Lew McMurrran (WTIA)

Last week, Lew McMurran, the VP of Government Affairs for the Washington Technology Industry Association (WTIA) spoke to our entrepreneurship class.  He discussed a bit of his background, and then proceeded to talk about the WTIA.  He is the longest serving employee for the association, which allows businesses to band together and offers them services, events and programs, and advocacy and lobbying.  It was created in 1984 with a small government grant to talk about issues/find venture capitalists and employees.  The have worked to provide reasonable health care coverage to the businesses in the association, and hold events to benefit the technology field.  They currently have around 600 members (or 10% of the market).
This association seems like something very advantageous to the computing professional.  Although they focus mainly on tech based businesses, the events that they hold seem like great opportunities to make connections and find jobs within the industry.  The most interesting event that McMurran spoke about was the "crawl" that they have done in the past.  This is similar to a pub crawl, but they visit a handful of businesses in the tech industry instead of pubs (yet he did mention that there was still a fair bit of drinking, which is not surprising).  I'm going to be keeping an eye on their website and hope that another crawl takes place soon, because it sounds like a great way to see what kind of environment some of the software companies in the area have, which is of great interest to me (soon graduating and entering the job market).  Also, I will be utilizing wtiajobs.org, which has a listing of jobs from the companies that are members.  This will be another useful resource for finding my future job.

Jeff Goodwin: Entrepreneur/CISCO/Lexbe.com

Today we had the pleasure of listening to Jeff Goodwin in Entrepreneurship class.  Jeff has worked for Boeing, IBM, CISCO, as well as bootstrapped a successful start-up company that was sold to CISCO.  He has his bachelors in Business from WSU, but has worked mostly with assembly level coding for IP in the Device drivers/VPN/Firewall realm (including about 3 million other lines of intellectual property).  Though not the most prominent or memorable public speaker of the bunch this quarter, he did spout a few incredibly insightful gems during his talk.  I'll list them and then elaborate:
1. You can start a business on your own with $5000 (he's done it twice)
2. You must not get too emotionally attached to your company.
3. The reward of purchasing smaller companies is the culture that they have created.  Rarely can a large corporation execute these types of ventures in-house.
4. The closer you get to the customer, and the more you can understand their experience/problems, the more value your business will have.

The first point was simply an eye opener, as very few of our guest speakers have really elaborated on how much it actually costs to build a start-up software company.  This is helpful, as it really is easy to come up with that kind of initial investment.
The second point was just a very valid point, and we have heard it time and time again during the course of this quarter.  You can build a business for the long-haul, but if you want to really make money, you must have an exit strategy.  That means that you can't get too emotionally invested, but you must also maintain a balance between that and being very committed and intellectually invested.  This seems like a very hard thing to do, as everything that I have ever been a part of are things that I get very emotionally invested in.  I could potentially see it being very hard to let go of a company that I built from the ground up.
The third point was something that I had heard before, but Jeff iterated it in a way that I hadn't really heard before.  It's interesting to me that large companies can't logically or logistically create an environment where a small-business environment exists to create something that is innovative like Jeff's company did.  Once a company has become a "corporation" they can supposedly no longer create that kind of product, and it is much more cost effective and good for the corporation's culture to simply "eat" a start-up that is doing something well.
Lastly, a point that was made glaringly clear in my TCSS 360 class, that you must get very close to the customer and really understand what the "hurt" is in their day to day.  This is something that I will hopefully take with me into any software development that I do.  Whether it be something that I am putting spare time into, or for my future job, I now know that I must always focus on the customers' needs.  This was not something that I was really aware of prior to attending the university.  I always assumed that programming was based on ideas spawned in the minds of the programmers and that it was typically an "ah-ha" moment that created most of the programs out there.  Yet it really is the user that is key.  They are the ones that matter, because even if you do have a great idea for a program, if no one wants to use it, then it really is almost worthless.

Extra Credit Post: Solitary (TV Show)

