Back on Twitter and replacing Yomper with my name and following friends, as well as stephenfry, scobleizer, fredwilson and NESTA. The latter tweeted about it’s latest paper, Connected Universities, and the launch event. The videos of the launch event are great quality (not Flip?) but are not on YouTube, very slow to load, no controls and there is no embedded URL; also no place for comments so no participation for those not at the launch event.
On the 30th anniversary of the first day in office of Margaret Thatcher, it grates to read a report on clusters that promotes a centralist theme and in which the words “equity” and “entrepreneur`” are hardly mentioned. We read that the key to the success of making money from universities’ knowledge is better central control. The early success of the Cambridge Cluster is dismissed as “serendipitious”. Does the same apply to Silicon Valley? But then successful entrepreneurs are always classified as “lucky”!
I wonder which body of people has contributed more to university funds in recent years in Cambridge – entrepreneurs such as Gates, Hauser, Edwards, Janeway, Judge, Sainsbury, Taylor and many more, or the transfer office, Cambridge Enterprise. How many of the entrepreneurs would be stamped with the derogatory term, “sneak-outs”?
The one appearance of the word equity in the report appears on page 16 on the notes on Light Blue Equity; “As a spin-out the university (Cambridge) holds a small equity stake”. Why small? Why no mention of the “small” equity stake by NESTA? In the video, Herman Hauser lists the number of outstanding research institutes of companies which failed to turn ideas into products and have now been closed. Xerox Palo Alto and Bell Laboratories are two well known examples.
Herman Hauser (interesting that he is now very involved in stem cells businesses) states that Amadeus Capital follow the 1,000 companies which are VC funded in the UK of which 750 are not profitable and need to raise further funds every one or two years. These companies are Active Equity Companies (AEC) requiring new equity funds each year and make them very different from the mass of companies which are Passive Equity Companies(PEC) where growth is constrained by such classic terms as sales, margins and cash flow. They have been extensively studied.
I think that recent research puts the Entrepreneur if not at the centre of the growth of clusters at least a key part of the process.
However if entrepreneurs are “lucky” how do transfer offices deal with these temperamental but crucial beings? Which business plan resource should they use? Use the Y Combinator model? Should transfer offices have a separate section encouraging entrepreneurs in their cluster on the basis that the university, with or without an equity stake, can be confident that entrepreneurs are like elephants, and will never forget the help received in the early days, and will become generous donors in the future. We should promote the active, Connecting Universities, providing crucial services to entrepreneurs. When the universities lose the plot and become the story clusters will wither.
One last point: in the video on the discussion the Vice-Chancellor of Bristol University states that he runs a business in the West Country with a turnover of some £400million. But does he run a business? In one of the videos Michael Kitson, Senior Lecturer, Judge Business School, a co-author of the report states that universities are fundamentally very different from companies for a number or reasons such as they cannot be relocated. I always worry when people emphasise the good things about business (such as higher pay) but do not recognise the downside of being in business. Some of the skills learnt by business can be useful in running a university or hospital (people are a common thread) but it is very important to separate their functions and cultures.
30 years has been a long time and the world has changed with privatisation winning the day in much of the world – long may it be at the heart of knowledge based clusters with “call me lucky” entrepreneurs blazing the trails of new industries. And good luck to any who try to hold them back!
PS: The CEN on 5 May 2009 announces the appointment of three new senior members of staff to Cambridge Enterprise, turnover of £10million, more than 450 active agreements, 1,100 individual patents and with more than 120 new inventions reviewed each year.
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