Spring Quarter 2010 Course Outline DRAFT

PROGRAM NUvention: Energy (ISEN 430)

TIME Thursdays, 2:00-5:00 p.m.
LOCATION GXX, Jacobs Center, NU Evanston Campus
FACULTY Nicholas Switanek, Visiting Assistant Professor of Management
DIRECTORS and Organizations, Kellogg School of Management, n-
switanek@kellogg.northwestern.edu, 847-491-8074
Michael Marasco, Clinical Associate Professor & Director, Center
for Entrepreneurship and Innovation, McCormick School of
Engineering,
mmarasco@northwestern.edu, 847-467-6347
Thomas McMahon, Adjunct Professor, Initiative for Sustainability
and Energy at Northwestern (ISEN)
SUPPORTING Clinton Francis, Professor, School of Law,
FACULTY cwfrancis@law.northwestern.edu, 312-503-6484

PROGRAM Joyce Gab Kneeland, Associate Director, Center for

COORDINATOR Entrepreneurship and Innovation, McCormick School of Engineering,
joycegabkneeland@northwestern.edu, 847-467-4432
STUDENT Arthur Zitao Zhang
ASSISTANT
PROGRAM Ford Engineering Design Center, 2133 Sheridan Road, #2-331,
OFFICE Evanston,
847-467-6347, 847-467-4727 (fax) and
ISEN, 2145 Sheridan Road, L550, Evanston, 847-467-1972
OFFICE HOURS Each NUvention faculty member maintains office hours. Please
contact them directly to schedule an appointment.
BOARD Bridget Calendo, Initiative for Sustainability and Energy at
RELATIONS Northwestern (ISEN), bridget@northwestern.edu, 847-467-0863
COURSE NUvention: Energy provides students an authentic experience of
OVERVIEW helping to develop real products or services in the energy area:
from concept; through engineering and market analyses;
cumulating in the development of a business plan to take the
product or service to market. Over an intense quarter, graduate
students from schools across campus will come together in
interdisciplinary teams to develop a product or service and a
business in the burgeoning sustainable energy industry. Consistent
with the NUvention approach, student teams develop their own

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 business ideas, rather than consult to companies to develop
company ideas or technologies. Projects come from students or
from Northwestern or Argonne laboratories. By simulating the
product/service and business development process, NUvention:
Energy helps students develop creative, interpersonal, business,
and technical skills.
PROGRAM NUvention: Energy has been designed to facilitate student learning
OBJECTIVES experiences around the following entrepreneurial challenges:
• Innovate from need to prototype in the sustainable energy
sector
• Link innovation to a business concept with technical and
financial viability
• Use design to translate an idea into a product or service
• Obtain intellectual property protection and regulatory
approval
• Convince subject matter experts and financers to fund your
idea
• Build a team from individuals with diverse professional
backgrounds
PROJECT-BASED Successful entrepreneurship in the sustainable energy sector
LEARNING demands basic skills and understanding of many disciplines,
APPROACH including in design, market analysis, business strategy formation,
financial modeling, energy policy analysis, and environmental life
cycle assessment. To help students develop these skills, they are
matched to projects centered on one of a variety of technologies
and service ideas at points in the energy system extending from
generation through transmission or storage to industrial or
individual use.

The class organizes learning around deliverables pertaining to

business and design, crucially including an examination of the
environmental aspects of their projects. By crafting these
deliverables, students will build the core skills and perspective
necessary to forming an energy venture that is sustainable both
economically and ecologically.

Design Storyboard, Technology Dependency & Readiness Map,

Environmental Life Cycle Assessment

Business Market Sizing, Elevator Pitch, Business Model Outline,

Business Development Milestone Timeline, Financial
Model, Final Presentation and Supporting Documents

NUvention: Energy is designed so that students will learn within and

outside the classroom, and the principal learning takes place within
the team, working on the team project.

Team Assignments: Since innovation and entrepreneurship are

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 never individual efforts, most NUvention assignments will be
performed collectively by teams. According to their interests and
expertise, graduate students are brought together in cross-
disciplinary groups to develop a business concept in sustainable
energy.

According to the nature of the deliverable, it is expected that the

students with the deepest expertise in the assignment area will take
a lead role (i.e. Kellogg students leading financial projections and
McCormick students leading prototyping), but all team members
share responsibilities for every deliverable and those taking lead
roles should elicit contributions from team members rather than
simply doing the work themselves. The team meetings and work
sessions that result in a completed assignment will be great
opportunities to develop skills in communicating your expertise and
learning from your peers from other disciplines, including an
advisory board of industry experts.

