Spinoffs

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Quelques Réalités des Start-ups (académiques) ventureideas @ EPFL 24 novembre 2005 Hervé Lebret

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EPFL spin-offs

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US University VC backed spin-offs Source: " A STUDY OF ACADEMIC ENTREPRENEURS USING VENTURE CAPITAL DATA“ Junfu Zhang, PUBLIC POLICY INSTITUTE OF CALIFORNIA (2005) Range: 1992-2001 These are VC backed startups EPFL is in the 6-10 range - Snaketech - Cytion - Endoart - IR Microsystems - Dartfish - BeamExpress - Covalys - Innovative SIlicon

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“an academic spin-off is a new firm created to exploit commercially some knowledge, technology or research results developed within a university” from “Toward a Typology of University Spin-offs” Pinay and al. Small Business Economics, 2003 e.g. Google is a Stanford spin-off, - basic patent belongs to Stanford - technology developed by founders during their work Yahoo is not a Stanford spin-off: - no IP generated - founders developed it on their spare time What is an academic spin-off?

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Source: “Toward a Typology of University Spin-offs” Pinay and al. Small Business Economics, 2003 Typologies of academic spin-offs

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Typologies of academic spin-off Source; “Toward a Typology of University Spin-offs” Pinay and al. Small Business Economics, 2003

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Industry distribution of start-ups Source: " A STUDY OF ACADEMIC ENTREPRENEURS USING VENTURE CAPITAL DATA“ Junfu Zhang, PUBLIC POLICY INSTITUTE OF CALIFORNIA (2005)

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USA vs. Europe - Hi-tech Source: Personal Compilation from Yahoo data, sept05

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USA vs. Europe - Biotech Source: Personal Compilation from Yahoo data, sept05

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Where do entrepreneurs come from ? Which institutions: - Big companies? - Start-ups? - SMEs? - - Universities Which role: Business oriented people? - Engineers? Students/PhDs/postdocs? - Professors? Some data: "High-Tech Start-Ups and Industry Dynamics in Silicon Valley" Junfu Zhang, PUBLIC POLICY INSTITUTE OF CALIFORNIA (2003) In hi-tech

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Some data: "The Dynamics of California’s Biotechnology Industry" Junfu Zhang, PUBLIC POLICY INSTITUTE OF CALIFORNIA (2005) Where do entrepreneurs come from ? In biotech Which institutions: - Big companies? - Start-ups? - SMEs? - Universities? Which role: Business people? - Engineers? PhDs/postdocs? - Professors?

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Some indicators in Switzerland Global Entrepreneurship Monitor; Rapport 2003 sur l’Entrepreneuriat en Suisse Figure 1: taux d’activité entrepreneuriale Figure 2: indice d’activité entrepreneuriale des entreprises Entrepreneurship acceptable as an average Intrapreneurship maybe a problem

Switzerland faces challenges: 

Switzerland faces challenges SOURCE: trend chart on innovation – European Commission People and infrastructure high quality Foster what you have Entrepreneurial spirit National growth rate The Swiss specificities

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Employment in Switzerland Source: OFS RE 2001 et www.pmeinfo.ch 99% of companies it is well known SMEs are an important component

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Jobs in “top100 Swiss” startups Source: http://www.inno-swiss.com/fr/rangliste.asp About 10-15 companies per year, creating in average 80 jobs each

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Employment in Switzerland Source: OFS RE 2001 et www.pmeinfo.ch Top100 Swiss data Do startups grow faster than SMEs?

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USA vs. Europe - Hi-tech It’s also about jobs Source: Personal Compilation from Yahoo data, sept05

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USA vs. Europe - Biotech It’s also about jobs Source: Personal Compilation from Yahoo data, sept05

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USA vs. Europe - Biotech USA vs. Europe - Hi-tech Jobs and wealth Source: Personal Compilation from Yahoo data, sept05

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Jobs in California biotech 98% of companies "The Dynamics of California’s Biotechnology Industry" Junfu Zhang, PUBLIC POLICY INSTITUTE OF CALIFORNIA (2005)

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Switzerland vs. US biotech Many Swiss companies remain extremely small

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Jobs in tech clusters "High-Tech Start-Ups and Industry Dynamics in Silicon Valley" Junfu Zhang, PUBLIC POLICY INSTITUTE OF CALIFORNIA (2003) “5 or more employees” might be an interesting measure

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Top US and European VCs Source: Personal data US VCs are bigger but there is money in Europe Some VCs among the biggest

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US and European VCs Source: Amadeus Capital Partners (thanks P. Dutheil) US VCs are bigger but there is money in Europe from 2000 to Q3 - 2004

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L’âge du capitaine! Source: Personal compilation from 42 famous founders Source: Entrepreneurs from Technology-Based Universities: An Empirical First Look D. Hsu, E. Roberts and C. Eesley (Draft Sept, 2005)

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Research and Innovation There has been an going debate on the contradiction in doing quality research and spin-off activity. However: many studies show a correlation between number of publications and patenting, between quality research and innovation (e.g. Agrawal 2002, Shane 2000) in biotech, many very successful startups are linked to “Star” scientists, e.g. Genentech, Biogen, Amgen have Nobel Prize founders who knows Einstein had patents on refrigerators ? (and made money with them!) clearly Stanford, Berkeley, MIT, Harvard are among the best for spin-offs the best in research ranking “a university’ s national academy membership is the most important variable in explaining its number of academic entrepreneurs” Zhang (2005)

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A few personal thoughts It seems there may be an advantage for founders who are ambitious, i.e. focused on growth young living in the USA? (at least know how it works) It is more difficult but possible to succeed in Europe Wealth and job creation are the two faces of the same coin I am not sure the lack of resources is a good explanation for the low success rate and number in Europe The world is global, I am not sure what a local leader is

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So what? A few other lessons from the USA, at least from the Silicon Valley… - Public funding is huge (e.g. $3B for Stem Cell research in California) - Innovation should be opened (e.g. Saxenian’s work) - Ambitious projects/people more visible and likely to succeed? - People keep trying and risk taking is a value - It may be easier when you are young

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“Success is going from one failure to another, without losing your enthusiasm” Winston Churchill   “Ever tried, ever failed? keep trying! fail better!” Samuel Beckett “If I am in total control, I am not going fast enough” Mario Andretti About failure and risk