Fueling the Entrepreneurial Spirit with OCTANe in Irvine
May 15, 2009 Leave a comment
Engineers are a funny breed. We spend much of our lives being skeptical, proving or disproving ideas and theories. At the same time we crave new ideas and technologies.
Those engineers who are creative and develop new ideas often lack skills needed to turn visions into useful products. Enter OCTANe, fuel for the entrepreneurial spirit in Orange County and Southern California. OCTANe’s goal is to fuel “innovation development” in Orange County and Southern California by connecting people, capital and technology. OCTANe accelerates entrepreneurs and company development for Orange County’s information technology and biomedical industries.
On May 14th I attended an OCTANe’s weekly event entitled “Entrepreneurial traps – Tips for developing companies. What the big guys know but won’t tell you.” The speaker was Mr. Rich Henson, co-founder of Source Scientific, and Irvine-based biotech product development company.
Having been in the tech industry for much of the past 35 years, I was a bit skeptical that anything new or interesting would come of the event. Maybe I could collect a few business cards, and with a bit of luck expand my personal and professional network a bit deeper into the “OC.”
Surprise, Mr. Henson’s presentation was fascinating, relevant, and kept the audience focused for the entire evening. Using the entrepreneurial playbook 101 we all studied in university, Henson took the ideas, added very relevant examples and stories, and ensured everybody in the audience walked away with at least a few new thoughts on how they could and should get off the fence and innovate.
Disruptive Technologies. While hitting most of the Entrepreneurial 101 outline, a couple topics were particularly notable to me. His breakdown of sustainable technologies vs. disruptive technologies was great. Starting with the example of digital photography, and how it has nearly wiped out the personal camera and film industry, he went on to show many additional examples of disruptive technologies and their impact on entire industries. The final lesson was that we should consider how to position a disruptive technology to either make an existing product obsolete, or to force a large incumbent to respond to your product by changing or dismantling their core product. Other examples include VoIP (voice over Internet protocol), alternative power generation, shipping containers, and others.
Building the “A” Team. This topic dealt with an entrepreneur building his management and product development team. While this may be a common idea, it was the first time I had heard the concept of “A” people always hire “A” people. “B” people on the other hand nearly always hire “C” or “D” people. The “A” will nearly always win, if they are focused on a common goal or objective. The “A” team leader should be smart enough to embrace other “A” team member ideas, visions, and criticisms, and the result should be the best possible product. Very true.
Entering Mature Markets. You do not always have to produce an earth-shattering, innovative and visionary product. You can introduce new products into mature markets, as long as you are not afraid to go directly against a mature and stronger incumbent. Example, Apple’s iPhone is a new product entering a very old telephone industry. And it is doing just fine.
Don’t Try to Recover All Startup Costs with Your First Product Launch. A prototype or first run on a product will always have an economy of scale that is unfavorable. You should not plan to raise process to a level that will make your product unattractive to a potential target market. Make your money after your product gets some traction and creates a market awareness and strong industry desire to use your product.
Create market Awareness and Demand. You need to understand the difference between push and pull marketing. Push marketing is very labor and energy intensive. Pull marketing brings higher market velocity and demand. To effectively benefit from pull marketing you need to accomplish two things:
- Get your public evangelist. This is often a thought leader in a target industry who commands immediate respect within the community. If you can win the thought leader’s favor, the rest of the community will soon follow.
- Don’t sell your technology, sell the vision. Hensen’s outstanding example was “in the factory we make cosmetics.” “In the stores we sell hope.”
Many more topics, many more great ideas. Not a person left the room, and we were reluctant to let him off the stage, even as we passed the allotted time for the meeting.
In summary, Hensen left us with a couple of positive, motivating thoughts. Nothing we’d never heard before, but after the seminar the words took on a much larger context and meaning.
“There is never a bad time to be an entrepreneur”
“Never let anybody steal your dreams”
The skeptic in me took the night off, and I will be spending a lot of time for the next few days codifying my dreams
John Savageau, Long Beach, http://www.linkedin.com/in/johnsavageau