Thinking Out Loud

My MIT experience has been incredibly eye opening. I recently had the opportunity to write for the MIT Entrepreneurship Review (fondly referred to as MITER) and discussed what I see as “the rocket fuel” that runs the MIT entrepreneurial engine. Check out the post here.

I recently interviewed with an early stage start-up in Cambridge who described one of their core principles as experimentation via hypothesis testing. They were looking for an MBA who would take the same scientific approach they used with their product to develop a road-map for their business. This got me thinking about experimentation and the massive one we’re trying right now with the MIT $100K: the MIT $100K Twitch (or Twitter Pitch) Contest.

The Hypothesis: using prize money and almost frictionless entry criteria, the MIT $100K will reach current and future entrepreneurs from across the country. This will unite the nationwide entrepreneurial community and bring together individuals with similar interests.

The Experiment: With the Twitch Contest, nearly anyone can now participate in the MIT $100K without leaving their armchair. All they need to do is pitch their idea on Twitter (and a few other odds-and-ends) for a chance to win $500 and global recognition as the first ever winner of the MIT $100K Twitch Contest. The winner will be chosen by two criteria: (1) objective Twitch quality and (2) virality. Virality here is key –  it will be judged by who retweets a Twitch and the number of followers that person has.

What will happen? We don’t know. What do we hope happens? We have at least one contestant from every state and we attract influential individuals from across the country to cast their vote for Twitches simply by retweeting them.

So if you’re reading this, you have no excuse – enter the contest. Once you’ve Twitched, wage war on the Twittersphere and get the most influential people you can find to retweet you. The Twitching begins on April 20th and will continue for 20 days in celebration of the 20th year of the MIT $100K. Follow the MIT $100K on Twitter and read the rules here.

The best $40 I’ve spent during my time as a student: a ticket to the MIT Sloan Sports Analytics Conference. My buddy Raj (contributor to BC Interruption) and I went to the BCEC with high expectations and left agreeing that those expectations had been exceeded. Bill Simmons (one of my favorite sports writers and a panelist) affectionately dubbed the event “Dorkapalooza” given the event’s affiliation with MIT. I have never pretended to understand sports in any great depth; but what I heard at the conference I believe transcended sports and can simply stand alone as solid business practice. One lesson was this: even the best quantitative analysis will never put a business into auto-pilot while it executes a plan.

Bill Polian, the president of the Colts, and Jonathan Kraft, the Owner of the Patriots had an amazing volley back-and-forth around the role of quantitative analysis in football. Their approach to quantitative analysis was far from how Mark Cuban (Owner of Dallas Mavericks) & Daryl Morey (GM of Houston Rockets / Sloanie) described basketball, and even further from how Michael Lewis (Author of MoneyBall) & Bill Simmons (ESPN sports writer) described baseball. Baseball and basketball, which both have more discrete actions than football, seem to be better suited for making in-game decisions based on analytics. Football, however, resembles the business world in that it operates in an almost infinitely complex environment with many “good” answers but no “perfect” answer.

Both Kraft and Polian agreed that the complexity of game-time situations in football, which could include injuries on a previous play, receiver / safety match-ups, offensive / defensive momentum, and a dozen other factors, are far too complex for a super-computer based on analytics to make better decisions than the best tacticians in the game (professed to be Polian & Belichick). Contrary to Polian and Kraft’s aversion to in-game analytics was their belief that pre-game analytics could be a critical success factor for designing a game-plan and strategy for an opponent. I couldn’t help but remove football from the picture and apply this to standard business management. Taken a different way, what they said was that in an infinitely complex environment you should build a plan based on sound analysis. When it comes time to execute, however, you need to have the wisdom to potentially divert from this plan as new and impossible-to-predict information emerges.

I plan on covering the Sloan Sports Analytics Conference in several subsequent posts. I urge everyone to look into going next year, it was an absolutely incredible experience. If you want to follow the ongoing conversation on Twitter: #SSAC.

