Entrepreneurship lessons from tech legend Ken SpencerNov 24, 2014
Successful companies must empower employees to be responsible for their own decisions – and the potential for saving money by eliminating micromanagement will more than compensate for any potential employee errors.
Technology entrepreneurship legend and Beedie alumnus Dr. Ken Spencer delivered this sage advice in front of an audience of aspiring entrepreneurs from SFU’s Faculty of Applied Sciences and the Beedie School of Business at a special fireside chat.
The event, held on November 19 at SFU’s Surrey campus, saw Spencer interviewed by fellow tech entrepreneur – and former business partner and mentee – Laurie Wallace, co-founder of wireless communications company Datum Telegraphic.
Spencer co-founded Creo Products in 1983, acting as CEO until 1995 but remaining active on the board until the company’s acquisition by Kodak for over $1 billion in 2005. Wallace, meanwhile, served as President and CEO of Datum Telegraphic until its sale in 2000 to PMC-Sierra.
Spencer was an initial investor in Datum Telegraphic, in addition to holding a seat on the board. He revealed during the interview, however, that Wallace has long claimed that Spencer fell asleep during Wallace’s funding pitch – a claim that Spencer denies.
Wallace noted that Creo Products had enjoyed success with the first product it launched, an optical tape recorder, but had opted to abandon this after five years to focus on manufacturing imaging and software technology for computer to plate and digital printing. Asked for the reasoning behind abandoning a successful product, Spencer responded that it was market-driven.
“I think that all startups rarely succeed in the product they start out with,” he said. “We financed the original product by having one team do consultancy work to fund the development team. We got it to market but the market wasn’t big enough to satisfy our ego expectations. Market research drove us towards the pre-press business.”
Asked to expand on the emphasis he places on corporate culture, Spencer revealed that prior to spending company money, employees were expected to ask themselves three questions: would they get payback on the investment within three years; had they consulted with the people affected by this decision; and would they still spend this money if they owned the company?
Spencer also commented on the importance of tech entrepreneurs – particularly those from an engineering background – gaining a solid grasp of economics and accounting in order to understand the company finances.
“Accounting is essentially really easy – it’s only plus and minus,” said Spencer. “To learn accounting you have to learn the language. Once you know the language, I could teach anyone how to read financial statements in two hours.”
Elaborating further on the employee culture within his organizations, Spencer revealed that in the first ten years of Creo’s operation, the only employee to quit the company opted to return less than three months later – at which point Wallace noted that Datum also did not lose a single employee within the first five years of operation.
“If people are leaving, it is a sign of displeasure,” said Wallace. “One of the things I look at when I am considering investing is attrition – you want a business that retains its best employees.”
Spencer also stated that he believed it is beneficial for entrepreneurs to work for a large organization for a few years in order to understand the systems they use. He did, however, note that this is not essential, citing organizations such as Google, Facebook and Microsoft as high-profile examples of successful tech entrepreneurs who had no big company experience.
After selling Creo, Spencer has prioritized his philanthropic efforts, focusing particularly on education. He has a long-standing affiliation with SFU in promoting tech entrepreneurship education, with SFU home to the Technology Entrepreneurship@SFU program. The program offers third-and fourth-year business and applied sciences students a competitive academic pathway to turn their ideas into successful new products.
“When I sold Creo I had more money than I knew what to do with – I said I would invest in technology, but I found that took too long,” said Spencer. “Education is a priority for me, and my sweet spot is getting business and engineering students together while they’re still at school rather than waiting for them to start fighting at work. The program here at SFU is great for that.”
View photos from the event on the Beedie School of Business’ Flickr page.