Tracking MIT tech startups

If you’re looking for technology entrepreneurship, most academics think of MIT and Stanford. Both schools — driven more by the entrepreneurial attitudes of their engineering students than their business schools — have spawned thousands of tech-based startups. Of course, I’m a little biased (as an MIT alumnus and a keeper of the Silicon Valley myth of exceptionalism).

Looking for something else, I found the Xconomy blog, founded (by among others) by the former editor of MIT’s magazine, Technology Review. Although it’s organized as a blog, it’s more like an online magazine.

Last year, they had two really interesting articles on MIT entrepreneurship. One contrasted MIT and Harvard tech transfer. Another chronicles recent Boston tech startups (including a list of the startups).

On a lighter note, they profile the entrepreneurial activities of the successful MIT blackjack team fictionalized in the movie 21 (based on the book Bringing Down The House).

There are plenty of blogs about Silicon Valley tech entrepreneurship — led by VentureBeat and ValleyWag. Xconomy seems to be the only comparable Boston blog, and as long as MIT alumni continue to create tech startups, one worth monitoring.

Harvard’s tech startup successes

While Harvard students, Bill Gates co- founded Microsoft in 1975, and Mark Zuckerberg founded Facebook in 2004. There weren’t a lot of home runs in between. Unlike the little science school down the road, Harvard doesn’t have a lot of big success stories.

The small business column of the Wall Street Journal has a long feature on today’s incipient entrepreneurship among current Harvard students, encouraged by Zuckerberg as a role model.

Based on my own experience and research, my sense is that student (or you alumni) entrepreneurship succeeds based on four factors:

• student intelligence/ability
• cultural attitudes surrounding the nascent entrepreneurs — family, friends, faculty, fellow students, local industry. (This is Stanford’s secret weapon, dating back to the Terman days).
• formal preparation, such as technology entrepreneurship programs
• external demand conditions, like starting a dot-com in 1998 or Web 2.0 company in 2004.

Harvard obviously has smart students, and now it has a real engineering school which (if it’s like other engineering schools) will be filled with faculty interested in solving real problems.

The WSJ talks about the culture issues. I hope that it’s more about empowerment — a belief in the possible through the Zuckerberg existence proof. But (as with a decade ago) there’s a hint that greed is a (the?) major factor. Wanting financial returns is fine, but great startups are created by entrepreneurs who want to change the world, not those who are counting the days to their IPO.

Photo by Scott Beale / Laughing Squid via Flickr.

SJSU's prize-winning tech startups

Today we had the finals of the 6th annual Silicon Valley Business Plan Competition here at San José State. I was one of the judges that winnowed down the 69 entries to 17 semifinalists and then 8 finalists.

The first prize ($10k) was won by a low-tech business plan by a student from our undergraduate honors business program, but the second ($5k) and third ($1k) prizes went to high-tech plans from SJSU alumni:

• nMotion plans to make a market in high-tech ads (since they don’t have a website, for now I won’t say more)
• BayCom has developed a new text message-based reader response system it calls Dial-Send-Read.

Our four industry judges were excited by the plans, as each year we have worked to bring technology-based startup plans from other colleges across campus.

We historically have had a dilemma that I think many campuses face with their business plans. Business students can come up with well-executed plans for run-of-the-mill businesses (like restaurants), while engineering (or here, industrial design) students have great technology but a hard time making a business out of it.

As I saw at the Georgia Tech conference, the key to good technology entrepreneurship education (like real startups) is cross-disciplinary cooperation. Technology management faculty are re-inventing this wheel across the country every year.

While such cooperation is a common issue for all tech entrepreneurship, like other CSU schools we have a slightly different problem than Harvard or Georgia Tech. We’re primarily an undergraduate program: 75% of our 32,000 students are undergraduates. My sense is the matching process is a little tougher with undergraduates than graduates — perhaps because the graduates will have already experience some cooperation in the workplace.

