2010 November | Sales Aerobics for Engineers ® Blog

Is Entrepreneurship for you? An interview with Amy Cell, Ann Arbor SPARK Business Incubator

November 28, 2010 By Babette Ten Haken Leave a Comment

Amy Cell joined Ann Arbor SPARK in 2006 and is currently Vice President, Talent Enhancement & Entrepreneurial Education, where she assists organizations with their talent needs, provides oversight for a variety of entrepreneurial education programs and manages the SPARK East incubator. Helping support economic and workforce growth in the region is her dream job, since she was born and raised in Michigan and earned a BA and MBA from U-Michigan. In addition to working as a CPA for Plante & Moran, and launching an Office of Student Life for the Ross School of Business at the University of Michigan, she has spent 10 years in a variety of human resources roles at Ford Motor Company, the Stanford Research Institute, Applied Biosystems and co-founded the consulting partnership HR Drivers. Current and past board memberships include the Center for Entrepreneurship at the U-M College of Engineering, Women’s Council for Washtenaw Community College, Huron Musical Association, Women’s Exchange of Washtenaw, Ross School of Business SE Michigan Alumni Club, Kingcare, King PTO and the Junior League of Ann Arbor.

BTH: Amy, what does your position involve?
AC: I connect talent and opportunity for entrepreneurs in the Greater Ann Arbor area and throughout Michigan. Ann Arbor SPARK works with innovative businesses and start-ups to launch and grow. I provide the talent components as each venture identifies gaps or needs.

BTH: Just what exactly is “talent?”
AC: Talent is a very unique component to any entrepreneurial endeavor. We rarely recognize how important talent is at each phase of business development. For start-ups, I align entrepreneurs with consultants with expertise in various fields such as accounting, marketing, financial / business planning, lean / Six Sigma, sales, prototyping, etc. so that entrepreneurs can move forward from idea to implementation.
SPARK has a suite of everything an entrepreneur needs. We have physical space so that the inventors / entrepreneurs can come to a place to work that is separate from their existing workplace or home environment, for example. We provide educational space as well and have weekly seminars on how to start your own business, as well as other topics such as marketing roundtables, biotech roundtables, etc.

SPARK also is a business accelerator and is a funding resource for entrepreneurs. We have competitions for innovation and conduct a Business Boot Camp twice a year for entrepreneurs who are selected to participate. Really, when you think about it, we offer a complete toolkit for the entrepreneur and a venue in which to network and connect with the business community.

BTH: Many communities have some form of business incubator / accelerator. How does Ann Arbor SPARK compare / contrast, not only locally but with models used in other states?
AC: Every community does economic development in a different way. We focus on the three major areas (business attraction, business retention and entrepreneurship) rather than in one or two areas. One of my responsibilities involves working with startups, local companies, and companies from out of state who want to relocate or open a division elsewhere in the US. I promote the advantages of what Michigan brings to the table. We approach business development with a broad brush stroke.

BTH: What are the greatest obstacles to entrepreneurship facing engineers, IT professionals and other technical individuals?
AC: I work with about 500 entrepreneurial companies each year who are looking for talent to assist them in moving to the next level. Oftentimes, I am working with the technical founder who is looking for talented consultants and mentors with business skills. You can have a brilliant technical team that has a patent or patents. I put them together with an equally talented business team.

One person can’t grow a company themselves. If someone is the technical founder, they usually have difficulties communicating and selling their idea, product or service to investors. The Executive Team should be able to sell. If the Founder / Inventor / CEO can’t sell, that’s an issue. Often the inventor doesn’t have solid business acumen. If there is no business development side then they will have trouble developing sales. That’s why what happens at SPARK is so important in moving the technology out from the drawing board into the daylight.
Sometimes I do see serial entrepreneurs who are inventors. They have the complete toolkit. But that’s rare.

BTH: What are the major reasons start-up companies thrive or get stuck and fail?
AC: Investors won’t take a chance on an unproven idea. Investors will invest in a “B” idea with an “A” team vs. and “A” idea with a “B” team. If you want to get funding you need to do what will attract investors. If the inventor/CEO is unwilling to relinquish the reins or work with a team, things can derail.

