Engineering the High Tech Start Up

Cory R. A. Hallam, William Flannery

• Publisher: Momentum Press
• Year: 2018
• ISBN:
  9781606505557
• Topic: Technologie et ingénierie
• Subtopic: Génie mécanique

This two-volume set has been written primarily for engineers, technicians, and scientists who are contemplating the unknown but attractive world of technological entrepreneurship, a key driver of economic growth in developed countries and critical in stimulating growth in developing countries. The purpose is to prepare these professionals as members of teams focusing on commercializing new technology-based products. The material has also been used to introduce engineering students to the processes involved in technological entrepreneurship. Volume one provides a background of fundamentals and theory to prepare the reader for the venture launch. Topics include the entrepreneurial process, the venture team, developing and marketing high tech products, and launching the new venture. Volume two goes into detail in critical areas such as intellectual property protection, legal forms of organization, financial projections, and business plan preparation and delivery. The primary emphasis is focused on creating lean and agile organizations capable of recognizing opportunities, quickly developing introductory products for small test markets to better define the opportunities, and using the results of those test markets to arrive at a product with wide acceptance capable of driving growth.

CHAPTER 1

INTRODUCTION

It’s been widely reported that over 90 percent of all startups, including high-tech ventures, fail. In spite of this statistic, entrepreneurship remains a vibrant force in most economies, and tech startups continue to play an important role in economic and quality-of-life growth. Presented with a wide variety of reasons for failure of a new venture, budding entrepreneurs find it difficult to draw any constructive conclusions that could guide them through the startup process. Not only would a list of reasons for failure be incomplete, it could also prove to be distracting, causing a focus on preventing failure rather than on designing an outstanding product or service with exceptional value for a customer.

This book is written for engineers who desire to start their own companies and are looking for guidance in the entrepreneurial process. The goal of the book is to turn the engineer into an entrepreneurial engineer, an individual who keeps one foot solidly planted in the engineering profession while guiding the process of moving a product or service idea to the marketplace. The terms “entrepreneurial engineer” or “engineer entrepreneur” are not oxymorons. Examples abound of engineers who have been highly successful as entrepreneurs, demonstrating that one does not have to forsake a career in engineering in order to become an entrepreneur. For those engineers who are members of a startup but are reluctant to stray far from the engineering discipline and take up the activities of the entrepreneur, the goal of the book is to help them understand the entrepreneurial process as well as the way entrepreneurs think and the tools they use.

1.1 THE ENTREPRENEURIAL ENGINEER

Engineers and entrepreneurs have one key characteristic in common: a high degree of motivation to proactively take action in solving problems or pursuing opportunities. This propensity to act is essential for any entrepreneurial endeavor. However, whereas engineers are trained to recognize a problem and apply scientific and engineering principles to solve that problem, entrepreneurs are skilled at recognizing opportunities and gathering the necessary resources to take advantage of opportunities to launch new ventures. This difference in approach to problems and opportunities is a major cause of conflicts that often separate the engineer from the entrepreneur.

There are other important differences between the two. Engineers are reluctant to accept failure in any form as an acceptable outcome. They tend to be uncomfortable with uncertainty, preferring precision and certainty in dealing with problems and approach problems in a highly organized project management manner, emphasizing schedules, milestones and deadlines, resources required, and budgets. Success, or performance, is measured in terms of the degree to which the ultimate product or service meets predetermined or desired specifications.

Entrepreneurs, on the other hand, are calculated risk takers, comfortable dealing with uncertainty. They recognize that failure is indeed a possible outcome, but are willing to take action if the perceived rewards are high enough. In seeking a successful startup, they are concerned with the steps or stages required to commercialize the product or service. They recognize that the organized project management approach favored by the engineer is ineffective, and focus instead on whatever is required to develop and offer a product or service of significant value to a customer.

In the high-tech environment, engineers are prone to failure unless they develop the ability to deal with the highly ambiguous and uncertain business world, whereas the entrepreneur is likely to fail without an understanding of the technology world. In reality, it is much easier for the engineer to learn the intricacies of entrepreneurship than it is for the entrepreneur to learn the details of the engineering world. The entrepreneurial engineer should be able to move easily between the rational world of the engineer and the uncertain, nonlinear world of new startups. For the engineer starting a small consulting firm, the transition can be relatively easy. For larger new venture efforts, however, the engineer will most likely work in a dynamic team environment with diverse sets of individual skills and personalities, adding another level of complexity and uncertainty to the effort.

1.2 SUCCESSFUL ENTREPRENEURIAL VENTURES

Successful new ventures have several characteristics in common. This book will focus on three characteristics or themes that will be carried throughout the remaining chapters. First, the product or services in a successful venture is proven to be ideal for the user or customer. Invariably this means that the founders have expended significant energy in identifying market needs and tailoring the product or service to meet those needs. Second, the entrepreneur is involved in every aspect of the successful startup. Starting a firm from scratch is a daunting task that goes well beyond designing a marketable product, but includes seeking necessary funding, researching potential markets, establishing manufacturing capabilities, and protecting the resulting intellectual properties. The entrepreneur cannot afford to delegate any of those tasks to others, but must develop, organize, and lead a compatible team capable of addressing these critical areas. Third, successful companies show consistent growth, beyond the initial market or customer base. The entrepreneur’s vision is essential in defining growth opportunities and communicating that vision to employees and stakeholders alike.

1.3 ENGINEERING ENTREPRENEURSHIP OPPORTUNITIES

Engineering entrepreneurship opportunities occur in many forms. Many engineers get started in entrepreneurship out of a desire to have more control over their professional careers. Some start their own consulting firms after spending some time developing marketable skills while employed and gaining unique experience in larger organizations. Others start accidentally when a hobby or part-time avocation becomes time-consuming and they are forced to decide whether to drop the avocation or devote their total energies to their interests. Many entrepreneurial engineers are content to experience a slow but steady internal growth as sole proprietors, whereas others seek protection under the corporate umbrella, perhaps as a limited liability company (LLC) or S-corporation. At some time in their development, however, they will be force...