Category Archives: Knowledge @ CSUF Entrepreneurship

Timeless Networking Advice for Entrepreneurs from a Cal State Fullerton Mentor

CSUF Startup Incubator Open House 2016

Here’s a photo of entrepreneurs networking at the CSUF Startup Incubator Open House in 2016. You never know when you will meet your next business partner, client, employee, or friend.

A couple of weeks ago in the weekly CSUF Entrepreneurship Insider Director Jackson talked about the importance of networking. Networking is a powerful way for entrepreneurs to actively create new opportunities and while volumes can (and have) been written on the topic oftentimes the best advice is also the most straightforward advice.

After reading Director Jackson’s newsletter, longtime CSUF Entrepreneurship mentor, executive, and serial entrepreneur Dr. Don McCrea sent in some advice that I think every entrepreneur should know about and put into practice. Here is Don’s timeless networking advice for entrepreneurs:

Here’s a suggestion that was made to me several years ago that I feel is the best networking advice I’ve ever gotten. The advice is to ask two questions, listening to the response on each one, and then following up where appropriate. Here they are:

  1. Ask “Who are you?” Not, “What do you do?” Asking who they are differentiates you from everyone else they’ll meet at the event, but also lets you get to know more about who they really are.
  2. Ask “How can I help you?” Again, listen to what they need. Maybe even jot a note on their business card. If you encounter someone at that event (or later) who fills that need, introduce the two of them. You will be well-remembered, and you’ve begun a relationship.

You’re starting a conversation, not taking a test. So these questions are designed to provoke that conversation, and there may be some interchange that takes place between the two questions.

I’ve always listened naturally for how I can create value for those I meet—especially if they’re a prospect or client—but reframing my questions to those above has had a very positive effect on my network creation.

Being able to stand out from the crowd is a skill that you can learn and these questions are a good way to do that. At the next networking event you attend, or even the next person you meet for the first time, try asking these straightforward questions and see what kind of response you get. I bet it will work out very well for you.

Speaking of networking, our next event is How Successful Entrepreneurs Raise Funds from Banks in Irvine on Wednesday, April 18 at 6pm. We hope to see you there!


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6 Things Our Business School Teaches Students About Entrepreneurship

CSUF Startup Competition Semifinals Vanessa Ganaden and Rachel Herzog

Two CSUF Entrepreneurship students, Vanessa Ganaden (left) and Rachel Herzog (right), pitching their concept at the recent CSUF Startup Competition Semifinals. They are advancing to the Finals of the competition where they stand to win part of the more than $10,000 in scholarships and in-kind services!

We were recently sent an article titled 6 Things Business School Won’t Teach You About Entrepreneurship by Corey Ferreira that we largely agree with and completely disagree with at the same time. Mr. Ferreira’s contention is that business schools do not teach entrepreneurship in a way that is actionable for most people. He goes on to list six areas where business schools are deficient. We largely agree with his view of entrepreneurship and how for most of us entrepreneurship is about hustling and getting things done with limited resources.

But we have to disagree with his contention that business schools, especially the business school at Cal State Fullerton, do not prepare students well enough for this reality. At Cal State Fullerton we teach students many of the lessons Mr. Ferreira outlines in his article and we build on that through the CSUF Startup Incubator, entrepreneurial student clubs, and competitions like the upcoming CSUF Startup Competition. Below are my responses to the six areas Mr. Ferreira identified in his article.

A business can be scrappy

Our curriculum and our students embody scrappiness. We teach our students what it means to bootstrap a business and bolster those teachings with many guest speakers who have been there, done that. Mr. Ferreira rightly notes that many startups have to embrace a scrappy ethic in order to launch their business and we inculcate our students with hard won lessons on how to do that.

For example, central to much of our teaching is the need to create a minimum viable product (MVP) because that way you can test your hypothesis about what your customers want without having to create a finished product out of the gate. Buttressing the MVP is market research that involves actually getting out of the building and talking with potential customers. This process gives entrepreneurs with limited resources the best opportunity for success because they will inevitably find out so much valuable information from interviewing customers, launching an MVP, and iterating off of their results.