Successful start-ups have an understanding of the market and their customers. They clearly understand pain points and develop a solution. They develop a painkiller instead of a vitamin. Some people think they are going to get a lot of money for an idea or have a great idea but have no customers. They haven’t done their homework. However, they feel people will intuitively understand their idea, embrace it, fund it and move it into the marketplace for them. That’s not how entrepreneurship works. Lots of inventors don’t get out to the customer. If you don’t know who your customer is, investors will perceive risk in your idea and potential failure.

BTH: If you had one piece of advice for any engineering, IT or other technical professional thinking of leaving their current place of employment and starting their own business, what would it be?
AC: Creating a compelling a business case for a product or service – growing your own business – requires persuasion and communication skills. I’ve seen many PhD’s who call themselves “former” introverts who have learned how to get out in a crowd and sell things. This can be learned if you really want to.

SPARK Boot Camp gives entrepreneurs the environment in which to practice how they communicate their business to others. Our mentors and consultants provide feedback on how to give a presentation as well as a pitch.
There are organizations such as Toastmasters International and various business organizations these entrepreneurs can join which will give them additional experience getting up in front of others and talking about who they are and what their company is all about. Consider this process improvement to changing one’s aversion to business communication. Practice. That’s really what’s at hand here.

BTH: Do technical professionals make good business people?
AC: Technical people really are business people. They understand the technical aspect of their product or service. Being an entrepreneur, or head of your own company, requires leadership skills. Leadership, requires a different set of skills and attributes from being an engineer or a sales person in someone else’s company.
Some of the best leaders I know are technical people. They have greater credibility with investors and the marketplace because they understand the technical side of their business. They understand their product. They know how to work in teams and how to select the teams. And their teams respect them.

BTH: What should entrepreneurs be doing to gain experience with the business community?
AC: There are a lot of resources out there within which to develop a network of support for your ideas. In Ann Arbor, we have the New Enterprise Forum which meets monthly. Entrepreneurs give business pitches to potential investors. There is an entrepreneurial panel which presents on a specific topic. There is networking and a warm, inviting community.

BTH: Thank you Amy for your insights. In wrapping up, I mentor at Ann Arbor SPARK judging business competitions and meeting with entrepreneurs on a volunteer basis each month. It’s a privilege working with Amy and the talented folks within this organization.

I find that many times, entrepreneurs have great ideas but don’t understand what’s involved in business development. They don’t understand what it takes to get customers. The toolkit Ann Arbor SPARK provides is invaluable in connecting these dots. As an entrepreneur, you need to talk to potential customers early in the idea or product development process to make sure you have a viable concept. And not just your family or friends or one or two customers. Sometimes entrepreneurs get shot down by this type of interaction and become discouraged . You need to reach out into the entrepreneurial community for support. You need to go out into your marketplace and get feedback. It’s those experiences which grow your passion and leadership for your innovation.

What’s your Business Plan? Do you even have one?

November 15, 2010 By Babette Ten Haken Leave a Comment

Have any of your clients ever asked you whether you had a business plan? And whether you could provide them with that business plan?

What did you say? What did you do?

Having a business plan, and re-visiting it every year, is one of the most important aspects of running your business efficiently and effectively. And I don’t mean the annual strategic planning exercise where everyone sets goals and expectations with wiggle room that either a) are met or b) have to be revised.

I’m talking about a Business Plan.

A business plan lets you know where the money is coming from and where it goes each year, based on prior years’ activity and performance. A business plan helps you quantify what you qualify to your customers day in and day out. It’s the basis for why your doors remain open and why customers should want to work with your company. It’s more than a business plan. It’s a business platform.

You use it for obtaining financing and you use it for being acquired, if that’s your plan. Your Business Plan is your credibility.

For all you engineers, IT professionals and technology folks who bemoan what they didn’t teach you in engineering school, or wonder whether to get an MBA or an MEng or PhD, here’s a clue: understand what it takes to produce a business plan.

Whether you are an inventor, a start-up, a newly funded company with venture capital and state funding or a mature business who wonders why you can’t move to the next level, a lot of your future has to do with how you view the data from the past. And your ability to combine that knowledge into a solid Business Plan.

