Category Archives: Technology Transfer

Are Universities Teaching the Wrong Entrepreneurship Process?

I’ve long wondered why so many schools support a business plan/VC model through contests and course work when most of their students will never be in the running for venture capital. Over the past few years through Startup Mason and other activities, we’ve moved to a more experiential model/process for entrepreneurship education. We’ve supported action, iteration and experimentation in lieu of planning. (Though many contests demand plans and/or executive summaries).

Dileep Rao at Forbes.com has an interesting piece arguing against teaching business plans and competitions and for a more hands on approach to learning entrepreneurship. There is much good in this piece for those who care about entrepreneurship education.  From Rao,

 As I am constantly repeating, the capital intensive VC model has worked in Silicon Valley, but seldom outside. While 88 percent of Silicon Valley’s billion-dollar entrepreneurs used venture capital, 91 percent outside Silicon Valley did not.

This means that universities may want to consider the following:

  • Teach students how to build businesses using capital efficiency, not just capital intensity. Most areas do not have successful VC funds. Even if they did, most VC funds do not build home runs. The top four percent of VC funds earn about 65% of industry IPO profits. Getting money from the other 96 percent may not do much to build a great company or to make you wealthy. With capital efficiency, students learn to grow without wasting both time and their opportunity in order to seek VC, only to be rejected by VCs. VCs reject about 98-99 percent of entrepreneurs who seek funds from them

  • Encourage students to build their business with smarts, not money. Less than five percent of VC funding goes to startups. This means that students need to learn how to build their business, and actually get some traction, before anyone will take them seriously. Universities should teach them how to do this.

  • Teach sales. Selling is the oxygen of a new business. To sell is to succeed. Unfortunately, many business schools believe that teaching sales has no academic value. Without sales, there is no business.

  • Encourage business startups rather than business plans. Universities organize business plan competitions with the hope that wise judges can pick winners. VCs, who are the foremost ‘wise judges’ in the business, fail to reach their target 80 percent of the time. If the VCs, who are full-time professionals, fail 80 percent of the time, why do universities think that their own ‘wise’ judges can do better?

  • Teach all students, rather than just entrepreneurship students or business-school students, how to build a business. I have found that many business-school students do not have a new-business opportunity to pursue. I would suggest casting a wider net in the hope that students in other schools have ideas for a new business that they want to develop and grow.

If you are involved in entrepreneurship education or considering studying entrepreneurship, read this entire article by Rao as it will give you many things to consider as your approach university entrepreneurship offerings.

Report Says UK Struggles with Research Commercialisation | Times Higher Education | #highered

The Times Higher Education site has an interesting piece highlighting the difficulties British universities are having commercializing all of the research funding they receive from their government. A new report on the subject has supported this criticism. From Elizabeth Gibney:

“British entrepreneurs are being badly let down by a lack of access to financial support and a system that often forces them to sell out to private equity investors or larger foreign companies to get ideas off the ground,” said committee chair and Labour MP, Andrew Miller.

MPs said they had been encouraged by the work of the Technology Strategy Board and its network of “catapult” centres, but said that they were concerned about the access of small firms to facilities, and that government grant funding was often highly bureaucratic to apply for and only enough to “get an idea off the ground”.

The report, Bridging the Valley of Death: Improving the Commercialisation of Research, adds that while academic research is the “jewel in the crown of UK innovation activity”, the committee had concerns about how universities interact with the commercialisation of research.

It questions whether changes to the Higher Education Innovation Fund, which reward institutions that have already benefited from successfully commercialising their intellectual property, might further decrease the success of already struggling institutions.

“We would like to see how well changes to the Higher Education Innovation Fund improve commercialisation activity; whether there is a need for greater amounts of proof of concept funding in the sector; and challenge the institutions to become more accommodating to non-traditional backgrounds among their academic staff,” it reads.

“We have concerns that driving an innovation agenda too aggressively through universities may have diminishing returns with regard to commercialisation and risk damaging the academic research that is working well,” it adds.

via MPs criticise government over research commercialisation | News | Times Higher Education.

