About the Author Dennis Posadas is the author of Jump Start: A Technoprenuership Fable and Rice & Chips: Technopreneurship and Innovation in Asia. His published credits include Bloomberg BussinessWeek.com, Forbes Asia, Christian Science Monitor, South China Morning Post, Darthmouth, Business Journal, Singapore Straits Times, Singapore Business Times, Japan Today, UCLA AsiaMedia, UPI, and other newspaper. Dennis is an engineer by training and is a consultant to the clean sector. He is currently an international fellow of the Washington, DC based Climate Institute. Dennis Posadas writes a technology column for the Philippines newspaper, BusinessWorld. His articles and opinions on Asian Technology innovation have been published in BusinnessWeek.com, Forbes Asia, UCLA AsiaMedia, United Press International (UPI), and Singapore Business Times. His previous book, Rice and Chips: Technoprenuership and Innovation in Asia, was published by Pearson Education Asia (Pearson Prentice Hall) in 2007. Posadas worked as a chip equipment development engineer; technology and business analyst and venture capital scout for Intel (based in Manila), and previously with Analog devices. He received his BS Electrical Engineering degree from the University of the Philippines in 1991, and was an Intel sponsored fellow to the Advanced Study Program of the Massachusettes Institue of Technology (MIT) in 1999. Posadas lives in Manila, Philippines with his wife Joy and three young daughters.
The main character of the story is Rajin. He has a wife named Silvia and a friend named Bob. Rajin is an engineer at the Silicon Valley. He wants to return back home to pursue his dream to build a technology company. But his wife didn’t want him to go back home because of her career but she knew Rajin was determined instead, she gave Rajin a deal that if after a few months nothing happens they will go back to resume their career. Rajin made his first client meetings but nothing happen. One day while at the bar he met an older man named Bob. Bob became his mentor. He helped Rajin to find angel investors and even venture capitalists. Venture capitalists typically want to invest equity in startups that are
already running. Angel Investors are individual investors who may be more willing to help at the very early stages of a venture’s life. Rajin prepared his presentation. He started by talking about the problem and the size of the market, including the market demographics, and describes the product he was building. He discussed the revenue projections, as well as the amount of capital investment he was looking for. After the meeting, Bob asked Rajin to have his Intellectual Property Strategy. Many tech startups rely on intellectual property. Intellectual property is the heart and soul of any technology startup. A different trend in the software sector is open source, where software developers offer the code for free and instead make money from supporting the software. Rajin and Bob went to the manufacturing floor of the electronics company where Rajin planned to assemble and tested his product. They use statistical charts to measure and track the quality of the product. Rajin also used statistics to determine if the design activities are getting somewhere whether they are contributing to improvements in the product. Rajin and Bob discuss what portion of their technology they would outsource, and which part they would develop inhouse. Rajin and Bob arrived at the local engineering university to hire his engineering manager. After two weeks of interviewing various candidates, he came across a young experienced engineering manager from one of the local technology firms. He introduced him to the rest of the developers in the company. The Accountant walked into Rajin’s office and discussed the cash flow situation. They are currently burning cash at around $10,000 a month. Bob and Rajin scheduled more clients presentations. Rajin arrived home to talk to his wife about the stock price. He reassured his wife that as soon he gets investors he’ll fix it immediately. Bob helped Rajin to attract capital, hiring and retaining skilled people and making sale. Bob and Rajin met at the office of the Acme Telecom to talk to the Purchasing Manager to be their first reference client of their company. Reference Client means a client that can use to convince other companies to buy products. Normally, purchasing managers from big companies don’t like doing what they have to. They prefer to deal with suppliers who have sold the same product elsewhere, so they’ll know if the product is any good. Rajin called his developers and the subcontractors to tell them to expect an order from him in a day also. He prepared them to be ready for the product. The engineering manager told Rajin that there are some problems, first is their Software Developers is quitting after receiving a good offer from other big software company. And the second none is they need more accurate analyzer to determine some of the timing issues having with the chips and the bus. Rajin understood the problem. Rajin could easily get hold of those analyzers in the U.S., but they could not afford it because it cost thousands of dollars and it is not easily available locally. Rajin talk to the software developer to stay until they had finish and deliver the product. he also told the software developer that before he leave he make sure he brief his replacement about the code he were working on, and make sure everything is well documented properly. In