Connect With the MIT $100K

• Website: www.mit100k.org
• Twitter: @mit100k
• Facebook: http://www.facebook.com/mit100k
• LinkedIn: LinkedIn Group
• Email: info {at} mit100k {dot} org

I am planning on writing a more casual post about our MIT $100K Executive Summary Contest finale event last night, but figured I’d post our press release while I’m thinking about it. Overall, the organizing team did an unbelievably good job pulling this event together.

CAMBRIDGE – February 11, 2010 – More than 350 people and 100+ online viewers from around the globe tuned in to see the MIT $100K award Pushpins the Overall Judges’ Choice Award and Mobile Track prize for the 2010 MIT $100K Executive Summary Contest.  Pushpins was just one team of a record-breaking submission field consisting of more than 140 entrants. Other winners included Vala in the Development Track, OzComp Natural Gas Compressors in the Energy Track, Leotus Home Cooling in the Products and Services Track, peerTransfer in the Web/IT Track, and Hydrangle Systems both in the Life Sciences Track and as the Audience Choice Award winner.

The theme of the night was The Matrix and the MIT $100K’s search for “The One.”  The competition organizers continued their efforts of combining entertainment with entrepreneurship, and created an evening full of excitement and comedy.  The event started with a poster session where all semi-finalist teams displayed their ideas for the general public.  Highlights of the evening included topics such as why a recession is a great time to be an entrepreneur, a preview of the upcoming MIT $100K Business Plan Contest, and an inspiring keynote address from Dr. Christina Lampe-Onnerud, CEO and Founder of Boston Power.

The night continued with $2,000 track prizes awarded to each of the six track winners, 60-second elevator pitches from each team, and the awarding of the Audience Choice and Judges’ Choice winners. The track winners were:

• Development: Vala – VALA is a company that uses mobile phone technology to instantly connect consumers to what they need and desire from vendors in the informal market of urban India.  VALA promises to increase the market activity of low-income vendors, while opening a sizeable profit potential through tiered fees, advertisement, and high-value data.
• Energy: OzComp Natural Gas Compressors - OzComp is a high efficiency double-acting compressor technology developed in conjunction with MIT with high serviceability and low weight/footprint for natural gas applications at the wellhead. Modular design and lower manufacturing cost are other benefits as well.
• Life Sciences: Hydrangle Systems - Hydrangle Systems has discovered a way for men diagnosed with prostate cancer to maintain potency while undergoing prostate cancer treatment surgeries. The Apex by Hydrangle Systems is a probe-like device that is used during prostate cancer “freezing” treatments to protect the “sex nerves” surrounding the prostate and preserve potency.
• Mobile: Pushpins – Pushpins is a viral and interactive couponing platform that pushes coupons as consumers browse and scan products in grocery and retail settings.
• Products and Services: Leotus Home Cooling - Leotus is redefining home cooling with a modular room air conditioner. Leotus’ patent pending technology splits the traditional unit into three parts—an indoor unit, an outdoor unit, and a connector bridge—resulting in a system that is safe and easy to install, tastefully designed, and allows full use of your window.
• Web/IT: peerTransfer – peerTransfer is an innovative online international money transfer & payments startup out of MIT.  Thanks to its patent pending technology, it provides individuals and small businesses with a low cost alternative compared to international bank transfers, saving around $300 for every $10,000 sent while increasing convenience and reliability.

In addition, a $1,000 Audience Choice Award was presented to Hydrangle Systems and was decided using technology from former MIT $100K competitor PollEverywhere.

The night concluded with the awarding of the $3,000 Judges’ Choice Award to Pushpins.

Events are already underway for the MIT $100K Business Plan Contest, with a submission deadline on March 4. Semi-finalists will be announced at an event on March 11^th and the finale event, where the MIT $100K will award over $350,000 in cash and prizes, will be on May 12^th.

