Wednesday, June 6, 2012

Turning Engineers Into Businesspeople

A new program gives scientists and engineers the tools they need to develop and market their ideas.

For the past five years, John Axerio-Cilies has been working to improve the aerodynamics of Formula One racecars. But on this day in his office at Stanford's Center for Turbulence Research, the Canadian-born engineering grad student is occupied with something that could be useful to physicians — a three-dimensional computer simulation based on the CT scans of a man with sleep apnea. As the onscreen "patient" inhales, his pharynx glows an angry red at the precise points where his breathing is obstructed. "Doctors who have seen it," the mechanical engineer says, "have been blown away."


Zhaoqing "Ching" Ding, a PhD candidate in
immunology and neuroscience at the Stanford
School  of Medicine, presents her group's project.

Axerio-Cilies developed this potentially groundbreaking diagnostic tool for ear, nose, and throat specialists at the suggestion of his friend Fabien Beckers. A 2011 Sloan Fellow, Beckers had been working on innovative ways of curing obstructive sleep apnea, a condition that affects at least 12 million Americans. Now they are turning the simulation software into a fledgling business, thanks to a popular GSB initiative Axerio-Cilies took last winter called the Program in Innovation and Entrepreneurship (PRIE).

Launched in 2011, PRIE is a 10-week Stanford business school program that gives top-notch scientists and engineers the knowledge and tools they need to develop and market their ideas, either to venture capitalists or to higher-ups within their own companies. Its reputation as an intensive proving ground for high-tech talent has spread quickly. Of hundreds who applied for this year's winter quarter program, just 60 were admitted. Half were Stanford postdocs and graduate students in science, medicine, and engineering. The rest were working professionals from Silicon Valley companies.

While PRIE participants don't have any prior business training, "what they have in common is that they have ideas that they are interested in commercializing," says Garth Saloner, dean of the Graduate School of Business and an early promoter of the program. "If you're interested in learning how to turn an idea into a business, or if you're inside a corporation and you want to learn how to be more effective at moving your ideas forward, this is something that may be of interest."

Great care is taken to select students from a variety of disciplines and industries who can work well with one another. Once they've been admitted to the program, they take classes in two broad areas. Some of the sessions deal with core business skills, including marketing, operations, strategy, accounting, finance, and economics. Others focus on practical skills, such as product design and evaluation, negotiation, intellectual property law, teamwork, public speaking, leadership, and pitching ideas.

Participants spend the remainder of their time working in teams to commercialize the best of their proposed products or services, as determined by a vote of the class. The first assignment is to develop a 1- to 2-minute elevator pitch. Later they work out detailed business plans and PowerPoint presentations. For the final evaluation, they suit up (in itself a novelty for some techies) and pitch their ideas to more than two dozen prominent Silicon Valley executives and corporate, venture, and angel investors.

Not all the class projects will go on to become real-world businesses. But even those that don't pan out are useful academic exercises, says PRIE assistant director Arden Grady. At the beginning of the program, for example, when the students give their elevator pitches, "some of them are good and some need significant work," says Grady. But after 10 weeks, "these engineers end up at a completely different level than people who haven't had this exposure."

Among the 60 students in this year's class is Aaron Puri, a doctoral student in the Stanford medical school's Department of Chemical and Systems Biology. Puri is hoping to finish his PhD thesis by summer, but before that he wants to learn some strategies for evaluating, refining, and communicating his ideas. His PRIE team will be working on a venture inspired by his laboratory research to develop a pharmaceutical drug to combat Clostridium difficile, one of the most prevalent hospital-acquired infections. The drug, he explains, would work by directly targeting a toxin the bacteria secretes.

Kevin Reynolds, a Stanford doctoral student in mechanical engineering, is hoping to market a quiet rotor for helicopters. "SkyWhisper is in the business of selling silence," he says, already exhibiting a flair for marketing. The first prototype will demonstrate noise reduction in a radio-controlled helicopter. Eventually SkyWhisper plans to have a similar technology installed on full-size helicopters that will enable them to operate inside of cities and local communities without being heard.

Another group in this year's class is working on a smartphone app that would help international travelers choose restaurants, locate them, and place their orders. Still another team hopes to reduce the cost of solar power installations by matching project sites with the most appropriate technology.

