Business & Economics

The government starts an incubator: The NSF Innovation Corps

Steve Blank

Over the last two months the U.S. government has been running one of the most audacious experiments in entrepreneurship since World War II.

They launched an incubator for the top scientists and engineers in the U.S.

This week we saw the results.

63 scientists and engineers in 21 teams made 2,000 customer calls in 8 weeks, turning laboratory ideas into formidable startups. 19 of the 21 teams are moving forward in commercializing their technology.

It was an extraordinary effort.

Your Country Needs You
In July I got a call from Errol Arkilic, a program manager at the National Science Foundation (NSF), the $6.8-billion U.S. government agency that supports research in all the non-medical fields of science and engineering.  “We’ve been reading your blog about your Lean Launchpad class.”  Wow, that’s nice, I thought, a call from a fan. No, the conversation was about to get more interesting.

“Our country needs you.” Say what? “Part of the NSF charter is to commercialize the best of the science and engineering research we fund. We want to make a bet that your Lean Launchpadclass can apply the scientific method to market-opportunity identification. We think your class can train scientists to start companies better than how we’re doing it now.”  Uh oh, where’s this heading?  “We want to select the best of our researchers, pay them $50,000 to take your class and see if we can change the outcome of their careers and their research.”

“That’s great, maybe I can set up a class for you next year,” I replied.  The answer shot back, “We want the class to start in 90 days,”

I remember thinking, “Wow, whoever’s on the other end of phone sounds just like an entrepreneur, they were asking for the impossible.”  Just as I was computing whether this was possible, he added, “And we want to bring 25 new teams every quarter.”

So of course, I said yes.

While they’ll never admit it, the National Science Foundation was starting an incubator– the Innovation Corps – to take the most promising research projects in American university laboratories and turn them into startups.

The Innovation Corps – Using the Lean LaunchPad as an Incubator for Scientists and Engineers

The Innovation Corps Startup Team
These weren’t 22-year olds who wanted to build a social shopping web site. Each of the teams selected by the NSF had a Principal Investigator – a research scientist who was a University professor; an Entrepreneurial Lead – a graduate student working in the Investigator’s lab; and a mentor from their local area who had business and/or domain expertise. And they were hard at work at some real science.

The I-Corps Incubator Program
Unlike other incubators, our Lean LaunchPad Class had a specific curriculum. We taught them the business model / customer development / agile development solution stack. This methodology forces rapid hypothesis testing and Customer Development by getting out of the building while building the product. (The mentors in our program are there to support the methodology, but aren’t there to tell stories.)

The gamble was that we could train Professors doing hard-core science, who had never been near a startup or Silicon Valley, to get out of the building and talk to customers and Pivot as easily as someone at a web startup.

The Scientists, the NSF and the teaching team were all going to go where no one had before.

Given that Silicon Valley had started with scientists and engineers not MBA’s, I thought this was a bet worth making.

The Curriculum
Since the teams were in Universities scattered across the U.S., we couldn’t keep them in Silicon Valley for all 8 weeks, so we tried an experiment in teaching remotely.

First, we brought all 21 teams to Stanford for 3-days of 10 hour-a-day classes inbusiness model design and customer development. After returning to their schools, they got out of their labs while they built their products. Once a week, via Webex,they presented their Customer Development progress on line to the teaching team and the other teams. Then it was our turn, and we lectured all the teams remotely. After 7 weeks they returned to Silicon Valley for their final presentations.

(The class syllabus is here. The class textbooks were “The Four Steps to the Epiphanyand Business Model Generation.”)

Assembling the Teaching Team
We recruited two veteran Venture Capital partners to be part of the 10-week teaching team: Jon Feiber, at Mohr Davidow and John Burke of True Ventures. Alexander Osterwalder joined us for the opening day, and Oren Jacob, ex-CTO of Pixar joined us for a finale.

The First Class
As the first class settled into their seats at Stanford I wondered if we were going to be able to get them to act like startups. Most of the Principal Investigators were professors. Some had their own labs managing large groups of researchers. Their average age was in the mid-40’s. Their mentors were at least that old. Only the Entrepreneurial Leads (the PI’s assistants) were in their mid to late 20’s.

