General Engineering Introduction/Engineering Entrepreneur
- 1 History
- 2 Sensics Example
- 3 Career Security, Not Job Security
- 4 K2M Example
- 5 Business Approach
- 6 Example Construction Equipment
- 7 Supply Chains
- 8 Example: Bowles Fluidics
- 9 Inventing
- 10 Investment
- 11 Positive Cash Flow
Engineering before the 1980's was typically done in large, vertically integrated companies. Innovation that did not fit the companies design model never happened. Large projects involving hundreds of engineers and thousands of people changed society rapidly. The best training an engineer could have to fit into these large organizations was at a military academy.
Engineers in the US during the 1980's thought that design was the paternalistic control point in production of anything. They outsourced manufacturing to different countries, keeping design in the US. These countries reverse engineered the products and soon began competing manufacturing products. The lesson? Design can be learned by anybody.
The paternalistic control point shifted momentarily to manufacturing. But 3D printing, crowd sourcing, and public domain designs may eventually threaten manufacturing and perhaps retail distribution. Any centralized, large manufacturing operation (cars) is threatened. This has turned engineering design into a “practice” like that of a lawyer or doctor.
A virtual reality head gear company competes with around three other companies. Their model is the lightest on the market. The goggles are purchased by those trying to assimilate massive quantities of data .. the military, researchers. They have a model designed to be hooked up to a cell phone for the mass market.
The company has many partners. They purchase parts, draw in 3D software, send designs out to be manufactured in limited quantities by someone else. They partner with lots of other companies. Engineers are employed on a temporary, project basis. For example a part time consulting engineer designs the plastic enclosure pieces. The engineers working for the company put the electronic documents together and send them to manufacturing engineers. How many people total work full time for the company? Seven. Not all seven are engineers.
Career Security, Not Job Security
A career is built through reputation and experiences that enable success with more complex and challenging projects. Jobs are merely disguised projects that can last from days to years. An engineer's goals are to grow professionally, find mutually advantageous working relationships, and be compensated. This is consulting engineering. An engineer learns that there is no loyalty, there are no guarantees, there are no friendships that can guarantee employment. This is the mentality of an entrepreneur.
Engineers can be employed by big defense contractors, big engineering service firms where projects are found within the company. This is typically a more stable job but recovering from layoffs, downsizing and finding another job can be harder. This is because more time is spent on building specialized, unique experience and expertise. The general or scientific engineering orientation is lost and a reputation outside the company takes work that some engineers don't do. Many end up working as managers, not engineers. Those that don't want to be managers should keep general engineering alive, find a consulting niche and then participate in starting companies.
K2M specializes in spinal surgery apparatus. The founding engineers lead the company. A tour reveals an incredible array of inspirational devices including cadavers, whale spines, hip and knee implants of other companies, surgical tools, 3D printers printing enlarged versions of new screws being designed, and kits sent to surgeons. An engineering notebook required by the FDA can be found in each engineer's office. A question about spinal cord disc replacement leads to a discussion of experiments in other companies that would be illegal in the US. An almost separate company within K2M places surgery kits in hospitals that may perform spinal surgery in the future. It sterilizes the kits, checks all the instruments in the kits, replaces any parts used and then ships them back to the hospital. None of these kits are made at K2M.
Companies like project teams because it focuses the team on products and services which deliver profit. The engineer is usually one of the first and sometimes the only engineer on the team. The engineer needs to be a generalist first. Contacts with colleagues outside the company are more important than specific technical expertise. Communication, professional networking and technical societies become absolutely critical to the engineer. Being able to work with “normal” people is a must. The company project may demand that the engineer become good at investor fund raising, good at selling, good at technical support. Perhaps the engineer may have to do these things first before a sales, finance, or human resources specialist can be hired.
Fundamentally, whether technical, funding raising, sales, support or human resources, the engineer needs to objectively analyze problems, articulate choices, and go with the one that is most likely to succeed.
Example Construction Equipment
The biggest floating cranes are scheduled years in advance by bridge and oil platform builders. Companies float the cranes across oceans to their next assignment. Who knows the history of these cranes? Who keeps track of their availability? Companies exist just to keep track of construction equipment serial numbers world wide. Construction equipment is often owned, operated and fixed by different companies. Coordinating all the equipment on a construction site is itself a task of engineers.
The Sensics and K2M examples above both sit on top of manufacturing supply chains. There are more entrepreneur opportunities (construction equipment example) within supply chains. Supply chains share common quality, invoice tracking, and inventory systems. Concepts such as “just in time” and “design build” involve a degree of cooperation between companies that has to evolve through mutual respect.
Penetrating existing supply chains means replacing a current participant. This is difficult. It is better to add value. Study a supply chain. Find it's weaknesses, find where it can be extended. Supply chains normally form associations. Attend their meetings. Listen to their presentations. Opportunities will become obvious.
Example: Bowles Fluidics
Bowles Fluidics makes 90% of the nozzles that squirt fluid on car windows in the US. They make the nozzles that aim warm and cold air on car dashboards. They are part of most automobile supply chains. They design shower nozzles. They design the massaging mechanisms for reclining chairs. Their market is not just commercial. They employ two types of engineers. Design engineers come up with patents and product ideas. Manufacturing engineers turn them into reality. Patents are framed and line the walls. Like most engineers with patents, the company owns them. Patents are applied for when they are ready to ship and market so they maximize the patent protection period of 20 years. They are ready to aggressively challenge any competitor that infringes on their patent. They protect the proprietary nature of their engineering design process and value their database of failed ideas as much as the ideas that are currently generating income. New design engineers are asked to learn the design process by reviewing the failures.
