Archive for the ‘Fellowship Details’ Category

2007 Kauffman Fellows Video

A 7 minute video synopsis of the 2007 Global Scholars program:


Global Scholar Presentations

Week 4: 11-15th Feb: The rest of week 4 was spent preparing presentations for pitches that took place on Wednesday in front of the Global Scholars and our mentors from the Kauffman Foundation. This gave us an ideal opportunity to implement everything learned during the first 3 weeks. It was obvious through our new and improved presentation styles, business lexicons and project developments that we had all progressed alot.

john_tyler.jpgAs usual Stuart and I made use of free time following the presentations to meet some people from the Kauffman Foundation. On Friday morning we met with John Tyler to discuss IP, Trademarks, Patenting, company formation in the US and other related areas. John is great at providing insight into complex areas and problems surrounding IP. He quickly resolved various issues Stuart and I had regarding IP and Trademarking in particular. Also, on Friday we had meeting with the Kauffman Foundation team organising a mobile infotainment project around the Olympics to improve maths, engineering and science education globally.

New Venture Bootcamp (Parts 3&4) – Ted Zoller

ted-zoller.jpgDay 15, Friday 7th Feb: Ted Zoller continued his intensive mini-MBA program with us from yesterday (Part 2). Bare with the excessively long blog on this occasion as I felt it was necessary to do justice to the amount of material covered. Today’s seminar focused on the most important factor in the validation of a business plan – the Implementation Planning. An Implementation Plan is a representation of the coordination of time & resources (human and physical). New ventures are by definition under-resourced, so one is usually executing ventures that have missing pieces. You can compensate missing pieces by over-compensating from available resources, by asking others to play a role, and by leveraging outside resources (e.g. contractors, services)

Primary constraints when starting up a business are Time & Money (money = time). Usually you can’t buy yourself out of a time problem but you can retime a money problem. Use measurable milestones & building blocks to resource these. Implementation Plan (ImP) explicit way to:
– Characterise these key milestones
– Coordinate marketing, financial and operational functions in business
– Maintain awareness of resources – personnel, fixed & variable assets
Need to consider key timing questions; do my milestones = customer milestones?
Best to set my milestones, & then set additional conservative milestones behind them –> expectations always met & provides breathing room.

Ted made the point that you should always try to avoid selling time. Although if it is necessary, don’t put yourself at a disadvantage. Its common for you to try and set value of time, but how do you define value? What is a unit of time worth? You don’t know what the value the client sees in the work. Determine their sense of value and keep below their price point. Challenge them to set this price point, NOT yourself. Another point which was raised was that: Value of work is very rarely linked to cost.

There 3 basic techniques in contracting with varying risks for the entrepreneur:
1- Time/materials/spec based billing; paid per unit utilised – low risk
2- Cost Plus = direct costs + margin (e.g. 25% fixed profit) – low risk
3- Fixed price contract – high risk
All 3 focus on optimising cost on behalf of the client. Juxtaposed to this, it’s better to use value-based billing which removes price from the equation. This means evaluating how the client values work not how they manage their money/budget. It may be worth everything to them to get the project done.

An Implementation Plan has 3 functions:
– Management tool – if you can’t model it you can’t manage it!
– Communication – at all levels to internal team, customers, clients, investors
– Staging tool to 1.) define dependencies between activities; 2.) understand key milestones & communicate them; 3.) allocate resources appropriate to them.

The Implementation Plan is tied directly to the financials, what you’re doing & ultimately how it’s funded. You must plan financial phases around the milestones in the plan. Ted advised that key milestones should revolve around when you’ll be OOC – out of cash! He also recommended measuring OOC from 6 months out or more, not the usual 3. Some other misc points:
– Cash, not asset, management keeps you in business
– Investors use milestones to negotiate – separate milestone-based tranches
– Milestones = negotiable; $$$ invested based on milestones being met
– Pin investors (& board) down on clear semantics of milestones

Some lessons from a Harvard paper titled “Milestones for Successful Venture Planning” by Block & Macmillan:
– Milestones are customised to the needs of the company
– 2 Levels: 1) Product/short term 2) long term
– Significant events, not just dates/chronology
– Time is a driver, but money is the key driver of milestones/events
– Ultimately managers are using milestones to communicate internally, if not, then not useful
– Contingency plan should be included in ImP
– ID who’s delivering on each milestone and hence relevant functions/people
– Success more to do with how using time & who engaging with than just chronology
– ImP includes: phases, tasks, sub tasks, dependencies. Track actuals (incl slippage) against plans
– Usually throwing people @ problems ≠ solutions
– Critical path analysis: end of each phase – elapsed time between start & end
– Set milestones at start of phases – opening of new advent!
– ID milestone that indicates a break through/success? E.g. first client/delivery/prototype/launch

