Case Studies

EngineeringSubjectCentreCaseStudies:

FourMiniCaseStudiesin Entrepreneurship
February2006

Authorship ThesecasestudieswerecommissionedbytheEngineeringSubjectCentreandwerewritten by:

LizRead,DevelopmentManagerforEnterpriseandEntrepreneurship(Students)at CoventryUniversity

EditedbyEngineeringSubjectCentrestaff.

PublishedbyTheHigherEducationAcademyEngineeringSubjectCentre

ISBN9781904804437
2006TheHigherEducationAcademyEngineeringSubjectCentre

Contents Foreword...................................................................................................5 1 Bowzo:aCaseStudyinEngineeringEntrepreneurship ...............6 2 DanielPlattLimited:ACaseStudyinEngineering Entrepreneurship .....................................................................................9 3 HiddenNation:ACaseStudyinEngineeringEntrepreneurship11 4 TheNarrowCarCompany...............................................................14

EngineeringSubjectCentre FourMiniCaseStudiesinEntrepreneurship

Foreword
Thefourcasestudiesthatfolloweachhaveanumberofcommonfeatures.Theyeach illustratethebirthofanideaandshowhowthatideacanberealisedintoamarketable product.Eachcasestudydealswithengineeringdesignanddevelopmentissuesandeach highlightstheimportanceofdevelopingsoundmarketingstrategiesincludingmarket research.Theimportanceofappropriatesupportmechanismsforyoungentrepreneursis alsocovered.Thecasestudiesillustratehowsuccessfulentrepreneursdeployarangeof entrepreneurialskillsandknowhow.Aboveall,theentrepreneursareseentohavethe capacitytoinnovateandexercisevision. WearegratefultoLizRead,DevelopmentManagerforEnterpriseandEntrepreneurship (Students)atCoventryUniversityforprovidingthesecasestudies.

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1 Bowzo:aCaseStudyinEngineeringEntrepreneurship
BowzowouldnotbewhereitistodayhadInotmetLarryTreanorwhenIwasinaplayful moodcommentsJimOswald,jointinventorofaproductwhich,itisanticipated,will dramaticallychangethewaytheviolinislearnt. Jimisacareerinventoranddesignengineerwho,havingleftRollsRoyceafter25yearsin theworldofenginecomponentsspecialisinginheatexchangers,wasreadyforsomething new. ItisfairtosaythatJimfoundthefirstfewmonthsafterhisreleaseuncomfortable.Hehad spentyearsworkingonmajorprojectsinvolvingteams,manyofwhichhehadledhimself. Hemissedteams,andhemissedthechallengeofprojectmanagement.Fortunately,Bowzo arrivedoutofnowhereandprovidedwhatheneeded. BothLarryandJimwereattachedtoCoventryUniversitysVisionWorksinordertogethelp indevelopingsomenewbusinessideas.TheVisionWorksprovidesaccommodation, telecommunicationsandcomputerfacilities,plus,perhapsmostimportantly,mentoringand coachingservicesforstartupbusinesses.WhenLarryandJimmet,Larrywasplanningthe launchofamultimediadesignbusinessbuthehadalsobeenaprofessionalmusicianand violinteacher.DuringadiscussionaboutproductideasLarryrevealedhisthoughtsabouta deviceforhelpingnoviceviolinplayerstolearnfasterandplaymoreaccuratelybybowing straightfromthemomentofthefirstlesson.Thedevicefixestotheneckoftheviolinand offersprecisecontroltostudentsdevelopingtheirbowingtechnique.

TheIdea
Larryunderstoodpreciselytheproblemsmanystudentshaveinbowingstraight.Theidea wastodesignandmanufactureasimpledevicethatcontrolsthebowingtechniqueby helpingthestudentkeepthebowstraightatalltimes.GivenJimsbackgroundinproduct developmentandLarrysspecialistknowledgebothcouldseethepotentialofacollaboration. Itworkedandoneyearlaterthefirstprototypeswerefinishedandmarkettestingwas underway.

