ENTREPRENEURSHIP FOR SCIENTISTS AND
ENGINEERS
CHAPTER 1
Scientists and Engineers as Entrepreneurs
LEARNING OBJECTIVES
After studying this chapter, students should be able to
1. Discuss why studying entrepreneurship is valuable.
2. Explain the role of innovation and entrepreneurship in the economy.
3. Define innovation in its various forms.
4. Describe the technology commercialization process.
CHAPTER OVERVIEW
The process of taking an invention from idea to business concept and then to market is
called technology commercialization. This dynamic process faces a unique set of challenges
and opportunities in a fast-paced market. Consequently, products must be developed faster,
prototyped earlier, and brought to market in record time. Small entrepreneurial companies
are in a good position to do that as they tend to be more flexible and quick to respond to
environmental changes. In contrast, large established companies have the challenge of
breaking away from traditional strategic thinking and the inertia of success.
It is important that students begin with a fundamental understanding of what is meant by
technology, technological change, innovation, and commercialization. With a good
grounding and common terms, it will be easier to get into more detail later on. This chapter
focuses on the idea of the engineer or scientist as entrepreneur and explores the decision to
become an entrepreneur, the role of entrepreneurship in the economy, and provides an
introduction to the commercialization process.
CHAPTER OUTLINE
1. The transition to entrepreneurship
a. Why study entrepreneurship?
2. The role of innovation and entrepreneurship
a. Defining innovation
b. Dispelling innovation myths
, 3. The commercialization process
a. Discovery
b. Opportunity recognition
c. Testing technology and market feasibility
d. Protecting IP assets
e. Prototyping
f. Testing the market and first customer
g. Deciding on a launch strategy
h. Developing the business plan
i. Launching the business
4. Summary
END OF CHAPTER QUESTIONS
1. Why is continual innovation critical to business success today?
Continual innovation is a driver of economic growth in models that respond to market
incentives, and it is a competitive advantage for entrepreneurs who compete in a
dynamic global environment.
2. How has the new economy affected entrepreneurial decision making?
The new economy is characterized by an emphasis on knowledge workers,
globalization, and innovation. As such, time-to-market is one of the key competitive
advantages for new technology companies operating with windows of opportunity that
are growing increasingly smaller. The longer it takes to develop a new product and
bring it to market, the less likely it will still meet customers’ needs when it is
introduced. Getting to market quicker is not only important for competitiveness and
survival, it can also result in higher profits.
3. When it is time to commercialize an invention, what options are available to an inventor
to navigate the business side of commercialization, and what are the advantages and
disadvantages of each?
Inventors and innovators generally choose from three major launch strategies. 1) They
can license the right to further develop, manufacture, and market their inventions to a
third party and collect royalties on sales. 2) They can sell the technology outright to
another company. 3) They can build a company to manufacture and sell their invention.
Licensing to a strategic partner or other third party generally is less risky than starting a
business, but the rewards are also lower should the technology be successful. Selling
the technology outright will typically produce the lowest level of reward, but the
, inventor incurs no further risk if the deal is structured correctly.
4. How are disruptive technologies different from sustaining or incremental technologies?
Incremental innovations build on existing technology but in a substantially new way.
The iPod, for example, was a major improvement over MP3 players (although some
would argue that the major improvement was branding and marketing). At the other
end of the spectrum are disruptive innovations that have no precedent and are game
changers, making obsolete previous technology. One prominent example is the
ARPANET, which gave birth to the Internet.
5. Why might engineering and science students, despite their inventive ideas, resist
becoming entrepreneurs?
Reasons why engineering and science students might resist becoming entrepreneurs
include the following:
They haven’t worked around other scientists or engineers who have started
businesses.
The formulaic approach to problem solving does not translate well to
entrepreneurship because of the uncertainty and ambiguity inherent in the
activities entrepreneurs undertake.
They can’t overcome the knowledge gap—the way entrepreneurs think about
things, which is less linear and more chaotic or free form.
CASE STUDY SUGGESTIONS
The case study, “Innovation in the Palm of his Hand” provides an opportunity to emphasize
several important concepts in the chapter.
Great innovations come from things you know something about. Hawkins was
fascinated with cognition and neurobiology and even went on to study it in some depth.
It was from that interest in neurobiology that he gained the insight that auto-associative
memory could be applied to data that varies over time. He also applied his
understanding of how humans predict their environment to the ultimate development
of the Palm Pilot that initiated the handheld computing era.
The importance of the melding of the idea person and the business person. Hawkins
knew that he was an idea person focused on the development of the product. He hired
Donna Dubinsky and she became the business and marketing part of the team.
The importance of customer feedback to product design. Hawkin’s first PDA, Zoomer,
was a failure, so determined not to make the same mistake again, he conducted in-depth
interviews with Zoomer users and what they learned changed the entire direction of the
company.
, Know when to bring in strategic partners. Partnering with U.S. Robotics to market and
distribute the PalmPilot ensured that they could promote the product and generate
sales more quickly than they could had they chosen to do it themselves.
A good discussion for students will emphasize the importance of understanding where
your strengths lie and know when it’s time to bring in the experts. As a scientist or
engineer, can you really do it all?
activity
Expectations Exercise
Ask students to prepare a couple of paragraphs on their background and a couple
paragraphs on the view of entrepreneurship that they bring to the course. Then have them
conclude with why they took the course. If you are using an online system such as
Blackboard, you might want to create a discussion forum and have the students post their
expectation exercise for others to view and comment. This is a great way to discover what
you’re dealing with in terms of types of students and level of interest.
