University Startups and Spin-Offs: Guide for Entrepreneurs in Academia (2015)
If you have ever been inside an MRI scanner, had a vaccination, flown in an airplane powered by rocket fuel, or used the seatbelt in your car, then you have experienced the benefits of university research. Thousands of products used every day have sprung to life out of university research labs. But in recent years, when it comes to leadership in innovation, universities have ceded the limelight to the private sector. Although much university research is still potentially useful, it rarely sees the light of day beyond publication in a scientific journal. Most of the patents held in university patent portfolios never earn a cent in revenue. Only a tiny minority of researchers will ever run their own company and apply the technologies they have so passionately invented. What does this disconnect stem from? Often from a lack of information about how to turn ideas into startups to make an impact.
Startup entrepreneurship is a learning experience that encompasses disciplines outside of your domain. It is a mindset, not a job. With that mindset, you should embrace the opportunity to integrate new skills into your life. You may discover a new talent you never knew you had. Starting a company sounds difficult, but the alternative, working in a corporation, is no cakewalk either. Few big corporations innovate. Climbing the ranks from the ground up often takes decades and is fraught with politics. Doing a good job and trying to be inventive will not help you to advance in the corporate environment. This leaves creative people frustrated. However, when joining a big corporation as an accomplished entrepreneur, your chances are much better. I know several founders who sold their startups to large companies. For them, entrepreneurship was the fast track to an executive position in a larger corporation.
Startup entrepreneurship is a huge advantage on your resume. You will gain diverse knowledge unlike that from any other project you have undertaken so far. After all, life is short. Wouldn’t it make sense to explore all the possibilities before committing to a line of work in which you spend 60% of your waking hours? I encourage everyone to give entrepreneurship a try. The guidelines in this book will enrich your experience and give you the tools to make the most of your ideas. You will gain a wealth of diverse knowledge by launching a startup. When you work in your own company instead of somebody else’s, you will learn the ropes of doing business and making an impact much faster (see Figure 1). This makes up for the long hours spent trying to get it off the ground. You will be able to draw on this throughout your life.
Figure 1. Diversity of knowledge from launching a startup
Who Is This Book For?
The first part of this book speaks directly to students and researchers who are interested in launching a startup or spin-off. In a nutshell, this is about showing founders how they can use the existing university system as a springboard for entrepreneurship, make the best of existing synergies, and sidestep all the ballast not conducive to startup success. The strategies are of course also useful for entrepreneurs venturing out on their own without an academic support system.
I do not examine the topic academically. Much has been written elsewhere about the commercialization of university patents and the complexities of public programs to stimulate entrepreneurship. It is also not my intent to suggest sweeping reforms to the education system to make it more entrepreneurial. But if you are studying, researching, or teaching at a university and are thinking about entrepreneurship, this book is for you. It contains practical advice that I find useful in launching a company, mostly based on my personal experience. All startups and entrepreneurs are unique, and I do not claim to have all the answers. Nevertheless, I introduce some unconventional ideas and approaches here that you may find useful in your own endeavors as an entrepreneur.
The second part of the book concentrates on universities. You may find yourself in a position where you wonder how the current system could better help foster startups and entrepreneurship. There are numerous opinions about how this should be done. However, a relatively conservative organization like a university cannot be turned on its head overnight with a sweeping reform. Yet there exists a growing desire among universities to redefine their relationship with the market and other external stakeholders. Making an impact with research beyond scientific publications occupies more and more mindshare. By understanding how the startup process works, universities can leverage their existing resources to help students and researchers launch companies with more impact.
Many of those ideas and approaches run contrary to what your startup advisors will tell you. This book may advocate that you do the opposite of what you read in the university’s official startup publication or in popular books about startups. It may even suggest that you forget what you just learned in a Guru workshop about entrepreneurship. Some of the ideas may seem overly opportunistic to you, especially if you have never been exposed to entrepreneurship before. Launching a startup is by definition opportunistic. If there is a chance, then take it. If there is none, then make one. Nobody will make your life work for you. You need to take matters into your own hands and take full responsibility for your destiny. This is one of the prevailing themes of this book.
What Will You Learn in This Book?
Launching a startup is not rocket science. Regardless, there are a few strategies and skills that founders must know to have a real chance at success. Putting together an entrepreneurship program at a university has much in common with launching a startup. So the strategies outlined in the first part of the book are just as useful for those who implement entrepreneurial programs in the curricula of universities. The overview in Figure 2 groups the book’s chapters by topic.
Figure 2. Chapters and topics
While you read, I encourage you to keep an open mind. Look at entrepreneurship as a process—an ongoing learning experience. It is in many ways more a mindset than a job, which may confuse you at times. There will be much conflict ahead. Armed with some basic tools, you will come to understand what it means to launch a startup. You will be in a position to analyze your challenges, break them down into manageable parts, and move them toward solutions quickly. Even though the end goal of your startup may still be uncertain, you will have a guide that explains the next steps.
All this comes not from a theoretical source, but from a battle-hardened practitioner who has walked this walk before: seven times, to be exact, as of this writing. That being said, do not take any of this as gospel. This is simply a collection of concepts I find helpful in getting a company off the ground in a relatively short time, with limited resources.
I wish I had a sure-fire recipe to create a successful company, but I don’t. Many turtles hatch, but few make it to the sea. Achieving startup success remains elusive. A whopping 93% of companies backed by Silicon Valley–based accelerator Y Combinator fail.1 Mind you, these are the 2% of handpicked companies that were selected to enter a 90-day entrepreneurship crash course in the startup capital of the world. Startups fail despite the best efforts of an army of talented venture capitalists, consultants, and the entrepreneurs themselves, who often display incredible drive to make their company work. There is no shame in failure. But if you and your startup arm yourselves with practical tools that entrepreneurs around the world have successfully used, the odds of graduating to the successful 7% have just increased.
With slight upgrades, universities and their startups can improve their chances of entrepreneurial success significantly. This requires effort from all stakeholders in the startup equation—not just from the government and universities, but first and foremost from the entrepreneurs themselves. If one thing is obvious, it is that entrepreneurship is hardly a theoretical school of thought, but a hands-on exercise. With this in mind, let’s begin.
1Henry Blodget, “Dear Entrepreneurs: Here’s How Bad Your Odds of Success Really Are,” Business Insider, May 28, 2013, www.businessinsider.com/startup-odds-ofsuccess-2013-5.