* DRAFT: NOT FOR DISTIBUTION! * The E-Club Review The Journal of The MIT Entrepreneurs Club aka: "The E-Club" ... published electronically on most weekends, including a comprehensive quarterly issue expanding on the best of the contents of the weeklies, at the massachvsetts institvte of technology, at cambridge, massachusetts; primarily an electronic journal, future plans include versions in hard-copy plus accompanying video and cd-rom tutorials, for a fee. details ahead ... Contents copyright (c) 1994 by The MIT Entrepreneurs Club, aka: "The E-Club", The Massachvsetts Institvte of Technology, and by individual authors, as noted herein, 1993 and 1994. Reproduction of the weekly and quarterly electronic versions of _The E-Club Review_ is allowed and encouraged, provided the entire publication, including this copyright notice and permission notice is always included intact, whether by electronic, xerographic, or any other means. No charge what-so-ever may be made by anyone re-distributing this journal. To subscribe send e-mail to: or to the editor: or call 617-253-2000. Do not send subscription requests or other list administrivia to the list. Thanks! Copies of issues of The E-Club Review may be found in the archives of The E-Club directly via afs, or by anonymous ftp. To access the locker from MIT's Athena computing environment, or any other afs site, type "attach e-club" and then "cd /mit/e-club" from Athena, or "cd /afs/athena. mit.edu/mit/e-club" and then "ls" to list the directories. To access the archives from other systems over The Internet, ftp to "lcs.mit.edu" and login as anonymous; use your Internet address as password and then "cd /pub/mit-e-club". Availability by fax and U.S. mail is possible, but electronic distribution via The Internet is preferred. * * * (table of contents for the weekly issue, vol. 1, no. 1, 18 feb 92) Editor's Greetings, Hint of Topics-to-Come: Richard Shyduroff; E-Club Review, 15 Feb: Andre Marquis on Eddie Elliot's Video Streamer; $10K'94 Student Competition Update: Joost Bonsen '92; MIT Alum Start-Up Column: Art Mellor & Peter Schmidt, Midnight Networks; New Courses, News, Activities, Ongoing & New Projects: Editors; Suggested MIT & Harvard Courses in Entrepreneurship: Editors; Suggested Reading: Editor's Current List; Humor: Marc Abrahams & The Journal of Irreproducible Results, TBA; * * * Editor's Greetings: Welcome to The E-Club Review! a new weekly and quarterly publication of the MIT Entrepreneurs Club, aka, "The E-Club", designed, edited and published at The Massachusetts Institute of Technology. The weekly _Review_ includes a regular column written by one or more E-Club member reviewers who cover first-hand selected new idea and start-up present- ations given each week at the regular Tuesday evening meetings of The E-Club. In all cases presenters have given their permission for reviews here. Additionally, a news-and-views section, plus letters from E-Club members- and-alum readers, and invited others who follow The E-Club's activites, will become a regular feature of the weekly. A weekly editorial by E-Club co-founder and co-director Richard Shyduroff, serialised historical pieces on The Club and on the Annual $10K MIT Student Competition, aka: "The 10K", and new projects of The Club and it's members will represent the editors' and columnists' primary contributions. Associate and graphics editor Nancy Gardner, '81, is working to develop _The Review's_ electronic look for a Mosaic "home-page" as well as the look-and-feel of a more traditional quarterly-journal-version in hard-copy. Guest editors and regular columnists will include current members of the MIT and Harvard communities, including members of the newly re-organised Harvard E-Club, as well as alum from both schools, and occasional other writers and researchers by invitation. Specialist columnists invited to participate include Joe Hadzima '73, of the Boston law firm Sullivan & Worcestor, John Preston, Director of Technology Development at MIT, Isidore Straus '69, co-founder of MIT spin-off Straus-Dash, Goodhue, Inc. and Lori Pressman '79, of MIT's TLO (Technology Licensing Office) represent the range of experts we help introduce to the MIT community through Club networking, year-'round workshops and tutorials and newly offered seminars for undergraduates, briefly described later in this issue. Selected seminar guests who offer their MIT start-ups or 10K competition- sourced new technology business enterprises, as live cases for student discussions and research, will appear from time-to-time in _The Review_. In this issue Art Mellor and Peter Schmidt, founders of Midnight Networks, present a paper given in the seminar during this past fall term. Another regular feature will be a series on the annual "10K" written by 10K94 Chairman, Joost Bonsen, course 6, '92, starting in this issue with the results of the auditing of this year's competition returns of "executive summaries", the first-phase of a five-month-long process resulting in the development of mit teams that "get" an idea, and through market research and business plan preparation and presentation, begin the job of launching new technology enterprises. Finally, several of us will offer suggestions for reading in all areas relevant to the missions of The E-Club and