To support the teams as they rapidly proceed through the

entrepreneurial development stages, teams attend lectures and
discussions in the classroom and meet with technical and other
experts.

Classes: We have a great diversity of students and faculty coming

together weekly to discuss topics relevant to energy
entrepreneurship. Faculty experts will be leading each class topic
using a variety of teaching approaches from lecture to case
discussion. Guest experts will be involved where appropriate. Each
student’s background and experience can help enhance the
learning: your active and thoughtful participation is strongly
encouraged.

Technical Advising: Each student team will be working with a

McCormick, Northwestern, or Argonne advisor in their specialty
area. Throughout the quarter, but at a minimum of once a month,
teams should arrange to meet with the technical advisor for the
specialist’s perspective and advice on the project.
FACULTY Each student will interface with faculty in the following roles:
ROLES School Faculty Director: The faculty director from your
respective school will have primary responsibility for your learning
in NUvention and will be available for any advising and will assess
your performance with input from all other faculty. All individual
student grading will be coordinated by the school faculty director.
Team Faculty Director: Each clinical team will be assigned one
faculty director that will be working closely with the team. This
director will become very knowledgeable of the team’s efforts and
will grade each team assignment. Where the director is not an
expert on the specific assignment, they will work with the faculty
director that is to ensure each assignment is graded appropriately.
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 Each faculty director advises and grades the assignments of 2-3
teams.
Supporting Faculty: A number of faculty subject matter experts
will teach and/or advise the student teams in areas like marketing,
market research, design and engineering. Each of these faculty will
be in communication with the Team Faculty Director on their efforts
and their input will be factored into grading.
STEERING The NUvention Steering Committee is composed of faculty and
COMMITTEE administration from Northwestern engineering, business, arts and
ROLES sciences, and law schools that provides overall governance to the
NUvention program in the following areas:
• Curriculum Development
• Financial Oversight
• Intellectual Capital
• Liaison to School and NU Administration
ADVISORY The NUvention Energy Advisory Board is composed of
BOARD representatives from the energy and energy finance sectors who
have supported the curriculum development of NUvention: Energy
and that bring a unique perspective to the program. Advisory Board
members will be invited to participate in certain classes including
the elevator pitch and final business plan presentations. They will
be available to advise the faculty and student teams over the
course of the program as needed.

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GRADING Grading components include:
Individual Grade: 400 Points
Assigned and determined by School Faculty Director
Team Grade: 600 Points
Assigned and determined by Team Faculty Director
Team Contracts 50 points
Elevator Pitch 100 points
Preliminary & Final Design 150 points
Final Presentation 100 points
Business Plan Framework 200 points

Final Grades will be calculated on the following scale as a

framework:

Total Points Grade

900-1000 points A
800-899 points B
700-799 points C
600-699 points D
Below 600 points F

All points earned will be posted on Blackboard.

NUvention: Energy faculty will grade according to the

distribution/curve requirements of their respective schools for
students from those schools.

Students will receive feedback on their performance from their

School and Team Faculty Director at the midpoint of the quarter.
STUDENT Every student is expected to abide by their individual school’s code
CONDUCT of conduct. Any alleged or actual violation of any code will be
researched by the faculty director from the student’s school. The
highest level of ethical behavior is expected from every NUvention:
Energy student.
TECHNOLOGY Students will be allowed to use laptops in the classroom for note-
USE taking purposes only during faculty-led case discussion and
lectures.
All laptops must be powered down during any guest
speakers. No exceptions!
All mobile phones and PDAs must be muted during class.
Lack of adherence to these policies will lower a student’s
participation grade.
STUDENT The faculty and students of NUvention: Energy expect the following
EXPECTATIONS from each student:
• Preparation: Every student needs to come prepared for class
and all their out of class activities from team meetings to
clinical shadowing.