Microgrants at U. of Michigan Will Spark Innovative Research | The Chronicle of Higher Education

We recently reported that the University of Michigan was offering a masters in entrepreneurship (joint program from business and engineering). Michigan is going deeper into the innovation and collaboration world with the announcement of microgrants to interdisciplinary teams to pursue new areas. From Paul Basken at The Chronicle of Higher Education:

Under the plan, which begins today, all Michigan faculty will be eligible for a $20,000 credit that can be redeemed only if they work with two other faculty members, including one outside their academic field.

The idea, which appears to be unique among American research universities, has numerous elements that Michigan leaders believe will be attractive to professors and the institution, including its emphases on encouraging interdisciplinary work and helping faculty compete for a tightening pool of federal money.

And, said Mary Sue Coleman, Michigan’s president, it will help Michigan and perhaps other universities overcome their widespread failure to let faculty pursue high-risk, high-reward hunches.

“I know that people have new ideas, good ideas, they’d love to try it out,” Ms. Coleman said in an interview. “But we don’t have good mechanisms now within the university for them to do that.”

Later in the piece,

Continue reading

New Master of Entrepreneurship Program | University of Michigan

The University of Michigan, a leader across many disciplines (and my alma mater) has announced the creation of a Master of Entrepreneurship. Its great to see it is a joint venture between business and engineering. I was fortunate to interview Michigan Alum and supporter Sam Zell a few months back and it was evident in our short talk that Michigan, its leaders, and supporters were fully aware of the interdisciplinary nature of entrepreneurship. This is a great development for Michigan and the practice, research, and teaching of entrepreneurship in higher education. From the Michigan Master of Entrepreneurship website:

The Michigan Master of Entrepreneurship (MsE) gives students the ability to create new technology-focused ventures, either as standalone entities or within established innovative organizations.

This instruction is not available through conventional business or engineering curricula. Most business schools focus on the skill set required in larger, more mature organizations. Most engineering programs do not include market assessment and commercialization skills. The MsE program brings these two cultures together in a novel synthesis that is greater than the sum of its parts.

The first students will begin in August 2012 and the application is available online. Go Blue! (I can write that, this is a blog!)

via Master of Entrepreneurship | University of Michigan.

As Facebook IPO Nears, Universities Take Aim at Student Startups | Huffington Post

Dylan Reid (@startupchile) reached out to me recently to discuss universities, technology and student startups. The piece is online at the Huffington Post:

While Stanford’s gain from Google is unusual, technology-transfer agreements have long been the primary means by which universities support and profit from startups. However, as Facebook illustrates, more student-founded companies are bootstrapping without university technology, leaving schools without any profit — though that may be changing.

“The university has always been a supplier of both technology and talent,” says Frank Rimalovski Managing Director of the NYU Innovation Venture Fund “and its our job to foster and support that.” Rimalovski’s fund, which was created by the university in 2010, makes seed and series A investments in startups with ties to NYU. To date the $20 Million fund has made three investments two of which — Fondu and numberFire — were started by current students with no ties to university technology. “There’s definitely been a groundswell of entrepreneurial interest from students,” says Rimalovski “and if there’s another Zuckerberg walking around our hallways, we want to be as supportive as we would of a faculty member working on a new cancer therapy.”

“Young people have always wanted to change the world,” says Hugo Van Vuuren, a founding partner at the Experiment Fund (xFund), a new seed-stage investor housed at Harvard’s Graduate School of Engineering. What’s new, says Van Vuuren, is that their turning to startups as vehicles to do so. Van Vuuren’s fund, which was announced in January, has already made a number of small investments in high-profile startups like RockHealth, led by Hall Tecco (MBA 11′) and Omada, co-founded by Sean Duffy, currently on leave from Harvard’s MD/ MBA program.

“The culture on campus is definitely changing,” says David J. Miller, a researcher at George Mason University’s School of Public Policy who studies student entrepreneurship, “universities are under tremendous budgetary pressure in terms of outside funding and also from students paying tuition.” Rimalovski agrees saying “to be a real player as a university today, you have to engage students and faculty who are increasingly interested in starting companies.”

While university investment in startups outside of technology-transfer is fairly new, college campuses have long been a breeding ground for new businesses. Years before Brin and Page, Michael Dell was selling PC kits out of his dorm at University of Texas-Austin and Bill Gates was writing computer applications in his Harvard dorm. “The emphasis on tech-transfer is definitely misguided,” says Miller “when you look at the most successful entrepreneurs, technology is rarely a decisive factor — Bill Gates was definitely not the best coder around.”

via Dylan Reid: As Facebook IPO Nears, Universities Take Aim at Student Startups.

