We spoke with Ashish Soni, executive director of digital innovation at the USC Viterbi School of Engineering, about how entrepreneurs come up with brilliant ideas, how those ideas are executed into world-changing products, where failure fits in, and whether it’s healthy to compare ourselves to the outliers.
From my perspective it comes down to three or four core skills. At the foundational level is the mindset. Part of this is to be observant. You have to be acutely aware of problems and pain points in the world around you. This allows you to spot opportunities and inefficiencies. In my class, I require the students to submit three problems every week. After a while they see how this is really just a muscle. The more they do it the better they get. By the end of the semester, after having submitted 50-60 ideas total, there are often some seeds for great businesses. So being observant is all about identifying those problems on a daily basis. It requires you to be mindful.
The other part of the mindset is to be self-aware. Ask yourself, “who am I as an entrepreneur?” “what are my skills, strengths, weaknesses, network, access to resources etc?”. Also, since at the early stages you’ll probably be relying on your own money to fund the project, you also need to consider what your risk threshold is. This is known as the ‘affordable loss principle’ and it essentially requires you to consider how much money you’re willing to lose if you fail. That will be different for every entrepreneur. So knowing your own risk tolerance and what your skills, network and access level is, helps you identify which route to go and where the probability of success is higher.
Once you’ve identified the problem and you understand what you bring to the table, the second step is all about process. You have to be able to do a feasibility analysis to determine which idea has the greatest odds of success. This can be quick and purely about analyzing the market size, whether there is demand, what the risks are (technology, financial, people risk) etc. This doesn’t have to be extremely intense because in the tech world things change rapidly. So a quick and dirty analysis is sufficient.
Thereafter, the third step focuses on execution, customer discovery, and doing a business model analysis to identify the key elements of the business. Consider questions like what kind of technology, people, money, business partners etc. will be needed to succeed? This is where you do customer discovery and get feedback from real world customers. Then you go build a product plan. In some teams that have engineers they can go out and build the thing.
What are the qualities for successful entrepreneurship?
Well the first, as mentioned earlier, is to be observant and self-aware. You have to be able to find the ideas and know your strengths and weaknesses.
The second is to persevere and be resilient. The Wall Street Journal recently did an analysis of a broad range of companies over the last 25-30 years and how long it took for the top companies to reach a $100 million valuation. On average it took seven years. Of course there are some outliers, like YouTube, Instagram etc. But if you take those black swans out of the picture, on average it takes seven years. It’s not something that happens overnight and you need to be able to be resilient over the long haul.
Thirdly, you need to have an open mind. You have to be able to stick with something but at the same time be open to change. This is where iterative thinking is critical.
Fourthly, you have to have a capacity to execute. You need to either be detail-oriented yourself or put together a team of people that are. Some entrepreneurs simply are not detail-oriented and so you need to know what type you are.
Finally, being able to connect with people is big. So much of innovation is a social craft so the capacity to be social is important. You don’t have to be an extrovert but you need to be able to build and sustain your social capital. You cannot be a lone wolf. Most big ideas were not solo efforts. They were sold that way for PR purposes.
Entrepreneurs often model themselves after the outliers like Zuckerberg, Jobs, Musk and Gates. But if they are outliers, is that a healthy goal
If people focus on the dollar value or the goal of running a public company they’ll never get there. They should rather be focusing on solving really big problems that can change the world. Jobs never cared so much about the money. It was more about his legacy and the product. Really successful people don’t think so much about the money. They think about how to allow what they’re doing to make an impact on the world. A lot of people chase the next startup idea for the money and raising capital when in fact there is no idea behind the scenes that is worth solving. There are so many problems in healthcare, education, poverty, the environment etc. that people are not being tackled and the focus is rather on something that is somewhat insignificant in comparison. I like to teach my students how to think. Go collect data on what the big societal problems are. You can approach it from demographic perspective, baby-boomer problems, energy etc. For example in Arizona there’s a great company called O Power. It’s a digital technology company based on research from Arizona State University psychology professor. They used mobile devices to reduce energy consumption. When you get a bill, it shows a happy face meter which shows how your energy bill compares to your neighbors. So it’s peer pressure! In one month consumption dropped 60%! There are so many ways to solve problems. That’s how new ideas will come forward. The key is to focus on real problems you care about and big ideas that have big markets.
