Entrepreneurial Aspect of Technology Commercialization

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The concept of entrepreneurship is extremely broad. I try to separate several dimensions, or categorize it into three basic groups. The groups are small business, family business, and technology commercialization. Small business management is about a person starting or operating a business that is not intended to experience very rapid growth, but rather to provide products or services on a small scale. These are frequently also referred to as mom-and-pop operations. Certainly managing a mom-and-pop business involves entrepreneurship – there’s no doubt about that; it’s an entrepreneurial act. However, the kinds of problems that mom-and-pops face are very different from those of family businesses, where the organization is trying to employ family members and balance out (usually) a very large number of social and emotional issues. And both of those (small businesses and family businesses) are quite a bit different from a situation in which an entrepreneur is trying to take a raw technology and make a commercially viable new product or service that nobody’s ever seen before. So I try to separate entrepreneurship into those three broad categories and talk about them separately, because the issues involved are quite different.

My personal research emphasis is on technology commercialization. What I mean by that is taking fundamental, basic research done at research universities and converting it into viable products and services. So what I talk about to entrepreneurs is the process of taking what I think of as potential solutions to problems (that being the research that’s done in universities), and the actual problems themselves (problems that people face in their day-to-day lives, or problems that need resolution in one form or another), and bringing those two together. Very often problems exist, and solutions exist for those problems, but the people who have the problems don’t know any of the people who have the solutions. I look at this in a broad way as a knowledge management concern – bringing together people with problems and people with solutions and trying to find matches between those two. To me, that’s the key to the technology commercialization process, and it often leads to business start-ups.
Once you have a match between a problem and a solution, you would move more into the business planning arena. The business planning process poses questions about what costs are involved, and what resources are needed, and also considers the competition and markets and those things external to the start-up.

The planning process is very important, and tends to get a lot of coverage in teaching. However, at first blush, especially in technology commercialization projects, I try to get people not to worry too much about how big the market is and how much things cost, and all that. Those are problems to be resolved in the planning process, and you may well find out when you put the meat on your plan that there really isn’t very much there, and the idea isn’t really worth pursuing. But in this sort of open-ended problem and solution/resolution discussion, you don’t want to think about that yet. Too many good ideas are never developed because people don’t give them a chance, and don’t try hard enough to find solutions to the problems that commercialization presents.

One thing that irks me is the confusion that people have about successful start-ups and what they mean. Most often, observers seem to want to conclude that entrepreneurs are successful because they are “a breed apart” or because they are brilliant. If the revolution has taught us anything, it demonstrates the fallacy of that kind of thinking. A lot of people who weren’t very capable were highly successful, at least in terms of enriching themselves, because the market was wacky. With all the hype surrounding the revolution, you couldn’t tell the evangelists from people with a truly viable idea. The point to make here is the fact that a person has made a lot of money in a start-up business doesn’t tell us much about that person, and entrepreneurs shouldn’t be put on a pedestal any more than lottery winners without a lot of careful study into what they did and how their firms became successful.

Successful business start-ups tend to need a lot of different kinds of expertise. One of the important content areas is finance. This is a matter of understanding what independent elements cost, and how one gets the money to cover those costs in order to create a product or service. One of the big challenges that we face with start-ups is, of course, cash flow. An ongoing business normally has a steady cash flow, so there is cash coming in and cash going out. People are paying bills, but they’re selling products. In a start-up technology commercialization, normally that is not the case. Cash goes out but doesn’t come in, at least until the new product or service is up and established in the marketplace. So you have to work out the sequence of how that’s going to happen, and what kind of money needs to be spent at what stage. A big part of this – and I think a much overlooked part – is the management, which is deciding what tasks have to be done and in what sequence in order to reach the marketplace. Then, the process needs to be optimized, so that you’re minimizing the number of rupees you have to spend before rupees start coming in the door. Matching up those cash flows is, of course, important in any kind of start-up – reaching that break-even point where the rupees going out start matching up to those coming in. You are by no means out of the woods when that happens, but you’re way down the road.

Large and successful organizations run on standardized systems and procedures, and what the entrepreneur needs to do is to build good standardized operating procedures. That’s absolutely critical because it will build reliability and replicability into the products and services that are provided, and that’s really going to be key. Once those standard operating procedures are created and implemented, then it takes a lot less management time and intervention and effort to get work done. I think very often entrepreneurs don’t think in terms of those standard operating procedures. This is fundamentally a management challenge and doesn’t require brilliant thinking as much as plain old hard work and analysis.

Goals and planning are very, very important, but they’re often not used effectively. In my mind, the best thing about planning is that it clarifies in the minds of entrepreneurs and their teams what they are trying to do and how they are going to accomplish it. In fact, as you start to implement those plans, many things can (and will) go wrong, and they are liable to worsen significantly if the plan is blindly implemented. At the same time, the act of developing the plan is critical. The plan is extremely important in helping both the entrepreneur and the team find unity of purpose and a clear focus on what they’re trying to do and the things they have to nail down in order to make that work. But you can’t kill yourself trying to stay with the original business plan. You learn an awful lot the first few months, and it can make you deviate quite a bit from the original plan.

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