The class is led by Peter Reiss, the MBA Class of 1963 Professor of Economics and codirector of the Center for Entrepreneurial Studies. He begins by going over the schedule: 58 class sessions, including several day-long Saturday boot camps, taught by 17 GSB faculty members. The schedule also includes guest lectures by expe- rienced local high-tech entrepreneurs, panel discussions, and networking events.

One of the hardest things for these scientists and engineers to get used to is the business school's case study method. Unlike reading a book on physics or biology, Reiss tells the students, a case is not about memorizing facts or information. "It's about something that's incredibly unstructured, where often a decision has to be made or a position has to be taken on something. That's what most business is about. It is about trying to distill a set of facts that are not organized at all – to martial an argument to convince somebody to do something, or that a course of action is reasonable. Believe it or not, there are good answers and bad answers, even when there is no E = mc2 equation."

So-called "soft" skills — things like public speaking, nonverbal communication, leadership, and teamwork — can be particularly challenging for this group. JD Schramm, a lecturer in organizational behavior, teaches modules on oral and written communication. Halfway through the sessions he spends an entire evening going through the anatomy of a pitch, from the first slide to the Q&A. He spends another Saturday videorecording practice pitches and giving feedback.

Schramm says his biggest task is to break these technical wizards from "the curse of knowledge." Some students, he says, know a subject so well, and are so steeped in it, that it can be hard for them to explain it to other people. "They have to figure out how to bring simplicity to the communication so that others can understand it, even those who don't have a science or engineering background," he says.

Outside companies that have steered employees into PRIE say that their engineers and scientists come back more confident and better able to communicate their ideas, lead their groups, and work in teams. That certainly was the case for April Slayden Mitchell, a senior research engineer at HP Labs in Palo Alto. She says the experience of preparing and pitching a new business idea to a group of venture capitalists at PRIE helped a lot when she presented a proposal recently at HP Labs for a new research opportunity. "The practical skills I gained for assessing and describing the value, risk, and advantages allowed me to effectively describe and defend the proposal and ultimately gain support and funding."

Adam Shor, a senior project engineer at the Palo Alto-based Electric Power Research Institute, says he found PRIE particularly helpful in his work as an innovation scout for photo- voltaics, products that convert solar radiation into direct electrical current. "My role is to be on the lookout for new things," he explains, adding that the program gave him the tools to advocate for promising technologies when he identifies them. "Engineers often are told, 'Just fix this problem and don't worry' [about the business side]. But if you have a better understanding of the business component, that opens up an infinite number of possibilities."

Another high-tech veteran who gained valuable insight from PRIE isColin Kincaid, senior director of product management at Cisco Systems. He says he would come out of class each night knowing exactly what he was going to do differently the next day. This was particularly helpful on the finance side, where he says he was able to translate some of the things he learned and make big changes in the way his group did several things in their portfolio management planning.

Such feedback is no doubt music to the ears of PRIE faculty director Reiss, who studied applied mathematics at Brown before earning master's and doctoral degrees in economics from Yale. His PRIE students typically are doing or have done graduate-level work in the quantitative sciences, mathematics, or medicine, and PRIE's aim is to break down the barriers that sometimes divide the scientifically talented from their business-minded colleagues.

"One thing you would find in a group like this is that they're very skeptical about the value that an MBA might bring to the table," he says. Similarly, mbas are very skeptical that these people have much value to add beyond their narrow technical expertise. "My mission in life is to make these two groups talk to one another," Reiss says.

One success story can be found back at the Center for Turbulence Research, where Axerio-Cilies is trying to determine whether his sleep apnea models correlate with data that doctors have gathered on the same patients in clinical settings. He's also starting work on another diagnostic tool: one that will enable cardiologists to take pressure measurements inside the heart without the use of catheters. He knows it takes time before he can get these tools into doctors' hands and that he will ultimately have to get FDA approval. "But the technology is very promising," he says. Indeed, the name of his new company is Morpheus Medical, after the Greek god of dreams.

Palo Alto-based freelance writer Theresa Johnston, AB '83, is a frequent contributor to Stanford Business.