TheMarket
Tohelpexploretheinitialreactionsofviolinteachingprofessionalsacrosstheworld,towhat appearedtobeabrilliantsolutiontoalongstandingproblem,bothLarryandJimfeltthat independentmarketingexpertisewasneededatanearlystage.Somestaggeringfacts emerged,notleastthatmorethanhalfamillionnewviolinsareboughtthroughouttheworld eachyear.Thisprobablymeansthatalmostanotherhalfamillionsecondhandviolinsare boughttoo,leadingtolotsoflessonsformanystudentskeentolearnfast.Themostlikely routetomarketwasidentifiedasviathetraditionalwholesaler/distributortoretailernetwork.
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Initialresearchindicatedthattherewasamarketforalowcost,easytousedeviceandthus thedesignengineeringandmanufacturingprioritieswereset.

Universitysupportmechanisms
ThemarketresearchwassupplementedbyfurtherinputsfromtheUniversitysDesign Institutewhichprovidedaspecialistsupportprogrammeforsmalltomediumsized enterprises.Thisincludedacomprehensiverangeofservicesfeaturingmarketingadvice, productdesignandinnovationprocessesaswellasfinancialmanagementandtechnology transfer. Jimwasimpressed.TherangeofservicesavailablefromtheDesignInstituteisfantastic wewereabletoputtheengineeringissuesonthetableanddealwiththeminawiderteam contextwithinputsfromexpertsasrequired. Theissueswereclear: Stylinganddesignvalues.Thefirsthandmadeprototypewascertainlyfunctionalbut neededmorework.Soonamoreaestheticshapewascreatedthataddedagreat dealtothepresentationandpackagingoftheproduct Durability.Newmaterialsweretestedandthebestofanumberofoptionsselected, wewillhavetowaituntilthelaunchtoknowmoreonthispoint. Manufacturingoptions.Lowvolumescouldbelasercutbuthighvolumesneededa moreappropriatetechniqueforcuttingandforming.Whichwouldbebestatlaunch? Productioncosts.Howfastwouldsalesgrowandwhatwouldbeanacceptable pricingstructureforcustomeranddistributionchainalike?

Progresstodate
Theexcellentteamworkinvolvingtheinventor,musicians,designengineersandmarketeers hasresultedinpreproductionprototypesthatareworkingwellinfieldtesting.Seedcapital hasbeensecuredonthebackofthispositivemarketresearchfindingsandtheformal productlaunchisscheduledforearlyin2006.Theteamaredeterminedtobringaproductto marketthatoffersexcellentdesign,practicalityandthehighestquality.Tothisendattention todetailiscriticalasaremethodicalengineeringprocesses.

Entertheentrepreneur,thenexit
Thecollisionbetweenentrepreneurandinventor/engineerwasbroughtaboutbythe realisationoftheexistenceofamarketneed.TheymetbyaccidentandtheinventorinLarry awakenedtheentrepreneurinJim,andanewpositionforJim,theinventor/engineer.He admitsthathewasfeelingmoreopentootherpeoplesideasatthetimeofmeetingLarry andsincethenhasprobablyrevertedtotypeashewaitsforthenextawakening.

Conclusions
Stayawakefornewopportunitiesbynotalwaysbeingyourself

EngineeringSubjectCentre FourMiniCaseStudiesinEntrepreneurship

Buildawiderteamtobringinnewthinkingonproductdevelopmentissuesyou mightbetooclosetotheopportunitytoseeitsfullpotential. Engineersandentrepreneursareinterchangeablewhentheyeachseethemarket needclearly.