In a bygone era the formula was to come up with an idea, raise money, and launch at scale. Those days aren’t completely gone but for the vast majority of businesses those days aren’t around anymore. So, we agree on the necessity of launching with a lean business model but I cannot agree with his contention that business schools, at least ours, don’t teach realistic business practices.

Plans aren’t the most important thing

In the CSUF entrepreneurship program, we agree that plans aren’t the most important thing. They’re important as far as they go; they help to crystallize the entrepreneur’s vision and helps him think through the process of launching a business but, as we teach all of our students, plans should be written in pencil. Changes will inevitability happen when faced with results that do not meet the entrepreneur’s hypothesis about any facet of his business.

In the classroom, we give supremacy to the creation of a lean business model canvas, which is a one page document that succinctly lays out the nine most important factors that determine a business’ success. That’s right, a one page document. Yes, we do have the students go through the process of filling out those key hypotheses found in the lean model in a full business plan but we stress the necessity of creating a plan that must be updated frequently and having an entrepreneurial mindset that embraces nimbleness and the ability to change. As Mr. Ferreira notes, these are called pivots and this is a concept that is very familiar to all of our students.

How to set goals

Mr. Ferreira states that: “So many entrepreneurs know what they want to do, but they don’t really  know how to do it. Setting goals makes it easier to determine the path  since you can reverse-engineer from where you want to be.”

We can quibble on this. In the CSUF Entrepreneurship program we favor the ground up approach to planning and then setting goals that are hard to achieve but not impossible. Goal setting done right is a skill that must be learned by doing and we have a program that stresses doing. Every one of our entrepreneurship students works on a startup with the goal being to go from concept to launch. These businesses are incubated in the classroom over the course of two semesters with the guidance of faculty and mentors (our mentor pool of over 600 people includes professionals from all disciplines and many entrepreneurs).

Goal setting is also baked into our curriculum through the processes already discussed in this post as part of the process of iterating from MVP to a final product. We believe and teach our students that what isn’t measured doesn’t improve and it is goals that are measured.

Marketing in the 21st century

Mr. Ferreira accurately describes the ephemeral nature of marketing today. Social media, by design, is geared towards the creation of content that has a very short lifespan. Glance at a Tweet, move on. Read a Facebook post, move on. Watch a video on YouTube, move on. The staccato nature of today’s media is ever changing and keeping up with everything is impossible.

And yet, we do teach how to thrive in this atmosphere by drawing on many of the same lessons that are applicable in other parts of our entrepreneurial curriculum. By discovering and knowing who your customers are and experimenting on how to effectively communicate with them you can set yourself up for success. All of our professors draw on their academic research or professional experiences to teach modern marketing techniques to our students.

How to be creative

The ineffable qualities of creativity are hard to teach, says Mr. Ferreira, and he’s pretty much right about that. But there are ways to teach students so that they can maximize the creative gifts that they already posses. At CSUF Entrepreneurship we view creativity as if it were a muscle, the more you work at it the stronger your creative muscle becomes.

While there isn’t a formula for creativity we have developed our curriculum so that our students have many opportunities to work out their creative muscles. All students majoring in entrepreneurship at Cal State Fullerton get the opportunity to do consulting working for actual businesses. Our CSUF Consulting program enables students to put into practice the lessons that they have learned in the classroom and that is an extremely creative process. Figuring out ways to create winning strategies for clients in a wide range of areas (including: marketing, operations, leadership, and finance) is a fantastic way to develop a student’s creativity.

Risk-taking

The CSUF Entrepreneurship program has a somewhat more nuanced view of risk taking than Mr. Ferreira has. The way we see it, all risks are not equal. Spending hundreds of thousands of dollars to build an app that you think the market wants is certainly a risk but it is not a good risk.

We teach our students to take small, containable risks that can be used as stepping stones towards creating products and services that the market actually wants. At its core, entrepreneurship is about trailblazing but it’s not about the kind of Leroy Jenkins-style trailblazing that almost always ends in doom and despair.

In the classroom, we do teach our students that failure is a fundamentally healthy part of entrepreneurship. This can be seen in everything that we teach: every decision is not carved in stone but, rather, an experiment to see what works and what doesn’t. Our whole lean startup approach is predicated on this belief.

