Jeff Amerine

Techpreneurship, with Jeff Amerine

(Jeff Amerine is an IA advisor, entrepreneurship educator, and officer with the University of Arkansas Technology Licensing Office. Each Thursday, his Techpreneurship blog will appear in INOV8. Drop him a line in comments.)

Techpreneurs can live by the Board, and unfortunately can die by the Board.  Forming a Board of Directors (BoD), like so many other aspects of early-stage corporate strategy, can serve as a force multiplier for the techpreneur, can be neutral (equals no value), or can be a tremendous liability.  So take the time and effort to do it right.

Small Business Notes has some great guidelines and suggestions for how to form a board, and what to look for in prospective  board members.

Here’s my view.

The Board should be comprised of individuals with broad and deep experience across the spectrum of business functions.  For some Board seats, the techpreneur may not have much discretion.  Lead investors will likely require a seat or two depending on their equity position.  If possible, work with the investor prior to closing the deal to ensure their representative will add value.  As hard as it may be, don’t go forward if that little voice in your head rings the jerk alarm.

For other available Board positions, look for seasoned leaders that have skills that fill in for weaknesses in the management team.  The management team doesn’t have to be represented on the Board, but in the early stages founder management should be on the Board. After all, founder techpreneurs didn’t sprint their way out of the big corporate world to follow their dreams just be wage-slaves for a new set of masters.

Do seek Board members that will challenge the management team.  Candor and integrity in making tough calls shouldn’t set off the jerk alarm.  You want that.  You need that.  The Board delivers no value in acting as a rubber stamp for even the most gifted CEO.  Nobody else in the building may have the guts to challenge your BS as the all powerful, visionary, charismatic founder.  Good Board members will and must.  Sometimes good Board members need to hold the mirror in front of the founder or CEO to point out the lack of a giant “S” on their chest and the absence of a cape…

The Board’s role must always be to act in the best interest of the shareholders, the customers, and the employees.  This fiduciary responsibility serves as a real burden for the Board.     By the same token a Board member’s agenda has to be aligned with the company strategy and not in conflict due to other business commitments or relationships.

Back to the composition of the Board.  Generally the techpreneur needs rainmakers on the Board along with pragmatic realists.  Rainmakers will open doors through their networks techpreneurs can seldom reach.   They have brand equity.  Customer decision-makers and potential investors will take their calls.  Realists will help make sure the company delivers on the commitments rainmakers identify.  Both functions are useful on the Board.

So what’s the right number of directors?  It depends.  Depending on the stage 3-9 can be a good range.  Very early stage companies don’t need more than 5 in my view.  Growth companies may want a few more.   Notice the odd numbers?  Never have a Board with an even number of directors.  The bylaws generally dictate how Board decisions get made, but needing more than a simple majority vote can really bog things down or can make the Board non-functioning.

How often should the Board meet?  Again, it depends.  I like monthly meetings especially in the early, risky stages of venture development.  As the business grows, quarterly meetings may be better.  Also, techpreneurs want Board members that will take a call to discuss a critical issue just about any time.  The more the techpreneur keeps the Board up to speed and engaged, the less painful the Board meetings will likely be.

What about BoD compensation?  Well free is always the right price, but there are only a few souls running around that will go for that deal.  If possible,  avoid monetary compensation.  Get BoD members to go for stock options that vest over time.  That way if the company performs, they win.  If the company doesn’t perform, well they get what they deserve, and at least the techpreneur didn’t have to bleed to company dry to pay for them.

Here’s a final  BoD note.  The foundation for a good Board begins in the corporate bylaws and operating agreements.  Don’t short change this important step.  Yes, you can go to LegalZoom.com and arm-chair lawyer it on the cheap, but don’t be surprised if a big ol’ piece of your backside gets exposed at some future date as a result.  Instead go to  quality corporate attorneys like Kutak Rock, Friday Eldredge, or the Rose Law Firm and get the professionals to help you set a solid foundation.

By now you may be bored with the Board talk.  Don’t be.  Figure out how to make the BoD an asset.  Also do some thinking about how to create a Board of Advisors (BoA) that can also provide great insight and wisdom.  For very, very early stage startups, a BoA can be really helpful and it carries less formality than the BoD.  Entrepreneur.com has a great piece on BoAs – check it out.

So I’m using a new picture this week.  I decided the two year old picture was clearly false advertising…  Shoot me your thoughts about Boards if of course you’re not already too bored by now…

The UA research park's Enterprise Center will be dedicated Oct. 21. Three IA clients are set to move in soon.

The tech-based startup community in Northwest Arkansas is getting the equivalent to prestigious high-rise condos.

The University of Arkansas Research and Technology Park in Fayetteville will officially dedicate its new Enterprise Center on Thursday, Oct. 21. The exterior for this new, state-of-the-art incubator space was completed in February. The interior is being finished up and tweaked to accommodate the first tenants (each an IA client) — NN-Labs, NanoMech and Arkansas Power Electronics.

