Context
This is an assignment I wrote for a course before graduation, hence it may seem a tad lengthy and dragged on at times (as one of the marking rubric is "evidence based", so I have to provide examples for every topic I bring up). However I think this write up is rather fun in sharing my experience of a "startup" course. To provide a bit of an extra context, this course is jointly offered by our school's business department and STEM departments, where a carefully selected cohort each year (we have to write application letter with resume, etc) is enrolled to form teams of 5-6 consisting of top business and STEM students to pursue a new venture. Everything in terms of the business itself is self-directed, but the teaching team is there to provide guidance and assistance when necessary, as well as teaching core materials much like a normal college course.
As a result, there won't be any "public domain" pictures on this essay. This is exactly what I handed in for marks except redacting some names and details. It's easy to see the amount of F's I have left for college as I'm literally typing emojis and jokes into my graded essays now. Yup, everything below is on my final version: I only removed some parts, I didn't add or modify anything.
Reflection on My journey in New Venture Design:
New Venture Design is the most unique course I have taken in my undergrad curriculum with the most diverse topics involved. I’ve learnt so much it is difficult to summarize every regard into a short reflection. For the ease of mind, I will roughly organize this reflection in chronological order by Early Phase - Team Formations & Ideation, Middle Phase - Startup Basics & Processes, Late Phase - Prototyping & Business Relationships, Post Course - My Biggest Lessons.Early Phase - Team Formations & Ideation
Week 1-2:As soon as the course began, it was a roller coaster ride. While it seemed slightly inefficient and hectic, the group formation phase involved a great deal of networking and understanding different perspectives, experiences, personalities quickly. There was some “applied game theory” type of situation between people trying to lock in groups / partners and to stay flexible for maximizing their chance at a well formed team. My biggest takeaway is networking skills can always be improved and it doesn’t have to feel forced or ingenuine even if stakes are on the line. Coming into this course without knowing anyone else, it also showed me the importance to expand new networks when necessary, and not to (overly) rely on existing friends or networks.
Week 3-8:
The course didn’t slow down at all after an intense start. There we were, six amazing members forming a great team, enthusiastic of starting our own business: except no one had a clue what our business would be. Everyone came in with some ideas but the more we learnt about how to validate a business idea, the more we find our original ideas invalidated.
For example:
- A hiking app with advanced features and partner matching was invalidated due to a competitor AllTrails already providing most of the functionalities and many potential customers reporting they would be unwilling to seek strangers to hike with.
- A UBC course scheduler that automates course sign ups based on avoiding time conflicts and matching with preferences such as a partner’s schedule was invalidated due to limited market size and low customer lifetime value.
- A financial data automation tool for data comparisons / cleaning for enterprises, despite being validated as a market gap by insider network from a member of our team, it was ultimately invalidated due to the lack of ability to defend the business.
- There were at least 20 more ideas brain stormed, and 5 more seriously considered.
My takeaway was: to start a business, it requires ambition and hard work just to generate and validate “an idea”; it shattered the notion people start businesses only because a moment of inspiration where amazing business ideas pop up out of nowhere with lucky circumstances.
Some specific topics I rarely considered before the course includes but are not limited to:
- The importance of talking to or interviewing with a diverse group of people instead of pondering, over-analyzing, self-reassuring on a business idea.
- The importance of focusing on problems and value propositions instead of an “innovative” idea - ie, solution to a problem no one has.
- Customer Decision Networks: the difference of someone paying, someone deciding or influencing the decision, and someone using the product is non-trivial for many products.
- Competitor Analysis: There may be obvious direct competitors or non-obvious indirect competitors, analyzing how a product can stand against, potentially take customers from them, and ultimately how to defend one’s own business are critical for a business.
- IP research - mostly for freedom to operate for a business.
- Startup Ideation is an iterative process and it becomes exponentially more valuable after more iterations and even failures. Because while pursuing a business idea, it naturally involves many other topics and discussions during the process of research and validations which inspires other business ideas’ research and validations.
Middle Phase - Startup Basics & Processes
Week 9-10:In continuation of business ideation, we struggled and had a couple of complete pivots. It was refreshing how failures can be a relief. While it seemed like we lost all the prior researches and progress, it all ended up guiding us towards a better position. There was an absolutely hilarious moment during week 9 of our lead business idea presentation - attachable & customized ergonomic pen / stylus mold fit to hand shapes, pressure points, etc - when instructor Jay asked us whether we truly believed the business idea had potential and market. The entire team was dead silent. It emphasized the difference between this course and many others: We weren’t here to fake enthusiasm or data / validations to get a good grade, we were here to take a real stab at starting our own business adventures. Immediately after the “Dead Silence” event, we knew we had to pivot from it 100%. We did, and it felt great as we were beginning to succumb to sunk cost fallacy prior to the event.
Week 11-18:
During the later half of the “middle phase”, the work slowly got more predictable and our team started to subdivide into Business Team, Hardware Team, and Software Team. It was overall more efficient as people started to showcase their specialty, but at times the team was almost too disconnected and a few issues arose due to miscommunications / some members not being up to date. It reminded me of how many hidden challenges there are in starting a business. On the other hand, it showed how important the founding members are to a startup, as there’re very limited capabilities for obtaining assistance / advising for developing a product, much less hiring expertise until funding are raised. More importantly, we had to believe in our own team (ie. all members), because starting a business is hard hard work, there is no room left for internal conflicts or people not pulling their weight. We were lucky to have such a team for this course.
