Many people often ask themselves if they want to be an entrepreneur, but not all entrepreneurs start out wanting to be or labeling themselves as such, said Scott Maloney, the Innovator-in-Residence for Arrowhead Center at New Mexico State University.
Maloney described his “typical non-typical” path to entrepreneurism at a recent Entrepreneur Encounters talk, which is part of a two-year speaker series at Arrowhead Center funded by 1982 NMSU chemical engineering alum Frank Seidel of Seidel Technologies.
Maloney’s talk, “Recognizing Business Opportunities,” was geared towards individuals of all professional backgrounds, not just business. His talk pivoted on the role of ideas, passion and inspiration in entrepreneurship.
Maloney, a self-described former lab scientist “with researchers, post-docs and a white lab coat with every color of the rainbow splattered on it,” knew that selling invented technology could literally translate to “selling out” in the world of science research. Though science is interested in novel discoveries, it does not have an interest in commercializing innovations that result from laboratory research. However, Maloney recognized that many inventions developed in lab settings could positively affect people’s lives, and not just in a monetary sense.
Spurred by this realization, he left the lab setting and enrolled in an MBA program. He emerged from his MBA to work in Manhattan for Fortune 500 pharmaceutical company Pfizer. It was here, through frequent international travels to buy and sell “scrappy little hard-working companies,” that he found energy and productivity in bringing these small companies’ ideas to sale for profit, and to more quickly commercialize inventions and innovations that made a difference.
“The straw that broke the camel’s back was when I came back from one of these ventures,” Maloney said. A two-inch thick stack of memos from his assistant, some of which simply indicated that more memos were coming, soured him on the office-bound portion of the job. Using his savvy to locate a “scrappy company” he knew could be expanded and later sold, he liquidated all of his assets to invest in a significant portion of 10-cent company stock. He then called the company to ask for a job.
It was a smart move. After he spent time focusing on expanding the business, his company with 10-cent stock was sold to Glaxo-Smith Kline in a multibillion dollar deal.
Maloney was far from finished. His next move was to the Internet company LivingSocial, where he helped expand business in a similar way as his previous company.
“What entrepreneurs tend to gloss over is what didn’t work, but we should always ask people about failures, as it is an important part of the process,” Maloney said.
During his presentation, Maloney traced the life of an initial idea through the scaffolding of a personal network, professional network, community level network and market level network, the last stage in which a product, solution, or invention starts to make money. Then, Maloney said, you experiment against the market and figure out what works and what doesn’t work with tactics such as A/B testing (do you like version A or version B?), “zero” testing where marginal cost and marginal benefit are figured, and the “If This Then That” test (“if I only give you, the customer, the ability to buy travel deals and nothing else, will you?”). Ideas become structured because every transaction has data. Everything is measurable, and nothing has to be left to assumptions.
Maloney said that in order to be successful, a person must approach ideas in the following ways: first, they must be open to challenging ideas; next, a person must be open to where ideas come from, and not be biased against any possible avenue; and last, recognize that productive ideas are not always disruptive at first.
Maloney used the well-known Pfizer drug Viagra as an example. Initially developed for heart patients to recover post-surgery, the drug “failed to perform” in human trials. As a matter of procedure, Pfizer stepped in to reclaim the drug from clinical trial participants across the globe. While most medication from clinical trials was recovered without incident, there was a less than 10 percent return rate on the Viagra heart drug. Puzzled, researchers launched further inquiries into why patients were reluctant to return a drug that by all accounts, didn’t work. This quandary prompted researchers to pursue the “idea,” a pursuit in which they discovered that patients, in a moment of serendipity, had found the alternative sexual enhancement side effect of the ineffective heart medication.
“Don’t hold out for a grand idea, as most ideas worth pursuing begin with a small inkling that something could change lives or solve a problem,” Maloney said. In this pursuit, he said, an entrepreneur can expect to undulate daily between feelings of elation and feelings of defeat. It is passion, he said, that helps a person see past the rocky moments to persevere.
“Make ideas evolve. Do what ever you have to do to keep that evolution in motion,” Maloney said in closing.
To learn more about Arrowhead Center, visit arrowheadcenter.nmsu.edu. For more information on the upcoming Entrepreneur Encounters series and other Arrowhead events, visit arrowheadcenter.nmsu.edu/events.
Information from NMSU