The Innovator's Acquisition Solution

Last month I polished off Clayton Christensen's The Innovator's Dilemma, blown away by its simple-yet-paradigm-shifting message: Great companies led by great managers fail when faced with disruptive innovation, not because they lack the necessary management skills to be successful, but precisely because they have the necessary management skills to be successful.  Great managers listen to their best customers and their best investors, and each demands ever-higher quality and ever-higher margins, respectively.  Naturally, great managers thus ignore lower-quality and lower-margin product innovations.  But with continuous improvement, when lower-quality becomes good-enough-quality (coupled with other desirable features) for the worst customers, those customers flock to the new innovation, and the great manager decides to move upmarket to solve for only the best customers.  Then the innovation becomes good-enough-quality for better customers, and they flock to the new innovation, forcing the great manager further upmarket.  This cycle continues until the great manager is left with no customers.

At each step in the cycle, the manager has the same choice: Solve for better customers with a higher-margin product, or solve for worse customers with a lower-margin product?  The correct choice is obvious.  But after so many cycles, the manager ends up with no market.  This is the innovator's dilemma.

In my Strategic Management of Technology and Innovation class, we recently discussed the subject of this very innovator's dilemma.  After class, I approached the professor (Dr. Jeffrey Covin) about writing a term paper on the topic.  He suggested I read Christensen's follow-up book, The Innovator's Solution, which I'm now about halfway through.

The Innovator's Solution recaps a lot of the material from its predecessor, but it begins to add a bit more detail about how to address the dilemma as a corporate innovator.  The crux of the strategy is to treat a disruptive innovation (which can be defined as a product that is not competitive with the category standard (e.g. iPod) on the main dimension of performance (song capacity), but which brings other potential advantages (superior portability), AND which can be improved on the main dimension of performance (song capacity) faster than the demands of the market) as a new and separate potential venture.  When evaluating such an opportunity, a manager should approach it as a seed investor would, not as a manager of an established company would.  If he evaluates the opportunity against other established-business opportunities (i.e. sustaining innovations on established products), he will inevitably choose to not pursue it vis-a-vi the innovator's dilemma.  What's more, the manager needs to pursue the opportunity by spinning off an (relatively) autonomous venture to isolate it from the demands of the larger business.  For example, an established business may have a policy to not pursue accounts worth less than $1 million, but a disruptively innovative product may have to start out with small accounts to gain traction.

And that is the point that interests me the most: How does a corporate innovator effectively create a new venture and isolate it from the main business to allow it to blossom?  In my own experience at Intuit, I was able to watch such a new venture form via acquisition, when the company acquired Mint.com.  I witnessed management first try to integrate Mint into Intuit's existing personal finance business, then subsequently back off and try to isolate it.  I plan to use this situation as a case study to further explore disruptive innovation.

Startup Weekend

This past weekend I was inaugurated into the club that few know about, but that every innovator- or entrepreneur-to-be should want to join.  I experienced a Startup Weekend.

This experience taught me volumes about generating an idea, getting people excited about it, leading a venture team, and communicating value, not to mention practical skills like programming PHP.  Here I recount the weekend as I look back on it.

Friday
On Friday evening, about 70 of us filed into a room in the Purdue Technology Center in Indianapolis.  Hands were shook, introductions were made: About 40% of the room were software developers, 30% marketing manager-types, 20% general manager-types, and a handful were artistically-inclined designers.

Each of us with an idea for a company had 60 seconds to pitch to the masses to attract team members.  I pitched an idea that had struck me two weeks earlier in my Marketing Research class: An SMS-based market research service that would recruit subjects by paying them $0.10 per SMS question that they responded to, and organizations (companies, political campaigns, other market research firms) would pay something like $0.30 per respondent for the service.  The client would get an auto-generated report with the results of their mini-survey within hours, since respondents would generally reply to the SMS immediately, and would get the results for pennies on the dollar compared to other market research methods (Internet, direct mail, phone, etc.).