Entrepreneurship, including point- ers to recent popular, and perhaps not-well-known, press articles, new and old text books and network-based sources of information. Book and paper reviews should start appearing next week. * * * The E-Club Review, Tuesday 15 Feb: - Andre Marquis, on Eddie Elliot's Video Streamer Joost Bonson started off the meeting by announcing that there were 33 entries in the 10K competition this year. That's up 6 from last year. It may not be too late to get involved. Teams can add members up through the deadline for submission of fully developed business plans. Send resumes by e-mail to Richard Shyduroff (rdshydur@athena.mit.edu) or by Institute mail to his mail folder at E15-443. After introductions, Eddie Elliott, a recent graduate of the Media Lab's Interactive Cinema Group, showed a video tape that demonstrated his novel video capture program for the Macintosh, Video Streamer, to a group of about 14 attendees. Video Streamer allows the user to view a live video image in the center of the screen as the preceding frames go streaming off the corner of the screen behind the live image. It's kind of like fanning a deck of cards down and to the right at a 45 degree angle with the cards face up. You can see all of the top card (the current video frame) and just the top- and-left-edges of the cards below it in the deck (the preceding video frames). It's difficult to do justice to the effect without seeing it. The Media Lab has applied for a patent on the technology. The view of just the corners of the older frames is enough context to locate transitions so it's easy to select a clip of video. Clips can be copied to another screen and saved. The software has other segmenting and editing capabilities. Mr. Elliot is looking for ways to commercialize Video Streamer and he has talked to several companies about his product. The group's discussion focused on potential applications as well as potential partners. Possible associates include video board manufacturers, video software developers, software pub- lishers and geophysical or medical imaging companies. Suggestions included creating a simple video capture tool for bundling with other software or hard- ware, putting out a piece of shareware to build initial support and selling the idea to a larger business for use in an in-house product. Eddie also had video tape of adults and kids playing around with the system at a couple of recent art exhibits and having a great deal of fun. Mr. Elliot suggested that he would need about 6 to 9 months of full-time work to create a sellable commercial product. The participants were divided be- tween recommending immediately getting a product out the door to beat all competitors versus taking a long-term strategy and building a business around the technology. Input from marketing masters would be quite helpful at this stage of the start-up. - Andre Marquis The Whitehead Institute for Biomedical Research, MIT * * * MIT Entrepreneurs Enter Fifth Annual $10K Competition - Joost Bonsen '92 The 1994 MIT $10K Entrepreneurial Competition (the "10K") has drawn plenty of MIT student and community interest, helped in large part by full-house attendance at the January IAP series, the Nuts and Bolts of Preparing Business Plans, pulled together by Joseph Hadzima '73 of Sullivan & Worcester's High Tech/New Ventures Group. By this year's 10K deadline at 5 p.m. on 10 February, student-led teams submitted 33 entries, up 20% from last year. For this first phase of the Competition, the teams prepared a no-more-than-5-page Executive Summary proposing a new venture, whether product or service oriented, non- technical or high-tech. This is the fifth year of the 10K, co-organized by the MIT Entrepreneurs Club (the "e-club") along with the Sloan New Ventures Association (the "NVA"). Invented by MIT E-Club co-director Richard Shyduroff, the 10K promotes cross- campus team-building and student entrepreneurship. No other MIT course, program, event or contest draws as much work and attention from new enterprise oriented students, both undergraduate and graduate, regardless of citizenship, from all 5 schools of Engineering, Science, Architecture/Urban Planning, Management, and Economics/Social Science. The 33 entries were submitted by teams totaling 69 people, 11 MIT staff and recent alumni and 58 students. (The principal contestant on each team must be a registered, full-time MIT student). Of these students, roughly 1/3 are undergraduate and 2/3 graduate. Nearly 1/4 are from Management and Economics, and 3/4 from Engineering, Science, and Architecture. The 10K Judges, drawn from the venture capital, legal, accounting, and MIT's technology licensing communities, make their choices on the basis of entries which merit further, in-depth consideration. At the MIT Entrepreneurs Club meeting at 6 pm on Tuesday, March 8th in 66-144, the teams which submitted the most promising Executive Summaries will be notified that the Judges would like to see fully-developed Business Plans of 20 to 40 pages, with fleshed-out market research, competitive analysis, product/service descriptions, pro forma financials and other details. From these "B-Plans", due in early April, the 1994 $10,000 David and Lindsay Morgenthaler Grand Prize Winner will be chosen. In addition to the Grand