neuroscience

Tom Koor

How will undergraduate founders destroy your company?

How will undergraduate founders destroy your company.

 What is the purpose of this article?

  • Help existing companies improve the return on the investment they make in new business ideas.
  • Help startup founders succeed by reducing the time spent on ideas with little market demand. Help founders understand what’s necessary to destroy incumbents.

The audience for this article includes business, ranging from pre-revenue through to long established global companies.

This article does not provide tax, legal or financial advice. You must do your own research and fact-based analysis using current and relevant information.

AI did not write this article.  I wrote every word.

You can download a PDF of this article from: How will undergraduate founders destroy your company

How do you read this article.

The article reflects my observations regarding the early-stage startup programs at 5 US universities.

The Appendix contains brief highlights of these programs.

What are the critical learnings in this article?

  • Founders first go through a program to validate that cash paying customers believe they have a problem which needs a solution.
  • The first step is to have face-to-face interviews with cash paying customers.
  • There should a multi-disciplinary set of founders e.g. business, technical, social sciences
  • Program, mentor, and founder problems are addressed by AI.
  • The programs have a structured learning process to rewire the founders’ brains over a period of several semesters.
  • The program is part time, with the founders taking other courses during the semester.

Why focus first on validating that a cash paying customers believe they have a problem?

  • This saves founders’ time. No point in building a solution people who don’t think they have a problem.
  • The founders are not building a solution. They are building a temporary organization to learn what solution to build
  • The founders can think about the necessary solution once they know the problem to focus on.

 Why are immediate face-to-face interviews with cash paying customer critical?

  • This immediately identifies if founders have both the desire and skills to meet with cash paying customers. Weaknesses in this area can be addressed through a combination of team changes and talent development.
  • Consulting reports and industry surveys rarely focus on the specific problem the founders are tying to understand.
  • Surveys by founders don’t allow the deep understanding of problems resulting probing customer dialogue such as the Five Whys root cause discussion.

Why does success depend on a multi-disciplinary team?

  • There are many aspects to how cash paying customers perceive a problem: financial; functional, operational & technical; and emotional. All decisions are emotional.
  • A silo-based team e.g. all engineers, often lacks the broad base of skills to understand how customers perceive their problem and the value of addressing the problem.
  • A multi-disciplinary team reduce the cognitive load on founders’ brains, reducing the need to learn and unlearn, and enabling more focus.

Why do the programs, founders, and mentors use AI tools?

Some of the many program pain points which AI can address are:

  • Tracking and reporting on the long-term outcomes of founders and startups.
  • Matching potential founders across faculties to create multi-disciplinary teams.
  • Helping to analyze program applications.
  • Matching founders with mentors and advisors.

Some of the many founder pain points which AI can address are:

  • Enabling business founders to create software without becoming software experts.
  • Enabling technical founders to create marketing and sales materials without becoming marketing and sales experts.
  • Helping founders prepare for face-to-face interviews by interacting with AI simulated customers.
  • Providing multiple founder team equity split scenarios.

Some of the many mentor pain points which AI can address are:

  • Saving mentor time at the beginning of the meeting by generating a pre-read package.
  • Helping mentors better communicate with founders by coaching the mentors on appropriate communications approaches.
  • Answering simple founder questions using AI coaches, allowing founders to focus on the most difficult and valuable issues.

Universities are implementing AI enabled infrastructure to reduce administrative load and enable both more and better startups to succeed. One example is MIT’s Orbit.

Why do the founders’ brains need to be rewired by a structured learning process?

  • Learning requires biological changes to the founders’ brain structure e.g. new connections among neurons, strengthen connections among neurons, and delete connections. The brain will naturally resist ideas and knowledge which is not consistent with historical ideas and knowledge.
  • The structured learning process encourages founders need to quickly learn new things, do things they are not comfortable with doing, do things they don’t want to do.
  • The founders don’t need to use cognitive capacity to figure out what are the critical things to do. The founders can use their cognitive capacity to learn and figure out how to execute what is critical.
  • This rewiring takes place over several semesters resulting in founders who can quickly learn and unlearn.

What are your next steps?

  • Define the words/concepts you’re using, in a glossary. I’ve seen major confusion when the same words mean different things to different people.
  • Do your own research and fact-based analysis using current and relevant information.
  • Compare your company’s process, talent, and technology for assessing new customer needs with the approach taken by the leading US Universities.
  • Transform your company’s approach. You may need to make talent changes as well as implement talent development process.  Your capital and talent allocation processes may need transformation.

What further reading should you do?

