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Project Olympus: A University Incubator That Works

It’s rare that I come across a tech incubator that can claim any more success than the square footage they’ve rented out. It’s not that incubators can’t work, it’s that most confuse office space with synergy. Others try to do too much and end up competing with the entrepreneurial ecosystem around them, e.g. by bulking up on paid advisors and other “experts”.

Given my bias, I was pleasantly surprised to meet with Dr. Lenore Blum, founder of Project Olympus, a two-year old incubator based out of Carnegie Mellon University in Pittsburgh. With a shoestring budget that would make certain government funded incubators blush, Dr. Blum has created a model that will be of interest to anyone trying to figure out how to better commercialize university research.

Here are some key facts about Project Olympus:

• It’s embedded within the School of Computer Science, a vibrant source of research given that it is actually composed of 6 academic units (Computer Science Department, Human-Computer Interaction Inst, Institute for Software Research, Language Technologies Institute, Machine Learning Department, Robotics Institute)
• It actively generates new ventures by reaching out to professors, graduate students and researchers to help them take the first step
• It focuses on helping developing ideas with commercial potential rather than getting bogged down with university tech transfer offices (which is a later step)
• It focuses on the real problems of commercialization (bulletproofing ideas, finding target markets, team building) rather than things like office space and advisory services

Two things stand out as key to Olympus’ early success:

PROBES (Problem Oriented Explorations)

Probes are deep explorations into technologies and their potential as new ventures. Entrepreneurs work with the Project Olympus team as well as its volunteer Advisory Cabinet (which I’m very please to be a part of) to develop avenues of commercialization for the technology as well as to give entrepreneurs hands-on practical training. What impresses me about this method is that it focuses on hands-on ideation rather than business plan writing. The sooner entrepreneurs work with other people and get their feedback the better the chance of success. Regular “show and tell” sessions ensure that entrepreneurs get feedback early and often.

Integration with the Tech Ecosystem

Knowing where an incubator starts and ends is something that many incubators have struggled with. An incubator can’t duplicate or replace an entire ecosystem so “playing well with others” is very important. As the following (somewhat complicated!) diagram shows, Project Olympus has a very clear idea of where they fit. They have one foot in university research labs and the other in the area just before seed funding. This is the perfect spot for a university incubator to occupy because they are increasing the number of entrepreneurs entering the ecosystem (i.e. increasing the size of the funnel at the top).

(click to enlarge)

Once projects graduate from Olympus there are other organizations to pick them up, including Idea Foundry (a non-profit investor and incubator), Innovation Works (a state-run seed fund and support organization), The Tech Collaborative (a non-profit tech economic development org) as well as local VCs such as Meakem Becker.

Overall, this is a great example of the many pieces at play in a vibrant tech ecosystem, and a rare dose of good judgement for an incubator such as Olympus to find its ideal spot. When the ecosystem works it not only creates great companies but can build and support local communities.

I think universities, especially those outside of Silicon Valley and Boston, could learn a great deal from Project Olympus. I also think this is an important model to study for any city trying to build a functioning tech ecosystem.

What do you think? Would this model work in other universities and communities?

Reminder: Startup Drinks al fresco, Wednesday, April 29

Come on out this Wednesday, April 29 from 5:30pm to Brutopia (Crescent St, just south of Ste-Catherine) for beers and startup mayhem.  The terrasse will be in full effect!

All are welcome!

Registration is now open at TechEntreprise!

Startup Drinks April Edition: Next Wednesday

Depending on weather, next Wednesday could be the first “Patio Edition” of Startup Drinks. Hope to see you there and please spread the word!

The details: Startup Drinks at Brutopia (Crescent St, just south of Ste-Catherine), on April 29 from 5:30pm.

Register soon at TechEntreprise!

Business Planning Without Business Plans

I recently ran a couple of business planning seminars at the 5th Annual Inventing the Future Conference put on by Young Inventors. Since it was a no Powerpoint affair (yeah!) I have no slides to share but here is a quick summary:

Business Plans DO NOT EQUAL Business Planning

By The Scott (Creative Commons)

It’s amazing how much stock we put in business plans considering they are works of fiction. Few startups really know their precise target market, product, pricing or cost structure. How could they? I guess writing a business plan is a good exercise in research and discipline but only if it doesn’t distract you from real business planning. My personal favorite is figuring out the size of a market. Any time there is 3rd party research on market size your product is probably too late. You can’t really size a market you’re creating from scratch so don’t sweat the details. Just show an intelligent attempt and that will be impressive enough. A recent WSJ article claims that Business Plans Don’t Matter to VCs (though not all agree).

