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Avoid Stagnation: Acceleration Trumps Incubation
Bill Aulet, Managing Director, Martin Trust Center for MIT Entrepreneurship
March 8, 2014
entrepreneurship.mit.edu @BillAulet
Summer 2012• Summer 2010 – Startup Central
• Summer 2011 – Wicked Awesome Summer StartUp Program (a/k/a WASSUP)
• Summer 2012 – FSA
• Summer 2013 – GFSA
Time
Succ
ess
• Complete the Ramp
• Entrepreneurs Not Companies:Teaching our students how to fish rather than catching a fish
• Fulfill MIT’s Mission
Goals of FSA
Validation
MIT Entrepreneurship Ramp
Inspiration, Idea,
Technology
Classroom Extra-Curricular
The Grand Plan: “The Ramp”
We neededsomething to
support students!
Validation
MIT Entrepreneurship Ramp
Inspiration, Idea,
Technology
Classroom Extra-Curricular
Most Often Unable to Achieve Escape
Velocity
Plan vs. Reality: Before FSA
Validation
Completing the Ramp with FSAMIT Entrepreneurship Ramp
Inspiration, Idea,
Technology
Classroom Extra-Curricular Accelerator
• Peter Thiel • Fellows Program
• $100k to dropout
Challenge
RESULTING CONCLUSION
Photo of Peter Thiel by David Orban via wikipedia.org
Stay in
school
Be a Serious
EntrepreneurORX
Changing Face of Entrepreneurship
Herbert B. Jones Foundation’s Milestone Achievement AwardsUniversity of Washington
• Educational
• Honest broker
• Existing extensive entrepreneurship eco-chamber & value chain
• Tremendous opportunity for a complementary program
MIT’s Unique Role
• Space
• Stipend
• Structure
• Status
How GFSA Works
˅Global
Community•Support - emotional, pride, culture
•Learning
•Peer motivation
Space
1. Baseline: $1k/month per person
– Creates full focus
2. Milestone Awards
Stipend
Area Mtg #1 Mtg #2 Mtg #3 Mtg #4 Total
Customer $5K
Product $5K
Team $5K
Financial $5K
Cumulative $20K
3. Discretionary budget available
1. April 6 – 1st round of applications due2. April – interviews3. May 1 – decisions4. 3.5 month program5. Demo Day at t=0 Festival (mid-September)6. Goal: student capabilities reach escape velocity
Structure
Student
Team
Mentor Network
• EiRs
• VMS
• Catalyst
Prototyping
• Labs
• IDC
Committee
• Holds team accountable
• Customized for team
• Members have BoD
experience
• 3 monthly meeting and 1
final meeting
Tues & Thurs
Luncheon Series
• JIT Education &
connections
• Internal & external
Informal Support
• Staff
General Rhythm
Validate & invalidate
idea based on Primary
Market Research (PMR) &
refine team
1st 30 Days
Continue to refine team & focus on product
definition & dev
2nd 30 Days
Financials, product
deviterations& polish
for graduation
3rd 30 Days
1. Acceptance with Social Norms
2. Good Housekeeping Seal of Approval/Status
Status
Reaction of Students & Application Process
ALL APPLICATIONS129 Teams, 376 Participants, 241 MIT Students (All Schools)
FIRST SCREENING26 Teams, 88 Participants, 61 MIT Students
GFSA FINAL SELECTION10 Teams, 35 Participants, 25 MIT Students
Other Summer Accelerators: 40 Teams – MIT Beehive Coop30 Teams – MassChallengeRockHealth, HealthBox, YC, etc.
GFSA Educational Component
TEAM• Founders Agreements & Equity
Splits
• Hiring and Firing Employees
• Developing Company Culture
CUSTOMER• Primary Market Research/
User Innovation
• Developing a Persona
• Securing your First Customer
• Decision Making Unit/Decision Making Process
FINANCE• Legal Issues and Startups• Building Financial Statements• Entrepreneurship MicroEconomics:
CoCA & LTV• Alternative Ways to Raise Capital
PRODUCT• 24 Steps to Successful Product Launch• Protecting and Growing your Core • Iterating, Refining & Evolving Your
Product• Building a Pricing Model
GFSA Clinic Leaders
MIT Management and Engineering Faculty
Eric von Hippel Matt Marx Catherine Tucker Fiona Murray Sanjay Sarma
GFSA Clinic Leaders
Internal Trust Center Resources
Bill AuletManaging Director
Christina ChaseEntrepreneur in Residence & Student Evangelist
Kyle JudahGFSA Program Director
Elaine ChenRethink Robotics
Jim DoughertyGreat Hill Partners
Charlie Tillett50-50-50 Consulting
Brian HalliganHubSpot
Entrepreneurs in Residence (EiRs)
GFSA Clinic Leaders
External Resources
Başak ÖzerNokia
Jack VanWoerkomHome DepotStaples
Christopher O'Donnell HubSpot
Kevin RustagiFounder, Ministry of Supply
Kit HickeyFounder, Ministry of Supply
Paul EnglishFounder, Kayak.com
Prahar ShahFounder, Mobee
Aaron WhiteFounder, Boundless Learning
Joe Greenstein Founder, Flixster
Dharmesh ShahHubSpot
Jim BaumCEO, Netezza
Chuck KaneFounderOne Laptop Per Child
• Extremely Important “Forcing Function” & Closure Event
• Three Goals for Three Audiences
– Students
– GFSA/Beehive
– Integration of External Players
• Positive effects already seen
– 3x increase in student participation in t=0 events from last year
– Fills pipeline to make next year’s GFSA much stronger
– Dozens of teams proactively asking to move into the Beehive
• Videos of Demo Day presentations can be seen at:
http://entrepreneurship.mit.edu
Demo Day “Graduation Event”
0
1
2
3
4
Customer Product Team Financials/Other Overall
Participant Data Validates Assumptions
Ability to Articulate Theory
0
1
2
3
4
Customer Product Team Financials/Other Overall
Participant Data Validates AssumptionsAbility to Execute
Participant Data Validates AssumptionsNet Promoter Score of +73
“This was one of the most valuable experiences I’ve had while at MIT.”
