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Walk the Talk

There’s an old adage that says the cobbler’s children are often the ones without shoes. Thinking about that should perhaps prompt innovative incubator managers to ask if their children – their companies – have the innovation they need to be successful in the marketplace. How do you go about becoming an innovative incubator? How do you implement innovation in an incubator? One of the ways is to look at your customer base and educate yourself on what your customers really need to succeed. The answer may not necessarily be what they think or say they need, so learning what your customers actually need should begin with examining the problem they are trying to solve.

Entrepreneurs speak their own language, and the responsibility of a business incubation programme is to interpret, curate, and educate, facilitating the discovery and implementation of the entrepreneur’s creation. At the Advanced Technology Development Center(ATDC) incubator, and the VentureLab (VL) commercialisation program at the Georgia Institute of Technology(Georgia Tech) in Atlanta, GA, we focus on helping entrepreneurs reduce their risk of market entry by prototyping or evolving a proof of concept, or assisting with market assessments to discover the potent?al of the product in the market.

We belive no one person can do it all, so we have staffed our VentureLab programme with experienced entrepreneurs that we call ‘venture catalysts’. Our venture catalysts have a very good general understanding of science and engineering, all of which helps them develop dialogue and trust with the professor or graduate student who has come to them for help in fostering their creation. These venture catalysts do not need a deep knowledge of the narrow market area, but need to know enough to be able to communicate the unique product attributes to potential customers. Having good business skills is also a must, which is why we include only serial entrepreneurs in the programme. There is no better way to demonstrate credibility to the fledging entrepreneur than to have already walked in their shoes?

Starting points

The VentureLab(VL) programme is structured around university technology and the students and faculty who develop it. In our VL program, the first phase of developing a company is called a “start-up”. A start-up does not have a business plan yet; it is still investigating the technology and the potential market placement of the invention or discovery. Only once a business model has been chosen and implementation of the plan begins, do the entrepreneurs and innovation coalesce to become a “company”. We view these as two completely separate stages of the company development process.

The director of our VentureLab, Keith McGreggor, believes that most companies make the mistake of focussing on the pursuit of funding before they understand the potential market segments they are trying to affect and how their product will benefit this market segment. Consumers can often say what their “pain” is and what they don’t want, but usually cannot tell you what it is they do want – and more importantly be willing to pay for. They just know it when they see it. Keith recommends reading the Steve Blank book “The Startup Owner’s Manual” to help incubator managers understand what their entrepreneurs need to grow their start-ups into a viable company.

Here are some key thoughts that Georgia Tech uses to facilitate healthy business incubation:

Start-ups are a contact sport. Don’t let anyone tell you differently. The best thing a start-up company can do is to get out into the public and talk to their potential customers, one-on-one, to find out if what they’re proposing is what the customer really wants. An incubator manager’s assignment is to encourage entrepreneurs to participate as much as possible in forums, tradeshows and any other networking activities to learn what their customers need – and to educate their potential customers about how their product will make life better for mankind. The real education part comes to the entrepreneur in valuable feedback from potential customers, affording the start-up the opportunity to tweak their product before it goes into the marketplace.

Be aware of adjacent spaces in your market research. Remain open to the possibility that what your entrepreneurs initially focus on may not end up being the most viable commercial use. I’ll insert the widely publicized discovery of the Post-it from 3M here. A researcher developed an experimental glue that was rejected for its intended purpose. However, the researcher’s wife found a perfectly good use for it on the back of small squares of paper that would stick to the refrigerator door and not leave a mark when removed. Voila! Post-it notes were born.

Don’t forget disruptive business processes that employ incremental technology can really be innovations with existing market re-segmentation - think e-books. Electronic books stormed into a long established market segment simply by changing the delivery method.

Entrepreneurs are born, they’re not made. It is our belief that entrepreneurs are born the way they are and one cannot force this behaviour on someone who is not predisposed to start-up companies. Entrepreneurs are the type of people who will never give up until they get it right. It is in their DNA and there’s no changing that. The incubator manager’s job is to encourage, guide and facilitate their journey, along with their product, into a viable company.

