UC Berkeley Class Helps Students Launch Their Startup: The Winning Team Gets $15K of Initial Investment Sponsored by Mehdi Maghsoodnia
Having been a Silicon Valley entrepreneur for over 25 years, Mehdi is an expert when it comes to startup issues such as scaling teams, product strategy, corporate finance & development, partnerships, and building high velocity distribution models. These are only some of the skills that he has picked up on in an illustrious career that spans roles as Chairman, Advisor, CEO, COO, CTO, SVP & Board Member (within companies) and Investor, Coach, Lecturer (external roles).
It was the significant amount of creativity and talent at universities in the Bay Area that inspired Mehdi to take out time from his current roles to teach students, and push them to take on their ideas. Having studied at the other end of the Bay (at a not so well known university named Stanford), Mehdi praised students at Berkeley, observing that “the average team here, is capable of executing more with a lesser amount of resources.”
“There’s a tremendous pool of talent here, but unfortunately, on average, teams are not getting the financial resources they need; access to capital is limited on the Berkeley campus,” Mehdi says. He believed that by bringing an experiential-style learning to his classroom, he could encourage more and more students to pursue paths as entrepreneurs.
Mehdi believed that a lot of classes that he took as a student were interesting, but largely academic and not “grounded in the reality” of what it takes to execute in a business. As a result, he always had a desire to come back and put together a class that was ‘operationally focused’ and pushed students to experiment in what it would be like to create a business in the real world. “My class is not about readings and homework, but about the challenges in forming a team, learning to recruit students around you, coming up with an idea and becoming passionate about it.”
His primary fear is that the student dynamic and external financial factors can often curb creativity, and prevent his students’ work from ever escaping the ideation phase.
“It’s important to understand that a lot of these students are first generation students; a conservative crowd that’s scared of taking risks because they have a lot to lose. As a result, there’s a distinct, cultural dynamic, where because of the lack of financial comfort, students are always seeking a more secure job.” To sway the opinions of students, and encourage them, Mehdi remarks that the probability of one successful company executing at multiple ideas is very, very low – “A players don’t do new ideas as much – they like to stick to their strength,” he says, indicating that many new emerging markets are ripe for new entrepreneurs to claim their hold and capture market share.
Keeping the need for increasing security for students in mind, Mehdi hopes to inspire them to take on their ideas, and aims to facilitate them in the process of doing so. However, unlike other classes, Mehdi hopes that a monetary incentive will help overcome the risk-averse mentality students possess and encourage them to focus more on outcomes than ideas – through a cash award of $15,000 that he has raised himself; he hopes that it will create a competitive dynamic and help result in a tangible outcome in his class. This is something that he is trying for a second semester; he strongly believes that gamifying the entrepreneurship process, and making the stakes similar to real life by creating rewards is the best way to change the way students approach such classes. By making it as similar as possible to the real world, where winner takes all market share and profit, Mehdi has noticed increased inputs in ideas and better quality work from his students. The prize is being divided into $9000, $4000 and $2000 for 1st, 2nd and 3rd place respectively. The SCET will be featuring winning projects and their business plans towards the end of the semester! Some previous winners and their projects can be seen here.
As I waited for Mehdi outside his class, he was talking to European students, encouraging them to stop overthinking and begin executing: “Remember, you’re like a swimmer. If you keep getting up to look at others and see where they are, you lose. If you think it’s a big idea, pursue it; unless somebody else succeeds, your market is empty and there for the taking,” he told the entrepreneurs, spelling out how easy it was to change mentality and execute.
This semester, Mehdi is hoping that startups in his experience-based learning class can identify that they have data selling points, something that is not always clear to students. Having not enabled outcomes as much as he would have wanted to before, Mehdi is determined to help change sentiment and risk preferences at Berkeley. He hopes to help teams identify what is unique in their business model as they “peel the onion” and discover beyond website and advertising strategies, what it is in their business that is truly unique. “90% of ideas have data points that can be monetized, but startups don’t inherently recognize that,” Mehdi said. By figuring out how their ideas can focus on consumer and product trends, Mehdi hopes that ideas will promise collection of large amounts of data, that can become main value points for the businesses created in IEOR 185.
Mehdi Maghsoodnia is currently serving as a board member at SpineZone Bouju & Vitagene. He previously served as CEO of Rafter and BookRenter.com and before that as SVP of products at CafePress, COO at Actiance and SVP at Intellisync. He also served on the board of PBworks, Fotomoto and Facetime Communications. He has been an EIR at Trinity Ventures, MDV and IVP.
Over the past two years, Mehdi has been teaching IEOR 185 (Challenge Lab).