Transcript Document

Entrepreneurial Process Improvement:
Selling the benefits, weighing the risks
Brian Bascom, CEO
February 18, 2012
Overview
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Who we are
Why you care
Anatomy of a tech start-up
Forces acting on new ventures
Inside the mind of the entrepreneur
Q&A
Who We Are
• United States Veterans Chamber of Commerce
– Membership-based business organization
– Chapters in different cities & states
– Work with local chambers of commerce, state and
local government officials, and Veteran Service
Organizations nationwide
• Our mission: Helping Veterans manage,
create, and develop business opportunities.
Who’s This Guy?
• Runs the USVCC national office
• Army Veteran
– Balkans, Middle East
– Infantry, Scouts, PSYOP, Civil Affairs
• Assists member Veteran businesses daily
– Advises them on marketing and financing
– Works with agencies, universities, and lenders
• Worked in telephony (big firm and dot-com)
• Former ASEE Programs Chair
Who You Are (Ideally)
1. Managing projects or programs
2. In an established development environment
3. With software and business processes
• Can be a team lead, manager, programmer,
consultant, PM, or senior executive.
• Responsible for making (good) things happen.
Defining the New Venture
Our focus today: high-tech entrepreneurs/firms
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Technical start-ups
Smaller, young companies
Addressing real-world problems
Caught before they solidify their processes
Not beyond living invoice-to-invoice
(or funding round-to-funding round)
Why You Care About Entrepreneurs
• Corporate landscape constantly evolves
• Must deal with smaller corporate players
– They bring new technologies
– They provide (sometimes theoretical) cost savings
• Might be your next career move…
– Directly (new company) or indirectly (consultant)
Find Your Next Bottleneck
Supplier
Sub
contractor
Partner
Your
Company
New
Acquisition
Sub
contractor
Customer
Secondary
Customer
What Are These People Doing?
Inside the Mind of the Start-up
• “Surprise exists in the mind of the
commander.” – Sargon, John Boyd
• Understand the forces operating on a start-up
or young business
– Reduce your surprise at their actions
– Align your efforts/suggestions with those forces
Iron Triangle of New Ventures
Money
Product
Ver. 1.0
Management
Marketing
Talking Process
• Until the first product ships, process is a minor
sideshow
• After the first product ships, process will
remain a sideshow unless it positively affects:
– Money
– Management
– Marketing
• Some examples…
Cultural Factors
“Where there is an on-ramp, there will also be an off-ramp.”
1. Gather resources, create business concept
2. Execute the basic business model
3. Execute the planned exit strategy
This is the new cultural norm in business
Management Ekman Spiral
CEO
VP Opns/COO
Movement on the surface
does not correspond to
movement beneath the
surface. Deep currents
move in unlike directions.
“Triangle Issues”
Product Manager
Project Manager
Team Lead
Programmer
“Product”-ivity
Alternative Identification Chart
Observations on Venture Production
Some Reasons for Few Processes
• How new ventures are formed:
– Who do you know and like?
– Who knows about the problem we’re solving?
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Competing styles and standards
Known processes not workable in new venture
“War of the curly braces”
Left a large company to escape the “stifling
development environment”
Understanding Risk v. Gamble
• Risk is recoverable; losing a gamble loses all.
• Those in a new venture are living in a soup of
uncertainty (about their team, market,
deadlines, and customer intent), without the
safety net of a diversified product portfolio.
• Result: behavioral heuristics of uncertainty
come to the forefront more than otherwise.
Heuristics Game
• Directions:
– Listen to the question.
– Write down your answer, “A” or “B.”
– Raise your hand after you write your answer.
– Follow the next verbal directions.
– No questions, no talking, until the game ends (it
only takes a couple of minutes, total).
• Ready?
Some Critical Heuristics
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Hyperbolic discounting
Irrational escalation
Anchoring bias (on successful start-ups)
Loss-averse risk acceptance
Framing effect (iron triangle factors)
Overconfidence effect
Availability heuristic (also knowledge bias)
Aligning With Heuristics
• Go with the flow, not counter to it
• Contrarians do not fare well in new ventures
– “Cohesion is more important than accuracy”
– Frame suggestions as corollaries to current plan
• Sell realistic timeframes and milestones
– Simplified by rampant underestimation
– Milestones are process by another name
• Future pain doesn’t sell – present pain does
Questions?
Brian Bascom
CEO
United States Veterans
Chamber of Commerce
[email protected]
www.usvcc.com