Summer@Highland 2012 Entrepreneurship Program for Student Entrepreneurs

I am no expert, but i think Highland Capital is a well known firm. Well, the partners there seem to agree with me that something is happening on campus with student entrepreneurs.  Check out their Summer@Highland program,

Summer@HIGHLAND is a 5-year old entrepreneurship program designed to provide university-affiliated startups with the environment and resources for taking their initiative/company to the next level. The program is “founder friendly”: Highland receives no equity stake in exchange for a team’s participation, and teams are under no obligation to Highland after the summer. Our only priority is helping entrepreneurs and their teams significantly advance their startup over the summer.

Selected teams will receive $15K, free office space in Highland’s Cambridge or Menlo Park office, and the opportunity to work closely with the Highland team and an incredible network of founders. Teams will also have access to the Summer@HIGHLAND Speaker Series, which has included founders, CEOs and experts from technology leaders.

You have about 68 days to get your applications in. (Early deadline is March 1, 2012, and regular deadline is April 5, 2012).

It is interesting to note that they are not looking for business plans, but for applicants that have taken some action, on a scalable path, and are entering large markets. This is about high impact student firms, not basic t-shirt shops (so yes, they would have rejected Marc Ecko!).

via Summer@Highland 2011 Entrepreneurship Program.

UT TTO Official Resigns Due to Ties to University Startups

Trouble on the technology transfer front from the University of Texas. I will have to learn more, but here is the one line pitch — uber successful California biotech researcher Richard Miller is lured to Texas to lead the way as the first commercialization chief, but quickly runs into conflict of interest issues for being too entrepreneurial! From Kirk Ladendorf at the Austin Statesman.

Miller, a veteran biotechnology researcher and entrepreneur in California, went to work for UT in September 2010 to help turn more of the school’s research discoveries into new jobs, companies and licensing income. As part of his job, he oversaw the work of the Office of Technology Commercialization, which assists companies that are interested in using patented UT technology and negotiates licensing deals with them.

Miller resigned effective Dec. 31 after he was told by UT officials that he could not have a personal and financial involvement in companies that might want to license technology developed at UT.

UT generated $25.6 million in licensing revenue in the most recent fiscal year and completed 29 new licensing and options agreements, according to the commercialization office’s website. The school also received 58 U.S. and foreign patents last year.

Juan Sanchez, UT’s vice president of research, said there was no active conflict of interest with Miller’s involvement with the companies because they had not yet licensed technology from UT. However, Miller “was setting up a scenario in which he would be negotiating with himself, and that would have been a conflict of interest, which we would not allow,” Sanchez said.

“We couldn’t move forward with his expectation of having a dual role” with the companies, Sanchez said. “It was clear that he would have to divest his interest. The resignation was his call. I would have liked him to remain as chief commercialization officer, but he chose not to.”

Sanchez said he instructed Miller in December to divest his interests in three startup companies that he had co-founded with UT faculty members and graduate students. Miller did divest his holdings in the three companies — Wibole, Graphea Inc. and Ultimor — but resigned sometime after that discussion, Sanchez said.

Get the most out of university technology transfer is a common cry, its no wonder we are running into scenarios such as this.

Over the past decade, UT has stepped up its efforts to generate more revenue from technology licensing. Part of the reason is faculty pressure and recruitment of top-level researchers. Both new recruits and existing research faculty have pressed the school’s administration to take a more proactive role in tech commercialization.

Pike Powers, an Austin lawyer and veteran economic development activist, said Miller brought new ideas to UT but might not have understood the constraints of working for a public university.

“He was offering some new ideas and thoughts about ways that the University of Texas could be more competitive,” Powers said. “I don’t think he received as strong a reception as he wanted to receive, so it was frustrating for him. He met with numerous members of the business community, and we advised him to be very careful about what steps he took next and to make sure he had the full support of the business community and the UT administration. But I don’t think he ever heard that message to the extent that he should have.”

What I find interesting is that people are looking for entrepreneurial leaders, but they also demand consensus. That is a little backwards no?

via UT official resigns after questions raised about ties to startups.