All Customers Are Not Created Equal

There’s not much I can write about targeting specific customers that hasn’t been covered by Geoffrey A. Moore in Crossing the Chasm. If you haven’t read it please stop reading this blog and buy the book! If you have, a re-read will remind you how it still holds true in so many cases. Startups should realize that there is no such thing as a generic customer. When you’re planning, it’s important to find a niche where you can find customers with specific pain points. Even within this niche you have to figure out how to target early adopters, i.e. people who are willing to take a risk on a startup. Targeting the early majority (i.e. more practically-minded people who need proof before they buy) is a waste of time until you have bona fides with early adopters.

From Wikimedia Commons

Real-world planning tip: Create fictional caricatures of your customers (e.g. “Joe the plumber”, or more precisely “Joe the small residential plumber looking for ways to level the playing field against bigger rivals”). You should have one caricature for each of your customer types. Then keep these ‘people’ in mind every time you make a strategic decision in your company.

Find The Value

Business plans make us believe that commercializing new products is a linear progress of steps leading outwards from the original idea. Reality is a lot less linear. Sure you may have a breakthrough technology or a wonderful idea and have a great plan to push it to market, but it has to pass the “Who Cares?” test first. It’s easy to convince yourself that people (especially generic people…) will buy your product. It’s a lot harder to go out and talk to them. I always ask entrepreneurs if they’ve talked to 100 prospective customers of their products. This actually takes less time than writing a business plan!

Real-world planning tip: Get to the core of your idea by figuring out if you have a vitamin or a painkiller. The good news is that this early in the game it’s not expensive to start over.

Real-world planning tip: Since Frederick Winslow Taylor invented time and motion studies people have been measuring and analyzing user behavior. Though I’m not recommending startups take up cameras and stopwatches, I am recommending you quantify the value you purportedly add. Think your solution saves time? Detail exactly how much time, in minutes or seconds. This presumes you know what your customers were doing before they bought your product. Once you have a convincing argument bring it to a customer and try to convince them. Then on to 99 more.

Write Once, Don’t-Survive-Battlefield Everywhere…

To summarize, I’m not saying that business plans are evil. Sometimes it’s good for entrepreneurs to work out ideas on paper before committing time and capital to them. Other times you have no choice, e.g. for banks or VCs. But don’t confuse writing a plan with real business planning. A plan is something you write, print, file away and celebrate with a pint. Business planning is a continuous discpline you’ll use throughout the life of your business.

Students Invent the Future at Young Inventors Conference

Nobody needs to be reminded how important students are to our startup ecosystem. I started my first Web consulting company in the McGill Music computer lab (which was probably against the rules!) along with two friends who were also students. Yet most universities privately admit they’re not doing a great job turning research projects into commercial products or students into CEOs.

It always surprises me that we see so few students at startup events. There are some but just not very many. At ConnectMcGill, a recent student event in Montreal, most students had never heard of the meetups, mixers and startups surrounding them. We need to do something about this!

One group that’s actively helping young entrepreneurs and inventors is Young Inventors International. Founded by Anne Swift, YII’s mission is…

…to work with leading universities, organizations, and entrepreneurs around the world to educate student inventors and entrepreneurs on how to create new ventures and social enterprises, build intellectual property portfolios, and acquire transferable professional skills. With more than 2,000 members who own almost 700 patented and patent-pending technologies, YII is the leading not-for-profit organization providing a comprehensive network for education and skill training specifically for student innovators and entrepreneurs in North America.

I ran a business planning session at their 5th annual Inventing the Future conference held recently in Pittsburgh at Carnegie-Mellon University. 120 students took part in a gruelling (ok, probably not that gruelling) “commercialisation marathon” that was kicked off by Regis McKenna of Kleiner Perkins fame. You can see some pictures and videos on the YII blog.

One of the highlights for me was something called BrainBuzz(tm) which was a 3-hour intensive brainstorming session. Small teams were formed and each tackled problems e.g. how to design a more effective passive solar energy collector or how to market a dancing robot (click the link, trust me). What’s amazing is the quality of ideas that flow, even from people without training in a particular field. BrainBuzz not only gives students confidence in their ideas but gives them a taste of the idea generation “buzz” that all startup entrepreneurs feel. That’s one way to get them hooked on becoming entrepreneurs.

If you are (or know) a student thinking about becoming an entrepreneur, I highly recommend you join Young Inventors and get involved. You’ll be joining a community already over 2000 strong, and growing.