If Mr. Ferreira is game, we would happily extend him the offer to sit in on some of our classes because we’re confident that he will see that the CSUF Entrepreneurship program is not like the business schools he describes in his article.


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Presenting to an Investment Panel – CSUF Startup

Last week, Director John Bradley Jackson hosted a seminar on “Presenting to an Investment Panel” at the CSUF Startup Incubator (Irvine). This was a special event, not only because the director was presenting, but because it was the first event at the newly opened CSUF Startup Incubator office at the Cal State Fullerton Irvine campus!

We will be publishing some video clips from this seminar but, until then, here’s the copy of JJ’s presentation.

And here are some pictures from the event.

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#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship:
http://bit.ly/CSUFknowledge

What to do about Underperforming Cofounders

Recently, I saw a question on Quora from an entrepreneur who was all in on her idea but was becoming frustrated with her putative cofounder. Her question was what should she do about a cofounder who can’t dedicate enough time to the startup because he has a full time job? Here’s my response:

Instead of focusing on the negatives, figure out how your friend can add value to your startup. Once you’ve aligned his skills/commitment to what you’re trying to accomplish then work with him to create metrics that he has to meet in order to get more equity through vesting options (or compensation in another way, maybe as a paid consultant or salesman). If he fails to reach those metrics on time then have a pathway that eventually leads to his graceful exit from the startup. In that scenario, if handled correctly your buddy will come to the conclusion that he just isn’t committed to the startup and will leave without a bad taste in his mouth.

Summarily banishing someone from a startup when they are able and willing to add something to your venture is a mistake early on unless you truly believe they’re not going to add anything or, even worse, hold you back. If you really believe he’s going to have a detrimental effect on your business then get rid of him now. But, if you think he can add something (i.e. connections with potential customers/investors, a high degree of knowledge in your industry, etc.) then try to work with him to come up with an equitable way to split the equity.

On a related note and not knowing your entrepreneurial history, starting a business is a lonely endeavor, especially for those who haven’t done it before. (Which is why we always recommend building out a team to the entrepreneurs that we work with at the CSUF Startup Incubator.) If you have plans on growing your business into something more significant than you and maybe a small team can handle then I would definitely recommend that you start building out a team as soon as possible. If your buddy isn’t a good fit then start recruiting others to join you. Working with others is good on the mental side of the equation for an entrepreneur and the more people you have working with you on a startup the more upside there is because these people will bring things to the table that you working alone cannot.

Agree? Disagree? What would you add?


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

An Excellent Titan Fast Pitch

All the way back in 2014 John Chi was a finalist in the Titan Fast Pitch competition thanks to his great idea, for sure, but also for how excellent he was at pitching his idea. John knew his idea front to back and was able to take that knowledge and boil it down to its essence in a compelling way.

Any student that is looking to start their entrepreneurial journey and earn a part of some scholarships at the Titan Fast Pitch on October 21 should watch this great example from John Chi:

What did John do right?

He got to the value proposition, or the “why”, at the beginning. John introduces his concept with a question about what do you do when your body starts to wear out. It’s a powerful question and it immediately grabbed the audiences’ (and judges’) attention. Stem cells are the answer and he launches into a concise explanation of how his business, Synova Life Sciences, will use a person’s own stem cells to help them regenerate lost tissue and feel better.

Along the way during his rapid-fire delivery John talks about the market size, which is large, what his business model (how he will make money) is, and his key partners. It’s a masterful performance and John has taken that performance on the road and has been very successful at other competitions as well.

And John is still developing his concept. As you can imagine, stem cell therapy is not a business you start overnight, but John did get his start in part thanks to his experience at the Titan Fast Pitch.

That is the power of competitions like the Titan Fast Pitch. It helps you get started. (And if you’re worried that you can’t do as well as John did my advice would be to not be. Practicing your pitch will certainly help as will developing your idea. Just remember that this competition, as with everything in life, isn’t a cul-de-sac for your entrepreneurial aspirations. It’s merely a point along the line that hopefully ends with you creating something awesome!)