Engineers can receive patents and be inventors. However, not all inventors get patents and many are not engineers. The next door neighbor who has an idea for a better motorcycle grip, or the friend with an idea about a better bed are motivated by what? What about a device that automatically trims finger nails stuck in it? What about a cat toilet? Service motivations are respected. Irritation can be leveraged. But many inventors have other motivations.
There is a dark side to inventing. Inventors are not necessarily engineers. They can be loners, secretive and resistant to education. They can be motivated by wealth and notoriety. In general they don't try to build the respect of an engineer. Many inventors don't have the money to begin manufacture or legally enforce the patent. Many are ignorant of the entire process and just want someone to purchase the “idea” or invest in what ultimately is a scam. US legislation patent legislation in the summer of 2011 changed the patent process to “First to File” like the rest of the world. This makes it even more expensive for the individual inventor to defend their patents.
One of the most popular high school engineering programs in the US (Project Lead the Way) puts a patent context on their capstone Engineering Design and Development (EDD) projects. Students have to come up with a problem and solution that has not been patented before. There are many problems with this:
- The patent context is dangerously close to an inventing context.
- Exposes engineering to the negatives associated with inventors.
- Undermines the engineering ethics and the service motivation in particular.
- Shrinks engineering to ONE BIG problem, rather dealing with the continuous large (accumulation of engineering knowledge institutionally) and small problems that an individual engineer deals with.
- Misplaces value on "ideas", creates "idea" ownership fantasies that are not supported by the "idea implementation" nature of the patent process.
- Creates unrealistic expectations of ownership, value and patent enforcement possibilities in the publicity and marketing of the program.
Many US school administrations have taken the position that they own patents created by professors and students. A legal battle over this issue reached the US supreme court in 2011 when a professor signed his rights over to a company that a university claimed they owned. The court ruled that a university does not have the right to all patents. Merely bringing this question up with in a community college can cripple administrative support for engineering projects. Most colleges have not dealt with this issue. To resolve the issue, they would have to hire lawyers, consume board meeting time and end up with a controversial policy. Instructors of freshman, general engineering courses should not entertain projects with patent possibilities. Make it clear up front that all projects are going to be in the public domain. Students who arrive in the course with the patent/inventor focus, should keep their ideas secret and enroll in Entrepreneur programs described below.
The positive side to inventing is that most actual patents are created by engineers working for firms. Through an analysis of US patents, relationships among engineers can be tracked. A search of the name of a particular inventor reveals a list of names, not one person as the inventor. The first name mentioned is usually the person who came up with the idea. The others mentioned help turn it into reality. By analyzing this list of names, inventor network drawings can be made. Capturing these relationships in on-line social inventor networks has had success in some areas. Most of these relationships are built face to face through engineering societies and local service organizations like Rotary Clubs in the US.
Rich people can not sit on their money without loosing it. There are an estimated 2 million people in the US that are or should be investing their money. Various institutions have evolved that service this need: TV Shows, Competitions, Angle Clubs and Venture Capital funds. Concentrate on selling ideas rather than creating a detailed business plan. Expect to fail at first. Expect to present many times to different groups in different settings. Use each presentation to improve the next.
The US show Shark Tank is one of many TV series from around the world that are similar to the British Show Dragon's Den. The shows feature entrepreneurs pitching their business ideas in order to secure investment from a panel of venture capitalists.
There are many different Entrepreneur Competitions. Some are for students, some are open to anybody. Some encourage professors to team with students. Some have lots of requirements and low benefits. Some can result in investment. Others award cash. They can be sponsored by schools or by investors. Find local ones!
According to the US Small Business Administration, there are at least 250,000 angels, funding about 30,000 small companies and investing $20 billion to $50 billion a year. Angel clubs usually meet over lunch. Proposals are submitted over the net, and then one gets an invitation to speech for 10-15 minutes while the investors eat lunch. You leave the room and the investors vote. If enough people vote, then you are invited back to make a longer presentation. After the longer presentation, individuals will contact you. There are sometimes several such clubs in a big metropolitan area.
Venture Capital Funds
Venture Capital Funds are managed by people that can gain a celebrity status. They invest in startups and companies that are expanding. They can take a company public by selling stock. They typically are more professional than Angle Clubs.
Positive Cash Flow
The problem with investors is that they can control the company. At a minimum, they have unique personalities and opinions that need to be listened to and dealt with. They can be constructive or destructive. Some try to avoid investors. This means trying to “pay as you go”, “stay in the black” or a positive cash flow. There are programs to help you get started by investors that deliberately don't want to be part of the process. And there are local government agencies who have money without any strings attached to help you get started. Below are some examples.
Business Incubators operate under the assumption that mixing a bunch of Entrepreneurs together in the same office complex will spark company development. They provide at low cost an office with basic internet connectivity near others in the same position. They provide these reduced services for a few months and sometimes investment money for a small part of the company. Some of these are related to government entities, some are entirely associated with a particular venture capital fund.
Small Business Administrations
At the federal, state, and local levels, business can be registered as “small” which is typically under 500 employees and an income under 6 million dollars. After registering, your company is eligible for preferential treatment in the bidding process to supply products or services to government agencies. There are similar programs for minorities and those with disabilities. These programs start at the federal level with similar programs at the state, county, and all the way down to the local level. A single person can become such a business! Just fill out the paper work.
The Small Business Administration and other federal agencies occasionally have money to invest or lend to businesses. The money is distributed locally. Relationships with local offices of the national program need to be built to access these loans.
Entrepreneur cultivation is as popular as police forces in most governments all the way from federal to the smallest town. Some are better than others. Most colleges with a business program, have an entrepreneur program offering courses that march you through the steps of starting a business.