Prize, prizes generously donated by the Deans of Engineering and Management, Sullivan & Worcester, Price Waterhouse, Copley Ventures, and other 10K'94 Competition sponsors will be awarded. The winners will be announced at the May session of the MIT Enterprise Forum, held the second Wednesday of the month, in 10-250 at 7 pm. For more information about this and future 10K Competitions and other entrepreneurship-oriented MIT activities, please call the MIT e-club hotline at 253-2000, or send electronic mail to or slip a note into the NVA folder in the Sloan School Lobby, in E52. --Joost Bonsen or 253-2000 x2 MIT $10K'94 Entrepreneurial Competition Committee Chairman * * * (alum guest column, based on the authors' visits to the e-club and under- graduate seminar sem089, fall-term '93 at mit, and students' discussions, using midnight networks as an mit start-up case for tracking and study) Midnight Networks Inc. Things We Think We Got Right Peter Schmidt, Art Mellor - 11/23/93 Here is a list of the things which we think we have gotten right about running Midnight Networks for the past two years. We already believed in most of them before we started, but we've been surprised by just how right they are. Others we had no idea about, but we have been taught to value them by experience. Here they are, in no particular order: 1. Setting expectations correctly is the most important key to success, with: - customers, especially - co-workers - yourself 2. Always use intelligent persistence - eventually (may take months, may take years) "no" will become "yes" 3. Ask your friends for help - they can give you: - good business advice - emotional support in what is an often highly stressful endeavor - pro bono professional services (like graphic design, accounting consulting, marketing help, etc.), just for the joy of using their best skills on a "fun project" 4. The combination of competence and honesty is remarkably rare. Thus, it can be a competitive advantage for you. 5. Let your customers fund your product development. They know their needs better than do you or venture capitalists. If they want something, odds are a bunch of other people want it also. Make sure you keep the rights to everything you produce via contracts. 6. Do a newsletter. Send it to friends, family, old customers, and new prospects. Send it out quarterly, and try to make it light, fun and moderately informative. 7. Talk to your lawyer often. A good rule of thumb is, can she/he summarize the current state of your business' affairs to a third person? Another is, do you have his/her phone number memorized? 8. Fit into a category/Play a known role. Sure, you have to be different in some way: better, faster, cheaper, cleaner, etc. But don't try to be different in too many ways, or people won't understand how your offering connects to their problem. 9. Come up with a good name and logo. Ours generates a lot of interest in us; here are the rules we used to come up with it: - the name must be easily understood when pronounced over the phone - you should never need to spell it out for someone - it should be distinctive - it should capture something of the image you want to convey in the market - it can't use any of "-tech," "-ix/-ex," "-tron/-ton," "system" or "-com" - it can't be a name of any of the founders - the logo should be designed in cooperation with a professional graphic designer 10. There is always competition. You are in business to solve customer problems, but these problems didn't just spring into existence yesterday. Your customers have been dealing with them one way or another for a while, and you must compete with whatever method they are currently using. The hardest sell may be when what they're currently doing is nothing! After all, doing nothing doesn't require writing checks, and whatever you are offering to them probably does. 11. There are no competitors, only other companies. If someone else is solving the customer problem that you want to, offer to do the solving for them. License your technology, enter into joint marketing agreements, hire them as a reseller, buy their company - the last thing you should do is start calculating how much "market share" they're "stealing" from you. 12. Everything always takes longer (but see below). 13. Kaizen. This Japanese philosophy of continuous improvement drove them to improve their manufacturing until it is the best in the world, and they`re still making it better! Use it to get over trying to always do the perfect solution the first time. Start with your best shot, and then make sure you regularly review how it's doing, and then improve it in the ways that become obvious. This takes out a lot of stress. But you have to make improving everything a key goal and part of your corporate culture, or "kaizen" may become just another name for management by fire-fighting and the chaos that results. 14. Focus on your processes and the products will follow. Solve problems by designing a process that will keep them from happening again, and then kaizen that process. 15. Treat _everyone_ as if you will soon be sitting across the table from them, trying to close a big deal. Everyone in your industry knows everyone else. 16. Communication is more important than your mother. 