Ted moved on to discuss some management issues:
– Better “A” team and “B” idea than the opposite, as you can always improve the idea
– Beg/borrow/steal you’re “A” team!
– Generally shouldn’t pick team members based on personal relationships
– Choose founders based on what they bringing to the venture
– Ensure they get the concept and are instrumentally engaged in venture
– If they tick these boxes and are a friend, you need to be careful and have a lot of pre-venture discussion around how to deal with crises
– Investors/partners bet on teams primarily
– Board of Directors – governance of company
– Board of Advisors – provide market insight – strategic advice
– ID that you’re somewhat aware of what you don’t know
– When starting only include core/essential people/functions – outsource others

M. Thatcher: “Look at a day when you are supremely satisfied at the end. It’s not a day when you lounge around doing nothing; it’s when you’ve had everything to do, and you’ve done it
Key lessons from the morning seminar:
– As company evolves it takes on various different organisation forms
– Focus on functions and align functions to potential co-founder that demo competency in relevant areas

Financials – In the afternoon Ted gave us a general overview of how to approach financial management of a new venture, including discussions on:
– Unit economics – the items that DRIVE the revenue and expenses of a business
– Model building – steps to building financials – staffing, marketing, other expenses
– Using the financials – from unit economics to financial statements – P&L, CF, BS
– Evaluating profitability – scenario analysis to move past BEP
– Funding the venture – Friends/family & /bootstrap, grants/awards, public/private seed, angels, speciality, VCs, debt, strategic investors
– Synchronise financials to implementation plan
– Capital acquisition strategy, think – who/when/what for (%)/terms/compromises/due diligence
– Following successful VC pitch ≥ 5 months before $ in bank
– Exit strategy: lifestyle/IPO/M&A/defined redemption/management buyout/asset liquidation
– Valuation – usually a discounted present value of future cash flow. A multiple of earnings at a point in future reduced by a discount factor
– W. Churchill: “Success is the ability to go from one failure to another with no loss of enthusiasm

In general Ted parted with an intimidating amount of knowledge during his 4 seminars with us. He basically covered every aspect of venture startup that one needs an awareness of. It’s amazing how well he comprehensibly and practically articulates and verbalises knowledge in short conversations that would normally fill several book chapters!! Ted connected the dots between everything we had learned thus far during our time at the Kauffman Foundation – he filled in every remaining gap and made the bigger picture easier to “visualise”.

Founders as CEOs – Noam Wasserman

noam_wassman.jpgDay 14, Thursday 6th Feb: Noam Wasserman is an Assistant Professor of Business Administration at Harvard Business School. He has taught on Harvard’s MBA course (Entrepreneurial Management), and the University’s Doctoral and Executive Education programs. Noam received his PhD in Organizational Behavior (with concentrations in Sociology and Microeconomics) from Harvard University in 2002, and received an MBA (with High Distinction) from Harvard Business School in 1999, graduating as a Baker Scholar. Noam talked to us in the afternoon about founders of companies becoming CEOs and the various trends/statistics related to this. In particular he focused on issues that arise for these CEO/Founders later on in the venture following SeriesA/B of VC investment. Sometimes VCs want to replace a Founding CEO once he had brought the company throught he hard times and success is on the horizon. The reasons being that perhaps now once the company is about to take on a massive scale the VC wants someone they know at the wheel, despite the Founder’s efforts up to that point. I found his talk extremely interesting, insightful and practical. Summary of key points:
– VCs on biggest reason for failure of new ventures
    – 65%: problems within founding or management teams
    Statistic hasn’t change din 15 years!
– Dynamic vrs static equity splits
    Organically/vesting based on effort/time/milestones
    Past/future contributions
    Opportunity cost
    Willingness to fight for equity stake
– Team stability does not necessarily imply team success
– Founder as CEO less likely to leave so less likely to get a raise later in venture
– Mr X, Founder & CEO: implies that he’s CEO because he was founder
– Mr X, President & CEO: fit for purpose, presumably!

New Venture Bootcamp (Part 2) – Ted Zoller

zoller.jpgDay 14, Thursday 6th Feb: Ted Zoller returned for part 2 of his “New Venture Bootcamp” (Part 1). He compared the coming 2 day-seminar, the business knowledge and training he was imparting, to a mini-MBA! MBA or not Ted’s second day with us proved as impressively informative and practical as we had come to expect from him! He presents topics with fantastic clarity and all but eliminates unnecessary jargon that usually only inhibit concept comprehension and adoption.This morning’s seminar focussed on the following 8 topics:
1.) Seeking the value proposition
– Review of
previous seminar & value propositions
– Value = relevant brand benefits/relative competitive price

– VP should take the following basic form:

Our innovation is a: (customer language)
That: (key benefit)
Unlike: (current state/key customers)
Ours: (key differentiators)
For: (beachhead customer)
Who: (key purchase motivation insight)
At a price/value: (relative to competitors)
Value Outcomes/Results: (client deliveries)

e.g.: is a proprietary search engine and repository that securely publishes scholarly research both in secure and open environments to network students, scholars, and researchers for the purpose of sharing data, promoting collaboration, and creating new knowledge.

