Let’s play the blame game. Government and universities have failed researchers.
I have written before that there are too many PhDs being produced every year. That’s our most viewed post with twice the traffic of the third most viewed post. I think that says something. The result of too many PhDs has meant a surplus of academics doing multiple post-doc tours of duty, lower wages, and a waste of tax payer money. All would be fine if there were enough jobs outside of academia to support those researchers in industry and government, but there are not. Let’s clarify that, there are not enough jobs willing to pay PhDs what they are really worth. And guess what that gets you? Sure, some really smart and passionate lovers of science/research who stick with it, but many of the smart people move on to careers outside of traditional academic jobs where there is money. You lose your talent.
Today is not about arguing this claim at greater length though. Today is about alternatives to this problem by asking where are all of the venture capitalists and startup angel investors?
Within academia we have legions of graduate students, post-doctoral scholars, and non-tenured faculty developing the most advanced technologies we can fathom. These people are wickedly intelligent and ambitious. And they are getting paid like crap with little hope of career advancement unless they continue to toil away for years. All while watching their peers in business enjoy stable incomes, start their retirement layaways by the age of 25, buy homes, and start families. That just seems a bit wrong. Academia either cannot or chooses not to reward their academics. Graduate degree programs do not need more money from government, it’s the faculty jobs that need more money from government to create more tenured positions.
As we all know though, government will be slow to increase tenure funding through more large research grants and universities are enjoying a certain status quo too much or are too financially strapped to do anything themselves. So, we have young, intelligent, ambitious young people developing killer new tools who are disheartened with their prospects. It’s the perfect combination to find entrepreneurs. The time is ripe for startup investors to come in and utilize the talent that academia and government have failed to do. Where there’s a problem, there’s an opportunity.
Changing the Ivory Tower model
In some respects we are starting to see that happen. Recently out at Stanford University the “Stanford Student Startup Lab” was established by some students, is based on the Y Combinator mentorship model, and takes a zero equity stake. This is still more of the “let the talent come to us” incubator model (more on that below), contains student restrictions, and overall I suspect will not draw the best talent out of the woodwork. Still, it is better than attempts by several universities that hold business plan competitions that in terms of rewarding the entrepreneur (i.e. the PhD talent) are terribly conceived. The universities will often take an enormous equity and/or IP stake, far more than what is standard in regular startup environments relative to the seed money raised. Again, startup investors should be pouncing on this opportunity.
Full disclosure time – Mendeley happens to be an investment backed startup developed by a few frustrated graduate students.
To be fair, government funding agencies, both in Europe/UK and the US, are providing some grants to kickstart new businesses from within academia. The problem is that these programs are limited and usually only large consortiums win the awards. I know, because I have co-written several (Ex TEAM and DURA). Closer in line with individual researcher grants are the NIH small business grants for academics. Unfortunately, these have so many caveats and overheads compared to early stage VC funding that it renders them nearly useless. They are also heavily favored toward principal investigators in faculty positions, rather than younger researchers. These grant programs should definitely continue to exist, but they are not the solution or making a dent in the problem.
What startup investors should start doing is actual recruitment, not another business plan competition. They need to go out and identify the talent and latest academic research. Stop waiting for them to come to you to pitch, that’s actually a pretty crappy strategy if you think about it. Entrepreneurs are usually pretty crazy people willing to take risks and that is exactly what all of those graduate students are. And briefly, why shouldn’t we increase the number of business plan competitions? Because all that gets you is a team that knows how to put together a winning proposal. It doesn’t necessarily get you product talent.
Instead, I’d like to see startup incubators created to nurture the talent recruited out of academia. And don’t just go into the Computer Science departments, go into every department. I came from a genetics background and I know many others in diverse fields with divergent thinking who are ready for the startup environment. The right recruitment and incubator model needs some refinement, but it’s there and waiting for the first movers.
Here are the 5 steps startup investors need to take to disrupt academia for the better:
1) Halt the ineffective business plan competitions that unis love to hold, usually in partnership with large venture capital.
2) Research the talent and promising technologies.
3) Get out of your office.
4) Recruit from universities like it’s the baseball minor leagues.
5) Establish a new model of startup incubation, which derives its talent straight from academia.
The potential economic silver lining
Suppose all of this becomes a reality. What would the impact be on the traditional academic and within universities? I believe conditions would improve. This is competition for talent, and competition is always a good thing. It will force policy makers at the university and various government levels to rethink how they are funneling tax payer money. It would undoubtedly open up more tenured positions and increase wages. It will most definitely create more industry jobs to which academics can fall into; that’s what startups do after all. And I’m willing to bet we see really smart people stay in science a little bit more if they know there are greater opportunities. And that’s a good thing for science and the rest of us.