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2 DanielPlattLimited:ACaseStudyinEngineering Entrepreneurship
Introduction
WilliamWilkes,RoofTileTechnicalManageratDanielPlattLimitedandanexperienced bricklayerandroofer,recognisedtheproblemprecisely.Buildersusingclayrooftilesoften findthattheycannotgettherooftilestheyneedwhentheyneedthem,especiallywhen workingonthevalleyareaofaroofwheretwopitchesmeet.During170yearsof manufacturingnaturalclayfloortilesDanielPlatthashadtoadapttomarketneedsinan entrepreneurialwayonmanyoccasionsandthisproblemforbuilderspresentedan opportunitytocreatenewcustomers. Themoveintothenichemarketforclayrooftileswasonesuchentrepreneurialresponse whenthewidermarketforceramicproductsbecameincreasinglycompetitive.Havingmade themove,maintainingastrong,distinctpositionintheselectednichewasvitalinorderto maximisethevalueoftheopportunity.Theintroductionofaflexibleproductdesignwould enabletherightproductstobeavailableexstock. Routinelybuildersmighthavetowaitforuptoeightweeksbecauseaparticularspecification tofitthepitchoftherooftheywereworkingonwasnotavailable.Theimplicationsinterms oftimelostandnegativecashflowaresignificantasjobscannotbecompletedwithin contractualterms.Producingonlyonetypeoffittinginsteadofthreewouldreducestock levelsandimproveproductavailabilityresultinginmoresatisfiedcustomersandincreasesin salerevenue.

TheEngineeringIssue
Roofsareconstructedwithdifferentlevelsofpitch(slope),mostcommonly40,45and50 degreepitches,eachonerequiringadifferentfittingwhichisinfactthetermusedto describetheanglebetweenthetwowingsofavalleytile.Thetaskwastodesignasingle tilethatwouldfitallthreeangles.Itwasrelativelyeasytogetitrightfortwoanglesbutall threerequiredmoreconsiderationtoensuretheaestheticsandthefunctionalityofthetile wereright,WilliamWilkesexplained. Theprocessbeganwithacardboardtemplate,progressedtoametalangledsupportplate andthentoapieceofextrudedclayplacedonthesupportplateandcuttorequiredshape. Differentanglesweretriedandtestedonametalframeroofconstructionfittedwithboards andtilelathsandlocatedwithinDanielPlattsmanufacturingfacility.Theselectedbestfits werethenfiredandplacedontothetestroof.Itwasalongandmeticulousdesign engineeringprocess.Asthevalleytilesdonotfeaturethenibsthatholdregularrooftileson thelaths,precisionengineeringwasessentialasthevalleytilesateveryanglemustbe supportedbytheregulartiles.

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InnovativeActionsSupport
DanielPlattscapacitytoexploittheopportunitywasconsiderablyenhancedbythesupport oftheInnovativeActionsProgramme,WestMidlands.Thisregionaldevelopmentagent providedamechanismforencouragingcompaniestothinkdifferentlyandformaking innovationrealandeffective.DanielPlattsentrepreneurialskillsandengineeringcapability wereboostedandaproductthatmayhaveotherwiseneverreachedthemarketwas successfullycreated.TheteamprovidedDavidPlattwithfundingtosupporttheresearch andproductdevelopmentprocessesincludingacoachingandmentoringservice. Theuniversalvalleytilesarecurrentlyontestwiththebuildingtradeandpositivefeedbackis alreadybeingreceived.Salesofrooftilesarenowprovidingcustomersforonethirdofthe companystotaloutput.

Conclusion
Employdesignengineerswhoreallyknowtheirmarkets Entrepreneurialcharacteristicscanbehandeddownfromgenerationtogenerationif thecultureisright Keepaheadofthemarket Aimtodiversify,buildingoncorecompetenceswhenthemarketmoves.

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3 HiddenNation:ACaseStudyinEngineeringEntrepreneurship
TheJourneyBegins
LeePrescottsjourneyintoentrepreneurshipbeganwithhispassionforBMX(BicycleMotor X).HegraduatedfromuniversitywithaBScinProductDesign10yearspriortoestablishing HiddenNation.Thecompanysproductrangeiscentredonhighquality,specialistBMX framesandcomponentswhichLeelearnedallaboutduringhisearlycareerinspecialistbike design.Leeknewfrompersonalexperiencethatthosewhocompeteatthehighestlevelin theBMXcircuitworldwidedemandonlythebestframesdesignedandmanufacturedtothe higheststandards.