2.) Business model development
– A business model is a conceptual tool that contains a big set of elements and their relationship…expressing the business logic of a specific firm.
– Can you be born global?

3.) Discovering the market
– Identifying customers and addressable markets through research

4.) Segmentation and Beachhead
How do you see your markets? How do you segment it? How are you going to position in the market? How do you see your Beachhead? Marketing comes down to you’re clarity regards:
– What you’re offering
– What its value is
– Who you’re offering it to
Ted also discussed the difference between combining and dividing segments

5.) First mover ‘advantage’
– not necessarily a winning approach
– expensive & risky, but potentially very rewarding
– cons: free-rider effect; technological discontinuities; shifts in consumers’ tastes; incumbent inertia; identification of ideal points
– Late entrants can leapfrog with: superior tech/quality/customer service/brand image
– The logic of success is not to be first to market, but to strive for market leadership by scanning opportunities, building on strengths, and committing resources to customers effectively

6.) Positioning and differentiation
– Identifying firm’s ‘ideal point’ in market and differentiating your offer
– Physical vrs Perceptual positioning

7.) Market plan development
– Segmentation; positioning; 1st mover/late entrant; entry strategy; differentiation
– Always novice tendency to under-budget on marketing
– Budget abundantly to key marketing milestones
– Consider gorilla marketing as apposed to full promotional marketing campaigns e.g. blogging

8.) Crossing the chasm
– See Melissa Schilling’s seminar on technical innovation

Viva kansas City!

Day 2, Tuesday 22nd Jan: After settling into the penthouse (Map) and acclimatising to the Baltic Missouri weather (highs 2C, lows -15C) week one got underway. The Global Scholars’ first introduction to the Kauffman Foundation (KF) (Map) and its leadership team was over lunch on Tuesday 22nd. Straight away we were all put at ease by the charisma, friendliness and humour of everyone from VPs to PAs. Karl Schramm, CEO of the KF, led the introductions which included all present (VPs, Team leaders, Global Scholars/KF Fellows) giving personal background information on themselves. The slagging contest soon ensued between the head honchos. One thing I noticed was that a lot of them reckon they have the best job in the Foundation – they definitely appear to love working for the KF! Levels of hierarchy seem pretty much transparent also, and everyone in the Foundation is accessible no matter what their role, CEO, VP, Advisor, PA. Impressive already!

paul_magelli.jpgIn the afternoon one of the other Scholars, Angelo, and I had time to meet with our mentor Paul Magelli. Paul is a seasoned entrepreneur, with over 50 years of experience. Paul is an absolute mind of contacts – Karl Schramm said himself that while the rest of us experience the usual ‘6 degrees of separation’, Paul’s rolodex affords him no more than ‘1 degree of separation’!! Not long into our meeting Angelo and I soon discovered this to be accurate as within minutes he was making plans to contact the CEO of an Aerospace MNC and a computing blue-chip VP for Angelo and I respectively!! Since then we have both received emails and/or phone calls from the contacts! This meeting gave me the chance to describe REHEAT in detail with Paul and to identify key areas where he could assist. On a side note, his son Paul Magelli Jnr. just sold his business, Apertio, to Nokia Seimens for €140M!

Day 3, Wednesday 23rd Jan:

carl_schramm.jpgWednesday morning kicked off with a seminar on entrepreneurship by Carl Schramm. He emphasised a number of points:
The Kauffman Foundation teaches entrepreneurship in a practical way
– Not orientated around business plans by default
      – The business plans follows later at the appropriate/necessary time (but the process does not circulate around the plan)
– Ultimately the only person truly thinking about/responsible for a project is ME
– I’m the one who should ALWAYS maintain control of the project
– If at all possible don’t use venture capital
      – Don’t let my project becomes someone else’s hobby!
      – Why are they interested in the first place?
      – Input/advice/analysis is much more affective when administered in an objective way
US business schools’ approaches circulate around:
      – Students hardwired to focus on writing business plans
      – Surrounding yourself with entrepreneurs & bios/stories of them/their successes
      – Find the right VC and let them do the thinking for/with you

