Universities: An Entrepreneur’s Ecosystem

2/25/08Follow @anneswift

Universities offer a thriving ecosystem that lends itself particularly well to entrepreneurship among students, faculty, and staff. My belief in the ability of the institution of higher education to foster entrepreneurship comes first hand from my experiences as a student entrepreneur at the University of Toronto, as well as my work with Young Inventors International, a non-profit organization that has taught hundreds of student entrepreneurs at universities across North America about innovation and bringing new products to market. Regardless of how directly supportive universities are of the commercialization of research, they offer access to a number of unique resources particularly helpful to budding entrepreneurs.

First, universities provide access to a large body of talented and skilled individuals gathered in one location, so building a team within the university ecosystem is much easier than anywhere else. Despite the romanticized view of the brilliant lone inventor, diversity of talent is very important for start-ups. Bringing new ideas to market requires a large number of skills, including a mix of business and technical expertise, so teams with members who possess a number of different skills are very valuable. Engineers who are wondering how to properly structure a business plan can always visit a management faculty member during office hours and ask for assistance. Entrepreneurship club meetings, classes, or lectures by well-known entrepreneurs offer a way of broadening knowledge about entrepreneurship—and connecting with others who are interested in the subject. Those who don’t yet have an idea for a venture can spend some time with engineering students or talk to faculty members about ideas that they think are worth commercializing—there are many students and faculty members who are looking for others to bring an idea to market. The key concept to bringing new ideas to market is collaboration. An excellent example of such cross-disciplinary collaboration is Akamai, an MIT start-up that was founded by a graduate student, a professor, and two Sloan school management students.

Under the Bayh-Dole Act, universities control the intellectual property (IP) that results from research funded by the federal government, so it is a good idea to talk to the university’s technology transfer or licensing office to clarify who has ownership rights to the idea before proceeding with commercialization. In addition, some universities have specific rules regarding IP ownership by faculty and graduate students. Many great companies have been built on licensed technologies, so even if the university owns the IP, there is still often an opportunity to start a new venture with the technology. For example, Google’s PageRank patent was licensed from Stanford University, and Akamai licensed its technology from MIT. In addition, many technology transfer offices have experts knowledgeable about entrepreneurship and can connect entrepreneurs to the outside community, including external technical and management experts, industry leaders, investors, and potential mentors.

University resources can also help with access to valuable information for market research. While the Internet is a good first stop, market predictions and trends usually require access to additional reports focused on a target market and specific industry. Students and faculty members usually have access to several market research resources, including a variety of databases that provide an overview of funding trends and opportunities (although these resources vary by university). Management school libraries, in particular, offer market research databases on a wealth of topics. These databases usually cost tens of thousands of dollars, and are often inaccessible by the general public. Apart from market research resources, many universities offer access to technical resources and labs, including rapid prototyping machines and information about recent developments in materials and advances in production techniques. Members of the university community can usually access some of these resources free of charge or for a small fee.

After building and testing the prototype, talking to the technology transfer office about IP, building a team of students and faculty members, and evaluating the market, entering a business plan competition can help to test the viability of the venture, raise some start-up cash, and get feedback from experts, including seasoned entrepreneurs, investors, and other service providers. Most universities have at least one competition. Some of these competitions focus on early-stage ideas, some on social entrepreneurship ventures, and others on mature companies ready to go to the market. The exercise of preparing a business plan will help to get the idea and venture organized by planning the process of bringing the technology to market. In addition, many business plan competitions offer additional resources to students or faculty preparing their business plans, so participation helps to expand professional networks and knowledge throughout the process. A number of successful start-up ventures, including Akamai and Seahorse Power, which was founded by a team of students from Babson and Olin Colleges, have benefitted from funding, advice, and publicity offered by business plan competitions.

From building a team to winning start-up capital, universities offer many unique and valuable resources to those within their community. One way to understand the power of the entrepreneurship ecosystem in universities is to read about start-up companies that have successfully leveraged the resources available to them within the community, such as Akamai and Seahorse Power. Since each university is different, it can be helpful to “map” the ecosystem by making a list of resources that are available, including clubs, people interested in entrepreneurship, entrepreneurship centers, and technology transfer offices. Knowing which resources are available can be empowering and can offer insight into the next steps to take when building a new venture within the university network. And even if the venture is not successful, mobilizing the resources within the community provides professional relationships, friendships, knowledge, and skills that will last a lifetime—well beyond the ivy-covered walls.

Anne Swift is the Head of Marketing (a.k.a. Chief Marketing Nut) at Nuts.com and a Director of the Fields Institute for Research in Mathematical Sciences. She is also the founder of Young Inventors International, which has helped thousands of university innovators around the world through online and offline events. Follow @anneswift

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  • http://www.sheeleytech.com Michael Sheeley

    Great article!

    I’m forwarding this article to my entrepreneur classmates at Bentley College in Waltham, Ma.

  • http://oddjobia.com Michael

    As an undergraduate student taking courses in business planning and the entrepreneurial process, I can say that I agree wholeheartedly with the business potential that rests within a college campus. Your point about intellectual property rights is concerning though – my classmates and I have a business idea that we’ve come up with in class and that we are considering pursuing!

  • Ian

    Taking the idea of an entrepreneurship club a step furthur, there’s a new residence at the University of Waterloo specialized for housing student entrepreneurs: http://www.velocity.uwaterloo.ca/

  • http://www.startupepicenter.org Scott Lane

    Anne,

    A great article and I would hope that those interested in becoming entrepreneurs would read this and look for universities that have a thorough track record of success in their DNA. Some are far better than others!

    The Entrepreneurial clubs can indeed prepare students. Other activities such as student government and other activities that may lead you out of your comfort zone are excellent. Any activity that forces milestones, a proactive nature, increased decision making, advanced maturity while executing on tough decisions (while having fun) is a fantastic learning experience that will shine through. Combining these attributes and built in networks with the IP and research faculty is a compelling proposition.

    Universities are not just great fun and learning but fantastic cross pollination possibilities are everywhere. Ideas have time to blossom and most students still have not heard “No” a million times, so that’s beneficial. So if you persevere and focus on execution and build your team with great skill and luck you’re well on your way.

    Nothing beats the viral nature of the university campus and the university network across the US and the globe! Facebook may be one of the largest of these examples, but they are certainly not alone. It was based on networks, as is Young Inventors International. YII and other organizations are invaluable!

  • http://www.jarg.com Michael Belanger

    Some times there are prior innovations of which universities are unaware. Northeastern University has out-licensed the innovative Internet-scalable database architecture patent to a Waltham company, that NU’s November 07 lawsuit against Google claims underlies Google’s search engine, most likely enabling the PageRank you sited.

  • http://www.jarg.com Michael

    Northeastern’s database architecture patent’s
    inventor, Professor Kenneth Baclawski provided these comments:

    “RDF is not a protocol. Guha was not involved in the original RDF language, but he was involved in RDF Schema which came later, and he also participated (with many other people) in the development of the RDF and RDFS standards.”

    – Ken

  • http://www.myfavoritentrepreneur.com armand rousso

    Armand Rousso is about to launch a new Start up site for Entrepreneur : http://www.myfavoritentrepreneur.com : stay Tuned !