Table Of ContentSTAGARS
UNIVERSITY STARTUPS
AND SPIN-OFFS
U
N
Guide for Entrepreneurs in Academia
I
V
E
University Startups and Spin-Offs teaches university students, researchers, and educators the most effective
strategies and tactics for launching their own startups from academic platforms with the backing of school R
programs, public grants, incubators, seed accelerators, and private partnerships in all parts of the world. S
Serial entrepreneur Manuel Stagars advises students, faculty, and researchers how to test their ideas
I
for marketability, how to develop commercial products out of research projects, and how to engage T
companies and investors with attractive value propositions. The author has seventeen years of experience
Y
as startup entrepreneur, founder of seven companies in the United States, Europe, and Japan, consultant
to universities on commercializing their research programs, angel investor, and startup mentor. Stagars’
advice is field-tested, battle-hardened, and supported with a wealth of instructive first-hand examples S
from his international experience. T
The author advises academic entrepreneurs to take matters into their own hands instead of relying on the
A
initiative and support of universities and governments. He shows students and researchers how to fit lean
startup methods to their existing university ecosystems, leveraging their strengths without getting bogged R
down in bureaucratic morass. Avoiding theory and jargon, the book focuses on real-world situations, practical
T
steps, checklists, and case studies. University students and researchers will learn the skills they need to
become startup entrepreneurs on an academic platform, including how to U
• test ideas for marketability
P
• develop commercial products out of research projects
• engage companies and investors with attractive value propositions S
• integrate lean startup methods into existing university ecosystems
• negotiate cultural idiosyncrasies and regulatory barriers in different countries and industries A
The final part of University Startups and Spin-Offs addresses university administrators, educators, technology N
licensing officers, incubator managers, and government grant officers. It shows them with practical examples
from the private and academic sectors how to D
• integrate startups into the fabric of the university
• develop a thriving entrepreneurial ecosystem for students and researchers S
• leverage latent network effects P
• build bridges between scientific research and industries seeking innovative solutions
• enhance the public image of the university I
N
• motivate your university’s best and brightest to engage in startup enterprises that will deliver
benefits to themselves, the university, and the public
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O
F
F
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ISBN 978-1-4842-0624-9 Companion
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Contents
About the Author ix
Acknowledgments xi
preface xiii
introduction xv
part i: strategies for university startup
entrepreneurs 1
chapter 1: the status Quo: How do startups fit into universities? 5
chapter 2: the Lean startup changed everything 15
chapter 3: What does it mean to Be a startup entrepreneur? 29
chapter 4: engaging others with Actionable next steps 55
chapter 5: Benefits vs features 61
chapter 6: simple strategies to Get unstuck 67
chapter 7: troubleshooting 77
chapter 8: the financial model 81
chapter 9: the Legal setup of Your startup 93
chapter 10: meetings and communication skills 99
chapter 11: startup Grants: can Government programs
stimulate entrepreneurship? 119
chapter 12: Venture capital and Angel investors 125
chapter 13: incubators and Accelerators 131
chapter 14: moving past the startup stage 137
part ii: strategies for universities 145
chapter 15: How do universities measure the impact of
their research? 151
chapter 16: Why Are university startups not taking off ? 157
chapter 17: How universities can support their startups today 165
viii Contents
chapter 18: Building a Bridge to the market 171
chapter 19: platform thinking for startup success 177
chapter 20: more platform projects 187
Appendix A: Additional considerations 203
index 219
Introduction
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.
xvi Introduction
Diversity of Working in your
knowledge own company
Working in
someone else’s
company
Time
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.
Introduction xvii
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.
Chapter 2 Chapters15, 16
Lean startup, test Roadblocks to
of ideas/products startup success
Chapter 3 Chapter 17
What does it mean to Simple startup
be an entrepreneur? support strategies
Chapters 4, 5, 6 ,7, 10 Chapter 18
Entrepreneurial Building a bridge
skills and strategies to the market
Chapter 8 Chapter 19
Financial model Platform thinking
Student, researcher University for startup success
Chapter 9
Legal setup Chapter 20
More platform
Chapters 11, 12, 13 Chapter 14
projects
Grants, venture Moving past the
capital, incubators startup stage
figure 2 Chapters and topics
xviii Introduction
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-of-
success-2013-5.
P A R T
I
Strategies for
University
Startup
Entrepreneurs
When did you choose to become an entrepreneur? In early childhood, or just
yesterday? Or are you still on the fence? Whatever the case, you should have
some idea about what it is like to start your own business before you take the
plunge—an idea based on the entrepreneurial experience of someone who
has done this before.
If you study or do research at a university, take a step back and observe your
environment from 50,000 feet in the air. You see a fail-safe system where
you acquire deep knowledge without much distraction. It does not matter
whether the economy is in a boom or in a slump; learning always has priority.
Now think about what this environment could do for you as a startup entre-
preneur. You have a strong community, an excellent network, diversity of ideas
and opinions, fully equipped workshops and labs, and tech support at your
disposal—all for free. Your university may have a strong reputation. It may
attract powerful external parties such as governments and corporations that
want to be involved in one form or another. All these advantages are unique,
and they exist only for students and researchers. In this walled garden, you can
test and experiment. If you fail, there is almost no consequence. Companies
seldom have such luxury. University startups have a leg up on anyone else.
When you know how to use this environment to your benefit, you can
compete with companies anywhere in the world from a strong base that
supports you all the way. Why not give it a shot and make the most of your
university experience?
Most of the time, your university or government will have some startup advice
for you. This is the conventional advice that others have diligently followed:
apply for this or that grant, participate in the business-plan competition, and
get some MBA students from another faculty to create a business model for
you. The startup consultant from the university or the government has never
launched a startup, so how can they be experts to guide you toward success?
Out of ignorance about what entrepreneurship really entails, startups give
away much of the control over their destiny.
Part 1 of this book will empower you with actual, practical steps that you can
apply today. Of course, this is no guarantee that your venture will succeed.
Nevertheless, it is much better than having no clue about how to begin, in the
process relying on non-entrepreneurs to call the shots for you. I have included
a few episodes from my own startup journey. They have little in common
with the success stories you would read in a Donald Trump book, but they
paint a picture of what most entrepreneurs may go through to eventually turn
their companies profitable. To make the point that successful startups are not
created overnight, let me recount how my first company came to pass in a
little more detail.
When I started out as an entrepreneur, I had the odds stacked firmly against
me. Nobody from my family had ever started their own business. None of
my friends had, either. Because I thought I wanted to be a medical doctor
from a very young age, I never seriously looked at any other professions.
Not only that, I never investigated what it really meant to be employed in a
hospital. After the first year at medical school, I terminated my studies with
the vague idea of doing something with the Internet and multimedia. All of my
old friends from school reacted to the decision with disbelief and criticism.
The same was the case with the new friends I had made during my freshman
year. Nobody could quite understand why this guy was dissatisfied with what
worked so well for them. Why did he decide to give it all up to try to do the
impossible? My parents were obviously less than thrilled when they heard of
my latest plans. They were not particularly supportive of this new direction,
yet they had no other choice than to let me try.
Because I was not independently wealthy, I had to take on some humbling,
menial jobs—just menial enough that I had enough time to develop my vision
and skill set in my free time. The first was part-time work as an usher in a movie
theatre. Occasionally some old classmates would see me vacuuming popcorn
from the floor; they must have chuckled at the sight of the valedictorian of
Description:University Startups and Spin-Offs teaches university students, researchers, and educators the most effective strategies and tactics for launching their own startups from academic platforms with the backing of school programs, public grants, incubators, seed accelerators, and private partnerships in
