Are we teaching founders more than they need to know?
Having over the last several years been involved in teaching undergraduate entrepreneurship, mentoring or judging countless business concepts for various competitions, and also deeply immersed in longer-term advisory roles, I have come to reflect on how much a founder should be expected to learn and do on his or her own. The oldest university affiliated incubator in the country, the ATDC at Georgia Tech, is only 34 years old, a millennial, and now there must be many thousand incubator and accelerator programs just in the US. Clearly these abundant educational resources help create the right mindset around talking to prospective customers; and they guide you to create a product or service that enough people will pay enough money for so that you have a business opportunity and are not wasting your valuable time on a science project.
I’m certainly a fan of this wave of attention to the startup world, but we must keep in mind that economists are reporting that the share of companies less than one-year-old in the United States has declined by almost half since the ATDC opened its doors. Even while unemployment has fallen and the stock market has soared, sluggish productivity and anemic wage growth are attributed to this phenomenon. (For more info, see the NY Times article on this September 20, 2017. I no longer use links for security reasons, plus this is all destined for print at some point.) When I mention this at technology gatherings where everyone in the room is bullish about the abundance of startup opportunities, this is greeted with some disbelief. What’s the cause? The economists think it’s the growing power of bigger companies, and I can agree with that. I have seen first-hand how much harder it has become to find and protect an open space on the checkerboard amidst the behemoths we all patronize every few minutes of every day, one way or the other. It’s the populist Top 1% story repeated in the business world.
Georgia Tech has a goal of teaching every one of its undergraduate students the basics of entrepreneurship, and it has a large endowment given specifically for that purpose. That is a good mission for a research university heavily skewed to engineering and the sciences and with only the brightest able to get accepted. Even those who ultimately pursue the corporate ladder after graduation, or who go on to advanced degrees leading to teaching and research, will somewhere along the way analyze a problem more astutely by applying some of those entrepreneurial principles they have learned. And, if they every do get startup fever, they’ll at least know how to speak the language.
A friend of mine from the tech industry is building a new family home. Many of us have done that, but most likely we have dealt with a builder, an architect and/or a general contractor to bring the house to completion. My friend is actually building his own house, down to hiring the day laborers and all the trades, procuring all the materials, and supervising every step of the process. He’s in no hurry, and I told him that if he ever finishes he’ll probably wonder what to do with his life afterwards. It’s got to be an enormous challenge for one who is not a practicing builder to deal with all the codes, find workers that are capable and honest, install the home systems and mechanical components so that they are up to code and are safe, and in the end have something that looks pretty.
I bring this up because I believe we are often trying to teach founders how to do everything in their startups from scratch. Perhaps we’d be better off letting them focus on the revenue and investment generating aspects of their ideas and not allowing them to get too distracted by vesting cliffs, waterfall charts, franchise taxes, collections and payments systems, the minutiae of strategic contracts, regulatory matters, and best practices for sourcing and on-boarding talent beyond the first handful of buddies. My home builder friend is still very active in the business he has run for decades, and he is of retirement age, so he’s entitled to amuse himself by learning a new craft. Startup founders had better be in much more of a hurry than that.
One of my more interesting assignments of late was what I thought would be a two-month project but lasted over two years. I effectively became, shall we say, the job superintendent for the founder. He’s a brilliant surgical oncologist on a mission to democratize access to clinical trials and targeted therapies for the 85% of cancer patients who do not have access to one of the major cancer centers like Sloan Kettering, Duke, or MD Anderson. The original business plan was to harvest tumors, collect genomic tests on them, use a smart database system to match their disease profiles and all annotated data against known trials and therapies, and return the results to the treatment team at the bedside. The core of this turned out to be 1.8M lines of code and considerable legal pioneering to create the flow of consents and HIPAA compliant information that could provide meaningful odds of extending and improving the lives of cancer patients. The surgeon began almost every presentation by saying he was tired of going to his patients’ funerals. It’s a compelling story.
The surgeon in this instance had no computer background, didn’t even use electronic records in his own practice, and had zero startup experience. He is now 68 YO, based in North Georgia, and could never be a candidate for abandoning his practice to pursue his dream by going to a medical accelerator somewhere in the country. I actually suggested carving out the pure data portion of the company into a separate entity with a credentialed digital health CEO, since it was running considerably ahead of the clinical progress, but he called that “the worst idea he had ever heard.” We raised significant capital at a high valuation based on his credibility, and he certainly was entitled to call the shots on decisions like that. So, during my two years we created an enormous amount of IP, completed Series A with a very clean cap table, entered into a number of partnerships, dealt with all the regulatory landmines around extracting, transporting, and analyzing human tissue, and developed a software product easy for a patient’s care team to use but backed by a complex set of code to match indications with treatments in an ultra secure manner. I checked out early this year when the surgeon wanted to spend more time on the clinical components to catch them up with the software. My ability to help in that process was limited, but the company has since raised considerably more funding and is harvesting tumors. You wouldn’t want me cutting on you, and you wouldn’t want the surgeon developing software and such a complicated business infrastructure, so we had a good division of labor. I helped him assemble a strong board and left him in good hands to continue his pursuits while I transitioned to a data sciences endeavor in Austin. That board in turn used its reach to bring other key players to the team. I certainly hope for a successful business outcome there, but more important will be the lives saved.
I tell that story because it is indicative of a class of startup founders who may or may not be older but for whatever reasons aren’t portable and really don’t know where to start. The surgeon reached out to me after no contact since 1966 when we were in high school together. He was the Key Club president the year after me, and he had somehow kept up with my career via hometown connections. All such projects seem to have come my way serendipitously, and I’ve got a number on the plate for consideration right now. My desire is to promote further this notion of “general contracting” for founders who have the technical knowledge and a viable idea but want someone else to handle the million details that come along with realizing a vision. That meets a need that is not served by the current incubator/accelerator universe and taps into often very consequential ideas from highly qualified founders. Over time a successful startup will grow to take on many of the operational functions in house and, it’s only natural for builders like me to work themselves out of a job and move on to the next. However, unlike the homebuilding analogy, where the end product is a physical object, the startup product is an animated creature for which some level of ongoing involvement may be appropriate. I’m flexible.
If you have the big concept that solves problems in a profession or industry you know very well and want to realize the fruits of that idea without giving up your primary endeavor, you may decide your better course of action is to hire a group who can just make it happen to your specifications without your literally having to pour the concrete footings. If you’ve already reached the pinnacle of a highly skilled profession and have derived your credentials from that, you might be best served by partnering with a “company builder” – the role I have taken in multiple cases and that I will continue energetically in my new partnership at TechSquare Labs in Atlanta. TechSquare Labs is already doing just that at scale for accomplished researchers out of Georgia Tech, and I’m looking forward to contributing.
For my regular readers, please note that I may skip a couple of weekly posts around the Holidays while I am busy repatriating myself to Georgia. I wish I could farm out this process to a GC. It’s easy enough to hire movers to do the heavy lifting, but even as in my case with a relatively de-contented life, the amount of time and energy deciding what to pack and what to leave with Goodwill is staggering. I’ve been in my current residence 3½ years, and I’m trying to follow the rule that if I haven’t used or worn something in that amount of time, it’s not getting moved.