Looking at them  I wondered if: 1) hard-core science and engineering projects could rapidly pivot, 2) if the Principal Investigators would simply “assign” the work to their graduate students. I thought about the common wisdom that only 20-year olds doing Internet startups could be agile. Some incubators would have labeled this group too old to be entrepreneurs. I smiled as I realized that I was older than most (but not all) of them.

The Stanford Lectures
Our first lecture was about 1) how to organize their thinking of what it takes to build a startup – the business model canvas and 2) how to test their hypotheses – theCustomer Development Process.

Since the first part of the lecture was about Alexander Osterwalder’s Business Model Canvas, Osterwalder flew in from Switzerland to teach slides 20-76. And since the rest of the slides were about Customer Development, I taught those.

http://www.slideshare.net/sblank/lecture-1-business-model-customer-development?from=ss_embed

The homework for the 21 teams in the next 24-hours? Come up with a business model canvas for their startup. And tell us how they will test each of their business model hypotheses.

As day one ended, I wondered what those canvases would look like.

Stay tuned for Part 2.

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Comments to "The government starts an incubator: The NSF Innovation Corps":
    • Anthony St. John '63

      “Whether resistance to global warming lies more in the hungers of American culture, or because our species is wired to ignore problems in some far-away future—this matters less now than it may have a few years ago, because the future has arrived.”
      Ref: California Magazine “Global Warming: Can We Adapt in Time?”

      The lack of urgency and effective actions to protect quality of life for future generations are preventing us from adapting in time, making it imperative for me to persevere because we must inspire innovators, such as those you are mentoring Professor Blank, to make the right things happen today.

      Among specific solutions, one is to accelerate development of our prefrontal cortex and another is to inhibit the ventromedial PFC, in order to control selfish tendencies that are destroying our civilization today.

      The paramount requirement for survival is that we must fast track advances in biology to maximize rational morality in order to adapt in time.

      Go Cal!

      [Report abuse]

    • Jolindy

      Professor Steven,
      I’m really really excited to read you.As a chiness freshman, I strongly feel
      the education gap between China and the U.S.I had a great interest to Berkeley.Because of buffett i fell in love with business,because of you i fell in love with Berkeley.It’s interesting.even,amazing.

      Look forward to see you soon, and exchange the academic problems with you.

      [Report abuse]

    • Anthony St. John

      Part 2. Highly Recommended Priorities for NSF Innovation Corps

      All of our marvelous innovations for the well-being of humanity could be in vain if we cannot curb our destruction of the environment and each other. It seems that our technology has not only outstripped our biology (see above comment), but it is going beyond our cultural ability to control it.

      WE MUST develop tools to program our biological systems as easily as we program digital ones. Thus it seems imperative that we develop enhanced powers for our brain, or fail to survive.

      BTW, one other imperative is that science needs a leader as charismatic as the late Carl Sagan. Right now, the faces of science are elected by book sales, TV specials, and pure self-promotion, while heads of scientific societies rarely function as public figures.

      There must be a better way to protect human survival, especially when international political leaders are making it almost impossible for the human race to survive.

      Our best and brightest innovators are our best bet to make the right things happen on a fast track, because the Ivory Tower culture can’t even find a way to communicate effectively with the public, except maybe on MSNBC.

      [Report abuse]

    • Anthony St. John '63

      Indeed, audacity is a paramount cultural value we must emphasize today, especially when scientific audacity is what is needed most when we must prove evolutionary biologists wrong about their conclusion that our brain cannot evolve biologically in time to help us save the human race from global warming. (See Ref. below)

      The most inconvenient truth is that our neuroscience labs just aren’t making the right things happen in time, especially when we are at rapidly increasing climate change risk.

      Is it possible to focus the brainpower of the NSF Innovation Corps on saving the human race?

      Ref: California Magazine “Global Warming: Can We Adapt in Time?”
      http://alumni.berkeley.edu/news/california-magazine/september-october-2006-global-warning/global-warming-can-we-adapt-time

      Merry Christmas.

      [Report abuse]

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