UNIVERSITY OF WASHINGTON

SEATTLE, WASHINGTON 98195

BPOL 536 /CSE 590IP Software Entrepreneurship

Class Hours: Monday and Wednesday 3:30-5:20pm, Balmer 413

Instructors: Emer Dooley, Business School; emer@u.washington.edu; 616-8682

Dan Weld, Computer Science & Engineering; weld@cs.washington.edu 543-9196

Readings:

To be read before class starts: Business 2.0 March 2000, P 136-184. “The smart way to start a net company”

22 Immutable Laws of Marketing, by Al Ries and Jack Trout

Startup, by Jerry Kaplan

Additional Readings:

High-Tech Startup by John Nesheim, on reserve in the Foster business library

Going Global: Four Entrepreneurs map the new world marketplace. William Taylor, Alan Webber. Penguin paperback. One-sitting read.

Information Rules: A strategic guide to the networked economy. Carl Shapiro and Hal Varian. HBS Press.

Reading packet : Available from the Balmer copy center. Includes:

“How to write a great business plan”. HBR July-Aug 1997.

HBS case studies: Microsoft Office: Finding the suite spot

Edmark Corp.

Course Description

The course provides an overview of the major elements of entrepreneurial activity in software, including market identification and analysis, evaluation and planning of the business, financing, typical operating and administrative problems and alter natives for growth or sale. Particular emphasis will be placed on the changing face of starting a business in the Internet space.

The course is organized as a series of case studies and lectures. Case studies are supplemented by class discussion with entrepreneurs, lawyers and financiers.

Course Objectives

1. To provide a multi-disciplined look at software start-ups.
2. To provide students an opportunity to develop a product concept and outline business plan.
3. To provide an opportunity to transform a technology concept into a business.

Course Project

Students will work in cross-disciplinary groups of four or so to develop a product concept and preliminary market analysis for a business plan along the following lines:

Week 2: One minute per person description of a software business concept.

Week 4 Preliminary presentation : The idea, target market, technology (2-3 slides max –5-10 minute pitch)

Week 6 Short presentation due: 5 slides something along the line of:

The market (Who is the customer)

The product –the competitive advantage ( What’s the customers’ compelling reason to buy)

The Channel (How do you reach them, How do they buy?)

The money (Financing, Projections : revenues and profits)

The plan (Overall direction; Schedule, risks and problems?)

Week 9 10 page plan and presentation

Grading

Grades will be awarded as follows:

Class Participation 10%

Class notes and web page 10%

2 page project report due by Jan 16^th (before MLK holiday) 10%

Group presentation and slides Jan 26^th 20%

Final Business Plan :50% (Presentation 20% ; Written Plan 30%)

Date	Session	Topic	Assignment/Guest
Mar 27 Week 1	Session #1	History of the computer industry.	Brian Bershad, CEO, Appliant
Mar 29	Session #2	Software industry structure and opportunities –nature of competition –distribution channels, value-added chains, business models: How are people making money? What opportunities are there?	Patrick Ennis, Arch Venture Partners Reading: The B-B boom, Business 2.0 http://www.business2.com/articles/1999/09/content/cover-story.html
Apr 3 Week 2	Session #3	Go-to-market strategies Strategic partnerships and alliances	Allan Adler, Venture Vision Susan DelBene, CEO, Nimble.com
Apr 5	Session #4	One minute per person on company idea
Apr 10 Week 3	Session #5	The Business Plan -Assignment: Business plans to be read in advance. Critique of plans. Why you need one, even if the VCs don’t require it. Essential elements etc.	Emer Readings: How to write a great business plan by Bill Sahlman, HBR July-August 1997 . 2 Business plans TBD –Madrona helping out here
Apr 12	Session #6	Lecture: Financing the startup Determining capital requirements; Crafting financial and fund-raising strategies. Overview of the sources of risk capital. What’s the right capital structure?	Linden Rhoads Readings: High-tech Startup Chapter 7, 8 and 9
Apr 17 Week 4	Session #7	The team –The importance of the team; Hiring, keeping and motivating great people (rewards and incentives) Putting together a board of advisors. Difference between Internet startup and more traditional firms.	Steve Sperry, CEO Acadio (Founder, Primus -now a company with market cap >$1billion. Just raised over $50m for new web-based startup Acadio.com)
Apr 19	Session #8	The development cycle. Understanding and managing the development cycle. Putting the customer first. The classic problems: Feature creep, code complete vs. ship date etc.	Steve Sinofsky, VP Office Eric Zocher (Go2net) HBS case: Microsoft Office: Finding the suite spot
Apr 24 Week 5	Session #8	Operations & cashflow management What’s involved and what does it cost to set up an operation. How do you plan for and cost out growth?	Chris Birkeland Cedargrove investments (asked –not confirmed)
Apr 26	Session #10	Group presentations
May 1 Week 6	Session #11	Information Rules? Or Suzan	Emer: Rules for the Information Economy ; Dan leads case study on Napster.com.
May 3	Session #12	Protecting your intellectual property & University licensing	Ed Lazowska, Chair Competer Science and Engineering on Univesity Licencing. Al AuYeung, Patent Attorney, BSTZ.com
May 8 Week 7	Session #13	Ready, Aim, Switch: Listening to your customers no matter how hard it hurts.	Brian Bershad, CEO Appliant
May 10	Session #14	Stanford Case Study on IBM’s bid for Edmark	Sally Narodick, now CEO of Apex Reading: Stanford case: Edmark Corp.
May 15 Week 8	Session #15	Netbot/ AdRelevance Case Study	Dan Weld
May 17	Session #16	Lecture: The deal: Valuation of high growth businesses; structuring the deal; negotiations; traps. Focus on exit strategies rather than early-stage.	Bill McAleer, Voyager Capital
May 22 Week 9	Session #17	International aspects of doing business	Katarina Bonde, EVP Captura Reading: Going Global.
May 24	Session #18	Group Final presentations
May 29 Week 10	Session #19	Holiday –Memorial Day
May 31	Session #20	Group Final presentations

Background (non-required) reading :

• Built to Last by James Collins and Jerry Porras (How great companies are built)

• New Venture Creation: Entrepreneurship for the 21^st Century, Jeffry Timmons

• Going Public by Michael Malone (Story of MIPS IPO)