If you are interested in competing in the Titan Fast Pitch we couldn’t be happier. Make sure to sign up today and if you have any questions we are happy to answer them and help you start your life as an entrepreneur. Please send all questions to csufentrepreneurship@fullerton.edu and we will respond as soon as possible.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

Forecasting for Entrepreneurs – How to Develop Assumptions

Joel Schwarzbart gave a great talk on forecasting for the CSUF Startup Incubator

Joel Schwarzbart gave a great talk on forecasting for the CSUF Startup Incubator

Joel Schwarzbart describes himself as half a CFO. What does that mean? Well, basically it means that Joel is a consultant who does many (if not most) of the financial activities that a full time CFO normally does but he does them for multiple clients.

Earlier this week, Joel gave a talk at the CSUF Startup Incubator in Placentia (by the way, we  bring in experts all the time to give talks and to have office hours, you can see all of our planned events by going to our Eventbrite page) about how to do forecasting if you are an entrepreneur working on a startup. While he talked at great length on a number of subjects that are important for forecasting there was one thing that I want to focus on here: Assumptions.

The accuracy of your forecast, which is the combination of all of your projections for your business, is in large part determined by the accuracy of your assumptions. Some things you have to assume:

  • How much you will spend on marketing efforts
  • The costs of the raw materials that go into making your products
  • Variable employee costs
  • Conversion rates on your ads
  • Your effective tax rates
  • Travel expenses
  • How many new customers you will bring online
  • And the list goes on and on and on….

Many of the entrepreneurs and students I work with do not give nearly enough consideration to their financial assumptions and yet it is from these assumptions that all forecasts come from. Fortunately, there are some easy ways to develop your financial assumptions and here are some of them:

Company Financial History

If your company has been around for a couple of years you will have to assume less than you would if your business is a startup. Simply use your actual history and financial statements to inform your assumptions. You will still have to take into consideration some other data points that I will cover presently.

Industry Norms

For our students, I always recommend them to look up the industry norm financial ratios in the library. In our library there is a database of financial ratios that is broken up by industry and by company size (there might be a huge difference in quick ratio for a small company versus a large company after all). With these kinds of industry and company-size financial ratios you can compare them to the financial ratios that you have developed for your pro forma (forecasted) financial documents; if the financial ratios you have aren’t even close to the industry norms then you might have an issue.

Besides financial ratios, there are many other kinds of industry norms that you can find out if you look hard enough or ask the right people about (industry magazines are usually a good source for this kind of information as are people who currently work in a given industry). For example, if you are opening a restaurant it would be a good idea to figure out your turnover rate (how many times a table is used over a period of time by a party).

Other Secondary Data

Besides industry norms, there are a lot of good sources of secondary data, which are nothing more than other sources of relevant information. For example, knowing the general strength of the economy is a good thing to know; knowing the strength of the economy for your area of operations is even better. Maybe the weather plays a part in the success of your business or maybe new regulations will play a more significant role in your business. There are many different fields to look into for secondary data.

(Yes, industry norms are a kind of secondary data but I think they’re important enough to have been covered separately.)

Observed Data

Now that I think of it, this might be the best kind of data that there is. If you directly observe something then that’s data that others do not have. For example, I remember reading about a startup a number of years back that was making some pretty good money taking pictures of department displays. Why? Competitors and companies that make items that go into department stores really wanted to know what was popular at that moment.

I have counseled students to get a head count on how many people went into a restaurant. Municipalities put out those strips on the road to get a count of how many vehicles pass by. Doing A/B (or multivariate) testing is another awesome source of observable data. Your company’s history is a form of observed data and, please, keep good metrics on your business; that will help you immensely.

So What?

I’m sure that there are other broad sources of data that I missed but I think you get the picture about assumptions. They are important because, like food, if you put good stuff in you will get good results and vice versa. And you need to have quality forecasts for your business so that you:

  • Make sure you have positive cash flow
  • Can plan to produce the right amount of product
  • Know where to spend money to get a good ROI on marketing
  • etc.

Forecasting is a fundamental part of any business and we were lucky to have Joel give a great talk on forecasts. But forecasting is just a part of growing a business. There are a lot of things to consider and to do it right you should have mentors to help guide you. You can find them on your own or you can work with mentors that you can find at CSUF Consulting or the CSUF Startup Incubator.

