Originally published September 6, 2016
By Daniel Perez and Leonard Martinez
Some of the best market analysis starts with “Hello.”
Ten students from The University of Texas at El Paso recently explored the streets of Dallas, Texas to talk to niche groups and to gauge the level of interest in their product concepts to see if they should be commercialized.
Students from the colleges of Engineering and Business Administration used neutral-language questions in a conversational style to gather valuable insights from their target audiences about whether to go forward with their ideas or to pivot in a slightly or altogether different direction to pursue entrepreneurial success.
The UTEP participants, along with two students from The University of Texas Rio Grande Valley, were part of the initial Student Accelerator Program (SAP) conducted in summer 2016 at The University of Texas at Dallas. The students were under the direction of UTEP’s Mike Loya Center for Innovation and Commerce.
The program is an extension of the work the Loya Center does to teach students how to validate business ideas through the creation of concise value propositions, which are statements about what a business can do for prospective customers. That information is used with market analysis to see if there is an appropriate product-market fit.
“First you find the nail and then you create the hammer,” said Aaron Cervantes, director of operations for the Loya Center.
The students formed six two-person teams, and their days were filled with customer interactions where they engaged in conversations to find a market plan, tested their business thesis, presented to faculty mentors, processed their feedback, and then began again.
Cervantes, who served as a mentor during the weeklong exercise, shared two examples of a team’s progression during the program that is supported by the University of Texas System’s Entrepreneurship Network.
One team wanted to market an all-in-one wrench and found no interest among mechanics, handymen or home-improvement stores. In the process, they began to speak with roofers who shared their need to stop work for several hours every afternoon during the summers because of the scorching temperatures. The team eventually dropped their wrench idea and devised a canopy concept that would benefit roofers.
Another group proposed odor-neutralizing athletic wear. After about 40 discussions with gym enthusiasts of different income levels, the duo learned that hard-core athletes did not mind their body odors, but busy moms wanted workout clothes that dried quickly.
“This kind of research is crucial for a business,” said Paola Chavez, a senior finance major and SAP participant involved in the active-wear project. “It’s great to know how to build a business, but without a market (for your product), it is a waste of time.”
The first-generation college student and her partner, Mauricio Mercado, a second-year MBA student, have been studying this market research method for about a year.
“It’s a life-enhancing methodology,” Mercado said. “It’s a validation. No one wants to waste resources.”
The participants performed well, said Jon Shapiro, director of the Venture Development Center at UT Dallas and SAP’s principal investigator. He praised the ambition, enthusiasm and mixed skill sets they brought to his research, which forced students to adapt and persevere in the face of rejection.
“By the end of the week I saw a significant change in confidence,” said Shapiro, who successfully launched and grew several technology companies during a 30-plus year career. He said being able to confidently share your ideas with others is a foundational skill to be an entrepreneur. “They got braver.”
Most of the students involved in the SAP look forward to participating in the more rigorous National Science Foundation I-Corps Regional Training in April 2017. The event brings together faculty and students from UTEP, Rice University, The University of Texas at Austin, Texas A&M University and Texas Tech University – Lubbock. Organizers also invite representatives from New Mexico State University and the Texas Tech Health Sciences Center El Paso. Once the April regional program is completed, the Loya Center will carefully select and support participants to apply for the I-Corps national cohorts.
The regional program takes about six weeks. Students join a faculty member with a patent, invention or disclosure technology. They start with three days of market research, where each idea is thoroughly scrutinized. They return to their home campuses to review their data and return to the site of the regional training five weeks later to present their findings.
Cervantes, the Loya Center director of operations, said the program’s goal is to teach faculty how to develop a business proposition based on their research in the lab and through conversations with their market audience. He added that those who participate in the training have a higher percentage of success earning the SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) grants. Cervantes organized National Science Foundation/I-Corps regional workshops at UTEP the past two years, most recently in April 2016.
Among the guests was Carlos Kemeny, Ph.D., director of the UT System’s Entrepreneurship Network. Kemeny said these programs are popular and make researchers more focused.
“It also helps faculty and students who want to pursue entrepreneurship,” Kemeny said. “It gives them phenomenal opportunities to do so.”
UTEP faculty and students who have been through the process called it demanding but rewarding. They encouraged fellow researchers interested in becoming entrepreneurs to participate before they start their scientific investigations.
“If you are in the research area, if you want to develop something, if you have an idea, it’s crucial to start with this,” said Samuel Terrazas, a graduate student in industrial, manufacturing and systems engineering. “I wish I could have started my research doing this first. It gives you a better idea of how to drive your research.”