Making a dent in the universe

Could we actually teach tenured faculty how to turn an idea into a company?  And if we did, could it change their lives?

We can now answer these questions.

Hell yes.

The Lean LaunchPad class for the National Science Foundation (NSF)

Over the last six months, we’ve been teaching a version of the Lean LaunchPad class for the National Science Foundation Innovation Corps.  We’ve taught two cohorts: 21 teams ending in December 2011, and 24 teams ending in May 2012. In July 2012 we’ll teach 50 more teams, and another 50 in October. Each 3-person team consists of a Principal Investigator, an Entrepreneurial Lead and a Mentor. 

The Principal Investigator (average age of ~45) is a tenured faculty running their own research lab who has had an active NSF grant within the last 5 years. The Principal Investigator forms the team by selecting one of his graduate students to be the Entrepreneurial Lead.

The Entrepreneurial Lead is a graduate student or post doc (average age ~ 28) who works within the Principal Investigator’s lab. If a commercial venture comes out of the I-Corps, it’s more than likely that the Entrepreneurial Lead will take an active role in the new company. (Typically Principal Investigators stay in their academic role and continue as an advisor to the new venture.)

Mentors (average age ~50) are an experienced entrepreneur located near the academic institution and has experience in transiting technology out of academic labs. Mentors are recommended by the Principal Investigator (who has worked with them in the past) or they may be a member of the NSF I-Corps Mentor network. Some mentors may become an active participant in a startup that comes out of the class.

The NSF I-Corps: Class Goals

The NSF I-Corps Lean LaunchPad class has different goals then the same class taught in a university or incubator. In a university, the Lean LaunchPad class teaches a methodology the students can use for the rest of their careers. In an incubator, the Lean LaunchPad develops angel or venture-funded startups.

Unlike an incubator or university class, the goal of the NSF I-Corps is to teach researchers how to move their technology from an academic lab into the commercial world. A successful outcome is a startup or a patent or technology license to a U.S. company.

(While many government agencies use Technology Readiness Levels to measure a projects technical maturity, there are no standards around Business Maturity Levels. The output of the NSF I-Corps class provides a proxy.)

The NSF I-Corps doesn’t pick winners or losers. It doesn’t replace private capital with government funds. Its goal is to get research the country has already paid for educated to the point where they can attract private capital. (It’s why we teach the class with experienced Venture Capitalists.)

Teaching objectives

Few of the Principal Investigators or Entrepreneurial Leads had startup experience, and few of the mentors were familiar with Business Model design or Customer Development.

Therefore, the teaching objectives of the I-Corps class are:

1) Help each team understand that a successful company was more than just their technology/invention by introducing all the parts of a business model (customers, channel, get/keep/grow, revenue models, partners, resources, activities and costs.)

2) Get the teams out of the building to test their hypotheses with prospective customers. The teams in the first cohort averaged 80 customer meetings per team; the second cohort spoke to an average of 100.

3) Motivate the teams to pursue  commercialization of their idea. The best indicators of their future success were whether they a) found a scalable business model, b) had an interest in starting a company, and c) would pursue additional funding.

Methodology

The National Science Foundation worked with NCIIA to establish a baseline of what the students knew before the class and followed it up with a survey after the class.

While my experience in teaching students at Stanford, Berkeley and Columbia told me that this class was an effective way to teach all the parts that make up a startup, would the same approach work with academic researchers?

Here’s what they found.

Results

Teams came into the class knowing little about what parts made up a company business model (customers, channel, get/keep/grow, revenue models, partners, resources, activities and costs.) They left with very deep knowledge.

I-Corps teams spent the class refining their business model and minimum viable product. By the end of the class:

• Over 95% believed that they found a scalable business model.

• 98% felt that they had found “product/market fit”.

The class increased everyones interest in starting a company. 92% said they were going to go out and raise money – either from the NSF or with private capital. (This was a bit astonishing. Given that most of them didn’t know what a startup was coming in. These are new jobs being created.)

One of the unexpected consequences of the class was its effect on the Principal Investigators, (almost all tenured professors.)  A surprising number said the ideas for the class will impact their research, and 98% of all of the attendees said it was going to be used in their careers.

Another unexpected result was the impact the class had on the professors own thinking about how they would teach their science and engineering students. We got numerous comments about “I’m going to get my department to teach this.”

What’s next

The NSF and NCIIA understand that the analysis doesn’t end by just studying the results of each cohort. We need to measure what happens to the teams and each of the team members (Principal Investigator, Entrepreneurial Lead and Mentor) over time. It’s only after a longitudinal study that will take years, can we see how deep of a dent we made in the universe.

But I think we’ve made a start.

Acknowledgements
Thanks to the team at NCIIA that provided the survey and analytical data (Angela Shartrand) and the logistical support (Anne Hendrixson) to run these NSF classes.

The National Science Foundation (Errol Arkilic, Babu DasGupta) took a chance at changing the status quo.

Members of Congress on both sides of the aisle who’ve realized cracking the code on how to teach starting companies means a brighter day for the future of  all jobs in the United States – not just tech startups.

And thanks to the venture capitalists and entrepreneurs who volunteer their time for their country; Jon Feiber from MDV, John Burke from True Ventures, Jim Hornthal from CMEA, Jerry Engel from Monitor Ventures (and the U.C. Berkeley Haas Business School,) Oren Jacob from ToyTalk and Lisa Forssell of Pixar.

And to our new teaching teams at University of Michigan and Georgia Tech – It’s your turn.

Lessons Learned

• The Lean LaunchPad class (Business Model design+Customer Development+ extreme hands-on) works
• They leave knowing:
  • how to search for a business model (customers, channel, get/keep/grow, revenue models, partners, resources, activities and costs,)
  • how to find product/market fit, and a scalable business model
• It has the potential to change careers, lives and our country