research

Lemon Theory of Due Dilligence

Last week, Bizologie presented at the SLA Texas Chapter meeting of information professionals in Dallas. It was a great program sponsored by Plunkett Research and IEEE. We had the privilege of hearing Dr. David Croson a professor of strategy, entrepreneurship, and business economics at SMU Cox School of Business. Croson is also an angel investor. His research and his presentation, Cashing In On Superior Research In The Startup Economy, both focus on the value of information in decision-making.

Croson.jpg

Because investors need to move money and make investments, time spent trying to pick only the best companies, or the “cherries” as Croson calls them, can be counter productive. Croson posits it is better to focus on filtering out the lemons and then invest in all the other opportunities that come across the desk. His research supports that that theory pays off.

How do you sort out the lemons? When doing due diligence on companies, go in looking for disconfirming evidence. Play the devil’s advocate and try and find every reason this company could or would fail: Is the industry not growing; Are there huge competitors; Are there unfavorable regulations coming? By intentionally looking for the bad news, you won’t miss something or be inclined to skip over something that seems negative.

Also as Croson points out, it is important to remember the value of research is zero if you don’t plan to make any changes with the information you receive. So when you are presented with the research, be sure that you are taking into account your original intentions and objectives for having sought the research in the first place.






3-Day Startup

3DayStarup

The last weekend in March, I and three of my colleagues from the UT-Austin School of Information had the distinct pleasure of volunteering as business research mentors at Austin 3-Day Startup (3DS), an educational event that gives college students ranging from freshmen to Ph.D. candidates a crash course in entrepreneurship. The idea behind 3DS is simple: the best way to learn entrepreneurship is to start a company.  The event takes place over the course of a fast paced, caffeine-fueled weekend.  In the course of about sixty hours, team members get an introduction to all of the trials and tribulations associated with starting a company (3DS board member Bart Bohn once humorously referred to this experience as “facilitated contact with reality”).

The structure of the event is simple:

  • Teams form Friday night, hone their ideas and start building prototypes.
  • Saturday, the teams take to the streets to perform primary customer validation—3DS is insistent that teams answer Rob Adam’s critical question: “If you build it, will they come?
  • Saturday night into Sunday morning, the teams have time to tweak their ideas based on the feedback they received from customers (or, in some cases, start over from scratch!).
  • Finally, Sunday morning, 3DS participants prepare for the apex of the event—a chance to pitch their ideas to an audience of seasoned entrepreneurs and investors (This year’s mentors included start-up superstars Gary Hoover and Joshua Baer among others).

Throughout the event, 3DS teams benefit from the guidance of seasoned entrepreneurs, investors and tech wizards who volunteer as mentors.  These mentors offer real-world advice and perspective on the company-formation process.  They help the young entrepreneurs in training ask the right questions and identify legitimate market pain points to which they need to respond.

This semester’s 3DS-Austin mentors included a group of business research gurus from UT-Austin’s School of Information (iSchool).  Myself, Becca Havens, Stephen Kuperman and Kamran Varahramyan (by way of the Department of Electrical and Computer Engineering) spent two sleepless nights with 3DS teams helping them answer crucial research questions during the first two days of the event.  The questions we fielded ranged from “how can you make money with crowdsourcing?” to “what are the business hours of every restaurant in Austin.”  By the end of the 60-hour event, we had helped the majority of the teams answer some of the tough questions that all entrepreneurs face: How big is the market?  Who is my competition?  How do we make money with this idea?  When the dust settled and the teams presented their ideas on Sunday night, our impact was evident in the clear and well-researched information in their presentations.

The success of this semester’s Austin 3DS teams validates the important role information professionals play in business and entrepreneurship.  Today, we face a flood of information, all of which has to be located, retrieved, organized, visualized and preserved.  This reality is especially stressful when you’re trying to start a viable business in 60 hours!  Luckily, as my colleague Stephen Kuperman remarked to one team, navigating the information flood “is what we do, and we’re really good at it.”

Ryan Field is an MS candidate at the University of Texas at Austin School of Information and a research analyst intern at the Austin Technology Incubator.

Competitive Intelligence Supports Innovation

Paap

At an Austin area SCIP meeting I was inspired by the keynote speaker Dr. Jay Paap. Paap is a seasoned technology and innovation management professional and now a faculty member at Sloan Business School at MIT. Most companies come up with an idea and then they ask CI to determine the market. Paap suggests putting this on its head. Use CI to gather information on how the market is changing to determine how companies could capitalize on that change and create a solution to solve a new problem. Paap is a proponent of using competitive intelligence early in the process of innovation. CI can "help anticipate needs by looking at leading industries and external forces affecting your customers" and "anticipate technologies by monitoring sources of disruption..."

Creativity = Need + Technology

"Innovation starts with intelligence." Competitive Intelligence can help companies manage risk by developing business cases when hard numbers are lacking. CI can be used to anticipate the drivers of innovation, adoption of new technology, competitors intentions, and it can provide inputs for project selection, execution, and review. CI "ensures that decision about innovative activities are based on the best available information."

Innovation = Creativity + Fit + Value

Paap definitely understands the value of information and competitive intelligence. Seeing how CI informs innovation adds more value to the CI service and helps companies see the return on investment.

Can happiness lead to success?

happiness

What if everything we've learned about success leading to happiness is backwards? Studies show that happy people are up to 30% more productive. These positive people also suffer from less burnout, and take fewer sick days. What if happiness directly leads to our success and not the other way around? This is becoming a hot topic of research at business schools. Raj Raghunathan is an associate professor at the University of Texas McCombs School of Business and writes the Sapient Nature blog for Psychology Today. I heard him speak at the UT Libraries a couple weeks ago and was intrigued by this idea. So many people define success as overcoming obstacles and reaching goals. But what happens then? We move the finish line. We set more challenges and goals. So that means we put happiness just out of our reach or at the next goal. Can we redefine happiness, and therefore success?

Shawn Achor author of The Happiness Advantage and former teaching fellow at Harvard University is also researching in this field. He explains that we get in a negative mindset and will always look for the negative. Can we change our viewpoint? What about the negative nellies? Is being a pessimist genetic? Achor says it is possible to change the way we think and become more positive. Raghunathan also believes we can get happy-smart and make happiness a priority.

What can you do to become more positive?

  • Be grateful - for 21 days write down 3 things you are grateful for and why
  • Exercise - get those endorphins flowing
  • Stop multitasking - focus and learn to meditate (even for just 2 minutes a day)
  • Think of others - volunteer or praise/thank just one person each day

The research shows that happiness is actually contagious. So theoretically as a manager or team member, you could spread positivity to your colleagues and help them become more productive and successful.