Is your company planning to fail

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/

Do you understand your customers

https://koorandassociates.org/understanding-customers/do-you-understand-your-customers/

Why is learning critical for your company’s success

https://koorandassociates.org/avoiding-business-failure/why-is-learning-critical-for-your-companys-success/

Appendix – 5 U.S. Universities. Startup programs for undergraduate students

This appendix provides some very brief highlights of undergraduate student startup programs.

Stanford University

  • Stanford has a decentralized set of student run and departmental programs.
  • Cardinal Ventures is a 10-week university wide student run program, on a part time basis during semesters.
  • BASIS is a first-year university wide undergraduate program with $100,000 prize money.

University of California, Berkely

Berkely has university wide structured funnels.

  • The STEP program is a university wide “top of the funnel” program with 1,000 new students annually. 70-75% are undergraduates. This is a 10 week long, part-time, program during school semesters.
  • Free Ventures is a student run program during school semesters. The expectation is at least 5 hours a week devoted to the startup.

Harvard

Harvard has a single process which encompasses all 13 schools.

  • The i-Lab program has three stages: Explore for students exploring ideas or looking for teams. Test is for teams with ideas. The focus is to validate that there are cash paying customers with problems. Propel is focused on All programs are semester based and are part-time

Wharton

The Venture Lab serves the entire university and is based in the business school.

  • The Venture Initiation Program (VIP) Venture Track runs on a rolling basis with no fixed end date for each startup. The program is part-time, during semesters.

MIT

MIT has a highly structured funnel.

  • MIT Sandbox Innovation Fund provides seed funding as milestones are met. Expectation of at least 6 hours per week. This part time during the semester program has no fixed end date.
  • VMS is an indefinite part time program with 90 minute in person mentoring sessions every 4-6 weeks. A team in VMS may be other MIT startup programs.
Tom Koor

Your greatest challenge is to learn, and unlearn, faster and better than before.

Your greatest challenge is to learn, and unlearn, faster and better than before.

The purpose of this article is to share my learnings and unlearnings, with the expectation that some will be of value to you. This article was 100% written by me – not by AI.  When you send me an email, my response is 100% written by me.

What have been my most valuable learnings in the past three months?

  • I forgot a learning from 30 years ago. If a leader does not believe they have a critical issue or problem, it is impossible for me to change their mind.  The reasons are based on cognitive psychology and neuroscience.
  • CEOs of successful companies spend 20-25% of their time listening to and understanding cash paying customers by meeting and talking with them. CEOs of poorly performing companies spend 3% of their time on this.  CEOs of fast growing early stage companies spend 50% (or more) of their time listening to and understanding cash paying customers.
  • I’m using AI to find fact-based reports with the data to answer to my very specific questions. I don’t use AI to make recommendations.
  • The psychological and biological construction of brains has helped people survive for 10,000 of years. That same psychological and biological construction results in most business leaders failing in today unpredictable, fast changing, and hyper competitive world.
  • My greatest challenge is to learn, and unlearn, faster and better than ever before.

What is my personal update?

  • Mentored a startup at the Hatchery, University of Toronto, Department of Engineering.
  • Accepted as a mentor at the Health Innovation Hub at the University of Toronto, Faculty of Medicine.
  • Continued my long-term fundraising for the Geoff Carr Fellowship at Lupus Ontario. Over the past 19 years family, friends, neighbours, and colleagues have contributed over 283,000. You can use the donation link later in this update
  • Continued as a member of the Angel Capital Association in the US and the Institute of Corporate Directors in Canada.
  • Continued to share with you, and on my website, some of what I’ve learned and unlearned, with the intent that some of you will find value. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.
  • Continued as Board Director at a private company.

I continue to focus my time to maximize the value and impact of my two professional purposes: #1 Enabling current and emerging business leaders to succeed, #2 Enabling business leaders to have a positive impact on society.

Sharing my learnings

Below are links to my website containing new and revised articles since my last update in September. The critical learnings from each article are included. Each article designed to enable discussion among founders, owners, shareholders, investors, CEOs, and boards of directors. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.

Links to my points-of-view articles:

What are the core components of talent? V7

  • There are 10 core components of talent.
  • People often focus on just 1 component of talent: Crystallized intelligence (e.g. historical skills, knowledge, experience, etc.) and ignore the other 9. This often leads to major problems, because historical skills, knowledge, and experience are quickly becoming obsolete.
  • The core components of talent fit into the qualification’s sections of a typical job description.
  • The core components of talent fit into the key competencies section of a typical job scorecard.
  • An AI worker would have both a job description and a job scorecard.
  • If AI is assisting a person in a role, then need clarity on how the AI’s 10 core components of talent are improving the person’s job scorecard.
  • What is the definition of an AI worker? What is the definition of an AI agent? What is the definition of AI? I don’t know.