other words, he makes it easy for the guys who’ll be taking over his work. The Software Developer understands what Rajin say; he thanked Rajin for giving him opportunity to work in his company. Rajin drove for about a mile towards the University campus. He picked an office location close to the University, so he could easily maintain good relations with the faculty. He asks for help from the University. He went to the Dean’s office to talk to the Dean to have a permission to use the expensive analyzer at the lab that his staff needs to use. Before the Dean agreed he first makes a quick phone call. “Many people don’t realize that technology entrepreneurs are born out of an ecosystem that nurtures it. As a University, we realize that and our role in it. We’d like to see more companies like what you have sprout up. After all, it eventually helps the University as well,” said the Dean. The Intellectual Property Lawyer visited them to discuss to them the Intellectual Property strategy. The Intellectual Property (IP) Lawyer looked at the drawings, the source codes, various board designs, and other proprietary items on the table. The IP lawyer files a Patent. Patents are really monopolies on ideas that governments grant to individuals, companies or institutions, in exchange for a public disclosure of an idea. “In that way you protect yourself from the claim that the technology has already been disclosed as prior art,” said the IP Lawyer. After finishing the product the Engineering Manager went to the Acme Telecom testing Facilities to meet the customer. He would be making the final decision whether to accept the product or not. “We need to tests its reliability. We’ve been putting it through the paces, to see if there are any bugs in the system. We are also testing it Mean Time Between failure (MTBF), Availability, Maintainability and User Friendliness” said the customer. After testing, the customer called the Engineering Manager to tell the problem. The Engineering Manager decided to get there down to see the problem. The customer told about the problem that it only happens around 1% of the time and it does not meet the specifications. The Developers went through possible cause that they could think of. But still they could not think of any reason why the system was having a problem. Until the youngest Software Developers has found out the problem. They just hired him fresh from school barely a week ago. The Engineering Manager asks the customer to change the setting of their system. The customer agrees. After resetting the settings of the system it immediately went up on the instrument panel. System efficiency is now up by 15%. The customer was very happy and wanted to have more work with them. Rajin received a phone call; it was the Venture Capitalist who is interested in investing. Venture Capitalist takes existing technology ventures, and grows them to the next higher level, even up to an initial Public Offering (IPO) or an acquisition. Rajin throw a dinner celebration at his home, for his staff who worked on the product and to tell his staffs the good news. He first says thanks to his staff for the hard work and sacrifices they have given to the project. And to reward them for their loyalty and hard work, Rajin decided to give them some equity in the company. The staffs are very happy with the good news. Rajin and Silvia decided to stay.
Bob and Rajin discussed about the Venture Capitalist. “The offer from the Venture Capitalist is 1% per share. The term sheet sys they want 51% of the company in exchange for the first tranche of half a million dollar”, Rajin said Bob told Rajin that he is sick but he can still work and help him grow the company. A few years later, Unfortunately Bob’s conditioned began to deteriorate. The Venture Capitalist called Rajin for the good news. The Initial Public Offering (IPO) of the company is going to push through. Rajin dressed up smartly in his grey suit for the big day. The halls of Stock Exchange reverberated with the loud sound of the bell as their issue announced. Rajin’s company had already become one of the biggest technology companies in the country. Sadly, Bob had already passed away. In the end, Rajin realizes the real meaning of being successful technology entrepreneur.
Lesson Learned In starting a business at the beginning there are many trials, failures and disappointments we have to face. We should be ready in facing those problems. When deciding to start a business you need to be sure of the reason why you are doing it. Listen to others who have experience in building a business. Who can guide you with your decision and may help you sometimes. Have a business plan that you can revisit every so often. Expects problems to crop up regularly at the start. Look for intelligent investors who are familiar with the industry you are targeting. Avoid those hidden motives for investing in your company. When picking a supplier, pick the best supplier who best fits your needs. Have strategy for which parts of your technology you can outsource, and which ones you will need to design and build. Do not be afraid to think of new ideas to improve more the business. When talking to potential clients do not be discouraged. Sometimes, the information you are able to gather from these discussions can help your company develop a better product, one that you never envisioned from the start. Allow a little leeway in managing creative talent. Do not micromanage them instead let them surprise you with what they can do.
Minimize your fixed costs. Instead of buying expensive items or services outright, consider renting or borrowing those at first. Take care of your people if you want to get excellent results from them. Treat everybody like a family and friend. Understand that they are part of the team. If everybody knows the roles they are expected to play, the business is on the way to becoming very successful. When having a problem listen to the idea of other people because sometimes the best ideas come from others. We should be careful in making decisions. When you become successful we should not forget the people who helped us.