This is the second post on our reflections from a Sunday afternoon spent working with engineering honors students at the University of Texas at Austin.
It is amazing to see what happens when you tell an engineering student to focus on markets as part of their design process. While we’ve said this many times to entrepreneurially minded engineering students at 3 Day Startup, I expected the result to be different saying this to a group of fifty future engineers, most of whom who hadn’t really considered starting a company.
But it wasn’t. Regardless of entrepreneurial interest, engineering students tend to base their analysis of potential markets on those that have the least competition. In the case of the student who had autonomous vehicle/robot technology, he started with futuristic applications. His first inclination was to use his solution to essentially eliminate stop lights–autonomous robots/vehicles with sensors at every street corner would eliminate the need for cars to ever stop, they could just speed up and slow down to avoid hitting each other.
That he had devised robot technology that could actually do this was impressive, but the commercial application was potentially very far into the future. I asked “well, how could we use this technology today? How about factories or hospitals?” His response was familiar: “we could do that, but there’s lots of competition in those areas and the applications I suggested has doesn’t have that kind of competition…mine would probably be the first.”
The Competition Conundrum
Everyone wants to be first. Who wants to be the fifth anything? First is intuitive to the American psyche and the concept can be destructive–at least for those of who us want more entrepreneurial activity. I have spoken with dozens of students who decide not to test out the entrepreneurial path because they feel that their ideas exist in spaces where there is lots of competition. It is not that they are afraid of competition but rather they don’t know what they could contribute.
The competition conundrum seems to kick in before a true opportunity analysis even occurs. This is a critical moment for most would-be entrepreneurs and for those of us who work with them. We have to demonstrate that not only is competition good but that the mere presence of competition is an excellent barometer for an interesting business proposition.
Solving the Equation
“Ok, so maybe it is a competitive space. But how much do you know understand about the technology versus how much do you understand about the market, ” I asked. The student took a step back and said, “well, I know my competitor’s technology inside out…it is really good, but I don’t know much about the market.” At this point, one of the other mentors walked over and suggested that the student analyze whether the ‘really good’ technology was actually solving the needs of the customers. The student got a big grin on his face and said, “OK, this is good, this is another set of questions I have to ask my prospective customers.”
And off he went.