Ignite! Innovation and Entrepreneurship at Stanford

corporate teamI just completed Stanford University’s Ignite certificate program on Entrepreneurship for Post 9-11 veterans. Thirty two of us veterans spent nearly 4 weeks together, intensely engaged in learning the theoretical and practical aspects of how to take an idea for a product or service, evaluate it, develop it, and then commercialize it to succeed as a business.   We visited several of the giants of Silicon Valley, and had a most impressive list of guest speakers, as well as lectures from the finest faculty in Stanford’s Graduate School of Business. On day one, we were divided into 6 teams, and each team immediately set to work creating a business plan for a different startup. On the final day, the teams briefed their plans to a panel of experts, who gave us “constructive feedback.” Our very own “Shark Tank.”

What an amazing opportunity, to be at the number one ranked business school in the nation, one of the best in the world, located in Silicon Valley – “ground zero” for innovation in technology and social media.  Bottom line: It was a lot of work, and it was fabulous. For more about the program go to: http://www.gsb.stanford.edu/programs/stanford-ignite/campus

Below are just a few of the insights I gained from the program. Each of us connected with different aspects of a very broad curriculum, but here are a few things that I took away:

– Good ideas are a dime-a-dozen; the hard part is creating a business model with a team that can PROVE that the idea can actually create value.

– The Business model – A fundamental part of business innovation is how the idea is commercialized and marketed. This may be as much art as science, but it is certainly some of both. The rock-star entrepreneurs in our economy were often most innovative in creating a business model that was able to successfully take a  good idea to market.

– Courage required. While we have all heard about the Apple’s, Googles, Facebooks, the Ubers, the AirBnBs – they are the exceptions. There are thousands of entrepreneurial start-ups every year, and over 90% fail. Being an entrepreneur is not for the faint hearted, nor for those who are unwilling to live with risk, out on the edge, and with the strong possibility of failure.

– Be ready to work like a slave, but that’s ok, if you truly believe in the product or service your business is selling, and you can convince others to believe in it with you. Founders and entrepreneurs must have passion, persistence, and resilience, since there is only a pin-prick of light at the end of the tunnel to pull them forward.

– Cash is King. It’s usually quite a while before a new business starts bringing in revenue, and finding the money to get through that “quite a while” is essential. Many founders work for very little or no pay for “quite a while,” before they can afford to pay themselves. When cash-is-king, and running out of cash means failure, frugality and rock-solid discipline are necessary virtues, for “quite a while”.

– Most startups fail for reasons that are both complex and simple, but the four reasons I heard most are:

1. Poor product-to-market fit
2. Running out of cash
3. Lack of maniacal focus and discipline
4. Break-up of the founding team

– “A Shit-Show.” At a startup incubator we visited, we were told that most startups are a chaotic “shit-show” at the beginning. Some get through it, most don’t. Passion, persistence and teamwork are necessary, but not sufficient virtues. You also need a workable idea, business acumen, a great and supportive network, and…..luck.

-Culture is Queen.  If cash is king to get a business started and moving, culture is queen in building a successful business over the long term. I was pleased to hear my own views reinforced by the faculty and our speakers, that a key leadership responsibility is to build a great culture in their business. One very successful CEO told us “Build the culture every day.”

– Know when to fold ‘em. While persistence is a virtue to a point, smart businessmen know when to pull the plug – which is hard for most founders.   Investors often know well before the founders, when it’s time to quit pouring good money after bad, and to choose to fight another day. A line we heard often: “Fail fast and cheap.”

– Venture Capital and Private Equity.  Founders and entrepreneurs are creative and passionate. VCs and PEs are (often) good men and women, but their job is to be cold, calculating and (sometimes) ruthless. They decide and act based on the answers to two fundamental questions: Will this make us money? And if it doesn’t, how do we get out of it as quickly and cheaply as possible? The rest are mere details…..

– Accounting and Finance. We had a number of sessions on accounting and finance. I learned that “money” and “capital” are even more complicated than I had thought, and accounting and finance people know how to measure ‘em, splice and dice ‘em, six ways to Sunday. This reinforced what I already knew – this ain’t my forte. But it’s important. Hire someone good.

– Strategy and Discovery.   We were taught that the road to success is very often more a result of discovery and adapting, than of successful strategic planning. While planning is important, it is more important to stay agile and flexible, to be ready to pivot when something isn’t working, and to strike when opportunities present themselves. Surprisingly similar to military planning.

– The Four stages of business development. We were given several models, but all were variations on this one:

  1. Exploration – An idea is born, evaluated, validated, and nourished into an opportunity
  2. Development – A product/service is developed and early customers are identified.
  3. Revenue – The product/service is commercialized and sold on an increasing scale.
  4. Profit – The company matures and operates as a profitable and growing enterprise.[i]

-To MBA, or not to MBA.  Most of the other transitioning vets in the program were in their thirties, just leaving the service, and one question kept coming up: Should they do an MBA on leaving the service? The advice I most often heard was: It depends. Those who are pretty sure they know what line of work they want to go into, and can get a job in that industry right out of the military, should take the job. Get the experience, don’t mess around – maybe do an Exec MBA later.   For those who are struggling to figure out what they want to do, the MBA provides a transition window to learn about options in the private sector, figure out what they’re good at and might want to do, get a broad and general set of business skills, and develop a network that can help find an entry level job in the direction they decide to go.