I recently discovered the television show "Solitude" on Hulu.  I enjoy watching Survivor, so Hulu recommended this program.  I began watching the show last night and have continued to keep the first season playing today while I was working on my business plan.  I enjoy psychological experiments and this one really took it to an extreme.  Basically, it is a reality show where nine players are put into individual pods and the only communication they have with the outside world is a computer "host" that interrogates them and instructs them on tasks and challenges they must perform.  They are all put through experiments that test their physical and psychological strength, and the first to give up and press a red button is eliminated from the game.  This seemed morbid to watch at first, but obviously once I was an episode deep, I was hooked.  It is very interesting to see how people react to solitary confinement, and what revelations they come to about themselves and their lives when put into a situation where they are alone with their thoughts and emotions.  One of the contestants was recently divorced and consistently talks about the failure of his relationship, relating it to failure in the challenges repeatedly.  Another contestant came to some interesting revelations about her parents and an abusive relationship.  Although this doesn't relate entirely to entrepreneurship, I think that those who are in touch with their inner-self and have endured enough pain to see the things that are harbored inside that cause them to act certain ways and react to others in ways have a huge advantage over others when it comes to business.  Being in a company with other people, especially a small company, you must interact with others on a very intimate level on a daily basis.  This can cause problems, as was seen in the documentary Start-Up.com that we watched previously.  On the flip-side of that, people who are analytical and in touch with their emotions are often much better at communicating and extinguishing tense situations in a business situation.  Being professional during times of conflict is important, but it is also important to have empathy and self-examination to be a fair and trusted employee/employer.

Lynette Claire (Tacoma Entrepreneurship Network)

Lynette Claire, a professor at UPS, visited our class yesterday to talk about her work with the Tacoma Entrepreneurship Network.  She has a PhD in early entrepreneurship from the University of Oregon and spoke about the South Sound and the ways in which she wants to develop the local economy through education and community of entrepreneurs in our area.  She talked about one of her students' project, centsless.org, which is a social website that allows users to borrow gear and other items from others.  This seems like a great idea in theory, but in practice I expect that it will fail due to liability.  Unfortunately, the demographic of those who may want to borrow an item rather than buy it will include many who also wish to steal and misuse those items.  This could be problematic for the image of the site itself, which could lead to its demise.  Something similar happened with craigslist when many users were abusing the website to steal and manipulate others.  She also talked about the event held to bring students from the three south sound universities together for a competition in entrepreneurship.  The Innovate! Create! event, held in November of 2011, was created to solve a unique problem (waste), and the winners took away the reward of an iPad.  Though she didn't necessarily agree with the judges' decision on the winner, the event seems like a great opportunity in my opinion.  It seems like a great forum to meet other entrepreneurs and practice the problem-solving process with others.
Claire also mentioned "Networks 101" where she talked about two different types of social networks.  The first is a cohesive network, where everyone in the network knows everyone else.  The second, structural holes network, has the focal member completely connected but their connections are not connected.  The cohesive network, she said, is great for quality of information and self-correction, while the structural holes network is benefited by new information.  I found this very interesting because I am very much a part of a cohesive network.  I enjoy introducing my friends to my other friends, and sometimes they even become acquaintances or even friends themselves.  I have never been a person to spend time with a single person, rather I enjoy spending my social time in groups (mainly because there is less pressure in groups).  I haven't had a "best-friend" since elementary school (besides my fiance, which is a totally different type of relationship from a friendship), and I think this is the reason that I tend to create a cohesive network in my life.

Movie Review: "Startup.com"

"Startup.com" is a documentary filmed during the dot com bubble burst that follows the life of a start-up, GovWorks.com, and its two co-founders and CEO's, Kaleil Tuzman and Tom Herman.  The film focused mainly on the period of time when Kaleil was raising VC (venture capitalist) funds prior to their IPO (initial public offering), and short periods of operation after the IPO.  The main focus was really on the relationship between the two co-founders, Kaleil and Tom.  Kaleil left Goldman-Sachs to help get the company off the ground, and his expertise in finance and procedures for funding gave him an edge in the initial stages of the business.  Though the friendship between the two CEO's was very interesting (and I found quite detrimental to the business overall), the most interesting part of the movie were the meetings with VC's.  The meetings seemed very uncomfortable, with many of the VC's criticizing (tearing apart really) the business plan for GovWorks.  The last meeting shown in detail (the biggest investor who they didn't end up working with -- their name eludes me at the moment) was the most uncomfortable, mainly because both parties seemed hostile and un-trusting of one another.  This is a process that I hopefully will never be required to be a part of, because I cannot stand tension like that.
Something surprising about Kaleil was that his lifestyle was very different from Tom's.  Tom (I recall) owned a large retreat where he invited the entire company, while Kaleil seemed to live in small apartments or hotel rooms (a rather modest lifestyle for a CEO).  This could possibly be the way that the filmmakers portrayed them, but it highlighted an underlying message that I felt was either fabricated or was an actual truth: Kaleil is a savvy businessman, while Tom is a passionate, techy idealist.  Although neither of them came out of the business on top (as was glazed over in the end of the film), you leave assuming that Kaleil will continue to be successful, while Tom will probably find his place somewhere else (other than as a CEO).  It seems that this is a good assumption, as Kaleil is now a board member for multiple companies/firms (according to Wikipedia) and Tom is obscured.  The biggest lesson I took away from this documentary was that it is ill-advisable to enter into a partnership with someone who doesn't have the same vision as you do.  Either one of these men could have had a better vision for the company, depending on how you look at it, but it was obvious that their vision was not the same.  In any case, friendship should never get in the way of business, bottom line.