What role does failure have for the entrepreneur?
I have mixed thoughts on failure and the current trend of ‘fail fast’. What I teach my students is that there are no rules. There are so many opinions and perspectives and every context and scenario is different. When people say fail fast, you want to take that with a grain of salt. Startups and entrepreneurship requires you to be in it for the long haul. If you don’t win, you’ll be disappointed and second guess yourself. If you fail repeatedly you risk planting the seed of doubt in your mind. You need some wins to build confidence. Some interesting research recently showed that you need about a 3:1 ratio of positive to negative thoughts. Otherwise you risk going into a downward spiral which leads to more toxic thoughts and further failure. However, you can’t be delusional and just think positively. You need results to back it up. Otherwise you’ll give up on yourself and others may give up on you too. It’s all a confidence game. This is a perspective I learned from a good friend and very successful serial entrepreneur, Jake Winebaum who is currently the CEO of Brighter.com.
What do your think of the current renaissance in entrepreneurship and how will it play out?
It’s partly driven by the current economy where younger people are having a harder time finding jobs but also because we’re in a new era of innovation. When you look at what has led to large revolutions in the past, such as the telephone, railroad, steam engine, and semi-conductor, there have been key technologies at the core of the disruption that have led to a huge spike of innovation around that. For example, with railroads, there’s the maintenance, support, servicing, train lines, food etc. So if you look at the entire ecosystem that was built around that single innovation, we can see that we’re in a similar stage now because of low-cost cloud, mobile, social, the SDKs, APIs etc. These tools are relatively so cheap that the engineer can build a product with a limited upfront investment. That opportunity has never existed before! Also, consider the new modes of instantaneous distribution. In the past you needed to get past gatekeepers to be successful. Today, although we still have gatekeepers like Google and Apple, there is still a relatively even playing field compared to historical times. Once you’re through something like the App Store, you suddenly have access to hundreds of millions of users. Also, the tools to build products are so readily available. If I want a map for my app, I can drop Google Maps in it. I don’t have to build that part. Having such basic building blocks makes getting off the ground not very difficult. The focus now is on solving a real problem, which is very exciting.
Tell us what you’re doing at USC.
Right now I’m the executive director of digital innovation at the USC Viterbi School of Engineering. So I’m co-leading the effort to create more startups out of our engineering school. We’re the second largest engineering school in the country and have approximately 6,000 engineering students and approximately 200 faculty / scientists in the school. We’re creating an Innovation Institute to offer programs and support for our students and faculty to create and launch startups.
What is the institute that you’re co-leading?
The institute is currently being setup and is designed to plant the seeds of entrepreneurship and innovation in all our students and interested faculty, educate them and provide the necessary resources and connections. Not all of the students want to be entrepreneurs and some will want to work for a Microsoft, Google etc. But by exposing every student to the fundamentals of entrepreneurship it allows them to decide whether it is something that interests them. So we’re bringing in rockstar guest speakers who have an engineering background and who have founded some of the largest tech companies in the world to come in and inspire the students. We will also offer the students a series of courses, workshops, summer bootcamps etc. where they learn how to execute their idea. From there, we provide resources for implementation and execution. We will offer support infrastructure with our own incubator and accelerator, and connect them with mentors, the local ecosystem, VCs, experts in marketing, legal and so forth. These are people who have done it several times and are able to give a few hours a month with students to give them feedback. Finally, all startups need early adopters so we help them boost their startups with the local USC ecosystem.
We feel pretty strongly that we have some of the smartest students and faculty in the world and if we can support them then the next big things that change the world can come out of USC.