ferocious amount of rejection from would-be disinterested customers.
But overall we have to unerringly focus on getting out of the lab or workshop and our product into the real commercial world. After all – no sales and no customers makes for a quick death of the start-up.
Failures are a key part of the start-up
We have to learn from the all too frequent failures in approaching the market. This will require making considerable adjustments to our original premises in how to sell the product – changes to how the product is used/what market should be approached/pricing etc.
We have to run a marathon rather than the 100 m sprint
Start-ups often take considerably longer than anyone ever anticipated and we have to factor in a longer time to get the product out in the marketplace and some degree of profitability creeping in.
A useful template
A successful approach to launching a start-up has come from Mr Steve Blank from Silicon Valley who is somewhat of a serial entrepreneur. He has created two complementary techniques: Business model design (to help understand who your customer really is) and Customer-development (real-world testing of your product in terms of sales and marketing).
If you are considering a start-up – do a google on his approach which is yielding great success.
Thanks to the Economist for an interesting take on a tricky problem.
With respect to start-ups, Benjamin Franklin’s comment should be noted: Energy and persistence conquer all things.
Yours in engineering learning
Steve