My idea turned out to be quite popular, and as such there was no trouble forming a team.  The four of us claimed a table in a hallway and set to work figuring out how to get this business started.  It would be hard to find a more diversely-experienced team: a marketing expert with years of experience, a college freshman with self-taught coding skills, an athlete with no technical or management experience per se, but who was excited to be involved in a startup, and me, a trained software developer currently learning this business stuff.

One of our first tasks was the all-important naming of our company.  After recruiting some help in coming up with a tagline ("Text. Earn. Learn." describing the three core components of the idea), we did a massive domain-name-availability search and eventually settled on txtern.com, giving us the name Txtern.  By the end of Friday night we had our domain, a Twitter handle, a Facebook page, and a technical design.  It was smooth sailing!

Saturday
In the morning, after a PR update, we hit the ground running on the technical side.  But it turned out that we ran into a swamp, which led to a wall, which led to a precarious cliffside.  The technology gods were angry with our promising idea, apparently, as we battled with recurring server issues (we changed servers four times), database access issues, and this-is-harder-than-I-thought-it-would-be coding issues.  By 4pm, I was ready to declare this product vaporware and just pitch a PowerPoint on Sunday, and I was irritated when we were all shepherded outside for a forced rock-paper-scissors tournament when I really needed to get that damned Apache Tomcat server installed.

That's right: We were forced into a rock-paper-scissors tournament.  Believe it or not, it turned out to be the saving grace of our day-old company, as it gave us a much-needed break from the grind of constant roadblocks and allowed us to think of a new technology strategy.  It was the best-spent 15 minutes of the entire weekend.

Our new strategy was to build the whole backend in PHP, which, as it happened, neither of us programmers knew.  But since Twilio (our chosen SMS service provider) provided great documentation on usage in PHP, we decided we'd learn it along the way by buddy-programming our way to success.  And it worked: Within an hour, we were adding phone numbers to our database.  Within another hour, we were sending text messages.  And by the end of the night, we could type in a survey question, have it texted to everyone in our database, and record their responses.  Success!

All of this was accompanied by another round of success: An experienced designer and entrepreneur for 30 years decided he wanted to join and help us out.  He provided fabulous ideas, logo designs, and the little "extras" that go a long way in a new business.  I now fully appreciate the value of graphic design in making a new business appear 1) professional, 2) real, and 3) bigger than it actually is.

Sunday
The final day was largely smooth sailing as we integrated the backend technology with the front-end website and designed the visual part of our pitch.  I was so hyped up for the pitch that evening that I found myself pacing around the room and with zero appetite.  But rather than feel nervous, I felt more like I was in a zone, where the business really could provide incredible value to clients, consumers, and investors alike.  I just needed to explain that to the judges.

The pitches began in the early evening, with prospective entrepreneurs condensing their weekend of incredible work into just 3 minutes.  All of the presenters enthusiastically showed off their products, and did it with an essence of fun; there were no overly awkward moments or failed efforts, only head-nods, applause, and laughs.  (Check out all of the businesses here)

We were slotted as the twelfth and final presentation of the evening.  I delivered the pitch and fielded the questions, and I was quite happy with the performance: the website looked great (rather than PowerPoint, we had set up the visuals on our site to display during the pitch) and the judges easily understood the concept and the value to each party.

When the judge's scores rolled in, we found out that we were not going to win Startup Weekend.  Our score was in the middle, which I think was a testament to the great work that teams put together over the intense weekend.  I hope and believe that several of those teams will continue to work on their businesses, and maybe some will ultimately be successful (each Startup Weekend tends to produce at least one or two living businesses).  But the four of us at Txtern decided to chalk this up as a wonderful learning experience, and head back to our jobs and educations.

