Technology Startup
For technology startups, developing an innovation product is one of the most critical things. You want your product to make money so your startup can grow into the type of company that you want, and you can live comfortably without having to work for somebody else. In order to do that, you must begin with a clear vision of the product based on your ideas and your ideas must meet a critical need in the market or solve a problem. In other word, to make money your product must deliver a value that the customers are willing to pay for.
For thousand years, products are always something in physical forms such as food, machines, bicycles, cars, books and other things etc. These products are sold in the market or in retail stores where customers come in to buy. But this type of market has limitation; people buy them in local market, near where they live, so the size of the market is limited by the number of customers in that area. However today with the advance of technology, things change. The products do not have to be in physical forms but can be in digital forms such as software, MP3 music, video etc. And market does not have to be limited in certain location. With the Internet, the market can be virtually anywhere, therefore there are unlimited numbers of customers that you can sell to.
In this global competitive market, there are all kinds of products and values exist. It takes a lot of efforts to come up with a value that is needed so entrepreneurs must research the market to identify opportunities or problems that they can solve. Anybody can come up with ideas but ideas alone do not make money so entrepreneur must know the market needs or customers’ problems before come up with solutions. But how do you know? The answer is simple: Ask customers. This is where many entrepreneurs are making mistake by NOT asking. In my entrepreneurship class, students always believe that they know what customers want. For many years of teaching, I always have to deal with optimists who think they know who the customers are and what they want. They keep on telling me that they can guess what customer problems are and want to build something immediately. I have to remind them that in “technology startup” both the product and customers are unknown, what they have are just vague ideas and nothing else.
The first thing I want students to do is research the market to identify opportunities, and they must start with an area that they are familiar with. For example, science students may focus on chemical industry, pharmaceutical industry or medical industry; technology students may focus on hardware industry, software industry. Once they identify a problem, they must investigate it thoroughly to determine the need by asking people in the industry to validate whether the problem is real before even think about develop solution. By doing this many students learn that what they think as a major problem actually is only a minor or insignificant, not worth to work on or already be solved. This is the first lesson they must learn about failure so they can be more skeptical and not hurry to build solution. A manager who came to my class as guest speaker reminded them: “Why do you think a student can solve a problem that experienced people who spent years in the industry cannot? A better approach you should investigate is improving things using latest technologies that you are learning now because technology changes fast and people who are working in the industry may not know.”
What I want students to do is applying what they have learned, mostly the latest technology, to solve problems. Even the problem may be solved by old technology but by using newer technology, they may come up with something better, cheaper, or faster and this is the advantage of technology innovations. Many startups in my entrepreneurship program follow this approach and succeed. Students often think they must create something new and confuse between invention and innovation. Invention is the creation of new product or new technology. Innovation is making improvement or adds new value to existing products using different approach or new technology. For example, Steve Jobs is NOT an inventor, he does not invent anything. But he is the best innovator as he brings new values to many things. The iPod is not the first music device. Sony invented the Walkman long time ago. And MP3 music device was created by Microsoft many years before the iPod. However Steve Jobs integrated MP3 in iPod and linked it to an online music-sharing platform called iTunes and this innovation becomes the best seller at that time. Mobile technology is an invention of Motorola but iPhone is an innovation where Steve Jobs integrated MP3 technology, mobile technology and computer technology into the iPhone.
I often tell students that by studying science and technology they have the best chance to create their own startup. Their knowledge and skills can help them to create new value to customers or change the market. When they build something successful, they will have great feeling of accomplishment in life. When they have idea and be able to execute it, success will encourage them to go further. Of course startup is a not easy, they will always be facing new challenge and experiencing something new but they also learn more. Many students are afraid of failure but by learning from failure they also learn how to succeed. Regardless of what happen, if they continue to learn from failure, they will become better, have stronger skills and success will happen. There is no easy way to learn in entrepreneurship, students must learn as they go along, they learn by making mistake and also learn when they succeed because everything they do will affect them and enrich their skills. Many students feel uncomfortable at the first sign of failure but in the entrepreneurship class, I force them to become a stronger and more determined to their goal. Students come up with new ideas then each have to ask 150 people for their opinions. They come back disappointed because many people tell them that their ideas are not good enough. I make them to come up with another idea then repeat the same cycle until they reach 80% of people tell them that they like their ideas. Only then they can start to build the prototype for the product. By doing this, students learn to come up with better ideas each time, and the best ideas can help them to succeed when they begin their own startup. I explain: “Do not afraid of failure. In this class, you learn to fail but you do not lose anything. The more you fail, the more you learn and as long as you learn from failure, you will get better grade. However, if you fail in life, you may lose your money, your time and much more. It is better to learn about failure when you are still in school because nothing will happen to you. And when you succeed, there is nothing better than the satisfaction of knowing you are reaching your dream. And better than that, your startup also creates jobs, helps many people the opportunity to make a comfortable living as well as their family and your local economy.”
According to a new survey due to the advancement of technology, there is a new list of very rich people and about half of them are entrepreneurs and investors in technology. Among the list of U.S. billionaires, there are 10 young people less than 30 years old who own huge fortune. On top of the list is Mark Zuckerberg, 30 years old and founder of Facebook with net worth around $34 billion dollars. Mark is also listed at No. 11 on the list of richest billionaires in America and the 14th richest in the world. Number two is Dustin Moskovitz, 30 years old, with net worth around $ 8 billion. He is also part of the Facebook team with Zuckerberg. Number three is Elizabeth Holmes, 30 years old with a net worth of $4.5 billion dollars. Elizabeth founded Theranos, a startup specializes in blood-testing company. Number four is Evan Spiegel 24 years old, founder of Snapchat, a photo-messaging app, with a net worth around $10 billion dollars. And Bobby Murphy, 25 years old, co-founder of snapchat with a net worth of $1.5 billion dollars.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
