Finding Next-Gen Founders & Ideas from Labs to Market
Sharing key learnings from mentoring an MIT team in the NSF/I-Corps program
In my few years as an angel investor, I've learned that building a robust support network for founders sets me apart.
Another differentiating point is that I find extraordinary founders before their companies are obvious opportunities.
As a reminder, PaperJet Ventures invests in founders with bold and disruptive ideas at the earliest stages.
This summer, I mentored a promising team out of MIT through the National Science Foundation's Innovation Corps ("I-Corps") program.
Before I forget, here is a quick shoutout to Databento's founder & CEO, Christina Qi, for the intros that led to this opportunity.
While mentoring a research team is a new experience for me, it undoubtedly aligns well with PaperJet Ventures' goal:
Invest deeply in building relationships with future founders before they start their entrepreneurial journeys. (As a joke with my fellow angel investor friends, I refer to this as my "pre-pre-seed strategy").
Get a glimpse of the future with technological innovations from the research labs (great examples include GPS and computer vision) that could shape the future and launch future trillion-dollar industries.
In this post, I will share some of the significant learnings and discoveries from this mentoring experience, including:
Institutional research labs are vital to the US innovation ecosystem, given their long history of bringing game-changer technologies to the world.
How the I-Corps program prepares scientists and engineers to bring innovations from labs to the market.
Startup founders who are reading this might answer questions such as:
Is there a path to start a company from these innovations?
Is being a founder the right direction to take for the next step in your career?
A Brief History of Research Labs
First, we need to understand the importance of research labs to the US innovation ecosystem.
Emerging technologies from institutional research labs funded by large governmental, academic, and corporate institutions have existed for a while.Â
One of the more prominent research programs in the world is the Defense Advanced Research Projects Agency ("DARPA"), a research and development agency of the United States Department of Defense. DARPA is responsible for the military development of emerging technologies and plays a vital role in major technological breakthroughs that we are familiar with today, including the Internet, GPS, computer mouse, drones, and many more.
University-affiliated research labs, including MIT and Stanford, have launched many significant innovations such as computer vision, email, graphical user interfaces, and blockchain.
Larry Page and Sergey Brin developed PageRank at Stanford University before founding Google. Nonprofit research labs such as SRI International gave us the first surgery robot, Davinci, the first virtual personal assistant, Siri, and many more. For more information about the history of institutional research labs, here is an excellent read about this subject.
Ideas to Market
The following chart provides a high-level roadmap of how research lab ideas are commercialized and launched to the market.
In the first stage, many university research labs work on foundational research in essential areas such as material science and biology.
Once teams such as our MIT team achieve a technological breakthrough, the next stage is to talk to users and companies in the Customer Discovery process, including Use-Inspired Research and Proofs-of-Concept, as shown in the chart above.
The National Science Foundation ("NSF") / I-Corps program helps the research teams to transition to the next stage by providing an immersive, seven-week experiential training program that prepares scientists and engineers to extend their focus beyond the university laboratory.
"The high-level goal of this program (I-Corps) is to increase the odds that publicly funded research can create impacts on society." - Roman Lubynsky, Executive Director at MIT I-Corps.
I-Corps serves as a bridge connecting the worlds of academia and industry. It encourages university teams to connect with companies, associations, and sometimes government agencies.Â
These meetings aim to grasp what users genuinely need and gather valuable insights about the industry environment. These insights guide how to effectively bring their innovations to the market for commercial success.
Each university-affiliated I-Corps team typically consists of an Entrepreneurial Lead (EL), a Technical Lead (TL), and an Industry Mentor (IM). As an IM, my role is to guide the team to derisk essential product and business developments by:
Help identify customers for interviews and make introductions to arrange some interviews.
Review and critique team presentations.
Facilitate reflection on and integration of customer feedback.
Be a sounding board for business model canvas (BMC) elements, a strategic management template for developing new business models. Here is an excellent guide if you are interested in learning more.