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 • Presence: Attendance is required at every class as well as out
of class activity. Attendance sign in rosters will be circulated
at each class. Any planned absence must be discussed with
your school faculty director.
• Promptness: Students are expected to be on time for class
and any out of class activity. All assignments must be
submitted by or before deadlines.
• Participation: We are in a learning environment where both
faculty and students learn from each other. Your active
participation in all class discussions and team projects is
critical to maximize learning.
PROGRAM The NUvention faculty directors have established a very high
OUTCOMES standard for their anticipated outcomes from this program. We
expect every student will be able to:
• Drive the evolution of a need through all stages of product
and business development
• Understand how intellectual property protection can be used
as a business strategy
• Navigate the challenges of energy regulation and policy
• Design and prototype; incorporate feedback from potential
users
• Develop a business plan framework that can serve as a
roadmap and preliminary document for funding conversations
• Pitch a business to obtain funding
The NUvention faculty hope that some of the ideas developed within
the class may lead to start-up companies that the students launch
upon class completion.
INTELLECTUAL Since some of the students and faculty efforts in NUvention: Energy
PROPERTY may lead to the creation of intellectual property, we have
developed an Intellectual Property Agreement that each NUvention:
Energy student must execute to define the potential interests of
involved students, faculty, Northwestern University, (if relevant)
Argonne National Lab and other third parties.
TEXTS Technology Ventures: From Idea to Enterprise, Byers, Dorf, and
Nelson (2010)
Sustainable Energy – without the hot air, McKay (2009), available
for download at http://www.withouthotair.com/

Brief Outline of Class Sessions

Week Topic Deliverable

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 1 Course Overview
2 Design for Customers Customer Story and Storyboard
3 Market Research Market Sizing
7 Business Models Business Model Outline
6 Developing the Pitch Elevator Pitch
Feasibility and Technology Dependency & Readiness
4
Uncertainty Map
5 Design for Environment Environmental Life Cycle Assessment
Strategy and Go-to-
8 Development Milestone Timeline
Market
9 Funding and Finance Financial Model
10 Dry-run Presentations Draft Presentation
Final Presentation & Supporting
11 Final Presentations
Documents
Outline of Class Sessions

APRIL 1: COURSE OVERVIEW

The course begins with a brief introduction to the coupled trends in energy use and
environmental degradation that inspire both pessimism and opportunity. We
discuss the great need for sustainable energy entrepreneurship, previewing some
of the themes of the remainder of the course. Finally, we engage in exercises to
begin building stronger relationships among the project team members who will
work together intensely throughout the quarter.

1.1 The Energy Challenge

Speaker Prof. Mark Ratner, Co-Director of the Initiative for Sustainability and
Energy at Northwestern (ISEN), Professor of Chemistry, College of Arts
and Sciences
Mark Petri, Argonne Labs

1.2 Course Overview

Faculty Professors Marasco and Switanek

1.3 Team Break Out

Focus Meet with technical advisors to learn more about what the technology
enables and to brainstorm its applications. Generate many ideas about
potential customers and markets.

APRIL 8: DESIGN FOR CUSTOMERS

Businesses profit by satisfying real or perceived needs. Entrepreneurs innovate by
finding new needs or new ways to satisfy needs or both. Leaving aside, for now,
issues of technical feasibility or environmental benefit, which people or businesses
might need your team’s nascent product or service? What are the customer
“stories” of which your team’s business might become a part?

2.1 The Design Process & Storyboarding

Faculty HLB Design Instructor?

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2.2 Team Break Out
Focus Using techniques from the session, develop the ideas from the
brainstorm in Week 1, or come up with new ones.
Sketch out stories of customer pain to clarify the potential target
customer and the opportunity.

APRIL 15: MARKET RESEARCH

What are effective ways for learning more about customers and their needs?
Student teams learn how to research potential target markets for their product or
service, and to assess the key characteristics of that market in terms of its size,
growth potential, and existing rival products or services.

3.1 Market Research

Faculty Kellogg Professor

3.2 Team Break Out

Focus Identify one or two markets from those surfaced in previous weeks as
main areas of promise.
Develop list of people to contact to learn more about target
customers’ needs and market.
Develop list of questions to ask.
Progress Customer Story and Storyboard
Check-In

APRIL 22: BUSINESS MODELS

Business models specify the business’s customers, the value proposition the
business offers customers, and how the business gets paid for providing customers
value. This session introduces the variety of models used in the energy sector and
beyond, and the considerations that affect the appropriateness of a model for a
business idea.

4.1 Business Model: Customer, Value Proposition, and Revenue Model

Faculty Professors Marasco or Switanek

4.2 Team Break Out

Focus Estimate the geographic scope and scale (number and value) of
customers in target market.
Draft value proposition in light of market research.
Assess potential revenue models for target market.
Assess sources of differentiation from rivals.
Progress Market Research, Storyboard
Check-In

APRIL 29: ASSESSING FEASIBILITY AND UNCERTAINTY

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Until now we have assumed that the proposed product or service functions as
hoped. In this session we provide a framework for assessing what it would take to
make that assumption a reality. We open the fully functional “black box” and
identify the key components on which the proposed business depends. Based on
these components, we will address two basic questions: 1) What are the technical
hurdles and risk regarding the functionality of the product or service; and 2) What
are the legal and regulatory hurdles and risks presented by the product or service.

