The opinion of the managing partner of the Fund Founder Collective David Frankel. Steve jobs, bill gates and mark Zuckerberg have popularized the image of the “obnoxious” entrepreneur who quits the University to turn over a particular industry. Indeed, it is difficult to overestimate their contribution to the development of it.
But think about it. A diligent student may also be a good entrepreneur. However, “wizards” from MIT, Stanford, Harvard, Caltech and other elite research universities rarely turn their ideas into business.
As a venture Fund, working with two leading universities in the world, we want to tell that to create his own company — not so difficult. And we would like to encourage young doctors to postpone studies in favor of their own startup.
To do this we spoke with the founder and Director of the company, Accion Systems Natalia Bailey. It produces ion engines for micro-satellites. Over the past three years Bailey received the title of doctor of technical Sciences in the field of aircraft design in the Lab space engines MIT, has raised $10.5 million to turn research into a product, and signed a contract for $6.5 million with the U.S. Department of defense.
Nothing is created in a vacuum. The missiles are deployed in a vacuum, but not created. Entrepreneurs in academia, you must be on the alert and to monitor changes that result in the market there is demand for their products.
For example, the ion engine was invented early calculator, but until recently, on the required propulsion for satellites that cost one to two billion dollars annually to run the Ministry of defence and news organisations. Fortunately for Accion, the market appeared smaller satellites.
A new class of venture Aero – and aastromreplicell was open to unconventional technical solutions. In addition, they needed indestructible powerplant, which do not have to spend investors money in case of an explosion. Production technology microelectromechanical allowed to create ion engines effective from the point of view of the economy.
Research Bailey met the needs of the market, which gave her the springboard to launch your startup. Do not rush to sign partnerships.
Many scientists firmly believe that the fastest way to turn their research into marketable products is to enter into a partnership with a large company which will take care of all the operational troubles like recruitment and sales. Bailey didnt want to hope in case, because I was not confident that her incentives and the incentives of a large company match. “The order adopted in large aerospace companies do not suit us — where all the processes are slower and involve high overhead costs.
Besides, I wasnt sure that we will be able to adapt their production technology under our product”. Her engines were interested in the big players, but she took a chance and opened his own company because he did not want to be another “cog in the wheel drooping of the Corporation”. As a result, Bailey opened a company Accion.
Entrepreneurship is a discipline where you can only get a “credit” or “nezachet”. Failed experiment in the laboratory gives food to more successful experiments in the future. The entrepreneurial bug leads to the fact that the company had run out of money, it cannot pay employees, and they lose faith in the leader.
First entrepreneurial experience Bailey was in the middle of 2000-ies. However, due to misunderstandings with the partner associated with the distribution of responsibilities, shares and participation in the company, it was unable to launch a startup.
Let it not earned on the first project, he taught her a valuable, if not expensive, lesson. “Create your company as flexible as possible. Many things will change — dont forget about it.”.
Entrepreneurship is not science. “It is one thing to create a working prototype in the lab, and quite another to figure out how to produce it in scale,” says Bailey. The companys development is a chaotic process.
The supply chain can break at the most inopportune moment, and people are gonna have in a panic to find alternative sources. Each 105-e device to fail for unknown reasons. Also the doctors will have to forget about the wealth of University laboratory, where there is everything necessary, and learn to use the available materials from a range of Ebay.
The scale of production implies that the project implementation will take much more time. The company is not enough to test the hypothesis by experiment — each product must pass field tests that can not upset the majority of scientific workers.
According to Bailey, the mentors told her that the final version of any project will be twice as expensive and take twice as more time than originally planned. “In my case it turned out to be four times more expensive”, — says the entrepreneur. For those who think about how to turn your research into a product, it would be wise to develop my engineering skills to build the prototype.
Back in high school, Bailey enlisted in the group of robotics, but because her technical level was low, she was entrusted to the only paper work. Then Bailey began to study herself working on “home projects”. “I always wanted a dog but couldnt keep her in the apartment.
So I tried to design a dog robot. She followed LED bracelet that I wore on my ankle,” she recalls. Since then many years passed and Bailey was in the Forbes 30 major producers under the age of 30 years.
Not bad for a man who never knew how to hold a soldering iron. Distribute shares as engineers. Distribution of shares in the company — its a tricky art and a delicate process.
When it was time to deal with the shares in Accion, Bailey approached the problem like an engineer. Inspired by the book by Noam Wasserman “the Main book of the founder of the business,” the team made a list of skills and competencies that will be required in the first three years of company existence.
Each item received a score depending on the importance, and the sum of points the team members will receive a proportionate share of the company. Such a division no one liked, but everyone knew the logic.
Find mentors. Bailey got in touch with one of the best corporate psychologist Anna Rowley and bill Swanson, Director of Raytheon, which is one of the largest producers of guided missiles. Anna helps me with communication.
I not only was given the transition from a start-up where you can discuss all the issues over lunch, to the company, which employs more than 20 people. There is important what you say, and what is left unsaid. It helps me to clear every aspect of my communication style. And bill is a walking encyclopedia of the business lessons and anecdotes.
It helps me deal with administrative issues, such as how to behave with good specialists who dont share the companys values. In addition, I can tell him that I need to meet someone new from Boeing by the end of the day, he introduces me to the head of the company. The art of management scientists.
Work at University can be a pleasant short seminars, communication with colleagues and wonderful campuses. The stormy life of the head of a startup compares to this peaceful haven. So how do you lure the geniuses from MIT or Harvard.
Treat with understanding to their curiosity. Accion could not afford to introduce the practice and Google allow employees to spend 20% of time on personal projects. Instead, Bailey began to encourage their interest in related disciplines.
For example, one of her specialists wanted to use their knowledge of statistics to conduct market research. Bailey asked him to prepare an analysis. So the employee has obtained new knowledge and skills, and team — important market information.
No need to be sorry management, investment. Despite the fact that the trajectory of career development Bailey resembled the flight of the rocket, it had its difficulties. For example, she understood that she needed to hire senior technical managers, but I always felt that the company has more important needs.
However, the moment came and she hired a talented Vice President. This allowed her to focus on strategic issues and delegate many important but routine duties.
According to the research company CB Insights, investment in projects related to the study of the cosmos, the development of UAV virtual and augmented reality, increased to $3.5 billion. However, despite this, to persuade people outside the community of astrophysicists to invest in startups from the industry rocket is still difficult.
Obviously, sooner or later, the search is successful and the entrepreneur will meet the investors with the relevant expertise, however, Bailey offers a focus on presentation to make it more convincing. “Be the most important skeptic. Better to make a mistake and discover it yourself than to let others do it”.
In addition, she advises to create a presentation, taking into account possible objections that may arise from potential investors. Get rid of scientific jargon and turn academic description of the problem in commercial history.
Why venture funds better than government programs. Attempt to get a government grant isnt a bad idea, especially when you consider that in this case it is not necessary to sacrifice a share in the company. But there are some difficulties.
The process of creating an innovative product, it is impossible to drive in the frame, however, each state program requires the owner to specify the terms. The grant is allocated for a limited period, and to obtain additional funds, the company must provide specific results. This is contrary to the world of venture capitalists, where progress and purpose mean a lot more.
Accepting a grant, you risk to run the pipeline recruitment and abbreviations. Every time money will come to an end, you will have to lay off talented employees.
Perhaps with venture funds to work is not easy, but if the entrepreneur can hope for government grants, then every election will turn it into a referendum on the fate of the business. Bailey advises to use a mixed model to attract investment for research and experimentation, and grants for turning technologies into products on the market.