Advice for entrepreneurs (and incubator managers):

Evaluate your market fit first. Make sure the market is there before investing your time, your relative’s life savings and fervent supporter’s sweat equity into a company proposal that’s doomed to fail because the market is just not there. In some cases, it may be bad timing, or other extenuating factors, that doom an otherwise viable plan. Once a market segment is identified, the business development process can begin.

Beware of false assumptions. It is important to impartially assess the real need. This goes hand-in-hand with market analysis and clearly identifying what the market niche is. This discovery process should be just that - a process. It is perfectly acceptable to backtrack and review market strategy based on customer feedback to make sure you’re correctly positioning your product or service to the needs of the customer.

Remember that start-ups are not ordinary businesses. You must first go through the start-up phase before you can create a “real” company. If you are assigning titles at this point in the process, you are off your mark. Go through the business model discovery. Check out Alex Osterwalder’s book, “Business Model Generation”,(another recommendation from Keith) is an excellent starting point. Business creation is not a one-size-fits-all proposition and should not be viewed that way. Each start-up has its very own distinct evolutionary process and should be managed in a way that allows for its individual needs.

Advice for incubator managers
Populate your incubation staff with actual entrepreneurs. Nobody understands the process of start-up formation as well as someone who has already been through the highs and lows of starting up their own company. Georgia Tech’s ATDC incubator uses an Entrepreneur-in-Residence(EIR) program that purposely rotates experienced entrepreneurs as advisors for their start-up companies. Some great, long-term relationships have emerged from this network, allowing the EIRs to, in some cases, be hired on as the start-up company evolves and grows. If nothing else, the EIRs have already made great networking contacts that the start-ups will no doubt need through their learning process. EIRs are used by multiple start-ups at the same time, providing valuable advice in the different phases of each individual start-up’s development.

For start-up entrepreneurs, focusing on the money is easy (but important); becoming a good business person is hard. Incubator managers need to help entrepreneurs focus on their business objectives. The better business people they become, the more solid their company will be, hence the greater chance for success.

The incubator manager’s main responsibilities are to help the start-ups find their way and then facilitate the execution of their strategy. Once you provide the right shoes for your children, then you can help them find the path they need to walk.
A little bit about Georgia Tech’s programmes

Georgia Tech has three main programmes supporting business incubation in Georgia. The largest and oldest component is the Advanced Technology Development Center(ATDC), followed by VentureLab, and, most recently, our new programme called Flashpoint.

The ATDC is a start-up accelerator that helps technology entrepreneurs in Georgia launch and build successful companies. Founded in 1980, ATDC has helped create millions of dollars in tax revenues by graduating more than 130 companies to date , which together have raised over a billion dollars in outside financing. Headquartered in Atlanta’s Technology Square, ATDC serves as the hub for technology entrepreneurship in Georgia. Membership is open to all technology start-up companies in Georgia, from those at the earliest conception stage to revenue generating, venture-fundable companies. Currently, ATDC has over 350 members, with approximately 34 being physically incubated over three locations: Technology Square, The Ford Bioscience Center, and our Savannah campus.

The VentureLab programme is Georgia Tech’s comprehensive centre for technology commercialisation, open to all faculty, research staff, and students who want to form start-up companies based upon intellectual property developed at Georgia Tech. University innovations are transformed into companies by developing engaging business models, connecting faculty and students with experienced entrepreneurs, locating sources of early-stage financing, and preparing these new companies for global markets.

Flashpoint is a new start-up accelerator programme at Georgia Tech for any eligible technology start-up. Flashpoint offers entrepreneurial education and access to experienced mentors, experts, investors and stars in an exciting, immersive, shared-learning, open workspace. The programme is delivered through several cohorts throughout the year that run for approximately three months.

Lynne Henkiel is Director for Georgia Tech’s Innovation-Led Partnership Program in the Enterprise Innovation Institute (EI2). She spent fifteen years with IBM in finance, manufacturing, research and development organization and holds a Master of Science in Technology Management from the University of Miami, FL and an undergraduate degree in finance from Nova Southeastern University, Ft. Lauderdale, FL. Lynne has been with Georgia Tech for over ten years working with the commercialisation of federal research and also works with the Advanced Technology Development Centre and other incubation programmes.
Published on 23-05-2012 10:06 by David Tee. 1416 page views

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