TI:GER and the other programs are going for formal, structured cooperation as part of a curriculum. So far, we’ve gone for informal cooperation — matchmaking business students with students who have a good technology. I’d be curious to hear how others have done such informal (or at least extracurricular) cross-functional cooperation.

Japan's engineering shortage

Saturday’s NY Times reported that Japan is now facing a shortage of engineering graduates.

Universities call it “rikei banare,” or “flight from science.” The decline is growing so drastic that industry has begun advertising campaigns intended to make engineering look sexy and cool, and companies are slowly starting to import foreign workers, or sending jobs to where the engineers are, in Vietnam and India.

It was engineering prowess that lifted this nation from postwar defeat to economic superpower. But according to educators, executives and young Japanese themselves, the young here are behaving more like Americans: choosing better-paying fields like finance and medicine, or more purely creative careers, like the arts, rather than following their salaryman fathers into the unglamorous world of manufacturing.

My friend Kaz Asakawa is quoted in this article:

The problem is likely to worsen because Japan has one of the lowest birthrates in the world. “Japan is sitting on a demographic time bomb,” said Kazuhiro Asakawa, a professor of business at Keio University. “An explosion is going to take place. They see it coming, but no one is doing enough about it.”

I suppose it’s good that the smart Japanese students want to be doctors. But finance? (As elsewhere, the willingness to pursue low-paying creative careers would be a function of personal and societal wealth that allow young people to live off the previous generation.) At least it’s not lawyers, who are a net drag on high tech companies.

The US has been facing this problem for more than a decade. How do we get more engineers?

• One way is to persuade high school guidance counselors to send colleges more students.
• Another is to relax immigration rules (such as the H-1b), which some (such as Norm Matloff) argue is just a way to reduce wages.
• A third is to argue — as Hal Salzman and Lindsay Lowell did in Nature earlier this month — that quality is more important than quantity — what matters is proportion of the very best technical talent.

Yet another solution is to hand out lottery tickets — incentive stock options — in hopes that the prospect of a big payout while motivate people to take the risk of working for startups. Certainly that is the philosophy around here in Silicon Valley, in other high tech regions like Seattle and San Diego, and also among MIT alumni. This afternoon I finished reading 17 semifinalists on our business plan contest, and certainly there is no shortage of engineers around here who want to start their own company.

But I have to remind myself there are still engineers (or CS types) that just want a job. These are people paid not in founder’s shares, or qualified options, but in salary. The problem is that (as with nurses and teachers), the economy needs a lot of engineers, so raising salaries across the board is a lot more expensive than paying high wages to a handful of NYSE traders or MLB players.

As I noted in researching entrepreneurship in the Asian PC industry a decade ago, two key factors are cultural attitudes towards startups and the access startups have to the domestic market. But since then I’ve realized that a third crucial factor is labor mobility by technical workers: engineers are willing to start (or join) new companies if they know they can always get a job if the startup fails, whereas historically in Japan and Korea the best jobs were available to those who joined MNCs and never left.

So increasing the attractiveness of engineering as a career both increases the supply of would-be entrepreneurs and the safety net for those who try to be entrepreneurs but fail — not to mention the supply of experienced engineers available to be raided.

Harvard’s Inventing Breakthroughs and Commercializing Science

At the Georgia Tech conference earlier this month, Lee Fleming of Harvard Business School described the program he created for technology commercialization.

The program he created is “Inventing Breakthroughs and Commercializing Science”. As the course explains its goals:

1. it gives you the managerial insights to increase the chances that your organization will invent a breakthrough.
2. it gives you an understanding of today's increasingly complex innovative landscape. …
3. the project will give you hands-on experience - as a member of a multi-disciplinary team - in the development of science-based technologies such as genomics, nanotechnology, information technology, and photonics.

As with the other programs discussed at the conference, the Harvard program has a strong interdisciplinary focus. In this case, the interdisciplinary nature is that of its students, who come not just from HBS, but also from science, engineering, medicine and other schools at Harvard. (Lee said a major issue is the divergence of class schedules, which Harvard plans to correct in Fall 2009).