17. Plan in detail - forcing yourself down into the details helps catch all those "oopses" that make things take twice as long. Everything will still take longer than you estimate, but not grotesquely longer. And you will find that you get better and better at closing the gap. 18. Document everything: processes, important bits of information, your daily tasks, etc. If everybody gets in the habit, it won't take long, and it quickly becomes an invaluable resource. 19. Automate wherever you can, but don't do it faster than you need to - it'll be a while before the marginal savings outweigh the up-front costs. 20. Openness is essential. It will lead to trust between you and your customers, and between you and your co-workers. Without openness, you cannot learn from each other, and kaizen becomes impossible. 21. Talk to customers in advance. Let them tell you what they want. Do market research! 22. There is always a good solution. Use your head and find it. 23. Flexibility yields job satisfaction, nimbleness in the face of changing customer demands, and adaptability that is able to benefit from new ideas. 24. Customers need solutions, not technology. On occasion, you can broaden their horizons of what is possible by exposing them to new technology, and they will then recast their problem in terms that your technology can solve. Or they may not, and you need to be ready for that. 25. There are N ways to do anything. 26. Admit your screw-ups immediately and take responsibility for them. Your customers and employees will love you for it! Well, they will if you also kaizen a process that will keep the screw-up from happening again. 27. Your business needs a superlative: best, fastest, most economical, farthest out on the cutting edge, most profitable, most visionary, most fun to work for, best value, cheapest, youngest, etc. etc. This gives you and your employees a hook on which to hang your goals. And it's good for morale too! 28. Talk to others in the business regularly so that you keep getting reminded that you're not alone out there. 29. Make sure that everyone is responsible to each other for results, then leave the methods up to individuals - and resist the urge to back-seat-drive! 30. Your corporate culture should be explicit so that you can kaizen it. Decide what you want it to be in cooperation with your co-workers, and then take steps to make sure that it becomes whatever you decided on. 31. You are married to your partners, and the company is your child. If you have a spat with a partner, you will lose sleep over it just like you do when you fight with your spouse. If you recognize this and work on the relationships, you can derive many of the emotional rewards of marriage in your day-to-day interactions at work. 32. Cash is more important than communication. Business cash flow is _very_different_ from personal cash flow: income is a lot more irregular and uncertain, and outgo tends to come in lumps. You have to watch it all the time, lest you get to exercise "executive privilege" by foregoing your paycheck. 33. Negotiate on everything you can, but be sensible about it. The other guy needs to make money, too. 34. Have as your first instinct to Be Cheap. 35. Your employees' attitudes toward the business aren't the same as yours. 36. Running your business is more work than you imagine, but it's _way_ more fun, so on balance you're way ahead of the game. Copyright (C) 1993 Peter Schmidt and Art Mellor. All rights reserved. Art Mellor : Midnight Networks Inc. 100 Fifth Avenue Waltham MA 02154 art@midnight.com : Vox 617/890-1001 Fax 0028 The Best in Network Software Peter H. Schmidt |`'| . | ,_ . , |_ + Midnight Networks Inc. peter@midnight.com | | | (| | | | (| | | |, 100 Fifth Avenue tel: 617/890-1001 _| Prospect Hill fax: 617/890-0028 N E T W O R K S Waltham, MA 02154 * * * This Week at MIT (especially for young entrepreneurs): Discover Engineering Series: ENGINEERING ENTREPRENEURS at MIT Thursday, 24 February, 2-3pm CAES Studios, Building 9, room 450 (be there by 1:30 at latest) (update on this annual special, live-interactive tv-broadcast from mit by tracy pierce of the center for advanced engineering studies (caes); richard shyduroff (and zinky shyduroff, t.a. in the esp/hssp course for 7th-12th graders) will be in the studio audience to answer questions about programs for kids at mit, as well as about the e-club. - rds) In celebration of National Engineers' Week, National Technological University (NTU) will sponsor a free broadcast originating from MIT's Center for Advanced Engineering Study - from 2-3 pm EST on Thursday, 24 February, 1994. The live interactive program will be broadcast on C-band, as well as to NTU's network subscribers with Ku-band digital reception capabilities. The free program is intended for middle and high school students, science club members, science teachers and school counselors. Registration is required. For technical reception information call Carol Bruxvoort, NTU 303-495-6422. Dr. Harry West, associate professor of mechanical engineering at MIT will again serve as moderator for Discover Engineering. PROGRAM THEME: Many engineering entrepreneurs think of their first ideas when still in school. Indeed the idea might be sparked by a course or activity at school. Others work independently, perhaps in the basement of their home. The journey from basement to