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NCIIA Conference

Join the NCIIA Conference to learn from R.F. Culbertson, the entrepreneur and professor of entrepreneurship at CMU, about teaching entrepreneurship through in-class competitions. Discover how to think like an entrepreneur and develop the skills needed to be compensated for your value rather than your time.

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NCIIA Conference

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  1. Startup Incinerator NCIIA Conference email: rfc@culbertsons.com twitter: @taylorpamm

  2. Startup Incinerator NCIIA Conference email: rfc@culbertsons.com twitter: @taylorpamm

  3. Who am I? • R.F. Culbertson • Entrepreneur / Prof. of Entrepreneurship @ CMU • Email = rfc@culbertsons.com • Twitter = @taylorpamm • Cell = 412.855.8767 (d) • Started “The Apprentice”in 1998 – 1999 • NBC – the rest was history…

  4. Who am I? • R.F. Culbertson = rfc@culbertsons.com • @taylorpamm / 412.855.8767 (d) / ‘The Apprentice’ • What do you do again? • In-Class Competitions for specific learning outcomes! • Goal is NOT to start a business … but rather • Teach you how to THINK like an Entrepreneur…

  5. Who am I? • R.F. Culbertson = rfc@culbertsons.com • @taylorpamm / 412.855.8767 (d) / ‘The Apprentice’ • It’s my view that entrepreneurship requires...

  6. Who am I? • R.F. Culbertson = rfc@culbertsons.com • @taylorpamm / 412.855.8767 (d) / ‘The Apprentice’ • It’s my view that entrepreneurship requires... “A very particular set of skills.”

  7. Who am I? • R.F. Culbertson = rfc@culbertsons.com • @taylorpamm / 412.855.8767 (d) / ‘The Apprentice’ • It’s my view that entrepreneurship requires... “A very particular set of skills.”

  8. Who am I? • R.F. Culbertson = rfc@culbertsons.com • @taylorpamm / 412.855.8767 (d) / ‘The Apprentice’ • A ‘set of skills’ that – overtime: “Will allow you to be compensated for your VALUE rather than your TIME.”

  9. Who am I? • R.F. Culbertson = rfc@culbertsons.com • @taylorpamm / 412.855.8767 (d) / ‘The Apprentice’ • Why take ‘Startup Incinerator’? “Eventually you will want to be compensated for your VALUE rather than your TIME.”

  10. Everyone wants more entrepreneurs

  11. I mean Everyone… do the math

  12. I mean More (20X)…

  13. E-ship’s 4 Pillars But as I would Teach: Market and Margin Related Issues: CriterionHigh PotentialLow Potential Problem Identified Unfocused Customers Reachable Unreachable Payback < 1 year > 3 years Value Added IRR > 40% IRR < 20% Market Size $50 -100MM <$10MM or > $100B Market Growth > 20% / annum < 20% & contracting Gross Margin > 40% & maintain < 20% & fragile

  14. E-ship’s 4 Pillars But as I would Teach: Market and Margin Related Issues: CriterionHigh PotentialLow Potential Problem Identified Unfocused Customers Reachable Unreachable Payback < 1 year > 3 years Value Added IRR > 40% IRR < 20% Market Size $50 -100MM <$10MM or > $100B Market Growth > 20% / annum < 20% & contracting Gross Margin > 40% & maintain < 20% & fragile

  15. E-ship’s 4 Pillars And as I would Teach: Competitive Advantage: CriterionHigh PotentialLow Potential Fix / Vari Costs Lowest Highest Degree of Control Stronger Weaker Barriers to Entry None Strong Proprietary Advantage Lead-Time Advantage Service Chain Contractual Advantages Network Advantages

  16. E-ship’s 4 Pillars And as I would Teach: Competitive Advantage: CriterionHigh PotentialLow Potential Fix / Vari Costs Lowest Highest Degree of Control Stronger Weaker Barriers to Entry None Strong Proprietary Advantage Lead-Time Advantage Service Chain Contractual Advantages Network Advantages

  17. E-ship’s 4 Pillars As I would Teach: Value Creation: CriterionHigh PotentialLow Potential Profit after Tax 10-15% < 5% and fragile Breakeven < 2 years > 3 years Positive Cash Flow < 2 years > 3 years ROI Potential 40-70% < 20% and fragile Value High strategic Low strategic Capitalization Req. Low-Moderate High/difficult to fund Exit Mechanism IPO, acquisition Undefined / illiquid invest.

  18. E-ship’s 4 Pillars As I would Teach: Value Creation: CriterionHigh PotentialLow Potential Profit after Tax 10-15% < 5% and fragile Breakeven < 2 years > 3 years Positive Cash Flow < 2 years > 3 years ROI Potential 40-70% < 20% and fragile Value High strategic Low strategic Capitalization Req. Low-Moderate High/difficult to fund Exit Mechanism IPO, acquisition Undefined / Non-Liquid invest.

