The World Bank categorizes one in five Indian citizens as poor. But the country is making progress. In 2015, 170 million people (12.4 per cent) lived in poverty, down from 29.8 per cent in 2009, and Indian Prime Minister Narendra Modi, who was born into poverty, has made economic inequality a priority of his administration. Stand-Up India is one initiative Modi is using to correct the economic imbalance. The program provides bank loans to budding entrepreneurs from the lowest economic strata. Student Start-Up, a spin-off program, aims to create 100,000 technology-based student startups and a million employment opportunities within ten years.
“To tackle jobless growth, we must comprehend multifaceted issues, craft viable solutions, and extract answerable questions from the clutter of public needs,” says Sanjay Inamdar, SF ’05, chairman of Student Start-Up. “This requires multiple tools, one of which is energizing entrepreneurship at the university level. Governments can’t provide jobs to everyone. People have to provide jobs to other people. We’re trying to grow a whole generation of self-starters who create jobs for themselves and for others.” The initiative, Inamdar adds, will create innovation laboratories within universities and groom students to take up entrepreneurial careers and launch new enterprises that generate jobs and societal solutions.
“Work hard and keep your head down—that’s Chile’s unofficial motto,” says Rocio Fonseca, SF ’14, executive director of Start-Up Chile. “The goal of the average Chilean is to get a job working for a corporation.” Fonseca adds that small and medium-sized businesses in Chile are not innovation driven. “They tend to err on the side of playing it safe—and that complacency curbs growth and evolution. Chile is not an entrepreneurial culture.”
In 2010, the Chilean government launched the ambitious enterprise accelerator Start-Up Chile to help it turn that national attitude around. The program helps early-stage, high-potential entrepreneurs bootstrap their startups using Chile as a platform to go global. With an annual portfolio of 200-250 companies, Start-Up Chile has fast become the best business accelerator program in Latin America and is counted among the top five worldwide. It’s also the cornerstone of Chile’s national economic development strategy.
Start-Up Chile is actually a collection of three programs: a pre-acceleration program for early-stage enterprises, a seed program for startups with a functioning product and early validation, and a follow-on fund for top performing startups looking to scale up in Latin American and globally. With robust training programs, workshops, peer-to-peer mentoring, and a busy calendar of networking events, Fonseca fosters a fertile environment that connects Chilean innovators with early-stage, high potential entrepreneurs around the world.
We live in a world of matchmakers. Airbnb matches people needing a room to people with an extra to rent. Lyft matches people needing a ride to people with a vehicle and an empty seat. eHarmony matches people looking for love with other people looking for love. The bottom line is, quite simply, supply and demand…with a twist. Multisided platforms are about matching one set of customers with another set of customers. And truth be told, bringing two customer groups together does not always result in a match made in heaven.
In their book Matchmakers: The New Economics of Multisided Platforms, MIT Sloan Dean Emeritus Richard Schmalensee and coauthor David S. Evans, explain how successful matchmakers excel and how entrepreneurs in this realm can improve their chances of survival. Schmalensee and Evans were among the first economists to analyze this marketplace and have consulted for some of the most storied platform businesses in the world.
Rich with stories from phenomenal winners and ignominious losers, their much-talked-about book guides the reader through this complex area of enterprise.
Return on investment. It’s not just an economic measure. Ray Leach, SF ’02, CEO of JumpStart in Cleveland, Ohio, believes that social ROI is every bit as important—and as impactful as economic ROI in improving the quality of life of a region. A national thought leader at the intersections of public, private, and philanthropic partnerships, Leach strives to accelerate job creation and increase economic outcomes in neighborhoods, regions, and countries. Co-founder of four tech startups, he was also a founding member of the U.S. Commerce Department’s National Advisory Council on Innovation and Entrepreneurship (NACIE).
Leach founded JumpStart to work in tandem with government efforts to boost quality of life in Northeast Ohio through entrepreneurship. His diverse team of investors, marketing professionals, mentors, and advisors offers expertise to the founders of new or growing startups. CoverMyMeds, one of JumpStart’s portfolio companies, was just acquired for $1B+. With JumpStart’s nurturing, the company grew from three people to more than 500 in eight years.
Leach believes that to promote entrepreneurship, governments and nonprofits like JumpStart must first create an environment in which entrepreneurial ventures can thrive. JumpStart provides mentorship, education, and introductions to investors—but Leach says that to be truly effective, he and his team needed to get creative. “We have begun to focus on a broad variety of problems that prevent the community from thriving. We realized, for example, that a lot of startups and established companies need employees, but those companies often are located in industrial parks in the suburbs. The unskilled labor they would like to hire resides in urban centers. We need to find out how to bring the workers and the jobs together. In other words, we’re not just looking at job creation, but reducing unemployment.”
Alan Mulally, SF ’82, the legendary turnaround-artist who resuscitated Ford Motor Company, has always stayed focused on what’s next. An early proponent of 3D printing, he said in an earlier SF Leadership Blog post, “Metal is in the near future. With the level of accuracy that is possible through this process, we are seeing a sudden and dramatic improvement in the quality and manufacturability of parts. It’s both economical and efficient because spare parts don’t have to be warehoused. Almost any part can be produced on demand—and its file can live in the cloud. Three-dimensional printing will revolutionize the manufacturing world.”
