Professors and researchers are idea machines. We regularly attack problems so hard we refer to them as “Grand Challenges”. I’m surprised we don’t have more monuments erected to celebrate our glorious profession.
If ideas were enough, all of the following people I see regularly would have thriving companies we’ve all heard of: my brother, my dad, my in-laws, my colleagues at VT, my colleagues abroad, my barber, students that take my classes, students from various business schools, parents of my kids’ friends, random people that approach me after I give a talk, and many more.
… having a good idea is the easy part.
So, why don’t they? Because having a good idea is (frankly) the easy part. Average professors lack the skills to build a company. But I’m living proof that some professors can learn to build companies. The problem is that learning on the job is far from optimal.
Before I created my company when I first started talking to VC’s, the prevailing wisdom was that I was a typical (absent minded) professor and just about anyone would be better to run a business than me.
In fact, I had already built a business once — I had grown my research group from zero to ten people and raised enough research capital to sustain a $1.5M/year operating budget for about 7 years. I managed all types of personalities, built software, partnered with other groups and labs, wrote proposals, produced high quality papers, and my work changed the way people use computers today. I was the CEO of a small business that had international influence and was part of a multinational, billion-dollar company (my university). So, to trivialize my experiences as not even remotely similar to building a company was a bit insulting.
Early on when dealing with potential investors, my professor title was the elephant in the room.
Luckily, being a professor means having thick skin. Early on when dealing with potential investors, my professor title was the elephant in the room. Like people trying to tell you you’re crazy without saying the word “crazy”. “This is a great idea, Kirk. But, are you really sure you’re the right person to make this into a company?” Some, under the auspices of tough love, were more direct: “you should stick to your day job.”
Luckily, my experiences and my ego were enough for me to discount most of these folks. Now, to be honest they were partially right. What they should have been saying was that there are people out there who would be better at building a business from a good idea. That’s absolutely true. Having built a startup, I now admire business brilliance now as much as I admire scientific brilliance. But, don’t let anyone substitute an MBA as equivalent to business brilliance. Find people who have built businesses from nothing into something worth tens of millions of dollars at least.
… I now admire business brilliance now as much as I admire scientific brilliance.
Over the years I’ve found both those talented enough to run my business and those willing, but I’ve not found those criteria combined in one person. That means I had to convince others (my investors, my cofounder, my developers, my mentors) to take this journey with me based on a good idea and somewhat irrational optimism. I’ve made plenty of mistakes, but luckily the mistakes I’ve made we’ve been able to recover from (so far).
So, when should you go for it? Some say that when you can convince at least one other intelligent person to join you, that’s the time to start. Others say you carefully analyze 1) the market potential, 2) the people involved, and 3) the technology, in that order. My advice would be to find someone willing to buy a product that captures your technology if you build it. Try to estimate how many more people would buy what you build. If there are enough people willing to buy, then start building your products. Find someone to take this journey with you since it is long and arduous.
What did I do? Well, I’m not sure if my story is something that will convince you to go for it, or dissuade you from it. While the stories you read about information technology companies still prevail in the press, most of these “overnight successes” are about a decade in the making. So, the get-rich-quick-fantasy ends shortly after you start your company. Successful entrepreneurs are not driven by money, but by passion for seeing their ideas propagate in the marketplace. As Guy Kawasaki would say, “make meaning.”
… our first customer evaporated …
For us, under my leadership, we initially built the wrong product. We built client-server software for Linux and our first customer (Merrill Lynch) evaporated in the Wall Street economic disaster. Luckily, we recovered and quickly built a Windows freeware version (Granola) that was wildly popular. Requests for Granola Enterprise versions started generating some revenue. We then realized we could not build client-server software for the Enterprise in an emerging Cloud-based world. So, we moved to a cloud-based infrastructure and adoption is picking up rapidly with our recent free software that measures your IT energy footprint. These were not technical decisions. We were responding to the market to build products for purchase so we could grow as a company. These key changes have enabled us to sustain ourselves long enough to attract several big government contracts and a growing user base of universities and corporations.
In summary, an idea is not enough – especially for a professor. Execution is everything. When you figure out how to productize your idea for the first time, be ready to adapt. If you can bring in a business builder who believes in your idea as much as you do, you are starting from stronger footing. If you can, find customers that will buy what you are selling as soon as you make it. But, if you lack all of these and can’t see yourself pursuing this idea for 5-7 years or more, you should probably just stick to your day job.
Most of our trials and tribulations so far have been business related. Our small size and technical capability have allowed us to adapt more quickly than others in the space. But, the CEO (me) was learning on the job. This means we possibly could have avoided some of these mistakes. What’s the biggest mistake I’ve made so far? Running out of money. But that’s the topic of another blog post altogether.