ANZ: Ideally Suited for Prototypes

Last month I spent two weeks on the other side of the world - one in New Zealand (Auckland) and the other in Australia (Sydney).  The purpose of the trip was a class: KIP (Kelley International Perspectives), which has the mission of teaching students about perspectives on business in other parts of the world.  Of course we had time to explore and be tourists, but we spent a fair amount of time visiting firms (10 in all) in addition to once-a-week sessions on campus back in January and February.

The main take-away for me from the experience stems from these countries' unique situations: They are both very geographically isolated - from every other nation, but especially from developed ones - and they both have very small populations (there are roughly 22 million Aussies and 4 million Kiwis).  They are also somewhat wealthy, developed, and American-like, stemming from their British origins.  In fact, Australia is often considered to be more like the US than the UK, and my own experience of Sydney was very much like visiting an American city, only the people had different accents.

All of these traits make Australia and New Zealand (ANZ) a perfect proving ground for new products destined for the US.  This is especially true for companies with established brands that they do not want to risk damaging for the sake of a new product.  And as it happens, many American companies are already leveraging ANZ in this way: We visited Kimberly-Clark in Sydney, who uses Australia quite often as a test market for its Huggies and Kotex brands.  They find that Australians react very similarly to Americans when it comes to marketing and products, so the level of success of a new campaign or new product there is a strong predictor for the same in the US.

This strategy may also work for a startup, but of course this strategy comes with the trade-off of needing to wait at least several months to get feedback from the ANZ market.  Also, I haven't dug much into the subject for the tech industry, but it would be great to see the results of companies opting to launch tech products in ANZ before the US and finding whether or not there was a correlation with success in the US.

Analysis of the Droid Landing Campaign

Note: For a marketing class project, we were to analyze a marketing campaign that involved social media.  Two classmates and I teamed up to produce the following.

Analysis of the Droid Landing Campaign

Ayushman Dutta, Jason Fletchall, Nirmalya Ray

Background

In November 2009, Motorola and Verizon Wireless entered the US smartphone arena in a big way by launching the Droid, the first phone carrying Google’s highly-acclaimed Éclair version of its Android operating system.  Arguably more notable than the phone itself was Motorola’s and Verizon’s marketing campaign, personifying the phone as a type of super-intelligent machine hooked into the “ever-expanding Android Market.”  The campaign spoke strongly to its target demographic (males aged roughly 18-30), as it fit in well with the enormously popular sci-fi thriller category of entertainment.  The campaign was widely considered to be a success, with sales of the Droid phone quickly eclipsing those of any previous Android phone.

Late the following Spring, rumors and leaks starting pointing to a new phone in the Droid line due out sometime in the Summer.

Enter the Droid Landing Campaign

On June 21, 2010, tech blogs lit up with the news that the YouTube account VerizonWireless had uploaded a short video featuring a human eye transforming into a Droid eye.  The video finished by naming its subject, Droid X, and a date, “07.2010.”

Within minutes, viewers had analyzed the video frame-by-frame and caught a mirror-image of text in a reflection in the eye, “@DroidLanding.”  A short journey over to Twitter revealed an account named “DroidLanding,” which had recently been opened and had tweeted, “REPORT: Droid X units have escaped! Get the stats on them at http://www.droiddoes.com . Forewarned is forearmed.”  Clicking on the link sent users to a Flash website featuring the phone with specifications listed and a “Coming Soon” note.

The DroidLanding account continued to tweet with increasing frequency over the following days.  The theme of the tweets was consistently one of a security organization warning citizens of a group of escaped Droid Xs spreading throughout the US, while at the same time injecting information about phone specifications.  The tweets often identified specific machines, such as “Droid X designate #3,” and began to give information about specific locations of the Droids, such as “Droid X designate #1 has been sighted in Nevada. Witnesses call it the greatest source of power next to the Hoover Dam.”

