chuck eesley stanford university€¦ · page 12 log(employees) 12 1993-200 2 =0 1993-200 2 =1...

Chuck Eesley Stanford University

Copyright © 2009 by the Board of Trustees of the Leland Stanford Junior University and Stanford Technology Ventures Program (STVP). This document may be

reproduced for educational purposes only.

 Recap IMVU/Steve Blank  Legal issues – Dan Dorosin  E-ship in other legal environments  Video

  IMVU  Steve Blank  Customer Development   Lilien, G. L., Morrison, P. D., Searls, K., Sonnack, M., & von Hippel,

E. (2002). Performance Assessment of the Lead User Idea-Generation Process for New Product Development. Management Science, 48(8), 1042-1059 (PDF)

  Abstract: Traditional idea generation techniques based on customer input usually collect information on new product needs from a random or typical set of customers. The 'lead user process' takes a different approach. It collects information about both needs and solutions from users at the leading edges of the target market, as well as from users in other markets that face similar problems in a more extreme form. This paper reports on a natural experiment conducted within the 3M Company on the effect of the lead user (LU) idea-generation process relative to more traditional methods. 3M is known for its innovation capabilities--and we find that the LU process appears to improve upon those capabilities. Annual sales of LU product ideas generated by the average LU project at 3M are conservatively projected to be $146 million after five years--more than eight times higher than forecast sales for the average contemporaneously conducted 'traditional' project. Each funded LU project is projected to create a new major product line for a 3M division. As a direct result, divisions funding LU project ideas are projecting their highest rate of major product line generation in the past 50 years.

  “Funded” ideas – what is the population of all generated ideas from each method?

 LU teams rated themselves significantly higher in marketing/sales skills . . . ?

 Partner at Fenwick & West LLP  Focuses on start-up companies and

venture capital firms  15 years of experience in counseling

emerging growth companies  Represented clients acquired by Comcast,

QAULCOMM, Google, Qlogic and KLA-Tencor

 OAP Project – May 4th 9am (session 12) 750-900 word description of opportunity and 5 minute in-class presentation.

 Team website

 Rehearse OEP presentations with Mentors (before Session 16 – Tues. 18th)

Founding Performance

Parental entrepreneurship Managerial Experience, prior founding

Wealth Lower wealth

Low opportunity costs High opportunity costs

Male Either gender

VC-backed firm work experience Entrep. prominent organization

Broker network Cohesive network

Need for achievement Self-efficacy

Education Education

Low uncertainty avoidance, high individualism

Product, marketing orientation

Generalists Growth market

Non-U.S. citizen Either

In 30s-40s Any age

Planning, VC 9

Charles Eesley - The Right Stuff

11

In the US you don’t see the government, but in China the role of the government is seen from the very beginning.

They could be a major funding source, help in penetrating the markets, and in protecting the competitive advantage. There

is some over-emphasis of the role of the government however. - GY– VC investor

There is a big government legacy. In the early days the government connections and system were the currency. Power was the currency, but that is changing to a system

whose currency is monetary. There was an opportunity to monetize that power. - GC - investor

 Log(employees)

12

1993-2002 =0

1993-2002 =1

2003-07 =0

2003-07 =1

Gov dad 3.62 4.34** 2.73 3.22**

Serial 3.78 3.72 2.30 3.19***

Science Park (2000-02)

3.39 4.61** >2002

2.85

2.42

Innovation 5.34 6.99*** 2.64 5.20***

13

N=230; (R2 0.627) ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively. Everjob_govt, Comm. Party, Govt. customer, Privatized, Entrep. parents, Entrep. index, rural, EECS, Overseas, SEZ,

software, electronics, wealthy family, Master’s, PhD, number of cofounders, industry and year fixed effects were included as controls but coefficients are not shown to save space.

VARIABLES Log(emp) Log(emp) Log(emp) Log(emp) Log(rev) Coastal 1993-2000 2.139*

(1.180) Privatize 1993-2000 2.799**

(1.098) Gov. dad 2002-07 -0.815**

(0.400) Gov. work history 2002-07 -0.524

(0.476) Park x 2000-02 1.320*

(0.715) Park x 2004-07 -1.933***

(0.647) E-index x 2004-07 0.215**

(0.091) Serial x 2003-07 0.629**

(0.305) Innovation x 03-07 1.838**

(0.871) Log(firm age) 0.109 0.392** 0.426** 0.501*** 0.085

(0.433) (0.183) (0.179) (0.171) (0.431)

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10

Pro

po

rtio

n

Founding Year

Proportion Becoming Entrepreneurs by Year (Unobserved Human

Capital)

Low human capital

High human capital



0.5 0.7 0.9 1.1 1.3 1.5 1.7

1996

1997

1998

1999

2000

2002

2003

2004

Hazard Rate Coefficients for Year-by-Year Interactions

Unobs. Talent (Income Residual) Years Education

0

0.2

0.4

0.6

0.8

1

Coefficients on Year Fixed Effects (controls for region, education,

department)

Year fixed effects

**

**

**

0.1 0.2

0.2

0.1

-0.45

-0.35

-0.25

-0.15

-0.05

0.05

0.15

0.25

Coefficients on Educ. Interaction with Year Fixed Effects

Master's Degree

http://mitworld.mit.edu/video/262

chuck eesley stanford university€¦ · page 12 log(employees) 12 1993-200 2 =0 1993-200 2 =1...

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