September 27, 2011
Five Essential Courses for Technology Entrepreneurs
Students who are interested in technology entrepreneurship are likely taking plenty of engineering, physical sciences, or computer science courses. But there are a few non-technical courses that I would strongly recommend to anybody aspiring to be an entrepreneur. Even as a technical founder, these five topics will be some of the most useful lessons in academia:
I strongly recommend that you take at least an introductory accounting course. Usually that means you have to take an extra non-credit course in your curriculum, but a basic understanding of corporate accounting will be well worth the extra time. Any entrepreneur needs to understand balance sheets, income statements, cash flow, working capital (and how to manage it), forecasting, and other aspects of the Generally Accepted Accounting Principles (GAAP). As an investor, I shy away from entrepreneurs who can’t tell me what their capital requirements, burn rate, and drop dead date are. Ultimately, you need to understand the fundamental cash principles of your business or you won’t have a business.
Equally, or even more, important is the fact that any early start-up is not really about building a product or a business; it’s about finding a scalable business model. That implies financial modelling of the core economics that turn one dollar into multiple dollars. You can’t do this if you don’t understand the basics of tax, tax credits, payroll, benefits, and all those other items that have a meaningful impact on your venture’s core economics. Don’t build one of those “perfect businesses” that only work without paying tax, overhead and salary. Do yourself a favour and take an accounting class instead.
2. Intellectual Property Law
Intellectual Property (IP) law deals with patents, copyright, trademarks, and trade secrets. For a lot of tech entrepreneurs, patents will be the foundation of their business (more on University IP in my November 4th blog post). It is going to be a bit tricky to get into a course on IP at the undergraduate level, so you may have to go to a professor at your Law School and wiggle your way into a class like I did.
Why go to the trouble? Because nobody else in your start-up will! You will be able to hire people who can write code or design circuit boards – IP management, not so much. Even if you can afford an in-house patent leader, they won’t understand the content the same way you do. IP is a very complex topic with plenty of room to screw up. As a hard-tech CTO you need to own this domain, so get as much as you can out of your university.
3. Excel (or equivalent spreadsheet software)
This is probably a class you will have to hunt down in a community college or other adult education program. It will also probably add more value to your efficiency and effectiveness than most university courses. Most people know a bit about excel, but you will want to understand the hidden shortcuts, modeling options, and mathematical formulas available. In particular, try to understand conditional formulas, indexing and look up functions, and pivot tables.
Why does a course on an MSOffice component make the top five? When I think about the activities I have done in my start-ups, I think about modeling business concepts, modelling and forecasting budgets, modelling and forecasting resources, making project plans, capital table management, incentive plans, compensation, and the list goes on. A lot of contract elements boil down to who gets what money at what time and in what sequence. And all this boils down to spreadsheets. Using them efficiently will gain you precious time, but using them effectively is even more powerful – especially for data-centric ventures. Very often you have to define something on day one that has to approximate day two hundred. Your incentive plan and financial forecasts, for example, have to be laid out fairly early, and still have to work two years into the start-up. The better you understand modelling tools like Excel, the easier this will be.
If your university offers a course on technical writing, take it. If you can’t find something on technical writing, just take a regular course on creative writing.
Writing is important because communication is the essence of an early stage venture when your idea is all that you have. This includes writing business plans, fund raising, contracts and agreements, correspondence, or even blog posts. Often times the impact of bad writing on your business can be quite profound. I have rejected financing intros because I couldn’t (easily) read the initial pitch email or identify the salient points of the business plan quickly enough. I probably shouldn’t have, but I did and do. And I am not alone.
5. Communication Skills
It is not just your written communication that matters. Pick a course from a range available on verbal or interpersonal communication skills. These will include critical communication skills like listening, relating to different communication styles, and public speaking. You can also join Toastmasters or similar groups that help you improve your presentation skills.
You are going to need these skills while you fund raise, recruit, and communicate with your team and customers. That’s pretty much all you do as a tech entrepreneur. Over the last decade, I probably made 500-1000 pitches to investors and customers alone (and I have never actually been in an actual “sales” role). As a founder you are the communication hub for your company. Great communication doesn’t always lead to a great business, but bad communication will kill any business.