Managing Technological Innovation

IEOR 4998, Tuesdays 1:10PM - 3:40PM 1127 Seeley W. Mudd Building

Managing Technological Innovation

Piece of paper
No names Why are you taking this class? What do you hope to learn from it? How did you hear about it? What do you expect to learn from it? How much do you already know? Have you taken any classes in any business eld (accounting, nance, marketing, other entrepreneurship, etc.)? Which? Do you know what: A CFO is? Venture capital is? A minimum viable product is? YCombinator is? Techcrunch is? Hacker News is? Are you involved with other Columbia entrepreneurship organizations? Which?

Jerry Neumann
@ganeumann reactionwheel.net

Justin Singer
@jericsinger justin-singer.org

Technology

The process by which an organization transforms labor, capital, materials and information into products and services of greater value...this concept of technology therefore extends beyond engineering and manufacturing to encompass a range of marketing, investment and managerial processes.

-The Innovators Dilemma

Innovation

The process by which an organization transforms labor, capital, materials and information into products and services of greater value...this concept of technology therefore extends beyond engineering and manufacturing to encompass a range of marketing, investment and managerial processes. Innovation refers to a change in one of these technologies.

-The Innovators Dilemma

Its also important that the word innovation be understood broadly. Startups use many kinds of innovation: novel scientic discoveries, repurposing an existing technology for a new use, devising a new business model that unlocks value that was hidden, or simply bringing a product or service to a new location or a previously underserved set of customers.

-The Lean Startup

Discovery Invention Research & Development Innovation

Entrepreneurship

Entrepreneurs start businesses.

Entrepreneurship is the commercialization of an innovation.

Two types of Startups

-From The Kauffman Foundations A Tale of Two Entrepreneurs, Bill Aulet and Fiona Murray, May 2013

Why Entrepreneurship?

Were here to put a dent in the universe. Otherwise why else even be here? Steve Jobs

-From The Kauffman Foundations The Importance of Startups in Job Creation and Job Destruction, Tim Kane, July 2010

For the earliest times of which we have record--back, say, to two thousand years before Christ--down to the beginning of the eighteenth century, there was no very great change in the standard of life of the average man living in the civilised centres of the earth... The slow rate of progress, or lack of progress, was due to two reasons--to the remarkable absence of important technical improvements and to the failure of capital to accumulate.
- Economic Possibilities for our Grandchildren, John Maynard Keynes (1930)

-From A Farewell to Alms, Gregory Clark

From the sixteenth century, with a cumulative crescendo after the eighteenth, the great age of science and technical inventions began, which since the beginnings of the nineteenth century have been in full ood--coal, steam, electricity, petrol, steel, rubber, cotton, the chemical industries, automatic machinery and the methods of mass production, wireless, printing, Newton, Darwin, and Einstein, and thousands of other things and men too famous to catalogue. What is the result? In spite of an enormous growth in the population of the world, which it has been necessary to equip with houses and machines, the average standard of life in Europe and the United States has been raised, I think, about fourfold.
- Economic Possibilities for our Grandchildren, John Maynard Keynes (1930)

The single most important contributor to a nations economic growth is the number of startups that grow to a billion dollars in revenue within 20 years.
- Carl Schramm, Kauman Foundation, quoted in http://www.forbes.com/sites/richkarlgaard/2010/10/20/what-grows-an-economy/

Entrepreneurship is aself-actualizing and a selftranscending activitythatthrough responsiveness to the marketintegrates the self, the entrepreneur, with society.Unavoidably, therefore, entrepreneurship is anexercise in social responsibility. To suppress orconstrain innovation and improvementandtheir implementationignores a societys needsand wants, holds it back, and diminishes itsfuture. Entrepreneurship is the unique processthat, by fusing innovation and implementation,allows individuals to bring new ideas into beingfor the benet of themselves and others. It is suigeneris, an irreducible form of freedom.
- Kauman Foundation, Entrepreneurshipin AmericanHigher Education, 2008

Goals
Understand what innovation is and why its important Be able to generate and evaluate ideas and opportunities Know the process by which ideas turn into businesses Understand how to continually evaluate your business and adapt to new information Have the condence to go and start when you have a world-changing idea.

Framework
IDEAS

PIVOT CUSTOMER DEVELOPMENT

IDEA

MVP

PMF

What this class is, and isnt

Class Structure
Guest lectures from working entrepreneurs, VCs, corporate intrapreneurs Readings on ideas, tools, strategy, tactics and class discussion; texts and online Lectures Homeworks Team project

How much work is this class?

Project: Start a Company

Entrepreneurs start businesses.

Form a team Think of an idea Research your market Dene your customer Design a product Business model Test and iterate Market Business plan Presentation

Assignments/Grading

40% Final group paper 40% Individual critique 20% Homeworks

This Week
Find a group No fewer than three people No more than ve people

Class Rules
Challenge me, challenge others, but be respectful Group work, but everyone contributes Learn from each other but do your own work

Schedule
Date 1 2 3 4 5 6 7 8 9 9/3/13 9/10/13 9/17/13 9/24/13 10/1/13 10/8/13 Intro Innovation I Innovation & Ideation Lean/Customer Discovery/MVP Estimation & Calibration/Market Research and Sizing/ Competitive Research Build-Measure-Iterate/PMF Customer Discovery Product & Business Model Pricing, nancial model Slides to review Cap Table Team presentation Group & Individual Reports Ideas Market Sizing Competitor Analysis TBD Business Model Canvas Breakeven & LTV Groups Markets Topic Group Progress Hand In

10/15/13 Business models 10/22/13 Financial 10/29/13 Pricing/Product 11/5/13 No class-Election Day

10 11/12/13 Marketing 11 11/19/13 Funding 12 11/26/13 Psychology for Startups 13 12/3/13 Presentations 12/10/13 Study Days 12/17/13 Finals

Texts
Required: 1. The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, C. Christensen. 2. Lean Analytics: Use Data to Build a Better Startup Faster, Alistair Croll and Benjamin Yoskovitz. 3. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, Alexander Osterwalder. Useful: 4. The Lean Startup, Eric Ries. 5. The Startup Owners Manual, Steve Blank and Bob Dorf. 6. Crossing the Chasm, Georey Moore 7. Founders at Work, Jennifer Livingston 8. Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, Brad Feld, Jason Mendelson and Dick Costolo

Also on Courseworks
Calendar Weekly Readings Assignments These slide decks

Readings for Next Week

Next Weeks Speaker