When I came home from Afghanistan with the military, I was ready to focus on the things I cared about most. I saw how short life could be, and it seemed as if I didn’t have much time to waste. I had been a serious songwriter and musician since my early teens, but recommitted myself to this passion after this deployment. During my transition out of the military, right before entering MIT Sloan, I ran into a guy named Chris Dorsey at a neighborhood blockparty. Within a few minutes, Chris found out I was a songwriter, and I found out Chris was a drummer. After the party, I sent Chris a bunch of my home-recordings and, within a month or so, we headed into the studio to record our music. We experienced a number of inefficiencies while in the studio; but, after recording, we were caught in what felt like a never-ending feedback loop that surrounded the music we had recorded. It was difficult to review the audio data outside the studio (the way we needed to review it), to iterate and polish our music. This, of course, translated into our spending more time in the studio, and our spending more money than we had ever planned to spend. Every independent musician knows this struggle; and, while in the studio, Chris and I laid the initial seeds for AudioCommon—the company we would later co-found to enable Cloud collaboration during the earliest stages of the music creation process.
As we continue to recover from a global recession and look to the future, it’s imperative that we build more entrepreneurial-driven academic institutions. Not only will this provide the foundation for much-needed innovation, it also will strengthen economies by providing jobs and fostering sustainable growth in enterprises.
Lessons can be learned from universities around the world about accelerating entrepreneurship. They can provide the model for how to create clusters of commercially successful startups around research-driven institutions. However, the success of that model largely depends on the role of the business school within that university setting.
I was recently invited to give a talk for Knowledge Stream in Russia about entrepreneurship and cross-cultural issues. This is similar to a Ted Talk, but I spoke via videoconference from Cambridge to a live audience in Moscow. There is growing interest in entrepreneurship in Russia, especially among younger people, but it’s still a very new and emerging area. In fact, Russia is one of the countries with the lowest entrepreneurial intention rates. The request for a talk on this topic was encouraging.
I began my talk highlighting some of the trends worldwide in entrepreneurship. I analyzed many studies to identify these trends, but one of the most useful was conducted by the Global Entrepreneurship Monitor. According to GEM, we’ve seen a big increase in early-stage activity since 2011. In 16 developing economies, it has increased about 25%. Three developing countries in particular saw above average rates of growth in terms of new startups: Argentina, Chile and China.
Intent to start a business is highest in emerging economies. People in those areas are most likely to see opportunities and believe in their ability to start a business. They hold entrepreneurship in high regard. Expectations to start a business are also higher in certain developing economies like China, Chile and Brazil. Interestingly, those measures tend to fall as countries rise in economic development.
Concern is mounting that the venture-capital model might be broken. Returns have been relatively poor in the past decade. More importantly, perhaps, the innovation outcome has been somewhat disappointing. As PayPal cofounder Peter Thiel complained, “We wanted flying cars; we got 140 characters.”
One key reason for this might be the way venture-capital funds are typically structured. Such funds have been organized for decades as limited partnerships, raising commitments among external investors to be invested and returned within 10 years.
During my recent visit to Seattle with MIT Sloan’s Technology Club, the city impressed me as a vibrant, outdoorsy town with a dynamic technological ecosystem. And man, do Seattleites love their teams.
As a native of Boston — a city famous for its rabid sports culture — I have to hand it to Seattle, whose fans regularly cause earthquakes by cheering for their football team. (According to seismologists, Seahawks fans shook the ground under CenturyLink Field during the recent playoff game against the New Orleans Saints, causing the second Seattle fan-generated earthquake in three years.) Respect.
Fervent fans aside, what I found most striking about the city was its entrepreneurial spirit. Sure, I knew about the creative work done by Seattle’s blue chip behemoths: Microsoft and Amazon. But I hadn’t appreciated the city’s thriving startup culture.