This led to speculation that Motorola and Verizon were organizing a scavenger hunt for Droid X phones.  And indeed, after two weeks of speculative discussion across tech blogs and forums, this was confirmed when on July 7 the droiddoes.com website posted official rules for a hunt.  The rules specified that the DroidLanding handle would sporadically tweet GPS coordinates over the next two weeks.  Each set of GPS coordinates would identify a location where a Droid X “designate” had landed, and where one determined and witty hunter could collect a free phone.

Sure enough, on July 8 DroidLanding tweeted coordinates that specified a location in New York City.  Within 30 minutes, the handle tweeted that the phone had been found, and later followed-up with a link to a picture of the successful Droid hunter.  This same pattern continued with 20 other phones being given away over the following 12 days in cities across the country.

Towards the end of the campaign, on July 15, the Droid X was officially launched, quickly sold out, and continued to sell out with each stock replenishment for months.

The Campaign’s Information Pathway

The campaign involved a fairly complex set of steps for consumers to follow, though the tech community as a whole helped individuals take shortcuts.  This figure shows the actual information pathway experienced by consumers.

The first step in the pathway was the discovery of the “Droid eye” video on YouTube.  A relatively small number of consumers needed to find it, as the path to the next step (1 on the diagram) was to post the video on tech-themed blogs and discussion forums.  Once in the blogosphere, the video received quite a bit of attention.  The path to the next step (2) was to analyze the video frame-by-frame to find the reflection in the eye.  Again, this could be done by a small number of consumers, since the path to the next step (3) was to simply post the reflection on blogs and forums.

The path to the next step (4) was intended for all consumers to take – it was the discovery and followership of the @DroidLanding Twitter handle.  At this point we believe the intended pathway and the actual pathway differ: The intended next path (5) was to find droiddoes.com via DroidLanding’s tweet to see images and specifications of the phone, but many consumers skipped that step and simply tried to decipher DroidLanding’s tweets for the locations of phones, then proceeded directly to discussion of the tweets on blogs and forums (6).  Likewise, some consumers checked out droiddoes.com but didn’t bother with the scavenger hunt.  In other words:

            Intended: All consumers 5 – 5.5 – 6

            Actual: Some consumers 5 – 6 and some consumers 5 – 5.5 – 6

Discussion of the phone and its associated scavenger hunt on blogs and forums (6) led to consideration of purchase by the consumers engaged in the campaign and also by those otherwise following tech blogs and forums.  Ultimately, the aspiration of the campaign was to have consumers go to a Verizon store (either in-person or online) (7) to purchase the phone on or near launch day, July 15.

Involved Technographics

The campaign necessitated involvement from almost all of the technographics:

• Creators: Found the messages in the eye and posted them.  Also the owners of the blogs who reported developments in the campaign.
• Critics: Main drivers of the discussions to find the answers to the clues in DroidLanding’s tweets.  Also drove the discussions of the specs of the phone itself (one forum alone reports over 250,000 posts)
• Collectors: Shared links to blog articles, droiddoes.com, and @DroidLanding with friends on Facebook and Twitter, thereby increasing awareness of the campaign.
• Joiners: Large chunk of the followers of @DroidLanding.
• Spectators: Large chunk of the readers of the tech blogs.

The Success of the Campaign

The main goal of this campaign was to generate buzz about the product, the Droid X phone, amongst the tech-loving community.  While the ultimate goal was of course increased sales of the phone, we believe that the intention was to generate buzz amongst this relatively small but influential community, which would then recommend the phone to friends and family members outside of the community.  And this was anecdotally true at least: One of us purchased the phone on launch day and subsequently had three decidedly non-tech-community-member relatives purchase the phone within two months.  In terms of hard numbers describing the buzz surrounding the product:

• The number of people who viewed the “Droid eye” video on YouTube was more than half a million. Combined with views of other commercials for Droid X on YouTube, the number was more than a million.
• The @DroidLanding Twitter handle gathered more than 30,000 followers.
• The forum droidxforums.com counted more than 250,000 posts.
• Other success metrics on this dimension would include “mentions” on Twitter, “shares” on Facebook, posts on tech blogs, and comments on tech blogs, though those measures were not readily available to us.

