Today, virtually every university on the planet has an entrepreneurship course. Most have centers, some run competitions, and a few even run venture capital funds. But all are curious about how these centuries-old institutions interconnect with recent technology and commercialization trends. The soul of entrepreneurship has changed, and our universities are struggling to keep up.
12 years ago, I was running entrepreneurship programs across 8 universities in Denmark. Little was known about impact, best practices, or even program purpose, except that the Government wanted academia to “focus on entrepreneurship”. We had to figure it out for ourselves, so I went to MIT’s Global Startup Workshop to learn from the best. At MIT GSW, I met my YouNoodle co-founder Rebeca Hwang, and the rest is history.
Let’s start by understanding how venture creation has changed over the past 5-10 years. Gone are the days where businesses were planned, investigated, launched, fundraised, scaled, and celebrated, in that order. Today’s ventures may come out of anywhere, at any time. They may need considerable investment before even building a prototype, and may never sell a product before they become “unicorns”, or billion-dollar companies.
Lean Startup canvasses have taken the place of business plans, but few successful entrepreneurs have used either. Most winning ventures have changed CEOs at least once, i.e. the initial inventor is rarely the person to take the project to commercial success. Money is truly global today, so promising ventures are less limited by local funding sources as they were even a few years ago. And, fueled by COVID-19, teams are increasingly distributed, meaning that co-founders may take months, or even years, before they meet in person.
A Fluid Venture Creation Model
So, how do we adjust our university programs to today’s fluid venture creation model? First of all, I argue that we have to make a conscious choice between two primary purposes: Education or Venture Creation. Most program managers would say they do a bit of both, but when you look under the hood, the reality is usually failure at both.
Let’s take an example. You are running an entrepreneurship competition, and you have invited a few local investors as judges, to make sure the event has legitimacy and value. The judges pick the most promising businesses, but it turns out that those emerged without much connection to your entrepreneurship program. You celebrate the winners, they may even raise some funds, but all the aspiring entrepreneurs who put in the work, who took the mentoring, and who made significant progress over the course of the program, those all leave empty-handed with a sense of disconnect between effort and reward.
But what’s worse is that your “winners” have not been prepared for the reality outside of the university. By simply pitching a compelling technology an investor finds valuable, the reality post-winning often is failure to live up to expectations. The local investors are usually not educators or mentors, and the (often) scientists or engineers who won, and fundraised, are woefully unprepared for the journey as a venture-backed founder.
As a result, most universities’ commercial spin-out success stories happened outside the entrepreneurship center and educational programs. Think about that for a moment. Are we really OK with that?
What Is the University’s Unique Role?
In most cases, I argue that the right choice is to optimize for education, not venture creation. Given the sheer amount of startup incubators, accelerators, funding sources, and experienced mentors available today, I argue that it is time for the university to step back into the role of the educator and facilitator.
In terms of education, I would like to see every graduate of every university understand the basics of business and venture creation. It does not matter what your degree is in, one way or another, society needs our entrepreneurial mind and value creation. Instead of trying to pick winners, we should allow students, graduates, and faculty to feel comfortable around the language and principles of venture creation. The rest will follow.
Now to the role of the facilitator. Everywhere you look on campus, you can find entrepreneurial opportunities. Labs with side projects showing commercial promise. Students with bright ideas can prototype for little to no money. Inventions that can be licensed to ambitious founders or intrapreneurs in large companies. We have to find those, motivate their development, and (most importantly) not stand in the way when commercial activities start taking form.
Technology transfer offices have to change, from revenue-driven to value-generating. Imagine if tech transfer staff motivate the creation of business with no priority given to university profits.
This is what Stanford University has done for decades, measuring the impact of technology transfer by the size of business value created for society. If done right, successful businesses will still generate plenty of royalties, simply because the pie gets much bigger.
And back to our entrepreneurship programs and centers. Tomorrow’s role is to facilitate, measure, and improve the process of entrepreneurial learning. Competitions may still exist but are run in order to celebrate progress, learning, and insights, not venture creation. Focus is now on improving the diversity of access to entrepreneurship skills, in terms of gender, background, and academic field. Success is when graduates and faculty start businesses later in life and attribute as much of their success to entrepreneurial learnings as they do academic achievements.
Torsten Kolind is CEO & Co-Founder of YouNoodle, an all-in-one application and evaluation platform that helps program organizers seamlessly manage university competitions and startup programs. YouNoodle is the engine behind more than 1,000 entrepreneurship challenges around the world. It allows you to connect with the most talented entrepreneurs in the ecosystem, reward them, and build long-lasting relationships.