The program (created with Vicki Sato and Kent Bown) has four modules: breakthrough innovation, opportunity analysis, analyzing prior patents, and developing cross-disciplinary teams.

As with most research schools, Lee is encouraged to bring his research into the classroom. The readings and cases (listed below) are largely based on his own work. In this day of Google, I won’t share his insight into the pedagogical purposes of each, but let instructors get that from the teaching notes.

I first learned of Lee from his paper with David Waguespack on open standards (which I cited in my own (co-authored) paper on open source communities). We met F2F when we served as discussants together for a panel at the 2007 Academy meeting, but I’m hoping we’ll be working together more in the future.

Lee also has a personal stake, in that his wife is CEO of a startup (with early stage funding) that is based on university licensed technology. So he’s living the technology commercialization life first hand.

Below is a bibliography of the materials presented by Lee.

Readings

• Lee Fleming, “Breakthroughs and the “Long Tail” of Innovation,” Sloan Management Reviews, 49, 1 (Fall 2007), pp 69-74.
• Lee Fleming and Matt Marx, “Managing Creativity in Small Worlds,” California Management Review, 48, 4 (Summer 2006), pp. 6-25

Cases
Here are the cases and the Harvard Business School Publishing case numbers.

• “Aptekar’s Unlikely Spin; Commercializing an MRI Breakthrough from Atomic Clocks and Quantum Computing,” (N1-608-064). (Teaching Note: 5-608-078)
• “Epodia: Demise of the HBS case-writing Monopoly?” (9-605-077) and “Linux, Supplement to Epodia,” (9-606-067). (Teaching Note: 5-607-104)
• “HP Nanotech: Partnership with CNSI,” (9-606-045). (Teaching Note: N5-607-105)
• “Infovision (A): Technology Transfer at Georgia Tech,” (9-605-064) and “Infovision (B): TI:GER Program Assessment,” (9-605-065). (Teaching Note: N5-607-102)
• “Photovoltaic Breakthrough,” (9-604-034). (Teaching Note: 5-606-085)
• “Barry Ricemen at NetD” (A) (9-606-090) and (B) (9-606-151). (Teaching Note: 5-607-107)
• “SpudSpy,” (9-605-059). (Teaching Note: 5-607-103)

Teaching Notes without Cases

• Module Note: “Key Concepts in a Module on Managing Invention of Breakthroughs,” March 19, 2007, (5-607-109).
• Teaching Note: “The Process of Scientific Discovery”, (5-607-126).

Interdisciplinary tech management education

Last Thursday and Friday, I was fortunate to be invited (due to a last minute cancellation) to attend a workshop at Georgia Tech on “Graduate Education in Technology Commercialization.” The annual workshop is funded by the Kauffman Foundation and hosted by Tech’s TI:GER program.

The major theme of the 24 hours was interdispclinary (or multidiscplinary) cooperation on campuses for delivering technology management education. One of the Thursday dinner dinner speakers were Mark Allen, Senior Vice Provost for Research and Innovation at Tech. Like Allen, I really liked the idea of combining research (generating new knowledge) and innovation (in this case, commercializing knowledge) under one vice provost.

The other dinner speaker was Andrew Comrie, who lists among is various titles “Director of Graduate Interdiscplinary Programs” at Arizona. He argued that the central mission of universities — knowledge creation and knowledge transfer — require creativity, innovation and entrepreneurship. Multidisiplinary programs allow creating new knowledge. One example is the professional science master’s, such as the combined biotech/business degree offered by UA and SJSU. The PSM — once a pet project of the Sloan Foundation — is inherently interdisciplinary, often including a business component to better prepare scientists for industry careers.

The discussion of the two specific curricula — at Georgia Tech and Harvard — were also clearly interdisciplinary in both the teachers and the students. (I hope to post more later).

An important point made by host Marie Thursby was that universities are organized around discplinary lines, but companies (and real world problems) are not. At some schools crossing disciplinary silos is harder than others. In my experience, it tends to be a double whammy — an overriding loyalty to disciplinary identity also crowds out an interest in solving real (often interdisciplinary) problems, as the Sidney Harris cartoon suggests.