A sub-goal of the campaign was to create awareness of the technical specs of the phone to help move consumers to the consideration step.  On this dimension, the campaign did fairly well, as measured by traffic to droiddoes.com:  The Internet traffic rank of the website went from more than 100,000 to 5,000 in a single day and stayed in the high 20,000s for months in a tech industry where technology quickly goes obsolete.  At its height, this accounted for 0.04% of the total traffic on the Internet (see Traffic Stats here).

In terms of speaking to the targeted demographic, the campaign also did well: The audience for droiddoes.com was skewed towards males aged 18-24 with college educations (see Audience here).

The ultimate goal of the campaign, increasing sales of the device, could be measured in part by sales data.  While this information is not accessible to us, we can guess that sales were excellent as the phone was consistently sold out for months (as noted earlier).  However, it would be difficult to attribute sales numbers directly to this campaign because there was no built-in mechanism for tracking sales through it.  How would Verizon know that what caused a person to walk into their store and buy a Droid X was that they followed @DroidLanding, or that they read about it on tech blogs?  The great sales numbers could have been caused by the rash of Droid X TV advertisements playing at the same time as this campaign.

Recommendations for Campaign Designers

With the intended information pathway leading from followership of @DroidLanding and subsequent viewership of droiddoes.com not actually playing out for many consumers, we considered recommendations for increasing the promotion of the Droid X device’s technical specifications.  While @DroidLanding did tweet tech specs regularly, we found these tweets to have rung false with the main theme of the Twitter handle as an organization warning citizens of escaped machines.  For example, “Droid X shoots in 720p. Which means you can really see the look on your face when you find one” does not convey the same sense of urgency or danger as the other tweets.  Alternatively, @DroidLanding could have tweeted links to videos describing the specs of the device, along with text conveying the videos as “reconnaissance” or “briefing” information.

We also considered other ways of reaching the target demographic of the campaign (males aged 18-30).  The campaign spoke very well to those in the demographic who enjoy sci-fi thriller movies and games and are also tech fanatics, but they comprise only a part of the demographic.  Many of the ads that accompanied the campaign (like this one) attempted to bridge that gap by showing office workers interacting with the phone, but they did not resonate with the younger end of the demographic, whose members are in high school and college.  Instead, the supplemental ads could have included college-age men and featured the phone’s tight integration with Facebook, or the customizability of its live wallpapers.  This could have turned this younger side of the demographic into trend-setters for the Droid X.

Velocity Conference: Day 3

The third and final day of the conference had the two dozen of us back in the comfort of the Faculty Club in Berkeley.  The assembled cast included several veterans and a relative newcomer:

• Gary Rogers, former CEO of Dreyer's Ice Cream
• Louis Jordan, SVP of Corporate Finance at Starbucks
• Joe Walsmith, Entrepreneur in a number of companies
• Rick Roethke, Founder & CEO of Barrington Management Co, a real estate firm
• Nicholas Seet, Founder of Auditude

Gary Rogers told us a fascinating tale about visiting an ice cream shop penniless, jobless, and looking for whatever work they had.  Two days later, he was the new owner of Dreyer's Ice Cream.  His ability to seize opportunities whether or not he seems to have the resources to do so absolutely exemplified the entrepreneurial spirit, and it served him well throughout his career.  He gave us seven points of advice to take with us in our own careers:

1. Make the most of every day (and he extended this to include "be serendipitous")
2. The joy of life is in the struggle
3. Be a builder (the process is the most fun part)
4. Prepare to be lucky ("fortune favors only the prepared mind")
5. Be a persistent optimist ("there is no such thing as can't, only won't")
6. You can only make some of the people happy some of the time, and that's enough
7. Develop a sustainable competitive advantage and leverage it

