No Last Steps
Building Continuous Pathways for Founders
This chapter is a part of the book “How to Build University Start-up Ecosystems: Five Information Patterns for Success.”
Now that you have aligned data across organizations and mapped out how founders currently move through your school’s entrepreneurship ecosystem, the next step is to improve these flows. The first place of improvement is to apply the idea of throughput from the manufacturing industry to identify bottlenecks in the entrepreneur’s journey. The second is to connect every event a founder attends with following steps to cut down on ambiguity and drop-off points between different programs. The third is to maintain contact with previous founders to preserve energy within the ecosystem.
Throughput for Entrepreneurship
The University of Michigan is an interesting entrepreneurial ecosystem in the sense that while many schools struggle to develop one entrepreneurial program, the university has half a dozen. Hackathons run by the Computer Science department, competitions run by Innovation in Action, courses out of the Business School, design teams out the School of Information, a student-led group called Optimize, an accelerator hosted by TechArb. All of these different programs have separate competitions, different timelines, and often have fundamentally different ideas of what entrepreneurship is and how best to do it. All of these different organizations make it hard to see that student success in any of these individual programs matters less than the total sum of successful founders coming out of the school’s ecosystem as a whole.
This mirrors an important idea in manufacturing theory called throughput (Workmity). Let’s say you work at a factory that makes computers. One machine can make 500 keyboards, another makes 300 screens, and the final machine makes 100 motherboards every hour. Your total throughput as a whole is only 100 computers because of the constraint on how many motherboards can be created in an hour. To increase output, factory managers are taught to focus their energy on increasing specifically the productivity on the constraining operation, or the operation that produces the least output. If this factory wants to increase their total output, they need to increase specifically the number of motherboard machines that operate.
This idea of throughput can be used to increase the output of university entrepreneurs by identifying constraining factors in founders’ journeys (generated in the last chapter). These constraining factors, or chokepoints, might appear as a resource that is completely missing or programs where there are far more strong applicants than open slots.
When CIDs find chokepoints, this shows places where more investment should be made. While this is easy to say, this can be an expensive endeavor. For university programs that cannot simply add capacity, CIDs might need to get inventive with cheaper, lighter-touch interventions. Perhaps there is only budget for five law school students to work at the Entrepreneurship Law Clinic each semester and so can only help twenty five founders set up their companies and negotiate contracts with clients. For the student founders that cannot be helped on an individual level, perhaps they can access a library of general contracts they can use, or the law clinic can host an event to help a dozen founders set up their LLCs at the same time.
For Every Step, Have a Next Step
One of the strongest and easiest investments CIDs can make is to connect each place where founders might drop off (graduation, losing a competition, end of a hackathon, etc.) to a set of resources that can help provide them a next step without needing to spend the time to search for it. Peter’s did not know that there was an accelerator program after the university that he could apply for. By the time Peter was aware, he was already far along in his job search. He might have maintained momentum with his company if he was immediately aware of a potential next step forward.
To keep founders actively engaged is relatively easy: after each event, win or lose, send an email to all participants of three potential next steps they can take. A class on entrepreneurship. An accelerator to apply for. A mentor to connect with. CIDs play an important role in understanding that to generate greater output overall, building connections between different resources is as important as the resources themselves.
Preserve Energy Within the System
However, there are times when founders find that their ideas are not going to work. Product development costs might be too high or perhaps there is no product market fit. By this point the university might have already invested hundreds if not thousands of dollars in these founders either directly by investment or indirectly by providing them classes/hackathons/lectures, etc. If these people simply move on from entrepreneurship entirely this investment is lost to the ecosystem. However, if these people can stay passively connected they can be re-engaged later to serve as mentors, industry experts, and judges.
The first step to set up this infrastructure for re-engagement is simply to track alumni still interested in entrepreneurship. Then, provide opportunities for re-engagement in a monthly or quarterly email that update alumni on major University events and alert them to upcoming volunteer opportunities.
Much classic advice for how to set up entrepreneurial infrastructure on university campuses includes the set up student venture funds, but currently only 200 universities out of 3,982 current American universities have the funds to invest the thousands to millions of dollars to manage and fund a university-led investment fund (ZLI). These funds also only have the capacity to invest in anywhere from a handful to a dozen of founders each year. CIDs take an opposite approach to the development of entrepreneurship ecosystems by looking for systemic ways to build infrastructure that can strengthen the ecosystem as a whole.
