Some advices on entrepreneurship
There are many approaches to entrepreneurship trainings, each has advantages and disadvantages. The traditional training approach is focusing on how to start a “company” where the main ideas for products and services are based on existing business. For example, open a small retail shop; start a bicycle repair shop; open a restaurant; or provide computer training services etc. The technology training approach is focusing on creating “startup” where the ideas are based on science and technology innovations, even the business may not yet exist and the market is still unknown. Of course, this type of entrepreneurship is more risky, but the reward is unlimited. If you are technology students and have some ideas about creating your own startup then I have some advices:
First you must determine if your ideas will fill a need, or solve a problem, and be welcomed in the market. Your success is depending on whether your ideas can provide values to the customers. In other word, if you spend time to develop that idea into a product, it must be worth something to the customers; else you are wasting your time. Do NOT believe in the business speculation theory of “Build it then money will come” as it never works. A lot of students make the mistake of building something immediately because they think their idea is great then be disappointed and frustrated. Before you create your product, you need to evaluate your idea to ensure that it will at least have a chance to succeed.
Of course, no one can guarantee anything so you must ask yourself: “Is there a problem in the market that my product can solve? You must evaluate all problems in specific market to see if such a need exist. For example, thirty years ago, Bill Gates asked: “There is an electronic kit called “Altair” contains many parts that people can build into a real computer but it has no operating system. Is there a need to create an operating system for it? He and Paul Allen built the operating system but Altair Company did not buy it because as a hardware company, they do not see the need for software. But at the same time IBM was developing the Personal Computer and needed an operating system. Bill Gates approached IBM then PC-DOS and MS-DOS were created as it met their needs. Within few years, IBM PC became the fastest selling computer and Microsoft became the largest software company in the world. Of course, Bill Gates became the richest people on earth.
There is a possibility that your idea may not be unique because others already have similar products in the market. Then you must ask: “Can I build a product that has better functions, higher quality then sell at lower price to get the advantage? Basically, if you are not the first one in the market, you must build something at least five or ten times better than your competitor’s product to succeed. For example, Apple’s iPhone is not the first mobile phone in the market as Motorola and Nokia already have several mobile phones. Why does Apple always has long lines of people in front of their store eager to buy? The simple reason: Steve Job ordered iPhone to have better design, easier to use, higher quality and many mobile applications. That is why Apple wins and captures the mobile market. You can do the same for your startup by convincing users that your product is better than your competitors.
To be technology entrepreneur, you must know the key success factor for startup. No, it is not the technology, not the price, and not the product. It is the customer because without customer, you do not have a business; and no business means no startup. So you must know what customers want. You must spend time to interact with potential customers. You do not need to build the “perfect” product as it takes time, but you can build a “prototype” then contact customers to ask whether they like it or not. You will receive a lot of feedback from those who may want to buy your product. Based on their feedbacks then you build your product. Because it has all the features and functions that customers already tell you that they want, they will definitely buy your product. This concept is so simple but you do not know how many people make the mistake by NOT asking. They think their idea is good, they think their product is brilliant and they waste time in develop a perfect product that may not have customers because it is not what they want.
In my entrepreneurship courses at CMU, students must research market, identify opportunities then build a “prototype”. After that they must contact at least 100 to 150 potential customers and document all of their feedbacks before building the actual product. They also have to determine how much people are willing to pay, and how many customers they can sell to. If customers do not like it, or there are not enough customers then the idea is considered “not good enough” and there is no reason to launch startup. This does not mean they failed but it is a lesson that they learn as they must learn from failure. Typically, most students fail several times but they also learn how to overcome obstacles, build their resiliency before graduate. I told my students: “You must learn about failure. As long as you fail in my class, you are doing well. The more you fail and learn from it, the better grade you will receive. By learning from failure, you will avoid mistakes that you may make when you launch your own startup. Every entrepreneur must learn from failures.”
In the past eight years teaching entrepreneurship for computer science and software engineering students, the program has launched over 45 startups. After several years, most startups are still doing well which is a record among universities. CMU is rated among top entrepreneurship programs in the U.S. not because the number of startups launched as other schools have more but we have high rate of success, measured by how long the startup lasts and how fast it grows into big company. I believe launching startup with a strong focus on product that meet customers’ needs is the key to success. What students build is solely based on their own skills, their own innovations, their own creativity, and their hard works. But having them learned from failures is the lesson that students told me that they value the most. I often told students, if they are afraid of failure, do not want to take risks, they cannot be entrepreneur as failure is the best lesson for their future success.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