Rick Roethke struck me as somewhat of a modern-day folk hero.  He actually joined us for many of the sessions during the conference, including the cocktail reception at Plug and Play, where I talked with him for quite a while.  "I'm not like all these people here," was one of the first things he said to me.  When I asked what he meant, he explained, "They probably wouldn't like the way I do things."  He continued to describe his career: laid back, enjoying the ride for what it is, never working too hard, taking vacations when he wanted to take vacations (even if it meant ending jobs), a lot of luck, finding deals by talking with people on vacation, and so on.  For Rick, his storied career wasn't for some feeling of achievement, purpose, or altruism; it was something to do that provided him the means to enjoy life.  His main concerns were world travel and relaxing in San Diego.

With all that we hear in our professional lives, and especially in business school, about success and taking on more projects to get ahead, Rick's story causes a bit of pause.  Yes, there is another way.

Velocity Conference: Day 2

A few weeks have gone by since the conference wrapped up in Berkeley - I spent two with a class in New Zealand and Australia (perhaps more on that later) and one back in Bloomington getting re-acclimated to the usual school life.  But I'd still like to share some of the insights I gained from the wonderful Velocity experience.

Day 2 had us traveling the Bay Area to meet with several organizations living the Silicon Valley lifestyle.  First up was Google, a place I've visited many times but which always has something new to offer.  Part of the "new" this time was a rude tour guide, a software engineer who had obvious disdain for us business students - my favorite quote was "People will a lot of times write code up here on the board... but you guys wouldn't know anything about that."  (I suppose his attitude gives validation to my earlier thoughts on MBAs.)  But some good insights into Google's innovation-related incentive system came out as well: One important piece is the practice of holding people accountable for goals beyond their control.  Suppose you're in a cost center, like development support, but your bonus hinges on a profit center's, like Android's, revenue.  What are you going to spend your spare time on?  Another piece, of which the managers we talked with were particularly proud, was that employee performance is measured by impact, not effort.  In other words, evaluation is based on how many people you get excited about something, not how hard you work.  Does that encourage entrepreneurial activity?  I'm not convinced on that point, but it certainly encourages a focus of existing entrepreneurial activity on things that matter to lots of people.

Our next stop was Sonicwall, a B2B company that provides top-notch firewall hardware, software, and services to (primarily) small businesses.  We met with members of their executive team to hear about working in a high-growth environment.  The key, one of the executives told us, to entering a new market is to not look at what competitors are doing, but to instead imagine you have nothing to do with the market and simply solve the customer's problem.  His favorite line of thinking was to imagine how LL Bean would enter the aviation market.  I remember hearing something very similar from Aaron Patzer, founder of Mint.com, when he spoke to all Intuit employees shortly after the acquisition of Mint by Intuit.  When speaking about the beginnings of the company, Patzer focused on the fact that he completely ignored what Quicken was offering and simply thought through what the average person wanted to see about their finances.

We finished off the day at Plug and Play Tech Center in Sunnyvale, the world's largest business incubator. The tour took us through mazes of cube farms grouped into themes by nationality, alma mater, and sometimes subject matter (like "mobile app development").  The unique decor found in each nook and cranny of the place made me feel that this was a truly creative space fit for entrepreneurs.  When our host explained how Plug and Play works, I was surprised to hear that it does not see itself as an incubator - it's a real estate firm.  It offers rental office space to entrepreneurs, and the relationship can end at that.  Of course, it also invests in some of its patrons (about 1/5 of them) and provides services like mentoring and introductions to VCs, but all of that is a la carte.  After the tour we heard from a panel of entrepreneurs housed in Plug and Play itself, who gave us advice on starting and running a business in the Valley.  One valuable nugget that came out from the panel was the belief that when you're starting a business, you have to look at your community as if you're on a playground: everybody might as well be your friend, regardless of experience, age, title, and so on.  Another nugget: If you're relying on secondary research to start a business, you might as well build nothing and just give up.  You must conduct primary research to really understand a new market.