boardroom can be hard work, but there is enormous satisfaction in creating an idea of your own. In this program we are going to learn from some entrepreneurs who have taken their grade school dreams and made them reality, and we are going to look at educational activities that help enable students to develop ideas of their own. From solar vehicles and pumps - to aids for the elderly - to computer programs; there are a lot of ideas out there. Some entrepreneurs are compelled to start their own company, and others learn to direct the resources of an existing corporation to make their idea become reality. You'll meet several entrepreneurs and see demonstrations of some exciting inventions. Phone in with your questions, or plan to join us (MIT building 9-450) in the studio audience. The final list of guests for the program will include Jim Worden, Krisztina Holly, Dave Brancazio and Arthur Ganson. Each person will have about ten minutes of featured presentation. There are several videotapes that will be included and Krisztina is also going to run a demo in the studio. We welcome any and all interested folks to be part of the studio audience. The studio is in Building 9 Room 450. We ask that the audience arrive no later than 1:30 pm. Anytime between noon and 1:30 is OK for arrival. For more program info contact Tracy Pierce 617-253-5472 or tracy@mit.edu (editor's note: krisztina holly was on the winning team of the $10K'91 mit student competition for best new business start-up idea of the year, for her company's entry "dial-a-fish" now stylus innovation, inc.) * * * (some other new, ongoing and upcoming relevant activities at mit this term) o New undergraduate seminars at MIT on entrepreneurship: SEM 089 and 095, fall-and-spring-terms, 6 credits, Tuesdays at 7-9pm in 66-148 immediately following the E-Club's regular weekly meeting. For details contact Richard Shyduroff or at x3-2000. o Saturday courses in "tech start-ups" for high school kids (7-12th grades) are Athena computing-environment based, and teach the use of The Internet as a research tool. Topics woven throughout the ten-week-series include history of science & technology, inventions & patents, technology risks, starting-up new technology business enterprises and schools of the future. Registration is underway. This course is team-taught, in three 2-hour sessions from 10am to 5pm, and invites MIT and Harvard alum to co-teach. For details contact Richard Shyduroff (see above). For details on other of the Educational Studies Program's High School Studies Program's courses (50+ this spring) call the ESP at 253-4882 or send e-mail to . * * * Suggested MIT & Harvard Courses on Aspects of Entrepreneurship: _New Enterprises_, MIT-Sloan, course 15.375, Eric Von Hippel, Mondays, 2-4pm, E51-140 at MIT. _Inventions & Patents_, MIT, course 6.901, spring-term, Robert H. Rines, Mondays, 7-9pm, 37-212 at MIT. _New Technology Start-Up Business Enterprises at MIT_, MIT sem-095, Richard Shyduroff, Tuesdays, 7-9pm, 66-148 at MIT. * * * Suggested Reading (editor's january picks): _Juran on Quality by Design: The New Steps for Planning Quality into Goods and Services_, J. M. Duran, 1992, by The Free Press, New York, a division of Macmillan, Inc.; isbn 0-02-916683-7, 538 pages. _Interactions: New Visions of Human-Computer Interactions_, new quarterly publication of the Association for Computing Machinery, ACM, New York; issn 1072-5520, vol. 1, no. 1, January 1994. _American Steel_, Richard Preston, 1991, by Avon Books, New York, NY; isbn 0-380-71822-7, 278 pages (story of Nucor Steel Corporation). _I.D. The International Design Magazine_, Magazine Publications, New York, NY; issn 0894-5373, bi-monthly. * * * Humor: Beginning next week, excerpts from The Journal of Irreproducible Results, aka: "The JIR", edited at The Massachusetts Institute of Technology by Marc Abrahams, and being a joint effort of The MIT Museum, will grace the electronic pages of _The E-Club Review_. Among other collaborations currently at the "just-thinking-out-loud- about-it-all" phase, The E-Club plans to mount the best of the randomly amusing happenings in it's meetings, workshops and experienced on it's various retreats, on the stage, at least in Little Kresge; and on a weekly basis, as a brief "humor component" in it's on-air version of educational offerings in a new, in-the-works, 13-week series being developed for deployment via WBUR-FM. (When the BUR series has been accepted and funded and it's clear that that project is really going to happen, you'll probably know about it nearly first, by reading about it here. Meanwhile, you can browse the e-club locker for the directory JIR, and discover within the isntructions for subscribing to the electronic version of the _JIR_, the _Mini-JIR_, and learn more about the journal that co-sponsors, with The MIT Museum, The Annual IgNobel Awards at MIT. (editor's closing comment: in future issues, some discussion will be undertaken to review topics on stress reduction, and especially stress due to academic and high-tech start-up and ongoing business activities; that is, stress on humans, vs machines and systems, though due coverage of those areas under "technology risks" is appropriate too. more on this subject later. thanks for reading _the e-club review_! - rds) -------- eof; .