Category Archives: Entrepreneurship

Start-ups, innovation, market valuation and the like.

Herb Kelleher’s Classic 14 Ways to Be a Leader

“You must be jazzed by problem solving, the same way that a fireman gets a buzz out of extinguishing fires.”

Herb KelleherOriginally published in McCombs Today.

Despite soaring fuel costs and a glut of domestic airline seats, Southwest Airlines reported its 32nd consecutive annual profit in 2004. At that year’s McCombs BBA commencement, Herb Kelleher, co-founder, chairman and CEO of Southwest Airlines, delivered the keynote remarks in a lecture entitled “Fourteen Ways to Be a Leader.”

Kelleher began by proclaiming the commencement to be a splendid occasion. “Why? Because you are the kind of audience I crave; you have to listen to my thoughts, no matter how dull, how puerile, or even how depraved those thoughts might be,” he said with a grin.

The address that followed was classic Kelleher.

Ten years later, since retired from his leadership role at Southwest, Kelleher remains an astute and beloved commentator on life, business, and the principles of success. As commencement approaches for 2014, we’re pleased to present “Fourteen Ways to Be a Leader, Centennial Edition” with one modification (point No. 4), suggested by Kelleher in retrospect.

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The One Millionth SXSW Guide for 2014

Gentlemen and gentlewomen, start your Prii. 

UT Austin at SXSW

Gosh, is it even possible to get a blogger foot in the SXSW publicity door? The whole thing is like a giant ballroom full of chicken dancers–everyone is having fun but nobody is holding your hand. I honestly don’t know what that analogy means, but here is the One Millionth SXSW Guide for 2014, selfishly featuring friends and alumni of McCombs School of Business.

Friday, March 7

Ubuntu Leadership: Leaders for a Connected Africa

Africa is on the rise, with a projected GDP by 2050 bigger than the U.S. and China combined, and a population that is young and anxious to experience economic and cultural growth. As evidence of that, their cell phone network already kicks our butt, but that’s another story. Enter John Kidenda, who graduated from McCombs with support from the African Leadership Bridge, a program designed to train the next generation of African Leaders. Kidenda will be joined by presenters Frank Aswani, Rick Reeder, and current UT Austin student Takalani Malivha.

Sunday, March 9

Should You Drop Out of School to Start a Company?

Short answer, it worked great for a small handful of people. Good luck! But seriously, Andrew O’Hara dropped out of the Texas MBA program to found Chiron Health, and he wants to tell you about “multiple perspectives surrounding…the value of staying in school for starting a company to dropping out to accelerate a career in entrepreneurship,” along with Cam Houser and Michael Gibson. Does anyone edit these session descriptions?

Big Data & Web Communities: Connect with a Click

Tying online activism to community organizing in order to achieve a better world. Gentlemen and gentlewomen, start your Prii. Luke Kyohere is a recent MSTC grad at McCombs and he just won the Austinpreneur of the Year for 2014, so listen up. He is founder of Beyonic Technologies, which helps businesses in Africa incorporate mobile-based bulk payments into their operations. He is joined by Asha Curran, Larry Irving, and Parker Harris.

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Expert Advice About How and Where to Finance Your Business

“It’s like borrowing money from a mob boss—under the right set of circumstances, it can make sense.”

If you’re thinking about launching a new business there are basically three financing options available: equity, debt and bootstrapping. Choosing how and where to finance your business is no small decision–and can literally make the difference between realizing your business dreams or losing control of everything you’ve created.

In a recent interview with Rod Kurtz, Editor-at-Large with American Express OPEN Forum, serial entrepreneur and investor Rob Adams shares hard-earned insights about financing that every potential business owner should thoroughly grasp.

“What are the main types of financing available to entrepreneurs?”

The three types are equity, debt, and bootstrapping. Equity, most entrepreneurs know as venture capital. Debt, most people know as borrowing money from a bank. And bootstrapping is that the business generates enough cash from the start to not require any outside funders.

“I hear a lot about venture capital. Seems like there’s always a new startup in the news raising millions, which is obviously tempting. How do I know if it’s right for me?”

Venture capital is a form of private equity, and by definition, it means you’re selling a piece of your company. It typically applies to business models that are tech or life sciences, because they can be super high-growth and profitable, but cash-flow negative. When they’re cash-flow negative, they have no assets to collateralize, which is why it’s such a high-risk, high-reward business. And the investor owns a percentage of a higher-risk company. Regardless of urban legends, I can own one percent of your company and control 100 percent of what you do, through a concept of management rights. What I like to say, it’s like borrowing money from a mob boss—under the right set of circumstances, it can make sense, but you need to know what you’re doing.

“Debt is the one I’m most familiar with. Does this make more sense for a company like mine?”

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Three Hints for Funding Clean Energy Startups

“Clean energy is a hot topic right now, but innovators and entrepreneurs shouldn’t get cocky.”

Where is the money in startups these days? Here is a clue: Look at the student-led startup teams finding favor on college campuses during investor competition season. At the Super Bowl of such competitions, held last May at the McCombs School of Business, nothing was trending faster than funding clean energy startups.

I spoke with the founders of the competition’s winning clean energy startup to identify three essential moves that will help clean energy projects find investor support.

1. Ride the clean energy momentum

Panos Adamopoulos has 11 years of consulting and strategy development experience in Hong Kong and China, but last May his attentions were focused on a team of judges sitting in a ballroom at the Global Venture Labs Investment Competition in Austin. He had reason to feel confident; his pitch team had already won the top clean energy prizes at Rice, Berkeley, and Greenville Tech, and they were about to garner one more.

Seismos Team PitchAdamopoulos, Devin Bedwell, and Stevan Slusher, all students in the Master of Science in Technology Commercialization program at McCombs, teamed up to launch Seismos, a company that promises to free up previously unreachable oil reserves while lowering carbon dioxide loss during production.

Seismos added one more notch to their belt that day, with a win of the Wells Fargo Clean Energy prize, bringing their earnings to $45,000 cash and about $100,000 in incubation and consulting services.

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Tips for Entrepreneurs – Focus on Execution Intelligence

“Every time I’m asked to sign a nondisclosure agreement I see a huge red flag pop out that says Warning!”

A Good Hard Kick in the AssRob Adams has likely listened to as many new business ideas as anyone on the  planet, and one of his first tips for entrepreneurs is to never tell a potential investor you’ve got an original idea.

“Wake up,” he says, “Good ideas are not scarce, they are a dime a dozen.” If you don’t believe so, Adams suggests an online search of key words describing your idea. “You’ll find ten companies doing it, or thinking of doing it. You can drive yourself nuts searching for a unique idea, but that is not the point.”

The point, as he describes in his book A Good Hard Kick in the Ass, is execution intelligence, the ability to compose a team that can operationally execute a business plan with sustainability, flexibility and resilience, to dominate rather than define a market space.

Why Investors Hate the Nondisclosure

“Every time I’m asked to sign a nondisclosure agreement I see a huge red flag pop out that says Warning!” Adams asserts. “It screams out, ‘I’m stuck on my idea,’ it means you’ve spent too much energy obsessing about the idea and probably haven’t thought enough about the team, which is what the investor is really interested in. It implies you haven’t given much thought to your customers, or to the market.”

Getting to market first with a new idea doesn’t mean anything in Adams’ experience. “Netscape’s browser was out long before Microsoft Explorer,” he recalls. “Creating a new category does not necessarily spell success, but I can think of plenty of businesses that entered an existing category and proceeded to stomp all those roaches to pieces.”

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