The end of the day brought us a cocktail reception in a Plug and Play cafeteria with dozens of Kelley School of Business alumni in the Valley, and headlined by Art Norins, founder and CEO of Nor1, Plug and Play's largest client at something like 120 employees.  Back in October, Art spoke to us in Bloomington about the founding of his company and about networking in the Valley, so it was a bit of a reunion for us.  This time he addressed the challenges with rapid growth, as Nor1 has expanded from just 70 employees when we saw him five months ago.

Armed with piles of SWAG from the day (I was particularly fond of my Android keychain flashlight), we boarded the bus for the trek back to Berkeley, where we would close out the conference the next day.

Velocity Conference: Day 1

This morning kicked off the latest instance of a dozen-year-strong tradition for Entrepreneurial Management Academy students at the Kelley School:  We traveled to the Bay Area to learn about, at ground zero, the most vibrant startup culture in the world.  The Velocity Conference is put on each year to expose entrepreneurially-minded IU MBA students to the culture, the industries, and the financing environment of Silicon Valley.  Why this particular place?  As the mastermind of the Velocity Conference pointed out in his kick-off talk, the last 30 years in the Valley has seen more value creation than in any other place in any other time period in the history of mankind.

That mastermind was Dr. Jack Gill, founder of Vanguard Ventures, former faculty at Harvard, and IU alum.  He gave us a talk on his research into understanding the relationships between intelligence, leadership, and entrepreneurship.  As he posited, "intelligence" as we normally understand it is concerned only with the left hemisphere of the brain (logic, analytics, verbal skills), and thus our education focuses almost exclusively on developing left-brain skills.  However, an analysis of all Fortune 500 CEO's revealed that, in general, they do not possess superior left-brain skills, but rather they possess superior interpersonal and intrapersonal skills associated with the right hemisphere of the brain.  In other words, they are confident in themselves and they have the ability to build positive lasting relationships, and they are merely "good enough" at the core business subjects we learn in school.

We also heard from Andrew Smith, Founder and CEO of Advanced Transit Dynamics, a company that produces the Trailer Tail, a contraption that mounts onto a tracker trailer to reduce drag and therefore improve fuel economy by 5-6%.  Starting from his idea getting launched by winning the Rice business plan competition in 2006, he took us through his journey coming out of business school as an entrepreneur, and offered nuggets of advice that he has picked up along the way.  He uttered numerous quotable lines, including, "Entrepreneurship is mobilizing resources that you can't control."  How true: The art of entrepreneurship (in both a startup environment and a corporate environment) lies in inspiring people to help you achieve your goals with the least capital possible.  Need a prototype built?  Find some mechanical engineering students at a local university and see if they want to build one for a class project.  Getting a lot of money early can turn out to be a burden if you lose sight of such valuable frugality.

Other speakers included Greg Oslan, President and COO of Narus (now part of Boeing), and Rick Johnson, CEO of Johnson Ventures.  Greg took us through his experience successfully crafting turnaround situations, while Rick gave us his perspective on what makes a good business.  Our final speakers of the day, Sanjay Subhedar (founder of Storm Ventures and IU alum) and Tim Walsh (VP at Silicon Valley Bank and IU alum), shared with us their thoughts on financing in the Valley.  They lamented that it is becoming increasingly difficult to find good deals out there, not because there is a lack of ideas, but because there is a lack of need for funding; hardly anyone needs to build a manufacturing facility or even a storefront anymore so venture capital is limited to later-stage, high-growth period companies.  What I found particularly intriguing about their talk was their nonchalant acceptance of the beginning of a new tech bubble, something with which I'm concerned.  Sanjay half-joked that he was really looking forward to the bubble, because his companies would stand to be acquired for top dollar by big players like Google and Facebook.

Tomorrow we're on the road, visiting Google (to learn about corporate innovation), SonicWall (to learn about the rapid growth stage), and Plug and Play Tech Center (to learn about the world's largest incubator).