NN-Labs will occupy 2,600 square-feet of lab space; NanoMech will house its administrative headquarters in its 4,778 SF of office space, and APEI’s space will consist of a manufacturing line and two Class 1000 cleanrooms (special space used in manfacturing where the amount of environmental pollutants is tightly controlled).

Funding for the center came from several sources, including federal grants and lots of help from the Arkansas Economic Development Commission.

The Enterprise Center is located at 534 W. Research Center Blvd. within the park, just across the street from the UA’s Innovation Center. The dedication ceremony is scheduled for 1 p.m., and special guests will include Chancellor David Gearhart and AEDC Director Maria Haley. IA’s own Techpreneur himself, Jeff Amerine, will be there as well. (He merely has to walk out the door of his building, after all.)

INOV8 will be there as well, taking pictures and getting in on the refreshments and free tours, which are open to the public, by the way. We may even try to talk to some folks as well, and report back here. We’ll see just how distracted we are by the cookies.

John James, M.D.

Most people say, they know half of their marketing budget is wasted, they just don’t know which half.

Over the past decade, the two most powerful marketing platforms in the history of advertising have been created: Search Engine Keyword Marketing and Social Network Advertising. With each, you can track your return on your ad spend down to the penny, meaning no more wasted ad spend.

To start the revolution, Google stole (and perfected) Yahoo’s pay-per-click (PPC) keyword marketing platform. For those of you not familiar with Google’s business model, here’s a short primer video. (Seriously, watch it… you’re already waaaaay behind.)

After cutting my marketing teeth as a young direct-mail marketer, pay-per-click keyword marketing was a God-send. Even 10 years ago, keyword marketing was light years ahead of direct mail in terms of return on ad spend. More importantly, keyword marketing provided real-time analytics that allowed you to gauge the success (or failure) of a campaign in hours rather than months.

Since its inception, pay-per-click (PPC) keyword advertising has been the gold standard for providing a positive return on investment. I’ve bought (and sold) ads on the Interwebs for the last 13 years… and unfortunately, nothing could hold a candle to PPC marketing when done correctly.

For example, if I sell maternity scrubs, I’d buy the keyword “maternity scrubs” on Google. Whenever someone searches for maternity scrubs on Google, my ad will show up alongside hundreds of other stores selling scrubs for pregnant nurses.  Makes sense, right?

Ninety-nine percent of the advertising budget for my e-commerce company is spent towards PPC marketing on Google, Yahoo!, and MSN. Why? Because it works.

Until recently, this number was even closer to 100 percent. Over the last 6 months, I’ve directed a significant amount of our advertising budget towards social networks, namely Facebook.

Why? Again, because it works.

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August was a busy month for Arkansas patents. The U.S. Patent Office issued 21 patents to Arkansas inventors and entrepreneurs in August. A normal month sees two or three per week come out of Arkansas, which is comparable to other states that share our size and demographics.

But Arkansas expanded its chest a little in August. Among the 21 patents issued this past month were these doozies, each of them impressive in their own right, from the serious:

• Methods for the early diagnosis of ovarian cancer
• Minimally invasive diagnosis and treatment for breast cancer
• Some sort of something involving nanocrystals
• Some sort of something involving nanotubes

To the interesting if not quirky:

• Method of molding a shopping cart (???) for Target
• Phosphorescent wind indicator (again, ???)
• New system for Little Rock’s Aristotle to filter and manage e-mail
• System for providing ads to wi-fi devices (because Heaven knows we’re just plain underexposed to advertising)

Oh, and there were also a couple of “bags.” (Eventually, one would think, humanity will run out of innovations for bags/totes/purses, etc.)

Occasionally, INOV8 selects an Arkansas Patent of the Month, and August is an all-you-eat buffet. With all due respect and gratitude to the awesome work being performed by Arkansas university scientists in the areas of cancer research, our patents of the month lean to the quirky side. That said, the Patent of the Month for August is Edward Horn’s “high rise evacuation system.”

Horn, from Hot Springs Village and presumably a retiree, came up with this system:

A system for the evacuation of persons from high rise structures in an emergency, said system being secured to a vertical wall of said structure comprising:

a pair of upstanding vertically oriented discrete tubular posts each attached to said vertical wall; said posts being in close proximity to one another;

at least one evacuator, said evacuator affixed by means of upper and lower sleeves circumscribing said one of said posts for controlled vertical movement along substantially the length thereof; said evacuator adapted to receive an evacuee securely thereon;

a brake mounted to said evacuator and selectively engageable with said post to control the rate of movement of said evacuator relative thereof;

controls on said evacuator, actuatable by an evacuee thereon to control the pressure applied by said brake to said post and, thus, controlling the rate of movement of said evacuator;

said system being segmented such that said posts are extensible over a predetermined distance, such post segments being laterally offset from one another and each said post segment vertically overlapping with a successive post along said vertical wall to or toward ground level;

a cable attached to said evacuator, said cable extending to said other post; a weight at the other end of said cable, said weight acting as a counter balance to said evacuator to return said evacuator to its start position once evacuees have left said evacuator.