How Hard Is it to Be an Entrepreneur?

A look at what holds back engineers from starting their own businesses

12 March 2012

For the past few days, engineers and other innovators have gathered in Austin, Texas, at an increasingly popular annual festival focused on emerging technologies and startups: South by Southwest Interactive (SXSWi), which began on 9 March and wraps up 13 March. With so many leaders in technology attending, it only makes sense that IEEE should be there, too.

This year, the IEEE Standards Association is sponsoring three events at SXSWi that featured presentations by IEEE honorary member and inventor Dean Kamen and Nobumichi Tosa, president and cofounder of Maywa Denki, a Japanese company known for developing elaborately engineered electronic and mechanical instruments and devices and performing with them. Kamen discussed  his work and how he became successful, then he and Tosa spoke about what it takes to be an innovator, and then Tosa demonstrated some of Maywa Denki’s instruments and other devices.

SXSWi has become known as the place for startups to showcase their products and services and catch the attention of the public—and investors. Over the years, several businesses have also gotten their start at the festival.

Although Twitter launched a few months before SXSWi 2007 was held, cofounder Evan Williams has said that displaying the service on screens located in the venue’s hallways—a busy area during the event—is what led Twitter to “blow up.” Foursquare—the popular location-based service that has users checking in with their smartphones at locations and earning “points” and even “badges” for the number of times they check in—launched at the 2008 SXSWi. Six months later it had secured its first round of funding from investors.

Although some of Twitter and Foursquare’s founders have technical backgrounds, you may be surprised to learn they’re in the minority. According to a 2011 survey of more than 500 technology companies conducted by Duke and Harvard universities, only 37 percent of the companies’ leaders had engineering or computer science backgrounds.

A recent article on Forbes.com, “It’s a Big Step From Engineer to an Entrepreneur,” listed some possible reasons why more tech company leaders aren’t engineers. The article—written by Martin Zwilling, founder and CEO of Startup Professionals, a company that provides services to startup founders—included engineers’ misperceptions about business. One was that “everyone loves cool ideas and new technology.” Zwilling notes that it takes more than just that to succeed. It’s crucial to assess the commercial viability of an invention by getting customer feedback on prototypes and conducting market research.

Another misperception is that “engineers assume that the business issues can be resolved later,” Zwilling writes. “Working alone, or with other engineers, is great for the average engineer introvert, gives them better control, and minimizes distractions. A team with diverse skills is harder to manage, but more likely to build a thriving business.”

I’m not sure whether these misperceptions are true (tell us in the comments below), but I am sure there are certainly many hurdles to launching a business—not the least of which is acquiring the funding it takes to get started. However, there are resources to help, including many from IEEE.

For starters, check out IEEE-USA’s Entrepreneurs Village, an online resource that includes links to webinars on small business fundamentals, e-books, ways to start a local IEEE Entrepreneurs Network, and more.

There’s TechMatch, a free online service for those looking to get business planning and investment advice from seasoned professionals on starting or maintaining a business. Learn more about the service in an article we wrote in 2010.

The Institute has also featured the advice of an IEEE member who found that you don’t need a boat load of money to start your own business. Dileep Rao, a professor at the University of Minnesota’s Carlson School of Management, in Minneapolis, interviewed 28 Minnesota entrepreneurs who had built their start-ups into organizations generating more than US $100 million each in annual sales. Rao then distilled his findings in a book, Bootstrap to Billions (Interfinance, 2010, US $29).

Do you agree with the misperceptions engineers have about starting a business as listed in the Forbes article? What do you believe are the biggest hurdles facing engineers who want to become entrepreneurs? And if you’ve started your own business, share your story below.
 

Photo: Eric Gerrard/iStockphoto

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