What does it mean to be an entrepreneur?

Having a useful idea, understanding the ecosystem, making connections, and learning on your feet: these are some of the ingredients needed to create a start-up. On this post, Tom Edwardson from ETH Zurich, explains why your mindset and the questions you ask yourself are also important.
What does it mean to be an entrepreneur?

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Have you considered starting a spin-off as your next career step? Do you wonder how you might transition from academic to entrepreneur? In this post, I shed light on various aspects to, hopefully, answer some of the questions you might have, and also present some that you might want to ask yourself.

Do I have an idea that could lead to a business?

If you are looking to found a start-up company, as opposed to joining an existing venture, then this is of course a crucial question.

As scientists, we are used to presenting our research projects in the context of a real world problem or potential application. If you are fortunate enough to have discovered something that can solve such a problem, then this is a good start. However, whereas a journal editor or other researchers in your field may be convinced by the originality and ingenuity of your solution, a customer or investor is interested in why it is practically better than the state-of-the-art. Is it easier to use, cheaper to manufacture, or simply more effective? Do these advantages justify users, customers and regulators switching from an established technology that they are already familiar with? It may seem obvious, but grasping these important aspects can fundamentally shift your way of thinking about the science.

Be objective and critical of your own work. How does it compare to what is already out there?  Why would people buy a product based on it? Who would buy it? If you can’t convince yourself that you have something useful to offer, then there is little chance you’ll sway others. In the early stages, a combination of online research and discussion with your supervisor and colleagues can already be helpful to identify a real commercial opportunity. Later on you’ll want to speak to as many people as you can, especially those with experience in technology and business development, and constantly re-evaluate your assumptions based on their feedback. When you have such an opportunity, it is important to listen and not to convince. Coming to the conclusion that an idea is not really commercially viable is not a failure, it reflects maturity in the evaluation process, which will be just as important when the right opportunity comes along.

Patent before you publish

You may have developed the most impactful technology of the decade, but if you do not have patent protection, then you don’t own the idea. However, as long as the idea has not been publicly disclosed there is still the possibility to apply for a patent. This need for secrecy may seem at odds with the desire of scientists to share the knowledge they have gained. However, it is only important until a patent application has been filed, after which time the research results can be presented and published as usual. It is important to note that any type of disclosure (including posters, talks, abstracts), no matter how small the audience, may be considered prior art and prevent patent protection. Nevertheless, some conferences are actually confidential and non-disclosure agreements are a standard means to protect intellectual property while communicating with others.

Intellectual property is a complex beast. Fortunately, help is at hand in the form of your university’s technology transfer office. In addition to providing guidance, for example on disclosure of research results, it is common for universities to fund the patent application process. In this case, it is important to understand that the university owns the patent. Make sure to find what responsibilities and entitlements your role as inventor entails, and bear in mind that any company, including your own, will have to license the patent from the university before generating any revenue from the proprietary technology.

Having a patent filed on your research is not uncommon, and for many that will be the end of that. The patent may be licensed to another company, or abandoned if there is no commercial interest. But what are the next steps if you want to commercialise this technology by creating a spin-off?

Am I an entrepreneur?

As someone firmly rooted in academia, the word ‘entrepreneur’ used to be a put-off for me. It seemed money-centric and brought to mind a set of characteristics and an approach that I couldn’t relate to. This point of view was due to a lack of understanding. However, it is not uncommon for people who have little experience outside of the university system. As such, it is worth considering what a move in the entrepreneurial direction really entails, especially with respect to other career options.

For example, what is the difference between a university research group and a start-up company? They may have more similarities than you initially think and, in turn, have overlapping skillsets.

Let’s consider the typical university research group as a business. The main output of the lab is research results, which are published in peer-reviewed journals, presented at conferences, and shared in the media. In return, the group gains reputation, which helps to secure funding through research grants and salaried fellowships. Hopefully, within this system, the research lab can produce high-quality science with impact beyond securing the next grants. While this is a great oversimplification of the role of research labs, it represents the typical financial model. These tasks are also important to a research-based start-up company, with the fundamental difference that the goal is to develop a product that can eventually generate revenue.

So asides from these familiar concepts, what new knowledge and skills are required and how can we learn about them?

Attend workshops

Workshops, webinars, seminars and the like are an excellent place to start. These are often organised by universities, government agencies, scientific societies, or start-up incubators, and range from informal lectures, to highly involved competitions. The vast majority are free to attend, although in some cases you may have to apply to take part. Because you often don’t need a well-developed business idea to join many of these workshops, they are an ideal starting point. These days, the broad acceptance of virtual formats has made it easier than ever to attend. In addition to the educational content, the chance to meet people from your local entrepreneurial ecosystem is extremely valuable.

Find a mentor

If you don’t already have a mentor who has experience in turning science into business, it’s worth looking at coaching opportunities. The development of a technology into a business is a complicated and wandering process, and it is invaluable to have someone to keep you on track. University technology transfer offices will often offer some type of mentoring as part of their mandate to support spin-off companies. Other possibilities may stem from attending workshops, from government agencies, or start-up incubators. Be proactive, use your networks, and consider that this could also be an opportunity to get a potential team member on board in the early stages.

Funding opportunities

In addition to academic research grants, there is a growing number of funding opportunities aimed at technology development and commercialisation. These grants come in various formats from different funding bodies. For example, they may be a grant awarded to a principal investigator that can be used much like a typical research grant. Alternatively, salaried fellowships aimed at graduate students or postdocs, which may include access to entrepreneurial training courses, are a possibility. These funding opportunities can be administered by universities, government agencies, companies, and various other organisations promoting innovation and technology development. Applying for these types of funding can be a useful learning experience as it requires answering completely different questions than a typical basic research grant. It is also worth noting that contacting an obvious partner company directly may also lead to some funding support.

The sources of funding described above are typically non-dilutive, which essentially means they are a gift. Later on as your company grows and larger amounts of money are required to reach the next milestone, it is likely that dilutive funding, or investment, will be necessary. This comes at the price of giving part of the company away. As such, there is a clear advantage to funding your venture on non-dilutive grants for as long as possible, as long as the available capital is not limiting meaningful progress.

The ecosystem

You are not the first, you are not alone, and there are many lessons to be learned from those that walked the path before you.

Many university spin-offs, or independent start-up companies, were initiated by people with relatively little experience. They learned on their feet and drew from the resources available to them at the time. If you are struggling to navigate a particular aspect, identify people who have been in the same position and reach out to them. They probably did the same, and might be very happy to return the favour. It’s possible to get friendly advice on where to find the information you need, valuable opinions, and useful connections.  The challenge may not be solving a certain problem yourself, but finding the right person who has already solved it.

Even with the best support, the learning curve from academic to entrepreneur is steep, and the transition will also benefit from a certain appetite for risk and acceptance of uncertainty. So maybe the only question to ask yourself is: are you hungry to learn and ready for a challenge?

Photo by dendoktoor on Pixabay

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