TheMarket
Themarketismatureandpopulatedbydiscerningbuyers.TheBMXmarkethaswaxedand wanedsincethe1970s,butthroughouttheracingcircuithasremainedstrong,featuringa numberofracingstylesandclasseswhetheritbeflatlandortrailcompetition. FirstandforemostLeeisanengineerwhohaslearnedandunderstoodexactlywhatthe marketwantedandcouldnotget.Therealisationawoketheentrepreneurinhimbutfirsthe hadtogettheproductright,bothintermsofdesignandperformanceandbrandvalues.The customersnotonlywantedhighperformancebutalsowantedtobeassociatedwitha distinctiveanduniquenichebrandwherethebestbuyonlythebest.Furthermoreinsuchan elitistmarketcustomersbecomesalesrepresentativesbecausetheyareproudtobe associatedwiththebrand.

TheDesignandEngineeringIssues
Customersinthisnichespecifytheirownbikedesigningreatdetailencompassingevery majorandminorcomponentandassembly.Thebikemustbedurable,safeandfast. ThereforeeveryengineeringdecisionLeemadewasmarketdrivenfromtheoutsetinorder tomeettheperformanceobjectives. Heattreated,(853)lightweight,hardenedtubingwasselectedandsuppliedbyReynolds TubesintheUKandapartnershipestablishedwithaCzechcompanyinordertoachievethe requiredmanufacturingstandardswithinamarketablecost/pricestructure.Equallyas importantastheframewerethestemsandpoststhatlinktheframetotherestofthebike. Theseweredesignedtospecificcriteriatoo,withtheavoidanceofthreadstripping,minimal slippageandsafetyaspriorities.Thenumberofcomponentswasreducedtominimise possibilitiesoffailureandavoidunnecessaryproductioncosts.

MarketingStrategy
Nowtheengineerbecameevenmoreofanentrepreneur.Havingseenthemarket opportunitytheengineerhadtogettheproducttomarket.UntilthismomentinhiscareerLee hadworkedinlargeorganisationsalongsidesalesandmarketingcolleaguesbutnowitwas uptohimtotaketheproducttomarket.
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Firstlythebrandhadtobeconsideredandthefirststepstakentoestablishitspositioninthe marketplace. Carefulresearchshowedthataconnectionwithanalternativestyleandoff beatinnovativesolutionsofferedtherightvalues.ThenameHiddenNationimplies differenceandmystery,butfortheframeproductsomethingmorewasneededtodoitjustice inthemarketplace.ThenameAkirawaschosen.AkiraKurosawawasarenowned JapanesefilmmakerwhoseworkfeaturesSamuraitraditions.Akiraproducedhis storyboardsasfullscalepaintings.Thesepaintingsareworksofartinthemselvesandgiven JapaneseswordmakingtraditionstheinherentprecisionwastransferredtoHiddenNations brandvalues. Theexclusivityofthebrandwascarriedthroughtothesalesandmarketingstrategy.To datetendealershavebeenappointedintheUK,oneinIrelandandrecentlyoneinAustralia withnegotiationsunderwayinGermany.Thecustomershavebecomesalespeoplebecause theyvaluetheexclusiveassociation.Thewebsiteisaninformationsiteonlywithsales activitybeingundertakenexclusivelybythedealers,supportedbytradeadvertisingand targetededitorialcoveragecreatedbyapublicrelationscampaign.Wordofmouth endorsementshavealsobecomeasignificantroutetonewsales.Inthesecondyearof tradingsalesweredoublethatofYearOneandgrowthcontinuesforwhatisstillaoneman business.

Finance
Alloftheabovehadtobefunded.ABusinessPlanwascreatedandshowntoavarietyof traditionalfundingsourcesbanks,venturecapitalists,businessangelsandbusiness advisorsfromseveralinstitutions.OffersoffundingdidnotarrivebecauseLeewastoo young,toooptimistic,wrongabouttheproduct,wrongaboutthemarket.Leegotusedto rejectionbutcarriedonregardless.Hebackedhisownbeliefbyremortgaginghishouse andinvesting30,000ofhisownmoney.HeremainsinfulltimeemploymentasHeadof Designforaqueuemanagementsystemcompany,workingonHiddenNationinthe eveningsandreinvestsalltheprofitsfromtradingactivity.

