Entrepreneurship Series Review of Week 1. Many Types of Businesses Some Make or Grow things.
Smart Policy for Innovative Regions Grow your own Entrepreneurship and business development.
-
date post
20-Dec-2015 -
Category
Documents
-
view
217 -
download
0
Transcript of Smart Policy for Innovative Regions Grow your own Entrepreneurship and business development.
Startups and Entrepreneurship
Con High risk, high
failure per attempt
Can be resource intensive
Lack collateral for traditional finance
Pro Sticky Increasing returns
to scale High payoff
potential
Transforming Ideas Into New Companies
New Companies are transformed through a five stage transformation process to create a sustainable company – Start-Up Life Cycle
Each stage of the Start-Up Life Cycle represents the companies progressionof the business, management team, products (technology), markets, etc.
Discovery IdeaDevelopment
Start-UpCompany
EarlyGrowth
RapidGrowth
Increasing Costs / Effort
The Fore Systems Family Tree:The Region’s Economic Future
From 0 to 1500 jobs in 12 years, but the
region missed out on another 300+ jobs
that got away
Transarc / IBM Pittsburgh
1989 / 1999Laminar
1999
Spinnaker1999
FORE Systems / Marconi Networks
1990 / 1999Laurel
Networks1999
Comanage1998
CarnegieMellon
Mediasite1996
PanasasOpsware
LighteraNetworks
OnFiberCommunications
InFineraCorporation
WaveSmithNetworks
AcceLight
Legend
People
Tech
BothMoney
Sold
Missed
Closed
ScalableNetworks
The Picture of Success: San Diego 1980 - 2000
Hybritech
G e n sia1 9 8 6
C o rte x1 9 8 6
Im m u n eR e s p o n s e
1 9 8 6
G e n Pro b e1 9 8 3
ID EC1 9 8 5
C lo n e tics1 9 8 5
Bio ve st1 9 8 6
Pa cR imBio s cie n ce
1 9 8 5
Via g e n e1 9 8 7
Kimme l C a n ce rIn s titu te
1 9 9 0
Lipotec h1 9 8 7
C yp ro s1 9 9 2
No va d e x1 9 9 2
L ig a n d1 9 8 7
C o rva s1 9 8 7
F o rwa rdVe n tu re s
1 9 9 0
Amylin1 9 8 7
C yte l1 9 8 7
Bio s ite1 9 8 8
Pyxis1 9 8 7
Vica l1 9 8 7
Me d me tr ic1 9 8 9
Uro g e n1 9 9 6
Birn d o rfB io te ch n o lo g y
1 9 9 0
Na n o g e n1 9 9 1
G e n e sys1 9 9 0
So ma tix1 9 9 2
Se q u a n a1 9 9 2
C o mb i-C h e m1 9 9 4
C o rixa1 9 9 4
Ap p lie dGe n e tics
1 9 9 4
Tria n g lePh a rm a ce u tica ls
1 9 9 5
G e n Q u e st1 9 9 5
Firs t Denta l Health1995
G ryp h e n1 9 9 3
C yp h e rg e n1 9 9 3
D u ra1 9 9 0
C o lu mb iaHCA1990
Kin g s b u ryPar tners
1993
C h ro ma g e n1 9 9 4
D ig iR a d1 9 9 4
No va tr ix1 9 9 4
C h u g a lPh a rm a ce u tica ls
1 9 9 5
G e n ta1 9 8 8
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0-50 50-250 250-1000 1000 or more
Initial Employment Size in 1998
Tota
l J
ob
s C
rea
ted
1,000 + Jobs
250 to 999
50 to 249
10 to 49
Less than 10 Jobs
Amount of Gain
Large firms added few jobs
60% of the jobs were created by small firms
Small firms that become big firms are how we get sustained growth
Technology Job Creation and Destruction, by Age of Firm, 1998-2002
-8,000
-6,000
-4,000
-2,000
0
2,000
4,000
6,000
8,000
Firms more than 40 years old Firms less than 10 years old
Younger technology firms are the region’s growth drivers
Some Good News:University-related technology spin-offs
250
600
1,088
1,276
2,591
2 37
27
89
0
500
1000
1500
2000
2500
3000
1950's 1960's 1970's 1980's 1990's
0
10
20
30
40
50
60
70
80
90
100
Total Jobs Total Firms
175 Spin-off Firms, 6000+ jobs
IT
Orbits
These new technology companies form “Orbits” over time, spinouts of existing companies are sustaining growth
Biotech “Orbits” have been heavily influenced by the universities,we are just reaching the stage where companies create spinouts
Bio Orbits
Regional Commercialization Initiatives
IdeaDevelopment
Stage
Start-UpCompany
Stage
Early GrowthStage
Growth/RapidGrowth Stage
DiscoveryStage
Life SciencesGreenhouse
Digital Greenhouse
Idea Foundry
Idea Foundry
InnovationWorks
Un
iver
sity
Res
earc
h, C
om
pan
y R
esea
rch
, &
En
trep
ren
eurs
UniversityTechnology
Transfer
VentureCapital
DCEDBFTDA
ManufacturingTechnology
InformationTechnology
LifeSciences
RoboticsFoundry
University Entrepreneurial ProgramsPantherLabs, Limbach Center, & GSIA
Support Services
Pittsburgh Tech Council, Catalyst Connection,PRA, etc.