https://koorandassociates.org/creating-business-value/core-components-of-talent/

What is learning? V3

  • Learning is a biological process of changing your brain structure. The key changes to enable learning are new connections between neurons and strengthening the connections.
  • The best way for you to learn is to create your own conclusions and recommendations based on your own analysis of data you’ve collected.
  • The worst way for you to learn is to read reports and attend presentations.
  • Learning and unlearning is hard to do, especially if you’ve been a successful leader.

https://koorandassociates.org/creating-business-value/why-have-your-minimized-your-talent/

What is a startup? V2

  • A startup is a temporary organization designed to search out a repeatable, scalable, and profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs.1 Startups are not building a solution. They are building a tool to learn what solution to build.2
  • Your company may slip back into the startup stage at any point. Changes may mean that you no longer have a profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs.
  • Never ending customer, competitor, external environment, talent, operational, and financial monitoring is key to ensuring your company does not slip back to being a startup.

https://koorandassociates.org/the-startup-journey/what-is-a-startup/

Strategic Advisor vs Consultant vs Coach vs SME vs Trainer

  • The focus of the strategic advisor is helping business leaders learn to solve their critical problems.
  • Learning is a biological process of changing your brain structure.
  • The best way for you to learn is to create your own conclusions and recommendations based on your own analysis of data.
  • The worst way to learn is by reading reports and attending presentations.
  • Determine what combination of: strategic advisor, consultants, coaches, SME, and trainers your company needs. Identify which roles can be humans vs AI workers (often referred to as AI Agents or just AI) vs AI

https://koorandassociates.org/creating-business-value/strategic-advisor-vs-coach-vs-consultant/

MY NPS (Net Promotor Score)

I’m doing what I advise companies to do – getting my NPS.  I am asking you to complete the attached anonymous survey which asks you: “How likely are you to recommend me, or not recommend me, and why?”

Bain developed the Net Promoter Score process. They believe one question is the best predictor of future company behaviour. Very simply, asking customers how likely they would be to recommend or not recommend the company, followed by the question why. The answers enable companies to determine what they need to change.

I am doing the same thing, getting facts as to how I’m perceived and then deciding what to change, if anything.

The survey is totally anonymous.  I don’t know who responds or who does not respond.  I don’t know who gives what answers.  Thus, you can be honest in your response.

The following is a link to my survey:

Tom’s NPS Survey Link

Thank you in advance for your help.  The following is a link to the Bain website homepage for Net Promoter Score, which contains several short articles.

Link to Bain NPS articles

To support the Geoff Carr Fellowship at  Lupus Ontario

Link to my Geoff Carr Fellowship fundraising page

Tom Koor

Do you need to transform your brain?

Do you need to transform your brain?

The purpose of this post is to share my learnings and unlearnings, with the expectation that some will be of value to you. This post was 100% written by me – not by AI.  When you send me an email, my response is 100% written by me.

Why am I able to help business leaders succeed, without telling them what to do?

  • The leader must make major critical decisions and business changes they’ve never successfully done before.
  • Leaders who want me (or a subject matter expert) to tell them what to do will usually fail. Why? Hearing what I say, seeing my presentation, or reading my presentation results in leaders having: little in depth understanding, low long-term retention of knowledge, little ability to successfully answer challenging questions, and little ability to make to make ongoing changes to the leaders’ actions.
  • What results when I ask leaders questions and suggest the thinking they need to do to make their decisions and manage their execution? Leaders have a deep understanding of the knowledge, retain the knowledge for long-periods of time, can successfully answer challenging questions, and can make ongoing changes as they execute.
  • To learn and understand something new requires their brains to create new neural connections. Brains naturally resist this process. Brains will find many reasons not to change. Changing the mental model of a leader results in mental discomfort, stress, and pain.
  • A leader doing their own thinking results in them persuading and convincing themselves, with less resistance and pain.

Sharing my learnings

Below are links to my website containing new and revised articles since my last update in May. The critical learnings are included. Each article designed to enable discussion among founders, owners, shareholders, investors, CEOs, and boards of directors. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.

Links to my points-of-view articles:

What are the core components of talent? V5

  • There are 10 core components of talent.
  • People often focus on just 1 component of talent: Crystallized intelligence (e.g. historical skills, knowledge, experience, etc.) and ignore the other 9. This often leads to major problems, because historical skills, knowledge, and experience are quickly becoming obsolete.
  • Any role many be comprised of both people and technology (such as software, including AI) talent.
  • The 10 core components of talent apply to both people, technology, and AI.

https://koorandassociates.org/creating-business-value/core-components-of-talent/

How profitable are public stocks?