ASupportiveUniversity
AsaproviderofLeesearlyProductDesigneducation,hisuniversitywasinvolvedatthestart hiscareer.Muchlater,whenLeeconceivedhisideaandgrewthedesiretorunhisown business,hewasabletojointheuniversitysVisionWorksunitwhichsupportedembryonic startupbusinesses.VisionWorksprovidedofficeaccommodation,telecommunicationsand computerfacilitiesand,mostimportantlyforLee,acoachingandmentoringprogramme.He receivedtheadviceandencouragementessentialtoenablinghimtocompletetheBusiness Plananddeveloptheconfidenceheneededtomakehispersonalinvestment. AsLeesaysVisionWorksgavemesomeonetotalktoatatimewhenIhadtobecomean entrepreneuraswellasadesignengineer.
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Conclusions
Marketdrivenengineeringfuelledbyapassionfortheproductandthemarketmeant theproductbecameexactlywhatthecustomerswanted Beinganentrepreneurcanbeaverylonelyroleandsoanobjectivementoris valuable Entrepreneursmakemarketsandengineerscanmakeentrepreneurs.

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4 TheNarrowCarCompany
TheEntrepreneurialItch
After25yearsofbeinginvolvedindevelopingandsellingengineeringsolutionsinthemotor industry,HughKemphadhadenough. Despitebeinginvolvedinengineeringandmanufacturingforallthattime,IstillfeltthatI wantedtomakesomething,somethingwholeandcompleteandmine. Hughhadbeenamemberofumpteenteamsbutwasneverthesoleownerandchampionof acompleteproduct. MyfirstideawastogetasfarawayfromthemotorIndustryaspossiblesoIdecidedtobuild boats,especiallyasIlovesailing.However,IknewverylittleaboutbuildingboatsbutIdid knowaboutmakingcarssopowerwonoversailinthiscase. Fortunately,Hughhadbeenworkingonanewnarrowvehicleconcepttowardstheendofhis sevenyearsasDirectorofEngineeringatProdriveAutomativeTechnologyinWarwickinthe UK.Whentheentrepreneurialitchbecametoomuchtobearandhedecidedtomoveon, themomentoftruthcoincidedwithProdrivesdecisionnottopursuethenewvehicleconcept whichbecametheNaroCar.WithalicensefromProdrivetodeveloptheproductfromhis ownresources,HughsetupTheNarrowCarCompany.

TheEntrepreneur
Withlongexperienceofthecorporateworldataseniorlevel,includingtimeatLotusCars designingandbuildingenginesforGMandChrysler,Hughfeltconfidentofhisabilityto presenthisideastoanyaudience. Idgottechnicalknowledge,commercialnouseandpresentationskillsbutwhatIdidnot havewasenoughmoneytotaketheNarocarfromanideatoaworkingprototype.Theres moneyaroundforthebackend,suchaspreproductionprototypes,labour,capital equipment,onceyouhaveprovedtheconceptwithsomethingthatworksandlookslikethe realthingbutthereslittlemoneyaroundattheriskyend,thebeginning,forwhatisavery newanddifferentcarconcept. AsaclientatCoventryUniversitysVisionWorksBusinessstartupprogrammeandalsoa partneroftheUniversitysEngineeringFaculty,somegoodadviceandpracticaldesign engineeringsupportwasonofferwhichincludedinformationonfundingoptions. Hughtriedanumberofpotentialcorporatepartnersforequitybasedarrangements,and soughtsupportfromsuppliernetworksandtheEuropeanUnionsInnovativeActions
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programme.Prodrivewerewillingtoprovideengineeringcapacityatlowratesbutcashwas needed.AftereighteenmonthsHughwasabletosecureaUKGovernmentSMARTgrantof 57,000 aprogrammethatsupportsinnovativeideasattheearlystageofdevelopment. Thiswillbesufficienttoenableastaticrigtobebuilttotestthesteeringsystemandalsoa mulevehicle,amovingbutframeonlyprototype. Theentrepreneurbit,whereIfocusonanideaandseeanopportunitytodevelopithasnot beentoodifficultbecauseofmyallroundexperiencebutwhenitcametoapplyingfor fundingIhadabittolearn.

