Rewriting the rules of entrepreneurship
By Ronna Kelly | Illustrations By Carl DeTorres
On a cloudy day in December, a dozen venture capitalists from around the Bay Area crowd around a table 12 stories above the bustling streets of Downtown Berkeley, grilling student and alumni entrepreneurs about their fledgling business ideas.
"Besides money, what do you need?"
" Is this a stand-alone company or part of a larger company?"
"What motivated you to push this product on the market?"
" Who owns the intellectual property?"
Oblivious to stellar views outside that span the Berkeley Hills to San Francisco Bay, the VCs pepper team after team with such questions for hours. Hoping to get their business ideas off the ground, the teams are vying for four spaces at Skydeck, a one-year-old startup accelerator that provides mentorship, coaching, and office space to UC Berkeley students and recent alumni.
Located in the penthouse of Berkeleys tallest building, Skydeck is becoming a hub of UC Berkeleys entrepreneurship ecosystem?and the most visible symbol of the Haas Schools new approach to entrepreneurship. Like entrepreneurs who must respond to a rapidly changing business landscape, the field of entrepreneurship is undergoing a seismic shift in response to market forces--and the Haas School is at the forefront of that movement with initiatives like Skydeck.
Call this new era Entrepreneurship 2.0 or the Lean Startup, says Haas alumnus and Lester Center Executive Director Andre Marquis, MBA 96. Marquis knows all about version 1.0: His class of 1996 boasts several notable Internet entrepreneurs who founded the startups behind Google Earth, Yahoo!s search engine, and the largest online apartment rental site. Marquis own experience includes work on startup teams for Accept.com (acquired by Amazon), a startup inside Eli Lilly that cut drug development time in half, and an incubator he created with classmates while still earning his MBA.
"We all believed that the Internet would change everything," says Marquis. "Its taking a while longer than we thought, but it is, and one of the things its changing most is entrepreneurship."
Plummeting software and hardware costs combined with the Internet have enabled entrepreneurs to rapidly build prototypes, easily and quickly connect to customers and experts worldwide, test, refine, and test and refine some more.
"Entrepreneurs can literally start companies on their laptops with a credit card," says Haas Lecturer Steve Blank, a serial entrepreneur who is pioneering a new way of teaching entrepreneurship with an experiential course called Lean LaunchPad.
In addition, the pace of change is rapidly increasing, which means entrepreneurs no longer can spend months drafting a 50-page business plan before pitching VCs or developing products. (See Risk Takers articles.)
As a result, the Lester Center is evolving its business plan competitions into startup competitions, requiring teams to submit a one-page business model canvas instead of a business plan and encouraging students to start businesses while still in school.
The Lester Center won a major endorsement of its approach last month with the award of a $3.75 million grant from the National Science Foun dation (NSF). Teaming up with Stanford and UC San Francisco, the Lester Center will spearhead the creation of a Bay Area/Silicon Valley I-Corps Node--one of three being created by the NSF? to train the next generation of entrepreneurs and encourage partnerships between academia and industry. All three I-Corp Nodes will teach Blanks Lean LaunchPad framework.
"The NSF has built an incredibly smart program to bring together the best of science and technology invention with all the advances business schools have made in teaching entrepreneurship over the past decade," says Marquis.
Marquis top priority is helping Haas students start more companies that are more likely to succeed. Since his arrival in 2010 as the second executive director in the Lester Centers 21-year history, Skydeck has become a key vehicle to accomplish that goal. Marquis is joined by Professor Toby Stuart, who left Harvard Business School this year to become the second faculty director in the Lester Centers history and is now working on revamping the schools gateway entrepreneurship course for MBA students. (See Q&A with Stuart.)
"The best way to create entrepreneurial leaders is to give them the experience of building startups while they are here," explains Marquis. "When our MBA stu-dents go back to work, its almost certain they will be innovating by putting business models and technologies together in cross-functional teams. Thats what a startup does. While at Berkeley Haas, they get the theory and the practice."
Because entrepreneurship is a cross-disciplinary endeavor, Skydeck is similarly a cross-disciplinary collaboration of Haas and the Lester Center, the College of Engineering, and the UC Berkeley Vice Chancellor for Research Office. Students and recent alumni from across Cal can apply to work on their startups at Skydeck. But they get much more than free office space: Teams are matched with mentors, gain access to an extended network of startups, and can attend workshops and events at Skydeck, including hackathons designed to build technology solutions in 24 hours.
"I'm not a big believer in space," explains Marquis, noting that Facebook and Genentech didnt need office space to get off the ground. "I believe in community."
Skydeck is unique among accelerators because of the unique UC Berkeley community it taps into: world-renowned researchers and a strong culture of independent thinking, notes Haas Lecturer and Skydeck mentor Mark Coopersmith, BA 82, MBA 86, who built a $150 million consumer products and online commerce division for Sony and now advises VC-backed and large companies. "We have to leverage that Berkeley culture because that combination of intellect, discipline, and creative nonlinear thinking is what makes successful entrepreneurs," he says.
One of the first startups at Skydeck was Go Overseas, a Yelp-style website for programs abroad started by Mitch Gordon, MBA 12. Gordon moved into Skydeck from Haas previous business incubator in the basement of the Bancroft Hotel.
"We literally went from the basement to the penthouse," Gordon quips. "Skydeck gives me more legitimacy with customers right away."
Gordon had the idea for Go Overseas before enrolling in Haas. "The first day I was here I went straight to the Lester Center to get started on it," he says. "My business wouldnt be where it is today without Haas."
Springboard for Success
Melissa Millan, MBA 13, who won a spot in Skydeck in Decembers competition, tells a similar story.
"One of the reasons I came to Berkeley was to be in Skydeck, to be surrounded by similar-minded people following their entrepreneurial aspirations," says Millan, who founded Androgyny, a company that sells premium womens dress shirts.
Millan also is a testament to the success of the Haas Schools entrepreneurship curriculum, and Coopersmiths Workshop for Startups class in particular. She was one of five students who received funding within three months after taking Coopersmiths class and one of two students from his class to be accepted into Skydeck in December.
"Our entrepreneurship curriculum prepares our student entrepreneurs to get to that next level, as reflected by which teams were most prepared to move into Skydeck," notes Coopersmith. "Skydeck is a place for people to get business done, make connections, and take their ventures to the next stage. It becomes a springboard for growth, learning, and success."
In another step toward building a thriving entrepreneurship ecosystem, Berkeley Haas is spearheading an educational program funded by a $3.75 million National Science Foundation (NSF) grant that aims to commercialize university research and foster innovation.
The three-year grant creates one of three new Innovation Corps Nodes (or I-Nodes) that the NSF is establishing across the nation to increase the impact of NSF-funded research.
The Bay Area I-Node, which also includes UC San Francisco and Stanford, is headed by Dean Rich Lyons and Lecturer Steve Blank. Andre Marquis, executive director of the Lester Center for Entrepreneurship, serves as node manager. All of NSF's I-Nodes will teach Blank's Lean LaunchPad framework to researchers who have received funding from the NSF or Department of Energy in the last five years. Researchers will be required to apply.