Technical Consulting and Entrepreneurial Opportunities for Stanford Grad Students

Joe Miler – 2 May 2012 1

Technical Consulting and Entrepreneurial Opportunities for Stanford Grad Students

2 May 2012

Joe Miler (joe.miler@gmail.com)PhD CandidateGoodson Group

Dept. of Mechanical Eng.Stanford University

Joe Miler – 2 May 2012 2

Standard InteractionStanford GSB Stanford Engineer

Umm…{Why are you

shaking my hand so hard?}

Hey SUPER GREAT talk!! Let’s chat/sync up soon!

MBA student Grad student engineer

Joe Miler – 2 May 2012 3

Standard InteractionStanford GSB Stanford Engineer

Umm…{Why are you

shaking my hand so hard?}

Hey SUPER GREAT talk!! Let’s chat/sync up soon!

Dorks

Unrealistic

Smelly

Awkward

Deaf to customerInterchangeable

Arrogant

Rambling jargon

Obsessed with the irrelevant

Greedy Bossy

Paper-pushing

HypeBullshitting

Networking

Tricking people into buying stuff

Manipulative

Contracts

Unnecessary

Money-hungry

Engineers are so… Business people are so…

MBA student Grad student engineer

Sleazy

Joe Miler – 2 May 2012 4Grad student engineer

Joe Miler – 2 May 2012 5

Transferrable Skills• Work independently• Strong work ethic• Defining problems• Solving problems

– Deep expertise– Broad knowledge base

• Healthy skepticism• Good at experimenting

Skills Needed• Project management

– Setting priorities• Big picture strategy• Communication• Willingness to take risk

Do engineering grad students make good entrepreneurs?

Joe Miler – 2 May 2012 6

Outline

Networking

Technical Consulting

Starting a company at Stanford

Learning more…

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hi cool!

sh!t…

• Research– PhD Candidate in the Goodson Group– Research on microfluidic heat exchangers and

hotspot detection and prediction• Technical consulting

– Med device patent litigation– EV battery start-up (Series-A)– Grid-scale storage (Series-A)

• Various entrepreneurial projects, no winners– EV battery secondary use (GSB Nii Award)– Breast cancer detection

• BASES (~3 years)– External partnerships– IP workshops– Social-E Challenge

• Coursework– Entrepreneurship– Social entrepreneurship– Patent prosecution

• Miscellaneous– Filed research-related patent application– TA for 7 quarters

About me

yes

How I got here…

But also…

Joe Miler – 2 May 2012 8

hi cool!

sh!t…

• Research– PhD Candidate in the Goodson Group– Research on microfluidic heat exchangers and

hotspot detection and prediction• Technical consulting

– Med device patent litigation– EV battery start-up (Series-A)– Grid-scale storage (Series-A)

• Various entrepreneurial projects, no winners– EV battery secondary use (GSB Nii Award)– Breast cancer detection

• BASES (~3 years)– External partnerships– IP workshops– Social-E Challenge

• Coursework– Entrepreneurship– Social entrepreneurship– Patent prosecution

• Miscellaneous– Filed research-related patent application– TA for 7 quarters

About me

yeshmm…

I’m not an expert, but I have some experience that could be useful…

Joe Miler – 2 May 2012 9

Technical Consulting…

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• Start-ups• Investors• Lawyers

Who hires technical consultants?

http://www.pajamasandcoffee.com/?p=5161http://beyond.customline.com/2012/01/26/where-can-you-find-article-ideas/http://billsbigmlmblog.blogspot.com/2011/09/big-mlm-tip-decisions.html

Joe Miler – 2 May 2012 11

Who hires technical consultants?

http://www.pajamasandcoffee.com/?p=5161http://beyond.customline.com/2012/01/26/where-can-you-find-article-ideas/http://billsbigmlmblog.blogspot.com/2011/09/big-mlm-tip-decisions.html

• Start-ups:– Scenario 1: Fast solution– Scenario 2: New Ideas– Scenario 3: Big decision

• Investors• Lawyers

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• “No free puppies”. Your rate determines how you are treated. • Cash vs. Equity

How to determine your value: • Default answer: 2x-3x your FT hourly rate• Consider costs you incur

– Overhead– Dispatchability

• Consider your value to the company– Degrees have value– Domain expertise– IP contributions– Scarcity of skills

• Consider your opportunity cost• Other considerations

– Learning experience– Interest in their mission

Consulting rates: How much am I worth?

Annual Salary

Equiv. Hourly

ConsultingHourly

50K $25 $50-75

100K $50 $100-150

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• Expect negotiation• Do your homework

– MIT salary data (link)– Equivalent job offers

• Believe a solution exists, then look for it• Explore interests, not positions

Take a negotiation seminar/class, etc.

