Before selecting a product, a fledgling entrepreneur should consider a detailed business strategy if he or she wants to be successful, said Milton Chang, founder of New Focus Inc. and longtime photonics industry entrepreneur, to the Arizona Optics Industry Association.
During the packed address last month at the University of Arizona Optical Sciences Center, Chang related anecdotes and wisdom from his 27 years of starting and running high-tech businesses. "You can set up a company with a clear business strategy and let the technology follow," Chang said, noting that technical ideas often change in the early stages of a business.
In a "low-risk" start-up model, two or three principals prospect for potential technologies while living within their means and maintaining financial support for two to three years' worth of expenses. This strategy also allows the principals to gain management skills as the company develops, he said. It differs from the more familiar venture capital model, in which entrepreneurs bring ideas to investors who want high returns for their large capital investments.
Adapting to growth
A high level of camaraderie and fast-paced decision-making marks the initial phase of a company's growth, Chang added. After the company has grown to around 100 employees, a change in the management team may be necessary to reflect the vision developed over the company's evolution. Another re-evaluation should take place when a company has 1000 employees.
Photonics technologies that enable applications in the biomedical and telecommunications industries are particularly attractive to investors, but company principals must be able to demonstrate the quality of their leadership team and the accuracy of their market research to secure funding, he noted.
Working for a small start-up is a good way for an individual to determine whether entrepreneurship is a viable goal. Being comfortable with the uncertainties of a start-up environment and able to learn from mistakes without being overwhelmed are important qualities in an entrepreneur. Developing communications and program management skills are important as well, he said.
With all its lure of high rewards, being an entrepreneur is not for everyone, however. "Entrepreneur- ship requires taking risks," Chang said. "Physics is truth, but business is uncertainty."