Shark Tank. After returning home from Stanford, I was watching Shark Tank with my bride, and found myself chiming in with the “sharks” as they raked a presenter over the coals: What do you mean you don’t know who your primary customers will be, or whether they are willing to pay for your product/service,or how much? Who’s going to market and distribute it, and at what cost and risk? What do you mean, you haven’t figured out your expenses, don’t have a revenue model, and don’t know how much money you’ll need to break even or get to profitability?   Go back and do your homework!

As I watched the show, I anticipated those questions, because in Ignite, all of us had to squirm under that same grilling while our teams were preparing our own startup projects. While Shark Tank is somewhat artificial due to its imperative to be entertaining for 60 minutes on TV, it does offer some pretty good learning points for those wanting to bring a “good idea” into the market place.

My experience at Ignite was extremely informative, and even transformative; I learned an enormous amount, made some great new friends, and gained a much better understanding of business, and the creativity of capitalism. I got some important ideas for my own Fifth Factor Leadership business, and am a better man for having participated.  I am truly thankful for having had the opportunity to become an Ignite alumnus.

Bob Ignite hi res upside down

[i] Stanford Graduate Business School case   E-194 “A Note on Building a Financial Model,” Date 07/28/2005

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15 thoughts on “Ignite! Innovation and Entrepreneurship at Stanford

  1. Bob,

    What a wonderful experience. I am so jealous!!

    I almost hated to respond because it may sound like I am making this up. I have made a prototype for a product. I have done enough research to know that this item is not on sale anywhere. I have identified my market, tested the product and have discussed this product with a few potential users that are sold! I even made a video to prove the effectiveness of the item.

    Big question is how do I get it off the ground? What comes first? Trademarking the name, tag line, slogans, etc. or patents? It could be a mass produced item, but I do not want to be the mass producer. How do I find a team that can make the item, enough to initially to test them out first.

    Where do the uninformed go? Stanford is not an option!

    Thanks for the enticement!!

    Mary

    MARY REGNER (703) 655-5147

    “Semper Gratus”… Always grateful!

    >

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  2. Bob – as our class philosopher, you did a great job putting words and reflection to the experience we all shared. Thank you for doing the hard work. When I’ve had recent discussions with friends that are interested in the program, I’ve personally shied away from discussing content and focused on the quality of the program. I will send them this way when they want to know what exactly I learned.

    For those that read this blog and wonder if this program is right for them, I offer them this feedback.

    I was one of several active duty members of the class and I wondered if taking the course now, three years before I retired from active duty, would be worthwhile. I can now say definitively, yes! This is a course on business and entrepreneurism, but there are discussions on topics such as organizational culture, innovation, negotiations, and leadership that are immediately applicable in my military job. I am applying lessons from Ignite daily.

    When asked, “how was your trip to Stanford?” – I simply say that Ignite was motivating, transformative, world class, and welcoming.

    It was motivating because everyone in and around GSB, from alumni to professors to our guest speakers, had a contagious ambition unlike anywhere I have ever been. They all had inspirational stories and they truly believe that every person in our program has the ability to impact not just their organization or company, but the world. They believe the motto (Change Lives. Change Organizations. Change the world.) and you walk away from the experience believing that you can do it too.

    Transformative – for me it was a wake up call and a call-to-service at the perfect time in my life. As I plan for my transition from a military to civilian career, I’ve wondered before this program how I can continue to serve and make a difference. Now I do not have a doubt – we can do big things. I used to dread my transition to a civilian career and now I am eager. I cannot wait to make the jump … all in one month.

    The program was truly world class – the best business school professors, top-notch facilities, and a network of mentors and advisors who have truly been there and done that. The proximity to Silicon Valley is certainly beneficial as you are at the heart of innovative and entrepreneurial energy. And the weather doesn’t get any better than Palo Alto.

    And lastly, the Stanford family was incredibly welcoming. From the hand written note welcoming you to the program to the significant contributions to subsidize the program by alumni of GSB – there’s a family of people who want to help and assist you because they want you to succeed. And now as a graduate and “Igniter,” I feel it is my duty to one day give back to the program that I am so thankful to be a part of.

    – Lick

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    • Drew- I agree with EVERYTHING you say. Your response complements my post by focusing on the top-drawer quality of the staff, how everyone treated us, and the entire experience. Thank you for your comprehensive comment-it adds immeasurably to what I wrote in my blog, for those who might be interested in knowing more about the Ignite experience. Bob

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  3. Bob,

    I was introduced to you by Joe Musselman and have appreciated your work for THF.