Pittsburgh Gateways
LaunchCyte
Small Business Development
Business Plans – Small Business Development Centers (SBDCs) University of Pittsburgh Chrysler Center, Duquesne University St. Vincent College
Marketing Don Jones Center
Finance For StartupsFederal SBIR – Small Business Innovation
Research SBICs – Small Business Investment
Companies
State Opportunity Grants (PA) Ben Franklin Partners – Innovation Works
Venture Capital
Only ¼ is from Local Capital
Locations of Firms Funding Pittsburgh Biotech Companies, 1982-2001
Bergen-Passaic, NJ 3%
Boston, MA-NH 14%
Chicago, IL 5%
Hartford, CT 3%
Little Rock-North Little Rock, AR 3%
Minneapolis-St. Paul, MN-WI 3%
New York, NY 5%
Philadelphia, PA-NJ 8%
Pittsburgh, PA 26%
San Francisco, CA 19%
Rochester, MN 3%
Allentown-Bethlehem-Easton, PA
5%
Middlesex-Somerset-Hunterdon, NJ
3%
1996-2000 Venture Capital Flows IN and OUT of Pittsburgh
-$150 -$100 -$50 $0 $50 $100 $150 $200 $250 $300 $350 $400
DC
Unknown
Allentown
MD
OH
IL
CT
CO
NY
NC
NJ
VA
MA
FL
TX
CA
Other
P ittsburgh
Lo
cati
on
of
Ven
ture
Rec
ipie
nts
Amount of Investment ($ Mil)
IN OUT
Source: Venture Economics
Venture Capital Flows
Business Finance Quiz
$21 Billion
$135 Billion
$240 Billion
$9.9 Trillion
Federal contracts & procurement
Federal R&D funds
US business and consumer spending
Venture capital investment
Mentoring
Comprehensive Idea Foundry Launchcyte Innovation Works
Targeted Don Jones Center Duquesne / Chrysler SBDC
Networking
General Chamber or Tech Council Business association
Industry focused IT Network
Professional Focused CEO or CFO network, HR Assoc. TEC
Innovation Works
A Pennsylvania Ben Franklin PartnerMax of $100,000 for prototype and proof of concept (x3)Max of $300,000 for market entryEquity investments up to $500,000Disburse $1.5M per quarterQuarterly cycle, 60-90 day turn-around
The GO KIZ acts as the collaborative forum for
technology-based economic development in Pittsburgh
Researchand
Development
EntrepreneurialAssistance
Business Climate andEconomic Development
Support
Pittsburgh Digital Greenhouse
Growing a Chip Design Cluster in the regionExpect to create 1500 design jobs in 3 yearsPartnership with Universites, Local Development Organizations Cable Design, Cisco, Compunetix, Oki, Sony,
Intelligent Micro Design (IMD), Neo Linear, Inc., Sima Products Corporation, Steel River Systems, Videon Central Inc, Vocollect Inc.
Pittsburgh Life Sciences Greenhouse
Focus on the four pillars Drug Discovery Tools and Targets Therapeutic Strategies for Neurological and
Psychological Disorders Tissue / Organ Engineering Medical Devices and Diagnostics
Programs cover ALL needs: Capital, Space, Business Expertise, Networking and Technical Assistance
©2004 Idea Foundry
24
Our bet: $5.7 million of private risk capital on local biotech
We start companies from scratch• Technology review (>100 annually)
• Application development (refocus)
• I.P. strategy (create monopoly)
• Seed funding ($150K-$500K)
• Licensing (equity up-front)
• Business development (early deals)
• Executive recruiting (top local talent)
Life. Science. Business
Our model: Taking the biggest, earliest risk
LaunchCyte
Biotech Convergence
IT joining a new wave of BiotechLeverages Region’s Life Sciences R&DCenter for Biomedical Informatics (University of Pittsburgh)Pittsburgh Tissue Engineering InitiativeBioVenture / Life Sciences Greenhouse
Intelligent Operating Room
Suite of state-of-art technologies to assist surgeons
surgical robots for minimally invasive procedures
voice-controlled ancillary equipment to decrease personnel & time
integrated at and in clinical trials at UPMC Presbyterian Hospital
Pearl - The Nurse Robot
Indoor mobile robot for elderly functions as assistant,
guardian, companion, and monitor
personality
collaborative project of Carnegie Mellon and Pitt
Example university spin-offCASurgica, Inc.
commercializing the HipNav™ surgical guidance system developed at CMU & UPMC Shadyside Hospital
Example large, established company
builds robotic pharmaceutical distribution systems and related equipment for tracking and dispensing medications
Where Does the University Fit?
Assets
Quality & quantity of inputs, producers, resources
Innovation Push
Firms are market, growth and innovation oriented
InnovationPull
There is sufficient local demand or sensitivity to external demand
(Economic)Diversity
Depth & breadth in a supply or value chain
Note: Based on Porter’s Cluster Diamond
University Factors
Strong base of R&D Scale is required
Breadth of involvement Address the range of
needs
Regional alignment Transfer to nowhere
Active Regional Engagement
Active Industry Involvement
Active Tech Transfer
Regional B
enefit
High
Low
Size does matterAnnual R&D Spending and Start Ups
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
$900,000,000
$1,000,000,000
- 5.0 10.0 15.0 20.0 25.0
Number of Start Ups
R&
D S
pen
din
g
Johns Hopkins
University
Massachusetts Institute of Technology
Technology Transfer Options
Source: Gary Matkin, “Spinning off in the U.S.”, OECD Workshop on Research-based Spin-offs, 8 December 1999
Getting the most out of “U”
How many bets can you make, and how bigNot immune to the product cycle & marketBeware of false assetsWhat leverage does the university provide University provides the capacity to transform Requires broad involvement & alignment Stop the leaks and fill the gaps
Regional Impact ScorecardUniversity
State
Cluster
Market
Oriented
Innovative
Variety Region
Foc
used
Str
ateg
y
Tal
ent P
ool
Eco
nom
ic
Div
ersi
ty
Regional FocusSupport for Innovation
Effective Basic Services
R&D Base
Breadth of Involvement
Regional Alignment
High RegionalImpact
Least Critical
Most Critical