Carl quoted Adam Smith, an English theorist, who once said that the great thing about capitalism is that in the pursuit of self-interest or an intention to obtain personal wealth one CANNOT avoid doing a social good. With this in mind one can say that entrepreneurs contribute in various ways that perhaps an NGO or not-for-profit organisation may not, including:
      – Job & wealth creation – 50% of US jobs created by companies 5 years/younger
      – Drive innovation – economies/GDPs become wealthier upon innovation
Carl’s talk was very insightful and altered/informed my perspectives of new ventures and entrepreneurs in a number of ways. In particular I think in future I’ll use my intuition/initiative more when considering potential ventures and investigate a projects potential in a bespoke pragmatic way before thinking about business plans.

john_tyler.jpgIn the afternoon we had a very practical discussion on Non-Disclosure Agreements (NDAs) with John Tyler who is general counsel for the Kauffman Foundation. He is responsible for all legal aspects of the Foundation’s operations, including intellectual property, employment, investments, and compliance with IRS regulations for private foundations. A couple of major points I took away from this seminar include:
– NDAs are only worth the paper and ink used to write them UNLESS you have the ability and resources to enfource it
– One should use good judgement/discretion to avoid breaking NDAs
– Its important to include mutual obligations when composing NDA contracts, as this makes it seem more give & take, and they’re likely to look more favourably on the contract and any potential relationship.

Kauffman Fellowship – the details…

Gordon brownIn Gordon Brown’s 2006 budget speech he mentioned that enterprise and entrepreneurship would be given a new focus by the government. One way this happened was a partnership between NCGE and the Ewing Marion Kauffman Foundation in America. The partnership gives 12 select engineering graduates from UK/Northern Irish/Danish Universities the opportunity to study Entrepreneurship in America, with the intention of starting their own businesses. In 2007 Gordon Brown, now as Prime Minister, and Carl Schramm, CEO of the Kauffman Foundation, continued to emphasise the importance of Enterprise and the positive impact of working with global entrepreneurs at the launch of Global Entrepreneurship Week (video) in November 2007 (pictured above). Below is a picture of Carl Schramm and Gordon Brown with some of the 2008 global scholars (aka entrepreneurship fellows).

fellows_with_gordon_brown_4__custom_.jpgThis blog provides details of the Kauffman Entrepreneurship Fellowship, including training received from NCGE in the UK during the first 6 months, in addition to time spent training in the States with the Kauffman Foundation, during the last 6 months. Feel free to follow the blog for further details on my experiences during the Fellowship (July 07-08), which is supported by NICENT and INI. The outline of the program’s agenda is as follows:

London (Induction @ London Rebuilding Society): July 11th 2007 (2 day residential)
Portsmouth (@ University of Portsmouth): Sept 20th 2007 (2 day residential)
Manchester (@ University of Manchester): Nov 1st 2007 (2 day residential)
Reading/London (@ Microsoft, Kings College London): Dec 11th 2007 (2 day residential)
Kansas City (@ Kauffman Foundation): Jan 19th 2008 (4 weeks)
San Fran (@ Silicon Valley, Stanford): Feb 17th 2008 (9 days)
Boston (@ Harvard, MIT): Feb 26th 2008 (11 days)
San Fran (Internship @ Cisco’s IBSG): March 8th 2008 (12 weeks)
Kansas City (debrief): May 31st 2008 (1 week)
Home: June 6th 2008

USA phase:
For six months, Kauffman Global Scholars study, exchange ideas, and work with U.S. entrepreneurial experts. The groundbreaking program offers aspiring entrepreneurs:
– Direct access to American researchers, business founders, and policymakers who give scholars the insights to foster entrepreneurship in their own countries and to transform their entrepreneurial dreams into reality.
– Mentors who individually guide and coach each Scholar throughout the course of the six-month program.
– Visits to leading American universities to exchange ideas with faculty, students, and those engaged in innovative, entrepreneurial work.
– Three-month entrepreneurship internships at innovative entrepreneurial companies. Here, the Scholars experience the real-life challenges and rewards of entrepreneurship and, in turn, share their skills and talents with the mentoring companies.

An International Give-and-Take:
In today’s economy, companies must think and act globally to succeed. The Kauffman Global Scholars Program forms the cornerstone of an important transnational dialogue that benefits all who participate. Upon completing the program, Scholars take home a keen understanding of how they can apply their ideas, technical skills, and knowledge to create successful, high-impact ventures in their countries. And, the U.S. companies that host the Global Scholars gain an insider’s view of the resources, cultures, and business practices that characterize the countries with which they may do business.

Press releases:
Kauffman Foundation – Global Scholars
NCGE – Flying Start
Nicent – Two UU Graduates Selected for Prestigious Enterprise Programme
Nicent – Search Begins For Budding Student Entrepreneurs
INI – Kauffman Foundation Entrepreneurship Fellowship