  • The majority of US public stocks from Dec 1925 to Dec 2023 had negative returns.
  • The best performing 4% of US public stocks from 1926 2016 provided the entire stock market gains which exceeded one-month Treasury Bills.
  • S&P 500 outperformance relative to S&P 600 small cap and Russell 2000 has been increasing over time.
  • Most U.S. large cap funds have underperformed the S&P 500 for the past 15 years.
  • Most U.S. mid-cap funds have underperformed the S&P mid-cap 400 for the past 15 years.
  • Most U.S. small-cap funds have underperformed the S&P small-cap 600 for the past 15 years.
  • It appears to be close to impossible to predict the future performance of equity funds by looking at past performance.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-are-public-stocks/

How profitable is private equity?

  • The traditional PE equity value creation model appears broken. For 40 years the approach has been financial leverage and increasing the price to EBITDA multiple. This approach now often appears to fail.
  • The future is impossible to predict. The future is uncertain. The future cannot be predicted by extrapolating historical trends.
  • Successful GPs and LPs will be those who have the desire and ability to transform themselves.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-is-private-equity/

How profitable is venture capital?

  • If you were good at predicting which fund managers would be successful, you could have had excellent returns. But many Limited Partners (LPs) lost money from their investments.
  • The trend has been that the % of funds providing any cash return has been declining.
  • I have read multiple articles that some LPs have started to question VC fund managers who are showing high IRR results (which include both actual realized returns and estimated future unrealized returns) while the LPs are receiving little or no cash because the fund managers are unable to sell their investments to buyers.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-is-venture-capital/

How profitable are search funds?

  • The IRR for traditional search funds in Canada and the US has been 35.2%.
  • To make a profit by investing in search funds, you need the ability to predict which people (searchers or managers of funds which invest in searchers) have the talent to be successful.
  • 66% of search funds with an investment return, lost some or all their investor money. A small number of search funds generated much of the IRR return e.g. 8 exits had IRRs of 100% or more.
  • You may need to fund between 30 to 45 searchers, to have a high chance of approaching the IRR for the asset class as a whole.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-are-search-funds/

How profitable is angel investing? V4

  • Someone making investments in individual angel startups has the potential to make profit if: has the capital to create a diversified portfolio, the time to do due diligence and support the portfolio companies, the talent to select potentially profitable startups.
  • Someone making investments in an angel fund has the potential to make profit if: has the time to do due diligence and the talent to select fund managers who will be profitable in the future.
  • In either of the above cases, you may need to wait 10 or more years before achieving a cash profit.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-is-angel-investing/

Are you an angel investor or gambler? V3

  • You may need to create a portfolio of 20 or more companies.
  • You might need to invest $800,000 or more.
  • You need the skills and time for both due diligence and helping founders succeed. Money by itself is not enough.
  • You need to determine if you’re putting capital into early-stage companies because: you are an investor; you are a gambler; or this is a charitable activity and not part of your overall investment portfolio.

https://koorandassociates.org/selling-a-company-or-raising-capital/are-you-an-angel-investor-or-gambler/

Traditional succession planning dooms your company to failure? V3

  • Board directors and C-Suite executives must be able to make major decisions on the day they are appointed. Needing to learn about the company for 6-12 months risks failure.
  • Board directors and C-Suite executives need to have the capabilities to succeed in a future which is very different from the past. These leaders are of limited value if they only have the skills and experience to solve yesterday’s problems with the day before’s solutions.
  • Board director and C-Suite talent requirements must be defined in terms of the 10 core components of talent. The traditional approach of focusing on crystallized intelligence (i.e. historical skills, knowledge, and data) is insufficient in today’s turbulent and hyper-competitive world.

https://koorandassociates.org/creating-business-value/traditional-succession-planning-is-obsolete/

Personal Update:

  • Mentored a startup at the University of Toronto, Department of Engineering. The approach was based on weekly advisory board meetings.
  • Continued as Board Director at a private company.
  • Continued as a Patient Family Advisor at Sunnybrook Hospital.
  • Continued my long-term fundraising for the Geoff Carr Fellowship at Lupus Ontario. Over the past 19 years family, friends, neighbours, and colleagues have contributed over 276.000,000. You can use the donation link later in this update
  • Continued as a member of the Angel Capital Association in the US and the Institute of Corporate Directors in Canada.
  • Continued to share with you, and on my website, some of what I’ve learned and unlearned, with the intent that some of you will find value. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.

I continue to focus my time to maximize the value and impact of my two professional purposes: #1 Enabling current and emerging business leaders to succeed, #2 Enabling business leaders to have a positive impact on society.

 

To support the Geoff Carr Fellowship at  Lupus Ontario

Link to my Geoff Carr Fellowship fundraising page