The company that arguably is creating the noisiest buzz in the 3D space is Burlington, Massachusetts-based Desktop Metal—one of BostInno’s “17 Boston tech companies to watch in 2017.” CEO Ric Fulop, SF ’06, launched the startup in October of 2015 to bring metal 3D printing to design and manufacturing companies across the globe. Fulop and his team have raised $97 million in equity funding, including a $45 million round of funding led by Google, BMW, and Lowe’s. Previous investors include NEA, Kleiner Perkins Caufield & Byers, Lux Capital, GE Ventures, Saudi Aramco, and 3D printing leader Stratasys. Desktop Metal is preparing for a product launch in late 2017.
Scott Stern’s goal is to improve the global economy—one local economy at a time. The David Sarnoff Professor of Management of Technology and cofounder and director of the Innovation Policy Working Group at the National Bureau of Economic Research is working to strengthen regional economies around the world through entrepreneurship.
Stern makes a distinction in the kind of entrepreneurship he’s trying to promote—the innovation-fueled kind. Innovation-driven entrepreneurship (IDEs) involves the development of global enterprises that are commercializing technical or societal innovations with a clear competitive advantage and high growth potential. Not all new enterprises can be categorized as IDE—an individual launching a chain of dry-cleaning shops, for example, would be an entrepreneur of a small-medium enterprise (SME), not of an IDE.
Stern’s efforts are part of the MIT Regional Entrepreneurship Accelerator Program (REAP). During two-year engagements with REAP, partner regions around the world form multidisciplinary teams to build and implement customized regional strategies to enhance their IDE ecosystems.
Jobs. It may be the most loaded four-letter word in the American lexicon. The Great Recession shaped the national mindset so that job creation and economic development have grown into a veritable obsession. Nearly every political leader ranks the generation of employment opportunities at or near the top of his or her agenda. With all this focus on jobs, however, we have yet to develop a durable consensus about how to ensure that high-growth businesses survive and thrive. And unless they survive and thrive, they can’t very well generate new jobs.
Scott Stern, David Sarnoff Professor of Management of Technology and cofounder and director of the Innovation Policy Working Group at the National Bureau of Economic Research, has spent the last decade deconstructing this challenge from two perspectives. In the classroom, he has developed a curriculum that provides innovation-oriented entrepreneurs with a robust set of tools to make strategic decisions in a disciplined and systematic way. He has written 15 cases on the subject in the last five years and has made all the course materials available free of charge on the Entrepreneurial Strategy class website.
To date, MIT alumni have founded more than 30,000 companies employing 4.6 million people and producing annual revenues of $1.9 trillion. That makes the Institute roughly equivalent to the world’s 10th largest economy. And those stats are ticking up daily. Seventeen of the young entrepreneurs that Forbes magazine recently named to its “30 Under 30” list for 2017 are MIT students and alumni. Their buzz-worthy startups are widely diverse, ranging from a malaria detection device to all-natural cosmetics. Here’s the line-up:
- Ricky Ashenfelter, MBA ’15, cofounded Spoiler Alert, an online platform to help businesses manage food donations and reduce food waste.
- Noam Angrist, SB ’13, cofounded the nonprofit Young 1ove to develop successful sexual health information campaigns for African youth.
- John Lewandowski, a PhD student, launched Disease Diagnostic Groupto produce a handheld malaria detection device.
- Kwami Williams, SB ’12, started MoringaConnectto create cosmetics and snacks from Moringa trees growing in Ghana.
- Archit Bhise, SB ’13, andVinayak Ramesh, SB ’12, founded Wellframe, a care management app and dashboard for health insurance companies and patients.
How does a company build and keep consumer trust—and more important, win it back when that trust has been compromised? Thanks to viral video, the world has seen United Airlines “involuntarily deboard” a passenger, to use the airline’s term, and drag that passenger kicking and screaming from a legitimately purchased airline seat. The result? In the days following the incident, customers cut up United credit cards, shares in United Airlines stock slipped by 4%, and the company’s market value plummeted by $1 billion.
How can a company like United that has lost consumer trust gain it back? MIT Sloan Professor John Hauser says that it’s not enough to tell consumers that they can and should trust a company. “It’s critical to actually prove, again and again, that a company and its products can indeed be trusted – and customers must be provided with tangible, observable proof that a company has changed its ways.”
Four years ago, Hauser, MIT Sloan professor and former dean Glen Urban, and Gui Liberali of the Erasmus School of Economics in Rotterdam published a study on trust-based marketing called “Competitive information, trust, brand consideration and sales: Two field experiments.” The team tracked four marketing strategies by an American automaker with an ailing brand. The company had suffered from decades of negative publicity over the quality of its products and was working on several fronts to correct public perceptions.
If there’s a universal malady that strikes entrepreneurs, it’s burnout. A startup can consume its founder, leaving no time or energy for a personal life. Leadership and decision-making suffer as well as relationships with families and friends.
Jag Gill, SF ’13, founder and CEO of the global apparel startup Sundar notes that when you’re passionate about your business, it can be difficult to turn it off. “It’s easy to lose track of other important aspects of your life. It’s essential to have personal rituals built into your day. The gym, family time, a regular dinner with a friend. I like to say that if your time isn’t measured, it’s not managed.”
Alan Yan, SF ’07, founder of several successful enterprises, including AdChina, which was acquired by Alibaba in 2015, says he always makes sure to choose life over business. Enterprises come and go, he says, but family and friends are forever. “People are not machines. We are not digital action figures.” Yan made a decision to sell AdChina, in part, because a member of his family needed to move to California for health reasons. “I believe—and I have experienced this—that when you have the right balance between your personal and professional priorities, you function better in all areas of your life.”