ENGINEERS
CHAPTER 1
Scientists and Engineers as Entrepreneurs
LEARNING OBJECTIVES
After studying this chapter, students should be able to
1. Discuss why studying entrepreneurship is valuable.
2. Explain the role of innovation and entrepreneurship in the economy.
3. Define innovation in its various forms.
4. Describe the technology commercialization process.
CHAPTER OVERVIEW
The process of taking an invention from idea to business concept and then to market is
called technology commercialization. This dynamic process faces a unique set of challenges
and opportunities in a fast-paced market. Consequently, products must be developed faster,
prototyped earlier, and brought to market in record time. Small entrepreneurial companies
are in a good position to do that as they tend to be more flexible and quick to respond to
environmental changes. In contrast, large established companies have the challenge of
breaking away from traditional strategic thinking and the inertia of success.
It is important that students begin with a fundamental understanding of what is meant by
technology, technological change, innovation, and commercialization. With a good
grounding and common terms, it will be easier to get into more detail later on. This chapter
focuses on the idea of the engineer or scientist as entrepreneur and explores the decision to
become an entrepreneur, the role of entrepreneurship in the economy, and provides an
introduction to the commercialization process.
CHAPTER OUTLINE
1. The transition to entrepreneurship
a. Why study entrepreneurship?
2. The role of innovation and entrepreneurship
a. Defining innovation
b. Dispelling innovation myths
, 3. The commercialization process
a. Discovery
b. Opportunity recognition
c. Testing technology and market feasibility
d. Protecting IP assets
e. Prototyping
f. Testing the market and first customer
g. Deciding on a launch strategy
h. Developing the business plan
i. Launching the business
4. Summary
END OF CHAPTER QUESTIONS
1. Why is continual innovation critical to business success today?
Continual innovation is a driver of economic growth in models that respond to market
incentives, and it is a competitive advantage for entrepreneurs who compete in a
dynamic global environment.
2. How has the new economy affected entrepreneurial decision making?
The new economy is characterized by an emphasis on knowledge workers,
globalization, and innovation. As such, time-to-market is one of the key competitive
advantages for new technology companies operating with windows of opportunity that
are growing increasingly smaller. The longer it takes to develop a new product and
bring it to market, the less likely it will still meet customers’ needs when it is
introduced. Getting to market quicker is not only important for competitiveness and
survival, it can also result in higher profits.
3. When it is time to commercialize an invention, what options are available to an inventor
to navigate the business side of commercialization, and what are the advantages and
disadvantages of each?
Inventors and innovators generally choose from three major launch strategies. 1) They
can license the right to further develop, manufacture, and market their inventions to a
third party and collect royalties on sales. 2) They can sell the technology outright to
another company. 3) They can build a company to manufacture and sell their invention.
Licensing to a strategic partner or other third party generally is less risky than starting a
business, but the rewards are also lower should the technology be successful. Selling
the technology outright will typically produce the lowest level of reward, but the
, inventor incurs no further risk if the deal is structured correctly.
4. How are disruptive technologies different from sustaining or incremental technologies?
Incremental innovations build on existing technology but in a substantially new way.
The iPod, for example, was a major improvement over MP3 players (although some
would argue that the major improvement was branding and marketing). At the other
end of the spectrum are disruptive innovations that have no precedent and are game
changers, making obsolete previous technology. One prominent example is the
ARPANET, which gave birth to the Internet.
5. Why might engineering and science students, despite their inventive ideas, resist
becoming entrepreneurs?
Reasons why engineering and science students might resist becoming entrepreneurs
include the following:
They haven’t worked around other scientists or engineers who have started
businesses.
The formulaic approach to problem solving does not translate well to
entrepreneurship because of the uncertainty and ambiguity inherent in the
activities entrepreneurs undertake.
They can’t overcome the knowledge gap—the way entrepreneurs think about
things, which is less linear and more chaotic or free form.
CASE STUDY SUGGESTIONS
The case study, “Innovation in the Palm of his Hand” provides an opportunity to emphasize
several important concepts in the chapter.
Great innovations come from things you know something about. Hawkins was
fascinated with cognition and neurobiology and even went on to study it in some depth.
It was from that interest in neurobiology that he gained the insight that auto-associative
memory could be applied to data that varies over time. He also applied his
understanding of how humans predict their environment to the ultimate development
of the Palm Pilot that initiated the handheld computing era.
The importance of the melding of the idea person and the business person. Hawkins
knew that he was an idea person focused on the development of the product. He hired
Donna Dubinsky and she became the business and marketing part of the team.
The importance of customer feedback to product design. Hawkin’s first PDA, Zoomer,
was a failure, so determined not to make the same mistake again, he conducted in-depth
interviews with Zoomer users and what they learned changed the entire direction of the
company.
, Know when to bring in strategic partners. Partnering with U.S. Robotics to market and
distribute the PalmPilot ensured that they could promote the product and generate
sales more quickly than they could had they chosen to do it themselves.
A good discussion for students will emphasize the importance of understanding where
your strengths lie and know when it’s time to bring in the experts. As a scientist or
engineer, can you really do it all?
activity
Expectations Exercise
Ask students to prepare a couple of paragraphs on their background and a couple
paragraphs on the view of entrepreneurship that they bring to the course. Then have them
conclude with why they took the course. If you are using an online system such as
Blackboard, you might want to create a discussion forum and have the students post their
expectation exercise for others to view and comment. This is a great way to discover what
you’re dealing with in terms of types of students and level of interest.