Customer Discovery
The Customer Discovery process aims to guide startups toward building the right products for the right customers. Here are the typical steps:
Observing and defining a phenomenon (problem or market need)
Developing a hypothesis about a solution to the problem (business idea)
Experimenting to test the hypothesis (getting "out of the building")
In my previous Product Manager role, I conducted our company's customer interview process by speaking directly with enterprise customers. Through these interviews, we can extract vital insights guiding our product and business developments.
In comparison, I-Corps program directors pushed teams to gather insights from 100+ customer interviews during the 7-week program and accomplish what typically takes 18 months or more.Â
In addition, teams are not allowed to disclose the tech or what they are working on (which makes it challenging) during the interview, as it might bring bias to the meetings.Â
Questions are generally structured to extract insights and learnings, such as:
What are the vital user needs?
Is there a significant improvement over the existing solution?
Is there a substantial value to this potential solution?
What are the primary requirements (from product form factors to regulations)?
At this stage, teams are also trying to figure out a business model from this discovery process. If there is a potential problem/solution fit, teams would determine if they should start a company or partner/license the technologies.
Quality Matters More than Quantity
While finding 100+ companies to interview in such a short span is daunting, I saw many teams are resourceful and quick learners to meet the quota by leveraging intros from their networks.Â
While understanding user needs and pain points is vital to building the right product for the right customers, it's equally crucial to understand the degree of the potential customers' willingness to pay for the solution.Â
As part of my preparation, I often researched the target company beforehand so that I could guide a portion of the interview conversations towards:
Understand the target customers' business model and how our product can align with their strategic goals.
Obtain better contexts to determine if our solution is a potential vitamin or pain killer.
How does the decision-making process work with all the stakeholders within the company and external partners?
Derisk Market, Sales & Distribution
For many startups, finding the initial market segment to target the initial customers (aka the beachhead market) for a new product is challenging when there are multiple possible markets to consider.Â
While the I-Corps program provides a structure for teams to conduct as many interviews as possible during the 7-week program, my main feedback to the directors was teams should spend more time on deeper conversations that can help them figure out:
What's the right beachhead market to enter that aligns towards near-term and long-term expansion to avoid the risk of a niche market player?
Derisk the long sales cycle process that often plagues many early-stage companies.
Understand the complexity of the ecosystem to provide insights into distribution/partnership plans and figure out their trade-offs.
Self-Discovery - Should I be a Founder or Work For a Startup?
For many scientists and engineers, the I-Corps program forces many intelligent PhDs to go outside their comfort zones (i.e., labs 😀 ) and speak to as many people as possible.
Through this experience, they can get a glimpse of startup life to determine if entrepreneurship or working for startups is the right path for their career.
My Reflections
Mentoring at the I-Corps program certainly provided some flashbacks of my former life as a startup founder and product manager.Â
Many founders could benefit from a similar rigorous structure that can help them validate their ideas and learn how to build products and companies properly in the early days by spending more time with customers instead of fundraising.
Overall, it has been a great experience to see the future class of founders and how tech comes out of the lab to the market. The mentoring experience aligns with my goals as an early-stage investor.
In addition, the I-Corps program provides teams with plenty of insights but only some of the answers they seek.Â
In many instances, some teams might need additional customer discovery to figure out their beachhead market and determine whether starting a company is the next step.
Lastly, for anyone asking if any possible deal flow is coming out from this mentoring experience–that will be a subject for a future post.Â
My current focus is to continue nurturing these future founders' deep relationships and learn more about the innovations.
Final Note
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For any potential founder currently at Big Tech or fast-growing startups, my fellow angel investor friends and I would love to chat and connect you with our network of founders, experts, and investors.
If you want to learn more or have more questions, please contact me on X (fka Twitter).
Thanks to Jen Liao, Jaireh Tecarro, Alejandro Sevilla, and Haining Gao for reading the drafts of this post.
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