SDSU’s Real World Competition: Do a lot with little money

Epsilon Micro Devices team from SDSU

Published in UT San Diego, April 9, 2013

Lean startup is one of the hot new trends in the entrepreneurial ecosystem. It either means the founder is living on ramen and about to drop 10 pounds or that he is highly focused on figuring out what the customer really wants before he raises a bunch of dough and foolishly uses it up before he knows that answer.

So about two years ago, San Diego State University started adopting this philosophy into its entrepreneurship curriculum. At the same time, SDSU revamped its annual business plan competition to focus on “the real world of no or little money, learning to create a prototype, repeatedly interfacing with the customer and pivoting when necessary to create a solid business model,” said Bernhard Schroeder, director of Lavin Center Programs, Lavin Entrepreneurship Center at SDSU.

During the inaugural two-day LeanModel competition in March, the 19 student teams (from 11 California universities) competed in an event that was not mock-court. The teams had to tell the judges how their company had evolved and pivoted based on customer feedback and how they tested their product in the field.

“I learned the importance of always being on your toes,” said Gabby Igel, a member of Cal Poly San Luis Obispo’s Luna Light team that is developing a solar rechargeable LED light and cellphone charger. “When we were setting up our booth, we were told that in 20 minutes we would be making a two-minute elevator pitch to the judges and that the top three teams would each get $500.”

In addition to winning that $500, Luna Light placed second overall and was awarded an additional $3,500 that will be used to pay for producing 100 prototypes. Igel said their target consumer is the 1.6 billion people who don’t have access to electricity, and the first prototypes were tested in Kenya.

The top three “elevator pitch” teams advanced to “Tiger Tank,” for which they made 10-minute presentations. That winner as well as first place overall was Bosse Tools, started by Stephen Waldman, a first year MBA student at Loyola Marymount University. In the summer of 2011, Waldman was working for his parents doing construction and home and garden chores. Out of his exhaustion came the idea to create a double-handle shovel — Bosse’s first product — that Waldman contends increases working power while decreasing stress and pain.

During the competition, Waldman said he learned that “we need to move faster and get more products in the hands of more people who can test them out so we can get more feedback, and we also need scientific research to quantify the benefits.”

Third-place winner Epsilon Micro Devices, started by a San Diego State team, already has paying customers and more than $10,000 in revenue, according to co-founder Pieter van Niekerk, a senior majoring in bioengineering. The idea for the company originated when a scientist at another university asked John Waynelovich, a Ph.D. student at SDSU in biomathematics, to develop an inexpensive way to replicate a piece of research that required a clean room and costly equipment. Tanja Muetze, the third member of the team, provided the business expertise.

The company’s new products are being designed in conjunction with the SDSU machine shop and produced in a campus lab. They sell for about $1,000 and are being used by researchers in the U.S., Europe and Asia. The company’s goal is to bring the booming field of microfluids to biologists who did not have prior access.

“Through the competition we learned that we were on the right path regarding incorporating customer feedback into our products,” van Niekerk said. “I also learned that I need to use simpler language when I pitch to investors. My language is too technical, and I lose more than half my audience in the first two minutes.”

Two good books about the lean startup model are “The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses,” by Eric Ries (who grew up in San Diego) and “The Lean Entrepreneur: How Visionaries Create Products, Innovate with New Ventures, and Disrupt Markets,” co-authored by San Diegan Brant Cooper.

Rule No. 175: George Foreman has the “lean mean fat reducing grilling machine.” No entrepreneur should leave home without one.

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