Changing the Risk-Reward Ratio of Entrepreneurship
This article is a part of the book “How to Build Thriving Start-up Ecosystems: Five Information Patterns for Success.”
In conversations with Annika and other Ph.D. students, I discovered that many students interested in academic careers also wanted to explore entrepreneurship. However, they felt held back by the belief that pursuing work outside of academia might make them appear less “serious” about a potential professorship — especially in a time when academic positions are becoming increasingly scarce.
Fifty colleges have closed or merged since 2015, which has created ripple effects through the ecosystem with more applicants fighting for fewer positions (Webber). Some of these closures are due to COVID-19 funds that kept already struggling universities solvent. Other factors include lowered enrollment in college versus trade school as a college degree no longer guarantees a high paying, stable career(Camera). There are also simply fewer college age students being born, which has led to an inevitable decline in the number of students that reach higher education (Grawe). All of this leads to fewer tenure-track roles and a greater reliance on adjuncts and contingent faculty.
This scarcity of positions leads potential academics to not want to risk perceived deviations from a standard path so they have the highest chance possible to secure a position. Community Information Designers (CIDs) who want to increase the variety of founders who enter the entrepreneurship pipeline have the potential to lower the barrier to entry through two different levers in their ecosystems. They can lower the time that it takes for potential founders to see if they are interested in entrepreneurship through Ph.D. oriented hackathons. Or they can lower potential founders’ perceived risk in seeking out an entrepreneurial life path through the development of corporate research accelerators.
Less Time Investment with Hackathons
A hackathon is an event where students quickly form teams, ideate on a potential problem, and over the course of twenty-four to forty-eight hours design a solution to present to a panel of judges. Hackathons serve an important function to enable computer science students to try new technology, as well as network with corporations that sponsor the hackathons (Pattnaik). It is estimated that over 200 hackathons occur yearly at universities across America.
It is possible to rethink this concept of the hackathon for Ph.D. students’ skill sets and needs. The standard prototype developed at a hackathon is an app or website; perhaps for a Ph.D-oriented hackathon, the end product could be a Powerpoint presentation with schematics, or a potential business plan. Perhaps traditional hackathon participants can be paired with Ph.D. students to work in conjunction to tackle problems, coupling the Ph.D. student’s insights into a field with hackers’ expertise in product development.
There are likely several ways to rethink the concept of a hackathon. But the more that CIDs do to lower the amount of time commitment demanded from Ph.D. students to explore a company idea, the more they make it possible for a wider range of students to know whether they are interested in entrepreneurship.
Lower Risk Through Corporate Partnerships
CIDs can also activate another lever in their ecosystem by lowering the risk for Ph.D. students to pursue entrepreneurship by creating connections between corporate Research and Development offices, tech accelerators, and academics that creates a pipeline between academia and start-up creation.
There is already the idea of corporate sponsored research in academia where corporations might sponsor a faculty position or research role within a university, such as the University of Chicago’s Sponsored Program Services (Meier). There are also corporate sponsored accelerators, which develop companies outside of the corporation with the intent that sponsoring corporations will acquire potential successes. Stanley Black & Decker’s STANLEY+Techstars Accelerator focuses on startups working in advanced manufacturing and IoT (Techstars). In the food and beverage space the Nestlé R+D Accelerator partners with academic organizations to develop new solutions in the food and beverage space (Nestle).
But few places connect these two ideas together to make it so that the same people that conduct deep research are still involved as this research is translated into commercially viable products. This connected approach has numerous benefits: the people who have conducted the research on which a product is built can provide insight into potential pitfalls and repercussions that traditional businessmen might miss. Training researchers in identifying potential profitable companies from the start might also enable them to spot areas in their research for product development better than an outside tech transfer team.
The reason why the same people who are involved in deep research tend to not be also involved in product development is because there is a different skill set that is needed for research than development or sales. Because of this, a Ph.D. student’s version of entrepreneurship might not look like that of a hacker. It might include a larger co-founding team with both sales-oriented and product-oriented cofounders. Ph.D students might want to stay on as an advisor instead of as a co-founder. This might lead to smaller payouts if their start-up succeeds, but also de-risks their life path if the start-up fails, as they would have a stable salary as they develop their ideas.
As a CID, you might not have the power to develop a hackathon or a deep tech corporate accelerator on your own within the university. However, you can act as a connector to create the pathways for these kinds of opportunities to evolve. You can put the Ph.D. placement or career officer in touch with students who run hackathons and business clubs. You can create a Google form that asks corporate sponsors about their potential research interests and Ph.Ds on their research, and spot places in a CRM where there are aligned goals. Your role is to create the links between these various different parties to change information flows that result in more diverse founders that start their entrepreneurial journeys.