“We learn a lot of theory in class, but now we know how to execute.”
“The program fills the chasm that often limits ideas/projects from becoming real businesses.”
“This experience helped us to quickly develop the product that addressed real market needs, and with a high market potential.”
“This real world experience really helps clear up a lot of misconceptions about the struggle as well as the pay
off in the end.”
“I have already advised professors at other universities
about the program and suggested that this is the real way to honor your students.”
OVERALL•Huge success in allowing teams to make progress beyond best case scenario
•Three months is about the right time – less time would not be enough maybe a month longer would be even better
•There were conflicts with academic work at times but was manageable (WiCare & SmartScheduling)
•10 was a good size for year 1 & could grow next year but need to be careful on scaling too fast
Lessons Learned
Lessons Learned
SELECTION•Team should be the #1 criteria far & away - the best teams far outperformed the teams with more compelling projects at the beginning
•Developing culture in the GFSA cohort is a tricky but very important thing. Keeping a collaborative and positive spirit in the program is important to optimizing its success.
•Have mixed skilled teams makes a difference – this is a very good criteria
•Once teams get funding, they should probably not be in GFSA
Lessons Learned
IMPLEMENTATION•Key element was giving the teams the chance to revisit strategy/direction without a loss of urgency (there was only three months)
•Teams still reconfigured – founders issues took a lot of time; Forcing a founders agreement milestones halfway through was very productive
•Board meetings and milestone payments were extremely implortant in complementing the mentoring Demo Day as a forcing function worked extremely well and was a huge amount of work to pull off
•There is a limit to the value of mentorship and at some points it can get to be too much. Teams have to do things and get answers themselves rather than continually listening to more people.
• Acceleration works
• General Incubation does not work as well
• Avoid Stagnation: Acceleration Trumps Incubation
Conclusion
More info
• The book• www.disciplinedentrepreneurship.com
• Progress Dashboardwww.detoolbox.com
29
Coming March 18: New Online course
• Google “edX Entrepreneurship 101”
• https://www.edx.org/course/mitx/mitx-15-390x-entrepreneurship-101-who-1312
Top 10 Teams All 129 teams that applied
Number Percentage Number Percentage
MIT Undergrads 1 4.0% 45 19.7%
MIT Master's 18 72.0% 113 49.5%
MIT Doctorate 5 20.0% 62 27.3%
MIT Postdoc 1 4.0% 8 3.5%
All MIT Students (Including 2012 graduates) 25 100% 228 100%
0 0
MIT Students (from above) 25 71.4% 228 66.7%
MIT Alumni 4 11.4% 27 7.9%
Harvard Students 2 5.7% 18.5 5.4%
Harvard Alumni 0 0.0% 7.5 2.2%
Other 4 11.4% 61 17.8%
All participants 35 100% 342 100%
0 0
SAP (4, 11, MAS) 4 16.0% 25 11.0%
Eng (1, 2, 3, 6, 10, 16, 20, 22, ESD) 10.5 42.0% 98.5 43.2%
HASS (14, 17, 21, 24, CMS, STS) 0 0.0% 2.5 1.1%
Sloan (15 including certain joint programs with ESD) 8.5 34.0% 74.5 32.7%
Sci (5, 7, 8, 9, 12, 18) 0 0.0% 13 5.7%
Whitaker (HST) 0 0.0% 4.5 2.0%
Other (postdoc; Operations Research Center) 2 8.0% 10 4.4%
All MIT Students 25 100% 228 100%
Preliminary Results I: Input
Pre FSA
Topic Knowledge
(articulate) Capability (apply)
Scale 1 - 4 Scale 1 - 4 CUSTOMER average (across the group) 2.4 2.1
PRODUCT average (across the group) 2.5 2.2
TEAM average (across the group) 2.4 2.0
FINANCIALS/OTHER average (across the group) 2.6 2.1
Post FSA
Topic Knowledge
(articulate) Capability (apply)
Scale 1 - 4 Scale 1 - 4 CUSTOMER average (across the group) 3.5 3.3
PRODUCT average (across the group) 3.5 3.3
TEAM average (across the group) 3.5 3.3
FINANCIALS/OTHER average (across the group) 3.7 3.4
Preliminary Results: Skill Building
Thank you!
Any questions?
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