The program continued with a panel discussion of the interdisciplinary technology management centers at various universities, starting with Ikhlaq Sidhu and Ted Schielman of Berkeley. The panel continued with Sherry Hoskinson (of Arizona’s McGuire Center) and Jay Kesan, who talked about their Certificate in Entrepreneurship and Management at Illinois.

Clearly much of the progress here is due to Kauffman funding teaching initiatives and transfer of best practices. But it also depends on the willingness of various faculty and universities to take a risk — going beyond the conventional disciplinary silos, norms and rewards systems — in search of programs that will best prepare students for work in a multi-disiplinary world.

Five business lessons for engineers

At this year's TI:GER workshop, the most directly relevant talk was that by Ikhlaq Sidhu of UC Berkeley’s College of Engineering. Dr. Sidhu is an adjunct professor in the industrial engineering department and Director of the Center for Entrepreneurship & Technology.

Like most of the speakers, he talked about what his school has done in technology management education — in this case, 900 students taking 9 courses and/or involved in the VentureLab program. (The previous speaker, Ted Sichelman of the Berkeley law school, had enumerated the various interdisciplinary technology efforts across seven colleges at Cal).

As Sidhu explained his program, one figure jumped out at me — the supporting cast of 600 Silicon Valley professionals that get involved in the center’s programs. With names like Judy Estrin (former CTO of Cisco), such a supply would be impossible to find (let alone engage) anywhere outside Berkeley or Stanford (or maybe MIT or Harvard).

However, what I found most remarkable (i.e. worth remarking on) in his talk was a recap from the presentation he developed for last year’s workshop. Specifically, he identified five skills that today’s engineers need:

1. To know what problem is worth solving
2. To know how to acquire resources
3. To be able to communicate
4. To know how to work within and build global virtual teams
5. To be leaders in a global economy — not commoditized contributors.

This list is now driving Berkeley’s vision of how it trains engineers.

I personally found the list compelling for three reasons. First, all five relate directly or indirectly to business issues, not the technical side of engineering. That these are hard problems is exactly why I became a business professor (rather than taking the shorter path into C.S.)

Second, the list resonates with my 15 years at Palomar Software. While global teams are recent (and a bit of a fad), the other four are the issues that my cofounder and I — two engineers in a garage — confronted when running our software company 20 years ago. Neil and I were both above average communicators, but the accuracy, precision and completeness of communication by our staff was an ongoing challenge. While Palomar eventually found problems worth solving (that were not commoditized until 2001), during the first 7 years our choices were severely constrained by lack of resources.

(In 2000-2002, when we were working with HP and its other onshore and offshore printer driver development partners, we had to confront the global teams issue, complete with 8 p.m. PST teleconferences to Bangalore).

Finally, commoditization is an issue that’s been a central theme of my Silicon Valley-oriented blog. If technology is a commodity, it will be done in India, China, or wherever the cheapest location is this year: the only economic reason to train and employ American engineers is to create value that can’t be created elsewhere.

BPC: beyond the university

I’m attending a workshop on technology commercialization programs at the Georgia Tech Ti:GER program, funded by the Kauffman foundation.

One of the speakers, from the Arizona’s McGuire Center for Entrepreneurship, mentioned one of their successful startup teams, LenSense. The company has a technology for camera phone zoom lenses that they hope to someday have embedded in 25% of the world’s phones.

What caught my eye was not that they were a mobile phone technology (an area of great personal interest) nor that they met with local angels (apparently as part of the annual business plan competition).


What was interesting was that the team entered a real (i.e. non-university) business competition — and ended up finishing in the top 12 (the only school team to do so). The competition, Mobile Rules! funded by Nokia, awarded a series of prizes in March.

Unfortunately, they didn’t finish high enough to get publicity out of Nokia, and it’s not clear what they won other than the experience. But it seems this is something that all technology entrepreneurship programs should consider — seeking out real world competitions, if nothing else to enable the students to enter such competitions again after they graduate.