You can Google the term “business plan” and find templates all over the internet. So this information is available to you. What usually isn’t available is the expertise on how to craft the business plan effectively and convincingly so that you, your employees and perhaps potential investors understand who you are and where your company is going. In essence, your business plan is a road map for everyone to confidently follow. So get yourself a coach or a consultant to assist you in producing this important document.

The elements of a Business Plan include:

Business Overview (Executive Summary)
Marketing opportunities and drivers
Competitive analysis
Business Model
Management Team
Financials (or the pace of getting things done, including your exit strategy)

If your organization already has a business plan, ask to see it. Your career development hinges on being able to understand a business plan and potentially write one. You need to understand where you fit into the organization and what makes your organization “tick” within the competitive marketplace. If you understand your company’s business plan, you can determine where your skill sets best fit in as you take the steps to develop your career.

What’s your Career Plan? And how does it fit into your organization’s Business Plan?

Think about it.

Filed Under: Angels, Venture Capital, Private Equity, Entrepreneurs and StartUps Tagged With: business plan, entrepreneurs, startups

When the best solution is no solution at all.

November 2, 2010 By Babette Ten Haken Leave a Comment

When’s the last time you sat with a prospective or current client who was looking for a solution… and you recommended they pursue no solution at all?

Oh, no! Thumbs down on Rule #1 of sales: if they want to buy, sell???? How can this be?

I mean, your boss is on your case for producing more revenue for the company. You have sales quotas to meet, if you currently serve a sales function. And if you are in an engineering role, you certainly want to keep getting problems to solve. So what’s not to sell??? There are a lot of hungry mouths to feed. Get them to sign to contract, already! Get that project going!!

Except that it may be the wrong project at the wrong time. Or at least not the best solution because the problem hasn’t been fully defined. Or it’s a short-sighted solution to a problem with lots of peripheral issues that impact not only the project outcome but the strategic implications of the project, over the long haul.

In other words, someone didn’t do their homework very well. And that just might mean your client doesn’t know what they want or need. Are you willing to enlighten them, even if it means tabling the project for a while, or perhaps eliminating it as an option?

Let’s look at this situation another way.

Have you ever been in a situation where you feel you have hit a slam dunk with the prospective or current client? It’s just a matter of time before they sign the contract. They’ve already assured you that your solution is the front runner. They’ve got their funding allocated. They indicate to you that they have a key meeting coming up later that month and after that meeting, they will move forward with your solution. And you never hear back from them after the meeting.

They may have been doing their homework. In fact, the homework they were doing is exactly the type of homework you needed to be doing all along when you are going after the close, in order to win the project. When your client or prospect goes offline into the black hole of that “final meeting” phase in the decision making process, you are completely out of control of the situation. And if you haven’t taken the steps to define the variables and personalities truly impacting their decision making process, you will be left in the dark again and again. Because your prospects may be looking forward to going into that meeting and having their decision taken out of their hands. Because they never really intended to make a decision in the first place.

Because it could be that you really never had a slam dunk at all. Not even close. Perhaps they used you to provide them with a lot of information that they needed to make their decision….to select another vendor. In your over eagerness to participate in the sales process (and engineers, pay close attention to this) you engaged in peer level discussions rather than defined what criteria were critical for their corporate hierarchy in the vendor selection process.

Did you really think that these prospective or current clients were going to go into their “meeting” and advocate on your behalf and “sell” your project to their upper level management? Do these prospective or current clients work for you? I don’t think so.

So why create a situation for yourself where the prospective or current clients have all the cards and you still don’t understand the rules of engagement for their vendor selection process? And this vendor selection process may actually be dysfunctional at best. Which is why they end of making no decision at all or prolonging making a decision.

If you do your homework during the sales and project definition process, you can identify the issues and personalities that may ultimately derail your company as a potential vendor. You may also identify issues and personalities which make your working with this company less than a win-win situation (which means profitability is eaten up with a lot of chasing folks around to make a decision).

So sometimes, the best decision is to let your prospects not make a decision at all. You may have lost the opportunity for the project but may be saved an unprofitable long-winded drama in the long run.

And believe it or not, you may become more savvy regarding business development.

Think about it.

Filed Under: Entrepreneurs and StartUps, Sales, Pitching & Business Development Tagged With: business development, decision-making, engineering, sales