CSUF Consulting is great for clients that already have a business who are looking to improve in some fundamental way (i.e. marketing, operations, leadership, etc.). Each client is paired with a student team and a mentor who, as part of their classes, work with clients over the course of a semester to develop a comprehensive strategic plan that directly addresses some of the toughest issues or most promising opportunities that their client has.

The CSUF Startup Incubator, on the other hand, is built off of decades of entrepreneurial experience to help entrepreneurs go from concept to launch. At the beginning of a six month residency, entrepreneurs at the CSUF Startup Incubator sit down with Incubator staff and their dedicated startup coach to develop a startup plan that will position the entrepreneur for success. From that point on the team gets to work implementing that plan with the help of the entire CSUF Entrepreneurship community, which includes more than 500 subject matter experts who can be called upon to help. Oh, and residents at the CSUF Startup Incubator also get one of our CSUF Consulting teams attached to their startup to help them develop their startup plan by focusing their efforts on a critical part of the entrepreneur’s startup.

Give us a call today if you are interested in working with us, our number is (657) 278-3930. And to learn more about how to become a successful entrepreneur make sure to check out our Knowledge @ CSUF Entrepreneurship series where we have published posts and videos on topics that are important to entrepreneurs.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/CSUF_Knowledge

Building a Strong Culture from Startup to Mature Company

Dave Kinnear giving a talk on the importance of building a culture from startup to mature company for CSUF Entrepreneurship

Dave Kinnear giving a talk on the importance of building a culture from startup to mature company for CSUF Entrepreneurship

Last week, CSUF Entrepreneurship mentor and veteran executive coach for Vistage Dave Kinnear gave a great talk on the importance of culture for any organization and how to effectively build a great culture that will grow as your business grows. According to Dave, in order to accomplish this you first need to know how culture is built and the way to do this is to understand how people develop their world view.

For Dave, it all starts with fundamental organizing principles (FOPs), which is how people interpret reality. These are foundational principles that help to determine how you view everything.

From FOPs come values. Values are more disbursed than FOPs and are how we view the world. If you think that every person has inalienable rights then that is one of your values.

Next up are beliefs/habits. Beliefs/habits are our way of systematizing how we interact with the world. Instead of using pure logic to determine how to do things beliefs/habits help us to act quickly.

Action is the penultimate link in this chain and action is the manifestation of the heuristical responses as determined by our beliefs/habits. Actions taken are not always based off of complete information but without the foundational elements from above we couldn’t act.

From actions come results, which are simply how things end up once you take action. Depending on your FOPs, the world may be an ordered system akin to a clock but the complexity of that system is immeasurably complex and your results may not always align with that viewpoint. When that happens you will understandably start to question things.

The thing about this system is that the closer you get to FOPs the less change you will be willing to make. But if your results do not align with what you expected then you will start questioning things and reassess some things. The further up the line towards FOPs you get, the harder it is to change but you will be adjusting your beliefs/habits throughout your life.

In order to build a strong company culture you need to honestly assess what your world view is and create processes in your company that align with that. If you do it right then your culture will permeate every facet of your business and will help your business grow into the kind of entity that you want. It takes work but it can be done.

At least that was my interpretation of Dave’s thesis. Dave was more eloquent in explaining this in his talk and I hope to get some clips up from his talk for our Knowledge @ CSUF Entrepreneurship series soon.

And if you would like to meet with Dave to discuss culture and how to start your business you can reserve some time at his office hours that he does for CSUF Entrepreneurship. Office hours with Dave are a good way to get started on building your innovative concept and once you are ready to get serious about launching your business you should seriously consider becoming a resident at the CSUF Startup Incubator where we help entrepreneurs go from concept to launch.

Reading posts like this and attending talks by experts like Dave are part of the formula for success but there is significantly more value with working with experts like Dave and the people at the CSUF Startup Incubator.

Here are some thought-provoking quotes that Dave highlighted during his talk that I had to include in this post:

“Culture eats strategy for breakfast” is how Peter Drucker described culture and for Dave he sees culture as how organizations get things done.

“Values should underpin Vision, which dictates Mission, which determines Strategy, which surfaces Goals that frame Objectives, which in turn drives the Tactics that tell an organization what Resources, Infrastructure and Processes are needed to support a certainty of Execution” Mike Myatt.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge