Five Useful FREE Tools for Entrepreneurial Innovators

We recently introduced the MIN-Corps Toolbox of resources for technology commercialization and entrepreneurship.  Here are five especially useful tools for entrepreneurial innovators:

1. Value Proposition Design Canvas – What, exactly, are your potential customers trying to achieve?  What are the pains and gains associated with those “jobs?” The Value Proposition Design Canvas tool, developed by Alex Osterwalder and fully explained in this book, is a structured way to lay it all out. 
2. Talking to Humans – You don’t know if you have product-market fit unless actually ask potential customers.  But whom do you contact, how do you contact them, and what do you ask? This e-book, by Giff Constable is a down-to-earth, practical guide to customer discovery. 
3. Canvanizer – Having a great value proposition is just the beginning.  As Alex Osterwalder explained in the Business Model Generation book, you also need to define the overall business model – how you will do business and how you will make money.  This web tool, originally developed by German entrepreneurs for the Nuremberg Startup Weekend, allows geographically dispersed teams to brainstorm their hypotheses for all nine boxes in the business model canvas.
4. Kauffman Founders School – The Kauffman Foundation is a large ($2 billion) philanthropy that has focused for the past fifty years on two priorities:  education and entrepreneurship.  One of their more visible programs is 1 Million Cups, which is a program for entrepreneurs all over the world to present their startups to their local counterparts for feedback, insights and mutual support.  They also have been building an incredible video archive and blog where experts give specific, practical advice on multiple topics, from financing to recruiting a board of directors to scaling up a venture, and much more.  It’s a great just-in-time resource.
5. Steve Blank’s Website – The godfather of the Lean LaunchPad movement has an incredibly rich website that shares his disparate interests, insights and activities.  It’s cluttered, but full of useful information – Blank is on a mission and therefore makes materials broadly and freely available.  Especially look at the Slides/Videos tab and the Startup Tools tab.

Turn Trash into Treasure by Internalizing Externalities

Many amazing University of Minnesota researchers are developing innovations that benefit the environment.  Some are literally micro:  bacteria that remediate pollution. Others are macro:  such as the Institute on the Environment’s collaboration with three other universities, The Natural Capital Project, which quantifies the value of nature so that informed decisions can be made at the intersection of economic and environmental sustainability.

Environmental technology innovators often complain that no one wants to pay to keep air and water clean, or to reduce energy waste.  The problem is that polluters and energy wasters don’t necessarily bear the consequences of their actions.  The economics term for this phenomenon is “externality” – a side effect of a commercial activity that is experienced by unrelated third parties.

Externalities are not necessarily bad.  For instance, people who pay for advanced educations not only increase their personal incomes, but also pay higher taxes that fund better schools and parks, and also spend their disposable incomes on charities and sports and cultural activities.  However, more attention is paid to negative externalities:  farmers whose fields’ fertilizer runoff pollutes waterways or coal plants that spew particulates that cause lung disease and premature deaths.

The trick is to “internalize” the negative externality, to create either a consequence or a benefit that at least equalizes the mitigation cost to an entity that would otherwise generate a negative environmental impact.  This has been successfully achieved on multiple fronts:

• Cost Savings: Conversion to LED lights – LEDs produce a massive energy savings (4-5 times vs incandescents) that pays for itself not only with lower energy costs but also less maintenance
• Market Incentives: Cap and trade systems – Over 25 government entities around the world have create pollution “markets,” where businesses who are polluting less than a specified level can sell their pollution credits to higher polluters.  The result is to incentivize pollution reduction.  An example is the U.S. Acid Rain program, which has resulted in a drastic reduction in sulfur dioxide emissions.
• Recapture and reuse: Recycled aluminum consumes only about 5% of the energy of new aluminum, so manufacturers are incented to support recycling programs.  The result is that about 1/3 of the aluminum products are recycled from scrap.   University of Minnesota researchers are working on a technology to recapture phosphorus from farm fields so that it can be reused – this not only would reduce water pollution but also could save farmers money as world phosphorus reserves get depleted. 
• Government Incentives:  Tax credits and other financial incentives have been used to jumpstart solar, wind and numerous other renewable energy sources.  The University of Minnesota zip code alone is eligible for 57 different energy incentive programs.
• Government Fines:  The U.S. Corporate Average Fuel Economy (CAFÉ) standards for vehicles has resulted almost doubling gas mileage over the past 40 years.
• Reputation/Brand:  Nonprofits have been very effective at publicizing negative company practices, thus driving consumer behavior.  An example of a current initiative is the Greenpeace Tuna Shopping Guide.  In a different sphere, companies find it easier to recruit employees if their work spaces are environmentally friendly, so LEED (Leadership in Energy and Environmental Design) certified office buildings are able to command a premium from renters.

So, while it can be challenging to identify a market for environmental technologies, it is not impossible.  The trick is to find the value proposition that internalizes the externality.