After our new idea seemed more solid, the startup basics and processes kicked in:
- Designing technical road maps & designs that are feasible and efficient
- While both our hardware and software teams were quite experienced, there were a multitude of uncertainties such as delivery time of ordering parts from China, potential requirement changes, software development speed, etc.
- The increasing amount of options in Software industry of choosing the right tools for the right jobs can be daunting. Instead, we focused on the bottom lines and made minor decisions based on our members’ preference. Moved fast.
- Creating go-to-market plans based on a unique business models
- Even after creating a successful product, it is not easy to put the product in front of people who want it. This was especially true to us as we had a B2B model focused on small to medium sized businesses.
- Trade Shows, branding, direct sales are some of the core directions we found.
- Generating detailed financial projections based on research and business plans
- The biggest lesson for our business was the revenue stream as it is a hardware based product. It was important to realize relying on hardware sales and installation fees were not sustainable / scalable for our product.
- We eventually changed our revenue streams to a subscription model based heavily in software features.
- Drafting a Founder’s Agreement for rights, equity and their conditions
- While our team was happy to be equally divided, there were still many conditions to consider: what happens if someone quits, if someone couldn’t continue (sickness, death, etc), if someone the rest of the team wants to rid of in future, what is the vesting schedule, etc.
- Producing an effective presentation
- Created effective slide decks by changing text heavy slides into descriptive, picture or video focused format and rely on words to convey the information
- Understood most information will not be remembered by the audience and emphasize the critical aspects
- Practice, practice, practice for a truly impactful presentation.
Late Phase - Prototyping & Business Relationships
Week 19-23:As the course swiftly approached its conclusion, our efforts shifted heavily toward building the prototype and the business itself in its infancy. This included a great deal of technical development, specifically software development for me, as well as up to date financial plans with concrete projections and necessary funding. We learnt in class of possible sources of funding, namely:
- Early funding with Convertible Notes or SAFE (Simple Agreement on Future Equity)
- Non-dilutive financing with Government Grants, Contest Prizes, (sweetheart) loans, etc
- Pitching to potential investors first with “elevator pitch” emphasizing highly summarized core business values and then with formal presentations that are attractive and effective
We also had more contacts with our early potential customers who were interested in our product and it became clear how valuable such business relationships were. We were fortunate enough to visit onsite in Kelowna on two different farms and gained a great amount of industry knowledge and expertise within a few hours of time that would be difficult, if not impossible, to obtain through researches alone. They also helped further validate our business idea and provided recommendations for expansions and pivots. I felt very excited to have established these business relationships I would otherwise unlikely to ever have in my personal life.
A special mention to Week 22’s Past Alumni evening during which the telling of some successful and unsuccessful cases of continuing the business after the course was highly intriguing to me in seeing the range of possibilities in ideas and real life circumstances.
On the technical side, we were largely separated outside of key areas of integration. The hardware and software team worked separately. Further, even within the 2-man software team, we were subdivided to frontend and backend with me taking charge of our GCP server development. This wasn’t a completely new learning experience for my technical skills, but it was the most self-managed project which still had a high level of expectation and requirements for me. In comparison, other technical projects in school were either heavily team based where everyone was working together on the same technical problem, or they were more lightweight used as a vessel of teaching concepts. Even during my internships, I was used to having mentors and experts whenever hard issues came up. This project, instead, provided me the environment in becoming more independent as a software engineer or even as an architect (one benefit of a startup is definitely the title: I might as well be the CTO, ha).
Week 24-25:
What better way to conclude such a unique course than to showcase it to not only the entire cohort of our New Venture Design class, but also other invitees consisting of future prospects for the course and outside friends. We worked to the last minute for our demo night and final reports / presentation in hopes of completing it to the highest level we can - it backfired in causing the final details quite rushed so improvements could definitely be made in that regard.
Post Course & Conclusion: My Biggest Lessons
Throughout the course, my perspectives on what it means to be a entrepreneur, to start my own business changed. It is not easy to detail what exactly is my new definition, but I understand now while luck are always involved, they aren’t truly random. To quote the title of a chapter from Peter Thiel’s From Zero To One, “You are not a lottery ticket” and we should believe in a “definite optimistic” future where we hold most (or all) the cards in shaping and changing the future of a new business idea for the better.Two beliefs I used to have on startups are no more now (the two stem from the same idea):
- believing one can’t start a business until everything is aligned due to luck with a perfect idea out of a moment’s inspiration
- believing one can start a successful business because they have a great idea with basic research and planning that are good on paper
After the course it’s clear that neither is true for the majority of businesses out there. Instead, it is an iterative process with many steps involved, the biggest being: focusing on forming the right team, finding the right problem and value proposition, staying flexible to not succumb to sunk cost fallacy or stubbornness, having a clear idea on how to expand and defend the business in the future, and last but not least - putting in the time and effort, much more than any other job.
Lastly, I want to thank the teaching team for putting together such a unique experience to expose us to this wonderful, if not a bit scary, world of startups. I had a great time.