John Dimmer (Tacoma Angel Network)

Today we had yet another guest speaker, John Dimmer, a financial advisor and entrepreneur.  The amount of companies he has been involved with is in the 50-60 range, but a few of the ones he is currently a co-founder/co-owner of include the Tacoma Angel Network, Parker Johnstone Honda Dealerships, Airstream Dealerships in Covington (and more on the way), Roundtable Pizza, and Firs Management.  Dimmer attended the University of Oregon and has a degree in finance.  His early work included working at Puget Sound Bank, and he also worked with our instructor at Freerange media and Lariat Software.  After selling that company, he retired for a short period of time, then went to work for his father at Firs Management maintaining and organizing finance.
The main subject that Dimmer spoke on was financing an up-start.  The financing process begins with "self", as in you must supply financing yourself in the initial phases of your company.  Next, a person should have some connection to a friend or family that can help with funding (either with a loan or a stock option).  The main source of capital for a company should come in the third type, Angel investing.  Angels, for the most part, are currently "65 year old white men."  Most people probably know at least one "angel", but the best method to find angel investors is through an angel network, such as the Tacoma Angel Network, which Dimmer co-founded.  A person will most likely have to present to 10 angel investors in order to succeed with one.  Venture Capitalists and Loans/Bonds are the less likely methods of obtaining capital, but it does happen for probably less than 1% of companies in their lifetime.
Dimmer mentioned a few gems during his lecture.  The first gem was that venture capitalists generally won't be interested in a company with less than a $20 million evaluation.  If a venture capitalist does approach your company or seems interested in your company with a significantly smaller evaluation, chances are that they are only mining you for information to provide one of their portfolio companies with the information they need to destroy you.  This is definitely something to keep in mind if and when I am ever in that phase of a business (although it's not likely that I ever will be).  The other piece of information that he mentioned that I found particularly interesting was the types of investments that angels will commit to.  There are two types, and a hybrid, which include a loan (to be paid back with interest), a stock option, and a hybrid of the two where the angel is guaranteed repayment (or a tax write off in the least) while still having the ability to convert the loan into stock at their discretion.

Ron Kornfeld (Self-Proclaimed Serial Entrepreneur)

Ron Kornfeld, self-proclaimed "serial-entrepreneur", was the guest speaker today in my entrepreneurship class at UW Tacoma.  He began his talk by explaining that no one likes business plans; the purpose of a business plan is to put an idea into a standardized format that can be consumed efficiently by prospective partners/employees and venture capitalists.  In addition, the process of articulating the details of a business venture makes you test that business (it forces you to define smaller details that you maybe wouldn't have normally have thought of).
Ron worked for MCI, but left and started a company that wanted to simplify dial-up in the early days of the internet.  He has since encountered three net bubbles, solved some of the world's problems, and been involved with start-ups like Dreambox (which was acquired by Netflix), NimbleSource, Personal Grid, Normandy Partners, Harmonetrix, Cygnisoft, XactLabs, and Tweetiator.  I took a couple of very interesting pieces of information away from this lecture.  The first was that most start-ups don't need to raise millions of dollars.  This was something that I assumed coming into the class, but was being swayed to think otherwise by many of our class lectures.  Ron mentioned that start-ups do need some form of capital, but it doesn't have to be from venture capitalists; it can come from many different types of investors.  The second was the way that venture capitalists and the firms that they work for get their money.  I had just assumed that they were made up of billionaires who were looking for ways to invest their money (and hopefully earn a large return).  What really happens involves the government: government employees have pension funds that are paid into by current employees, but that money needs to be grown to meet the need of a generally increasing amount of retirees dipping into those funds.  Some of those funds are given to V.C. firms as a high-risk investment.  These firms then seek out the best start-ups to invest in, and this is done by looking at BUSINESS PLANS!  Which takes us full circle back to the idea that a business plan is crucial for any business idea that could be brought to fruition.
One last thing of note was that Ron discussed "disruption", which is basically the idea of breaking into a market and doing something better than what is currently available.  There are many pieces of software that I use on a daily basis that I believe could do things much better than what is currently available.  This inspired me to rethink my business idea, and I may be changing the business idea that I use for this class entirely.