6.1 Assessing Feasibility and Uncertainty in Technology and Regulation

Faculty VC for view on tech feasibility; Cahan or McMahon on regulatory

6.2 Team Break Out

Focus Sketch model of product/service and its components.
Sketch model of the regulatory context.
Identify key dependencies and uncertainties regarding both
technology and regulation.
Sketch timeline of the technological and regulatory context of the
business.
Progress Pitch Outline, Elevator Pitch, Business Model, Market Research,
Check-In Storyboard

MAY 6: DEVELOPING THE BUSINESS PITCH

Over the prior sessions we gained a deeper understanding of the proposed
business’s potential customers needs. What needs to be in a succinct statement of
the proposed business, or the “elevator pitch”? What are the parts that need to be
in place to make a compelling case for funding?

5.1 Developing the Business Pitch

Faculty Professor Marasco

5.2 Team Break Out

Focus Draft and deliver elevator pitch.
Identify gaps in the business pitch.
Plan to fill the gaps by term-end.
Narrow revenue model decision.
Refine market sizing estimates given refined revenue model.
Progress Business Model, Market Research, Storyboard
Check-In

MAY 13: DESIGN FOR ENVIRONMENT

Having unpacked the “black box” in the prior session, we next introduce methods
for assessing the environmental impact of the proposed business and for comparing
it to incumbent businesses you hope to displace. The core practice for assessing
relative environmental impacts is Life Cycle Assessment (LCA) addressing both the
manufacturing process and the product itself, a streamlined version of which we
learn and apply.

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7.1 Life Cycle Assessment
Faculty Jim Cahan, Sidley Austin LLP

7.2 Team Break Out

Focus Decide on the scope of the LCA.
Using the model of the product and its components, extend this model
through the life cycle, creating an inventory.
Prioritize the elements to address and plan to research them.
Progress Critical Uncertainty Map and Timeline, Pitch Outline, Elevator Pitch,
Check-In Business Model, Market Research, Storyboard

MAY 20: STRATEGY AND GO-TO-MARKET

Entrepreneurial business models evolve over time. When they’re designed, they
typically reflect a desired future position for the business. “Go-to-market” is
concerned with the many tactical steps that entrepreneurs take in trying to reach
that desired future position. Strategy seeks to ensure that the model is robust to a
variety of threats and obstacles, including rivals and regulation. This session
focuses on a framework for prioritizing business development activities, identifying
appropriate milestones, and protecting the fledgling business. The strategic use of
legal protections such as IP is discussed.

8.1 Strategy, “Go-to-Market,” and IP

Faculty Professor Marasco or Switanek; Francis or Reed on IP; Calkins on
marketing

8.2 Team Break Out

Focus Develop a development timeline for the business. What needs to
happen when in order for the business to succeed?
What are the three most important things that need to happen for the
team to know that the business is moving in the right direction?
Progress LCA, Critical Uncertainty Map and Timeline, Pitch Outline, Elevator
Check-In Pitch, Business Model, Market Research, Storyboard

MAY 27: FUNDING AND FINANCE

Clarity about business model, strategy, and development milestones lets you know
what additional resources you need to increase the chances of your venture’s
success. But whom should you ask? The variety of funding sources available to
energy entrepreneurs, with their diverse advantages and drawbacks, are
introduced. We discuss techniques of valuation and the financial models of the
business that your team needs to approach funders with your “ask”.

9.1 Funding and Finance

Speaker Panel of VC Investors, Public Sector Funders

9.2 Team Break Out

Focus Brainstorm what you would ask for from investors.
Assess the relative appropriateness of different forms of financing.

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 Plan the construction of a financial model.
Progress Developmental Milestone Timeline, LCA, Critical Uncertainty Map and
Check-In Timeline, Pitch Outline, Elevator Pitch, Business Model, Market
Research, Storyboard

JUNE 3: DRY-RUN PRESENTATIONS

Teams do practice runs of their presentations before the class and instructors.

10.1 Dry-Run Presentations

Faculty Professors Switanek, Marasco, McMahon
Focus Compelling story with persuading evidence.
Progress Financial Model, Draft Presentation, supporting documents
Check-In

JUNE 10: FINAL PRESENTATIONS AND COURSE CONCLUSION

Teams do formal final presentations before panel of industry and expert judges.

11.1
Faculty Professors Switanek, Marasco, McMahon
DUE Final Presentation & Supporting Documents

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