Entrepreneurship

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Entrepreneurship

• Apply your engineering talentto create your
  dream company.
• But remember - starting a companyis easy,
  building a successful business is hard!

frank_at_zeniegroup.com www.zeniegroup.com
11 February 2009
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• StreetSmart Entrepreneuring
• Frankly Speaking
• Give me your email address Ill send ,pdf copy
• Your Questions will influence theValue of my
  Answers.

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DisclaimerI have an Agenda! But, its not
hidden.
Have you heard about the hammer that thinks
everything looks like a nail?
Im an entrepreneur and I actually do believe
that Entrepreneuring leads to the best
solutions to most business problems!
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My Advice to Engineers
Engineering, Technology and Scienceare
Entrepreneurial Tools Customers, not
technology, are its foundation.
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What a change !

• In the late 1950s, 1960s and 1970s, we tried to
  instill successful big company practices into
  emerging companies - probably destroying many.
• In the 1980s and 1990s Peter Drucker, Tom Peters
  and others challenged this.
• Today, I believe we should be instilling
  entrepreneurial leadership into our largest
  companies - maybe we can save them.

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• OK What is an entrepreneur?

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What is an Entrepreneur?

• Entrepreneurs BUILD BUSINESSES through
  INNOVATIVE SOLUTIONSto UNMET CUSTOMER NEEDS.
• (Note Entrepreneurs do exist in the public and
  non-profit sectors.)
• Above all, innovation is not invention. It is
  a term of economics not technology.
• Entrepreneurs create discontinuities They
  obsolete accepted practices and change behavior.

Peter Drucker
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Fast vs. Right

• Mature Businesses -
• Right First Time
• Entrepreneurial Businesses -
• Fast First Time
• Is this true? Why?

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The Changing World of Innovation
Courtesy of Daniel H. Pink A Whole New Mind
Why Right Brainers Will Rule the Future2005 -
page 49
ATG Affluence Technology Globalization
Conceptual Age(creators and empathizers)
Information Age(knowledge workers)
Industrial Age(factory workers)
Maybe Walt Disneyand Steve Jobs are our
prototypes
Agriculture Age(farmers)
18th Century - 19th Century - 20th
Century - 21st Century
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Franks Entrepreneurial PrinciplesThe
Fundamentals are Simple

• Vision - what you hope to achieve through this
  venture.
• Culture - a set of underlying, shared values.
• Innovative Product/Market Strategy -what you
  will sell and how you will sell it.
• Sound Business Model -how you will earn a
  profit.
• Passionate Execution

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Markets Dont Exist Only Customers

• The Entrepreneurs Job is to
• Identify potential customers
• Understand their unmet needs, business economics,
  constraints priorities
• Create innovative, high value-added solutions to
  these needs
• Define new MARKET segments which enable you to
  communicate your benefits effectively!
• Leverage your market segmentation for
  differentiation strategic advantage dominate
  a niche and build from there.
• This is not an analytical or statistical
  exercise, rather its a face to face, creative and
  interactive customer experience.

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What would you prefer?

• You have a business with 10 million annual
  sales serving a 1 billion market. Choose 1
• 1 market share spread across the entire market,
  or
• 100 of a 10 million niche within the broad
  market.
• Why?

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Entrepreneurial vs. Traditional Market
Perspectives
Traditional Market DefinitionFor example - 1960s
Traditional US car manufacturers. Big, powerful
inefficient.
Today Prius Hybrids
Toyota mid 1960sSmall, fuel efficient Low
Costfollowed by variety of new models
Lexus - 1989One Luxury Model, LS400followed by
variety of new models
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Intellectual Property

• Market Power (MP) TRUMPS Intellectual Power (IP)
• The more successful you become, the more
  competition you will attract.
• How many great products were sustained
  monopolies? Likely response to your intellectual
  property
• Respect your patent and invent an equivalent or
  superior alternative.
• Respect your patent and purchase a license from
  you.
• Respect your patent and abandon the market.
• Ignore your patent and reverse engineer and copy
  your product.

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MP Trumps IP

• Monopoly

• True Story - One of my companies files a patent
  suit against a much large competitor for patent
  infringement.
• It took 9 years from filing suit to damage
  determination.
• Legal expenses reached 2 million.
• Management distraction - huge opportunity cost.
• Jury determined patent was valid and the
  competingproduct infringed.
• Judge confirmed infringement, but no willful act
  by infringer.
• Final damages 50,000 interest for 9 years.

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A Real Example

• Founded in January 1999
• All founders from Zymark Corporation
• Ken Rapp, NEU 84 President CEO
• FHZ co-founder Chairman
• Headquartered in Hopkinton, MA
• Website www.velquest.com
• Some of todays customers
• Pfizer, Glaxo SmithKline, Bristol-Myers Squibb
• AstraZeneca, Eli Lilly, Johnson Johnson

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Our Founding Process

• Who is our customer? - From our prior experience,
  we decided to serve laboratories in the
  pharmaceutical, biotech and related industries.
• We wanted to create Primary Demand rather than
  compete with existing products.
• Customer Research - Using our contacts, we
  visited 50 companies to discover their unmet
  needs.
• The CEO attended every meeting accompanied by at
  least one other founder.

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Customer Research How We Do It

• Find thoughtful, objective people.
• Go to them face-to-face. Bring a colleague.
• Look and Listen Very Carefully
• Briefly explain your objective
• Confirm hosts time constraints
• Promise to share your findings
• Ask open-ended questions
• Follow-up with clarifying questions
• Observe body language
• Never ask what they want. Inquire about
  problems and current solutions. Customers will
  ask for incremental improvements to current
  solutions.
• Your job is to create a far better solution
  discontinuities.
• Send thank you note and ask if you can come back
  to share your findings and clarify and
  additional questions.

Best Question What keeps youup at night?
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What We Found

• Customers reported resource constraints because
  increasing work loads and tighter time
  constraints.
• Digging deeper in manual paper-based systems
  the FDA requires layers of redundant checking to
  claim data integrity.
• As regulations increased, more resources were
  diverted from doing to checking and documenting.
• We discovered that 70 of their total laboratory
  resources were committed to compliance.

• Analyst/Chemists
• Data Creation, Investigations and Documentation

QA/Regulatory Inspections and Audits
Supervisors Data Reviewers Review, Checking and
Approval
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The FDA

• The FDA regulates US food and drug businesses.
• While its a US agency, its a strong model for
  Europe and Japan. Many regulations are being
  globally harmonized because pharma is rapidly
  moving to global organizations.
• Most FDA regulations for development and
  manufacturing are called Good Manufacturing
  Practices (GMP) and Good Laboratory Practices
  (GLP) they are quite similar. We use GMP to
  describe the family of regulations.
• Redundant Checking vs. Computer Validation

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VelQuests Niche

• We created a new segment - GMP Electronic
  Notebooks
• We are not a LIMS, ERP, Document Management
  System or many others - we make them more
  valuable.
• If Microsoft is desktop, VelQuest is benchtop.
• We replace paper notebooks with fully validated
  electronic data acquisition, documentation and
  quality verification.

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• Thanks
• Questions and Discussion