    My work w/Joe has been to provide him w/a bit of support in his establishing leadership priorities, strategy, strategy execution and business building activities. As in your blog we often say, ‘the team is more important than the idea’ – and he is responsible for a mighty fine idea. He will surely recognize the valuable principles summarized in your insightful blog below. Well done. Another principle/value we often discuss is, ‘preparation isn’t everything – but almost everything’.

    An HBR article I wrote a year or so ago, Six Ways to Sink a Growth Initiative, is attached – it focuses on business building in established organizations and reflects many of the same principles you articulated. You might fine the sidebar on capabilities relevant to your thinking on mobilizing a team. Your comments would be most welcome.

    All the best…….Don

    Donald L. Laurie Oyster International Tel: 617 859 3065 Cell: 617 792 7399 don@oysterinternational.com

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  4. Thanks Don – Joe Musselman’s The Honor Foundation is in close touch with Ignite -as a matter of fact Joe was scheduled as a guest to the opening dinner. One of the points that was made throughout the program was how important the team is in making a project work. When we made our final presentations, we were told that selling our team as cohesive, capable, and dedicated was a key piece of the presentation. If we had a great idea and business model, but our investors had no confidence in our team’s ability to work together to follow through with it, they either wouldn’t invest, or would invest on the condition that THEY pick the team. Which as you know is very often the case with VC funding. The founder holds on to a key percentage of the company, but the investors who are keeping it alive, make their money contingent on them putting in their own CEO, CFO, or other key players who they have confidence will ensure that they get a good return on their investment.

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  5. Hi Bob Thanks for reporting on your Ignite experience. It looks outstanding. You may know that entrepreneurs, investors, and great-idea originators can find help close to our San Diego home. It’s at the University of San Diego, where you led a key Masters program for years. Our Entrepreneurship initiatives are our own new venture. But in just four years we have offered coaching,boot-camps, and networking for aspiring entrepreneurs. Our “Shark-Tank”-type pitch competition has tripled in entrants, prize fund, and audience. Our USD Legacy Entrepreneurship Conference is on 8 October, and V2 Pitch Competition is on 28 April 2016. It will be great to have you join us!

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    • Thanks Mike – I know you have been doing great work in entrepreneurship at USD. The events you have organized at USD are a great venue for anyone in the San Diego area to experience first hand much of what we got out of Ignite. I will look forward to joining and playing whatever role you think might be constructive. Bob

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  6. Bob,

    Thank you for providing this update on what was clearly a valuable program. Having seen what works, and what doesn’t, when it comes to launching companies and products, I believe the cardinal mistake many entrepreneurs make is to get too close to their business model. As I’ve cautioned those working with me, you can love your business, but don’t fall in love with it. It’s great to hear this was covered during the course. If you’re at a large company, you might have the resources to correct this kind of mistake, but at a startup, where money and time are much tighter, you likely won’t have the luxury of retrenching if you miss or ignore evidence that your business plan’s no longer viable. This isn’t much different from the military, where you need to re-assess plans as soon as the evidence is available that your strategy and/or tactics aren’t working as planned.

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    • Thanks Andrew -your point is well taken, and was addressed during the course, but perhaps not emphasized enough. I allude to it in my post in “Know when to fold ’em” and “Venture Capital and Private Equity” – obviously there is a tension between persistence, drive, and never-say-die on the one hand, and not being too attached to your business or your business plan. That’s where experience, wisdom, coaching, and mentorship come in. But frequently “cash” and investors will get the final vote. That’s the role of Darwin in the world of entrepreneurship. As you know better than I.

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  7. Bob,

    I found your post educational, informative, and concise. Thanks for sharing your experience, as it sounds like it was a great one. I read about the program through the link that you provided and I now want to apply! First, I have to manage to convince the Navy to send me back to the West coast…

    I recently completed the Vet To CEO program at vettoceo.org. It’s a 7-week, online, collaborative program taught by two U.S. Army small business owner veterans and covers marketing, mission, execution, logistics, financing, and business plan writing. Overall, a great course for anyone considering entrepreneurship.

    Kyle

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    • Kyle – that sounds like a great program as well – esp for someone who doesn’t have the time or opportunity to do Ignite. I will pass that on. There’s no real ‘magic bullet,’ or ‘secret sauce’ here. But a lot of things have to go right for a business startup to take off – first you need a good idea, second some basic good judgment and business acumen, third, some money, fourth help from mentors and a strong network, and then….luck. The real advantage of the Ignite program was having access to all the Silicon Valley resources – that place is moving at the speed of light! Bob

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  8. How I wish I had the benefit of your inspiring “blogs” when I was young and starting up business with my then husband – things would have been so much easier! Although my working life is far behind me, I still enjoy reading how the younger people go about things and I must say I admire anyone who has the guts to be an entrepreneur in today’s ultra-competitive world.

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