This semester I am taking a class called “Introduction to Business Law for the Entrepreneur” (class 15.615 if you speak in numbers as most people do at MIT) taught by Professor John Akula. I thought this class made sense after my brief runabout through patent law (I patented a process that I’ve inevitably bailed on for various reasons). Professor Akula’s practical approach to business law, as he says, is not an exercise in memorization but instead is meant to provide a framework to explain “that feeling in your gut” when a business decision has legal implications.

Our first topic was torts. A topic like this is impossible to discuss without mentioning that U.S. tort law is written in such a way that people can sue one another in (sometimes) egregious situations. A day after the first lecture I was in the car listening to a radio commercial for a company called “411 Pain“. Their tag-line was: “If you get in an accident call 9-1-1, then call 1-XXX-411-PAIN.” In my opinion, this type of service is a catalyst for unnecessary lawsuits. Services like these exacerbate the burden on our legal system and source many of the lawsuits that inevitably make the U.S. legal system seem like a joke. We’ve all heard stories about people suing over hot coffee that’s deemed too hot and results in multi-million dollar settlements…

I know that the lessons I learn in Akula’s business law class are going to prove invaluable in my career. I’m just looking forward to covering topics that don’t highlight entire industries whose sole existence bastardize our legal system…

To this point, I consider myself a student of “micro-entrepreneurship.”  I am a member of the MIT Sloan Entrepreneurship and Innovation Program and along with many of my classmates maintain a clear focus on trying to launch or join an early stage start-up. Nearly all of the classes, lectures, and speeches I have attended to date have focused on an individual’s pursuit of entrepreneurship and the various challenges you may encounter. This is very relevant and actionable information which aligns beautifully with our MIT motto: Mens et Manus (Mind and Hand).

What I haven’t been thinking about is the big picture impact of entrepreneurship – I will refer to this as “macro-entrepreneurship.” I started to think about this in my post on legislative changes that promote entrepreneurship, but never as deeply as I have after my experiences this week.

As one of the directors of the MIT $100K Entrepreneurship Competition, I had the privilege to speak at MIT’s Entrepreneurship Development Program. Between my talk and the reception that followed, I was approached numerous times by representatives from different countries all asking about how to build similar entrepreneurship competitions. Countries included Ireland, Scotland, Nigeria, and Argentina. Their requests stemmed from government initiatives with an explicit intent to spur entrepreneurs to build economic value through innovation.

In the same week I stumbled on an interesting article on Bill Gates’ investment strategy for his renowned foundation. Gates says that “investment in science and technology can leverage those dollars and make more of a difference than charity and government aid alone.” Same message – innovation makes an incredible impact.

Experiencing this first hand really hammered home the fact that entrepreneurs have a very real opportunity to fuel the world economy through innovation! For me, taking a step back and looking at the big picture makes my individual pursuit of entrepreneurship that much more exciting.

For those interested in how to build an entrepreneurship competition…

I take no personal credit for the fact that the MIT $100K is one of the model competitions emulated around the world. My highly esteemed former directors were the visionaries that resulted in the worldwide recognition the program has received. In 1998, a spinout of the MIT $100K emerged called the Global Startup Workshop. This program has held annual conferences around the world to promote the infrastructure that makes the MIT community so successful at incubating and deploying new technology (one facet of which is the MIT $100K). If you are interested in hearing more, follow the two organizations on Twitter: @MIT100k and @startupsg.

This week I had an amazing opportunity to sit and listen to the founders, CEOs, and executives of six Silicon Valley startups. My fellow Sloanies and I were given encyclopedia volumes of information but I synthesized much of that advice into one overarching principle: being able to focus is key.

Focus allows you to compete with large incumbent competitors in a saturated marketplace. Investors, especially VCs, question if a technology or product will be able to survive a retaliatory product from a large incumbent. Mark Gorenberg from Hummer Winblad (a leading west coast VC) had an excellent quote: “We always have to ask ourselves is this going to be the next pothole or beachhead.” In order for a start-up to survive in a marketplace with large incumbent competitors, the entrepreneur must focus on specific differentiation.