TheNaroCar
NarrowbecameNarowhennamingthevehicle,whichfeaturesanarrowtrack,offeringthe trafficevadingagilityofamotorcyclewiththecomfort,safetyandloadcapabilityofacar. Oneortwopersonmodelsarepossiblewithflexiblecapacityforcarryingloads.Itstalland visibleandnarrow,itslightandefficientandthereallycleverbitisinthesteeringsystem whichfeaturesrollcontrolcapabilitythatenablesstabilitytobeachievedautomaticallyeven thoughthevehicleleanslikeamotorbike. Thesoftwarethatcontrolsthesteeringsystemhasmanyotherapplications.Forexample, wearelookingatapplicationstoimprovetransportoptionsforthedisabled.

Fundingthefrontend
ThefrontendofthevehiclebecameatwopartissueforHughKemp.Hehadalreadylearnt thatfundingforproofofconceptwashardtoachieveanditwasverymuchthefrontendof thecarthatneededfundinginordertoproveitsworth. ThemainissuewasthatIfounditwasvitaltotailormyapplicationpreciselytotheparticular fundersthemesandinterests.Itcanbefrustratinghavingtobendyourownprioritiestofit someoneelsesbutifthatswhatittakesIwouldadviseanyentrepreneurtodoso.

Markets
Thepotentialmarketsaremanyandvariedandwithproofofconcept,itremainstobeseen howeachnichecanbedeveloped. Anumberofmarketscouldbenefit,including:theendcustomerwhocouldenjoyastep changeinpersonaltransportanewvehiclemarketsegmentfornichemanufacturersand newsystemtechnologyforsuppliersofsystemssuchastherollcontrolandsteerbywire systems.Notleastofcourse,TheNarrowCarCompanyitself. Thevehicleconceptwillprovidealternativechoiceforpersonalandcitytransport.Thereisa segmentofthemarketwherecurrentlynothingisofferedfromtodaysautomobile manufacturersandthisiswheretheNaroispitched.TheresashortcarsuchastheSmart, butnotanarrowvehicleunlessyoushifttoamotorcycle,whichisunacceptabletomanyfor avarietyofreasons.Itisthereforeimportanttorealisethattheproductsemergingfromthis
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projectcouldhelptolaunchawholenewbusinessstreamfortheUKautomotive manufacturingsectoraswellaslicensingopportunitiesoverseas. Asacommutervehicletheproductcouldprovidetravelincomfortatnormalmotorway speedsandthenfindgapsinthecitytraffictomaintainasensiblespeedtocompletethe journey.Onceatthedestination,parkinginathirdofthespaceoccupiedbyaconventional passengercarispossible.Asjourneyscanbeachievedwith30%ofnormalfuel consumption,theNarocaralsoprovidesbothcostandenvironmentalbenefits. AsataxitheNarocarcouldprovideanalternativeforthoseindividualswhovaluetimeand needtotravelaroundourcitiestotightschedules. VirginLimoBikesprovideaserviceinthe cityforthosewhodontmindgettingwetasapillionrideronamotorcycle.TheNarovehicle willprovidetheidealplatformtoexpandthisserviceforafainterheartedpassenger. StatisticsshowthatCityofLondonvehiclespeedsatpeaktimesarepassengercarsat3 mph,busesandconventionaltaxisat5mphanddispatchridersat15mph.AstheNarohas thesamefootprintsasdispatchbikes,athreefoldreductioninjourneytimescouldbe achieved.Asthetaxiindustryprogressestohailingbymobilephone,theopportunityforthe appropriatesizevehicletobedispatchedtothecallerwouldmakesignificantreductionsin congestion,gaseousemissionsandCO2,andprovideshorterwaitingandjourneytimesfor singlepassengers. Thefinalapplicationasacitydeliveryvehiclewouldhelpcutcostsandpollutioncausedby oversizedvansusedbylogisticsoperators.Initialdesignsrangefromaflatbedforcarrying awkwardshapeloads,toaboxvanconceptfortheRoyalMail.Thereisevenabikerack attachmentfortheoutwardboundcouple.

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