Negotiating your consulting rate

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• Both sides need it done right• Read carefully• Key issues to look for:

– Maintain right to invent in future– Duration of agreement– Two-way NDA or not– IP assignment restricted to business area

• Get everything in writing

• Once you sign it, follow it.• People will push you to disclose.• Reputation is everything, but only you care about your reputation.

NDA’s and Consulting Agreements (NDA = Non-disclosure agreement)

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• Understand the problem(s)– Warning: The company may not.

• Discuss solution options– Trade-offs (e.g. accuracy, modularity, etc.) – Timelines

• Get to work• Check-in frequently

Critical skills• Demonstrate technical expertise.• Respect their domain-expertise.• Be creative.• Focus on tangible contributions. • Adopt their goals.

Maximizing your contribution

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Building start-ups at Stanford…

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• Start-up companies always have 2 products:– The widget/service– The business itself

• An entrepreneur is a “business experimentalist”ResearcherEntrepreneur

Research idea/hypothesis Startup ideaResearch proposal Business modelResearch funding Risk capitalMetric: performance data, fig. of merit, etc. Metric: Customers, clicks, etc1st experiment garbage data 1st business model iteration2nd experiment “preliminary data” 2nd business model iterationWell-designed experiment good data Scalable business modelGraduate! Get rich!

“A start-up is a temporary organization formed to search for a repeatable business model.” – Steve Blank (serial entrepreneur, Stanford Prof.)

An engineering approach to start-ups

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• Start-up companies always have 2 products:– The widget/service– The business itself

• An entrepreneur is a “business experimentalist”ResearcherEntrepreneur

Research idea/hypothesis Startup ideaResearch proposal Business modelResearch funding Risk capitalMetric: performance data, fig. of merit, etc. Metric: Customers, clicks, etc1st experiment garbage data 1st business model iteration2nd experiment “preliminary data” 2nd business model iterationWell-designed experiment good data Scalable business modelGraduate! Get rich!

“A start-up is a temporary organization formed to search for a repeatable business model experimental results.” – Steve Blank (serial entrepreneur, Stanford Prof.)

An engineering approach to start-ups

research teamOr…

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• Technical breakthroughs• Needs-finding

– Biofellows program– ME Design program– Informational Interviews– Networking

Where do start-ups come from?

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• First, what is a patent?– Right to exclude, not a right to build– A license to sue– Self-defense (M.A.D.)– A business asset – Resume/career builder

• What does it cost?– Time:

• Garbage: 1 hour • Good: More (depends on lawyers)

– Money: • Provisional: $2-3k (lawyer), $100 (yourself)• Full: $10k-20k (lawyer)

Should we apply for a patent?

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Good news• Stanford OTL helps

file the patent• You get royalties

Bad news• Stanford owns your IP • You have to compete to

license your own technology

IP at Stanford

Advice: • Keep a dated journal for anything remotely

patentable• Don’t underestimate the patentability of an idea… but only if that patent would have value to you

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• Business plan competitions– BASES– DoE– National

• Incubators– StartX – Ycombinator– Many more

• Angels• VCs• Strategic Investors

Understand the difference between business plans and business models

Raising $$$

Osterwalder Canvas

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Networking…

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• “Palm-up” networking• Imagine a role-reversal• Good networking opportunities

– Talks and lectures– Networking events (e.g. CHIPS, PRL)– Interdisciplinary classes

• You already have a network (i.e. peers at Stanford)

• Preparation:– Business cards– Skim headlines ahead of time– LinkedIn

Networking Basics

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• Likes to think:– She’s helping people.– She’s important.

• But also…– She’s missing the next big

thing.– She’s irrelevant.

• What she has to offer:– Connections– Deal-flow – Logistics enabler (eg cash)

• What you can bring to the table– Fresh ideas– Technical expertise – Access to your technical

network• Strategy

– Do quick background research– Get face time– You have 30 seconds to get

their interest– Be ready for 2 questions:

• How can I help you (right now)?• Why?

Networking: the big shot VC partnerRich entrepreneur( )

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• Likes to think:– He’s a leader.– Business runs the world.– Things work out, check the

details later.• But also…

– Oh crap, I need (start-up) ideas– Oh crap, I don’t have technical

skills• What he has to offer:

– Connections– Business knowledge– Big picture perspectives

• What you can bring to the table– Technology ideas– Technical expertise – Access to your technical

network• Strategy

– Goal is to start a relationship– Start high-level– Be ready for 2 questions:

• What are you working on? • What start-up ideas do you

have?

