As part of the Caltech Alumni Association’s continuing series of career webinars, Dr. Ken Pickar presented in July 2016 with advise on how to start a business. Dr. Pickar is a visiting professor of mechanical and medical engineering at Caltech where he teaches a course on entrepreneurship and serves as the faculty advisor for the Entrepreneur’s Club, the Consultant Club, and Engineers for a Sustainable World. Covering every step of the process, this webinar offers fantastic advice on avoiding common pitfalls, and setting your fledgling business up for success.
Here are five key takeaways.
1. Check your ego.
Just because you believe your creation is an amazing piece of technology, doesn’t mean it is marketable as a business. Instead of counting on your own instincts, do your research. Look at what other products are out there, the size of the market, and your product’s ability to compete on both a technological and business level. Have individuals without a personal investment in the product’s success evaluate it and give you critical feedback. Use this feedback to become more objective yourself. When in doubt, go with your lower estimate for the size of the market, the product’s marketability, and the business’s probability of success.
2. Investors contribute more than money.
Once you’re ready to start your business, you may look for funding from family, friends, venture capitalists, or angel investors. When you find an investor, make sure they’re also a good business partner. Businesses often fail early because the investor and the creator have very different ideas about where the business should go, or how it should get there. Discuss your goals, plans, and priorities with potential investors, and make sure everyone is on the same page, before going into business together.
3. Have an "Elevator Pitch".
Be willing and able to talk about your business idea and product. Academics are often concerned that if they talk about their business, the ideas will be stolen, but this rarely if ever happens. More importantly, if you don’t talk about your business, you won’t find funding. Have a brief pitch, short enough to fit into an elevator ride, that you can present to potential investors or advisors, as well as a more in depth idea of what you want to achieve. This will improve your odds of receiving support from both intellectual and financial sources.
4. Make fast decisions.
for most people just starting out, this is counterintuitive. Academics especially like to ensure they’re making the right decision, rather than a quick decision. In business, “fast and approximate is better than slow and right.” You can always readjust in the future with another fast decision, but taking too much time to consider all possibilities will bring your business to a standstill, costing you precious momentum that is vital to your success.
5. Don't quit your day job.
Starting a business is expensive and grueling, saving money, reducing spending, and keeping your day job can help relieve stress and the intense feeling that failure is not an option. Other tips for saving money in the initial stages, and reducing your stress level, involve keeping your team as small as possible, shopping for supplies, equipment, or other things you need on ebay or craigslist first, and selling anything you don’t need. Not only will these tips help your personal sense of well-being, they’ll also keep your business’s debt to equity ratio low, and make your business more likely to succeed.
To hear more helpful tips from Dr. Pickar, you can watch the full webinar online!