Focus helps you find product-market-fit: the right product for the right consumer. The CEO of Aardvark had an amazing story about leaving Google to spend the first six months of his start-up with only a product genre selected but no specific idea. His first focus was in fact an acknowledgment: he was bound to iterate many times before finding a consumable product so he should get it over with at the beginning. Their focus paid off. After creating several prototypes and testing with actual customers they were able to identify an idea with tremendous market potential.

My new favorite entrepreneurial buzzword is “pivot” – the ability for a start-up to change course mid-flight in order to optimize product-market-fit. While “pivot” may imply a shift in focus, it most certainly couldn’t be replaced by words like “scatter”, “diversify” or “fragment.” Pivots are simply the act of refocusing. Pivots will not be successful if focus (albeit a new focus) is not maintained throughout. Eric Ries has a great blog on pivots if you’re interested.

All of the executives we met with mentioned that they maintain focus on a specific mission statement to help them make decisions more efficiently and in-line with their competitive differentiation. The following are how several of the companies I met with choose to focus:

• The customer experience is the key – CEO/Co-Founder of Posterous.com
• Our competitive advantage is simplicity of design – CEO/Co-Founder of Box.net
• We win with a great product and a world class sales / marketing organization – VP of Customer Satisfaction at Salesforce.com
• We are entirely customer driven – CEO/Co-Founder of Aardvark (vark.com)

Each start-up may have a different focal point, but they will all adhere to the rule: focus is critical.

Take away: entrepreneurs are capable of pursuing an infinite number of products and markets. A successful entrepreneur understands that you cannot boil the ocean… focus one drop at a time.

As a Caucasian male born in suburban Connecticut with two Catholic educations under his belt, it will surprise most people to learn that I can recite every line of Tupac’s California Love and Biggie’s Hypnotize. I vividly remember the rivalry between the two rappers from back in the day. I was reminded of the drama and violence last week after Netflixing the movie “Notorious.” Fear not, this isn’t a blog about hip-hop music (although there will be a distinct parallel)…

I’m writing this 30,000 feet in the air on my way to Silicon Valley for a “Tech Trek” to fulfill my Entrepreneurship and Innovation certificate at MIT Sloan. In class before the trip, Bill Aulet, a professor of entrepreneurship joked that our meeting with Stanford and UC Berkeley MBAs would be like reigniting the Biggie Smalls / Tupac (he pronounced it “Two-Pack”) rivalry. I think it served its purpose – the class laughed.

Later in the same class, one of our guest speakers, another lecturer of entrepreneurship at MIT Sloan was running late. What held him up was a meeting at the statehouse in Boston where he was presenting to the Governor. The topic – legislative changes to non-compete clauses that can make it more favorable for start-ups to form and flourish in the Greater Boston area. Silicon Valley, and California in general, do not permit non-compete clauses and thus start-ups have been able to form out of larger less nimble companies.

What struck me was that these little 4, 6, 15 person start-ups, when grouped en masse, can really make an impact to the local economy. So much so that our state government is actively competing for them.

I’m heading to California to visit with nine funded and active start-ups, many of whom are extremely popular in today’s tech-savvy crowd (if you’re curious, the subset I’m meeting with includes Box.net, Posterous, Vapore, Serious Business, Salesforce.com, and Aardvark). I’m sure that within several of these companies, the story will go something like this: “I had an idea. It was a good one. I knew to get it off the ground I needed to move to the mecca of entrepreneurship – Silicon Valley. Blah. Blah. Blah.”

I’m an east coast guy all the way through. My family is here. I enjoy seasons (including the snow). I’m a Pats/Sox/Celts/Boston College fan. The state government of Massachusetts probably doesn’t have to do anything to make me choose Boston for my start-up… but I think its an amazing demonstration of the power of entrepreneurship that governments are taking full action to attract and retain start-ups. Hopefully in my lifetime Boston can reclaim the title belt from Silicon Valley as the premiere place to build your company.

Eastside represent.