Networking: the GSB’er

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Learn more…

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• NSUR 278A How to start a med device company• ME 245 IP strategy for start-ups • E-245 Customer development, start a company• ETL Success stories in Entrepreneurship• EDUC 224 Success stories in social entrepreneurship• Startup (CS-183)• Technology Venture Formation• High Performance Leadership • Interpersonal and Small Group Communication• Negotiation• Plenty of others…

Stanford Courses

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• Ask around, it’s a good conversation starter• Blogs

– Steve Blank– Paul Graham– Techcrunch– Etc.

• Other talks: – BASES email list– Energy Club email list

• Stanford E-corner videos • Books• See Appendix

Other Resources

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• Equity and vesting• Incorporation• Board strategy• Strategy for finance rounds• Evaluating a startup for employment

Topics that are hard to learn at Stanford

Addition: Much of this is covered in CS-183, taught by Peter Thiel. Informal coursenotes are available at :

http://blakemasters.tumblr.com/peter-thiels-cs183-startup(thanks to Sanjay Dastoor for sharing this info)

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Transferrable Skills• Work independently• Strong work ethic• Defining problems• Solving problems

– Deep expertise– Broad knowledge base

• Healthy skepticism• Good at experimenting

Skills Needed• Project management

– Setting priorities• Big picture strategy• Communication• Willingness to take risk

Do engineering grad students make good entrepreneurs?

Joe Miler – 2 May 2012 32

Saniya LeBlancAshish NagarSaahil MehraGreg Reiker

Michael BarakoGhyrn LovenessPolina Segalova

Amit DesaiTom Stepien

Jeff Schoxand company…

Thanks

Joe Miler – 2 May 2012 33

Please:• Email me with any additional

feedback: joe.miler@gmail.com

• Leave me your email address if you want a copy of the slides

Questions / Comments / Feedback

All Done

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Appendix

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• Ask lots of questions to understand their pain points. • Respect their domain-expertise (don’t be arrogant)• Be aware of confidentiality concerns.• Don’t be negative about anything until you know for

sure they don’t do it, never have, and don’t plan to. (ie don’t be negative)

• Send a thank-you note within 24 hrs

Visiting companies(eg research visits, interviews, etc.)

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• How should we structure this consulting work?• I’d like to discuss compensation…• I’m not comfortable with …• I want to provide the most value for [Insert

company name] while also…• Perhaps what you’re looking for is an

undergraduate intern…

Helpful phrases for discussing technical consulting opportunities

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• Meet in person, not phone, if possible• Be prompt and professional• Always bring pen and paper• Use a dedicated “IP-legit” notebook• Dress appropriately (probably business casual)• Distribute business cards• Take initiative on unsettled issues

Keep in mind: • Stanford limits you to 8 hrs/week• Inform your advisor

Tips for 1st day of consulting work

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• On-campus talks and workshops• Incubators• Call a lawyer (first 5 minutes free!)• Network• Marry one• Or…pay

Where to find cheap legal advice

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• Some of my work is covered by an NDA, but…• What is public domain is this: …• What I can tell you is this…• I’m not sure I’m comfortable talking about…• You know I’m not at liberty to talk about that

right now, but I would like to discuss…

Helpful phrases for avoiding disclosure of protected information

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• Know when to call, when to email. When in doubt, call.

• Get comfortable with indirect wording, e.g.: – “Talk off-line”– “Sync up”

• Learn good email etiquette for different situations: – Be direct, but polite.– Keep conversational/high-level, add details elsewhere

(e.g. as attachments or below)– Include your cell number in signature when appropriate– Write a clear, interesting subject line

Minutia: Business Skills

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• Be prompt. • Know who you’re talking to.• Follow-through• Extra-credit: Follow-up with introducer.

Managing on-line introductions

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• Be prompt. • Know who you’re talking to.• Follow-through• Extra-credit: Follow-up with introducer.

Managing on-line introductions

Note: names changed for privacy

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Online Resources

E-245 Resources for Start-upsGSB Entrepreneurial Studies Reading List

Stanford E-Corner

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• Do I want to found/work at a start-up?• How to assess market opportunities?• How do start-ups fail?• Why are people so important at a start-up?• How to raise money?• How to think about IP at a start-up?

Important topics to learn about from on-campus talks and classes

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Sample NDA and wage negotiation…

Joe Miler – 2 May 2012

Paperwork

My rate

Possible phone call

Details below

46

Joe Miler – 2 May 2012 47

Joe Miler – 2 May 2012 48

Joe Miler – 2 May 2012

Paperwork

My rate

Possible phone call

Details below

49