1THE ENTREPRENEURIAL BUSINESS OF SOFTWARE Fall 2006 Course Syllabus MBA 290T.2; ENG 298A P02 / CCN: 27873 I School 290-10/ CCN: 42859 Units of Credit: 3 Tuesday/Thursday, 4:00 PM - 5:30 PM F320 Haas Instructor Professor Kurt Keutzer www.eecs.berkeley.edu/~keutzer/ (see my professional interests) keutzer at eecs dot berkeley dot edu Office hour: Thursday 3-4PM 566 Cory HallCourse Objectives Software has a relatively low cost of development, manufacture, and distribution. At the same time the ability of software to embody complex algorithms and processes gives software-based companies the capability to create sustainable barriers to competition. As a result software is an ideal medium for entrepreneurs. When I taught this class in the fall of 2003 a team of two MBA students, two EECS students, and a student from the I School, created an outstanding class project. The computer-science researchers on the team were aware of a recently published technology that could find critical bugs in software, particularly possible security violations. To further realize the potential of the technology, a seed-stage company of four individuals had already been formed. Members of the class project initiated contact with the founders. The project team studied this seed-stage company, evaluated the opportunity, and developed a business plan around it. Today that seed-stage company has grown into a high-growth and profitable start-up named Coverity (www.coverity.com). Retrospectively I would consider this project a model for the class. The engineers identified a technology at a stage that was far below the radar of the business world. The business students helped the team to articulate the market potential. That the technology itself was not developed at Berkeley but at a university a bit to the south may seem like a flaw or even a sham. On the contrary it drives home an important business lesson: In the business world the ability to recognize value is at least as important as the ability to create it. My goal for the class is very simple. I’d like project teams of about five individuals representing a mixture of backgrounds to create high quality and actionable business plans focused on software-based business opportunities. I’d like those plans to win competitions (we’ll be coordinating with the business plan competition), to get funded, but most of all to lead to successful software companies. I am very confident that Berkeley students have the right set of skills to make this happen. I will do my best to mentor those skills and I have enlisted a group of successful entrepreneurs and venture capitalists to serve as mentors for the class as well.2Deliverables Weekly assignments A typical week will consist of a lecture on Tuesday with a related reading assignment and questions discussed on Thursday. These assignments will on issues that must be addressed in your business plan. The homework can be done in collaboration with your project team. Make sure it’s clear who is on the team when the homework is turned in. The answers should be delivered via email to Prof. Keutzer (keutzer at eecs dot berkeley dot edu and kurt dot keutzer at gmail.com) and are due by 8am Thursday. Project The project will be to develop a viable business plan. The business plan can be an entirely new venture or can be based on existing enterprise in its very early stages. In the latter case the business plan should embody a significant infusion of new ideas. The business plan will be presented in person and on paper. • a class presentation of the business plan (~30 minutes) • business plan (<3000 words, not including appendices) Grading (reflects the emphasis above) Questions: 10 assignments x 2 points each: 20 points Class project (checkpoints, presentations, and final report) 70 points Class participation 10 points TOTAL 100 points Mentors I don’t believe that entrepreneurism can be taught, but it can be mentored, and a list of mentors is given below. Note that mentorship is not guaranteed. A project will have to earn the attention of these entrepreneurs. You can look at the website links for biographies of these individuals:  Forest Baskett, General Partner, New Enterprise Associates (www.nea.com)  Brian Connors, General Partner, Formative Ventures (www.formativeventures.com)  Leo de Luna, Associate, Saints Venture Capital (www.saintsvc.com) (alumnus, 2003 class)  Beth Devin, former EVP at Charles Schwab, now CTO and SVP at Blackhawk Network  Bob Dahlberg, Venture Partner, Horizon Ventures, (www.horizonvc.com)  Aki Fujimura, Office of CTO and Office of Incubation, Cadence (www.cadence.com)  Shomit Ghosh, Venture Partner, Onset Ventures (www.onset.com)  Gordon Hull, formerly Managing Director at CMEA Ventures, now raising a new fund  Lars Leckie, Principal, Hummer Winblad Venture Partners (Lars just joined HWVP. You won’t find him on their website yet.)  Martin Lefebvre, CEO of CommandCAD, founder of Cadabra, private investor, and member of Band of Angels, (www.bandangels.com/team/member.php?bio=martin)  Paul Lippe, CEO QULAS, formerly general counsel at Synopsys and CEO Stanford Skolar  Joseph Raffa, Venture Partner, Adams Capital Management (www.acm.com)  Jim Smith, General Partner, Mohr Davidow (www.mdv.com)  Faysal Sohail, Managing Director, CMEA Ventures (www.cmeaventures.com)  Mark Stevens, Partner, Sequoia Capital (www.sequoiacap.com) Guests in class: Together with many of these mentors, Seth Hallem (CEO of Coverity) and Ann Winblad (co-founding partner of Hummer Winblad) will be joining the class for discussions.3Class Schedule Date Topic(s) Assignments to be read and questions completed before class Milestones at Start of Class August 29 Course Overview August 31 Developing ideas. Case: Motive Communications (Seth Hallem, CEO Coverity) September 5 Finding the right SW start-up idea: Cusumano: Ch. 5 September 6 5:45 - ??? Ideafest – Cory 540A/B Bring an idea September 7 Discussion on identifying and qualifying new ideas. Case: How VCs Evaluate Potential Venture Opportunities (Lars Leckie, Mohr Davidow) Teams formed September 12 Customer development. Cusumano: Ch 2 (Steve Blank, UC Berkeley) September 14 Discussion on defining your product or service and its market. Case: Documentum, Inc. Business mission September 19 Packaging and distribution alternatives. Case: Kana