  19. E-ship’s 4 Pillars As I would Teach: Management Team Issues: CriterionHigh PotentialLow Potential E-Team All-stars, Solo entrepreneur free agents Industry / Tech Superior records New guys on the block Experience Intellectual Know what they Do NOT know, what Honesty do not know they do not know

  20. E-ship’s 4 Pillars As I would Teach: Management Team Issues: CriterionHigh PotentialLow Potential E-Team All-stars, Solo entrepreneur free agents Industry / Tech Superior records New guys on the block Experience Intellectual Know what they Do NOT know, what Honesty do not know they do not know

  21. But: What about Teaching Entrepreneurship Experientially? It’s like ‘falling in love’ LOVE takes A LOT of work = Perfection! (Nobody WANTS the Runner-Up) Tell Me – I will forget, Show Me – I will remember, Involve Me – I will understand. —Ancient Chinese proverb

  22. We need to become X-perienced ‘Want-Tra-Preneurs’: • Teach the 4 Pillars of Entrepreneurship • Using an X-periential methodology • With Specific Learning Outcomes • Crowning a (1) Winner and (Many) Losers each time!

  23. In Classroom, Outcomes Based Competitions The Goals: • Augment an Entrepreneurship Offering • Learn the 4 Pillars: • Dynamic Decision-Making, • How to Sell, • Multi-Disciplinary Team Formation, • and Granular Cash Flow Analysis • Use In-Classroom Competitions to Improve Business Survival Rates

  24. In Classroom, Outcomes Based Competitions ‘The Apprentice’morphed into ‘Startup Incinerator’ • Students = No Ideas & very Diverse Bkgds. • No Business Plans • No Investor Pitches • Emphasis on Profitability & Sustainability

  25. Startup Incinerator: Is an “Intro” Level Course • 2.5 week projects with SME’s • For REVENUE projects – the Team that turns in the Most $’s  WINS ALL the $$’s

  26. Startup Incinerator: 4 Specific Goals: • Improve Dynamic Decision-Making 1

  27. Startup Incinerator: 4 Specific Goals: • Learn How to Sell 2

  28. Startup Incinerator: 4 Specific Goals: • Encourage Multi-Disciplinary Teams 3

  29. Startup Incinerator: 4 Specific Goals: • Business Modeling via Granular Cash Flow 4

  30. Startup Incinerator: 4 Specific Goals: • Business Modeling via Granular Cash Flow 4

  31. But I also wanted to teach: Entrepreneurial Thinking Add these numbers out loud with me: 0 + 1000

  32. + 40

  33. + 1000

  34. + 30

  35. + 1000

  36. + 20

  37. + 1000

  38. + 10 = ?

  39. + 10 = ?

  40. So - Who’s My Customer? Any ‘Student’@ CMU? • Any major – Normally WITHOUT an ‘Idea’

  41. What’s the Syllabus? (Pt. 1) Create, Compete & Destroy Teams Every 2 Weeks • Solve, real-world SME problems – 2 Weeks • SME’s contribute prizes • SME’s Problems Focus on : • Teams working together • Sales • Decision-Making • & Cash Flow

  42. What’s the Syllabus? (Pt. 2) Create, Compete & Destroy Teams Every 2 Weeks • Solve, real-world SME’s problems – 2 Weeks • Failures are analyzed and ENCOURAGED

  43. What’s the Syllabus? (Pt. 2) Create, Compete & Destroy Teams Every 2 Weeks • Solve, real-world SME’s problems – 2 Weeks • Failures are analyzed and ENCOURAGED • We Compete (to WIN) Every 2 Weeks

  44. What’s the Syllabus? (Pt. 2) Create, Compete & Destroy Teams Every 2 Weeks • Solve, real-world SME’s problems – 2 Weeks • Failures are analyzed and ENCOURAGED • We Compete (to WIN) Every 2 Weeks • 3 Presentations of 2.5, 1.5, and 1 minute

  45. What is the Structure? (Pt. 1) • Teach A Different Aspect of Entrepreneurship / Every 2 weeks. • The Lectures Match the Project’s focus • For example: • Granular Cash Flow: • #1 producing Team – Wins ALL the $$’s • Teaching: Accounting, Finance, YOM (Your Own Money) vs OPM, The Incubator Model (pros and cons)

  46. What is the Structure? (Pt. 2) • How we Build Teams: • Fantasy Football – Auction method for teams • Captains have $100 (fake) and bid for players (no more money = no more players) • Produces uneven numbered teams • Teaching: Hiring and Firing, Leadership, Motivation, Teams captains label the Best and Worst team members

  47. What is the the Competition? (Pt. 1) • Pre-Incinerator: • Teams hand in docs, ppt’s, xls’s for Seating • TA’s ‘seat’ the teams = Bracketology • In some projects – M&A is encouraged • Presentations are: • 1st Round = 2.5 min • Semi-Finals = 1.5 min (smack-talk) • Finals = 1 min (smack-talk & rebuttal)

  48. What is the the Competition? (Pt. 2) • Let the Games Begin: • There is NO Quit!

  49. What is the the Competition? (Pt. 2) • Let the Games Begin: • There is NO Quit!

  50. What is the the Competition? (Pt. 2) • Let the Games Begin: • There is NO Quit! • Dynamic Decision-Making (3 Presentations / Comp.) • After 1st Presentation = ‘smack talk’ & ‘rebuttal’ • Judges = Experts / Social Media / Peers / TA’s / $$’s • Voting Points can vary with level of expertise! • Voting via Mobile Device (in classroom)

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