Today, 15 to 20 percent of MIT graduates join startups. Ten years ago, only about 1.5 percent did, according to Vladimir Bulović, associate dean for innovation and a professor at MIT.
And yet, despite this dramatic shift, corporations obviously still hold tremendous economic power. In Cambridge, MIT sits at the center of a square mile densely packed with startups, but also with outposts for tech giants—Google, Microsoft—and laboratories for the world’s largest biosciences and pharmaceutical companies.
“Startups are much more efficient at getting to new markets,” said Bill Aulet, director of the Martin Trust Center for MIT Entrepreneurship, speaking Dec. 1 at the MIT Startup Ecosystem Conference. “They don’t have anything to lose. You have an install base, you’ve got to be careful. You have an existing business model, you’ve got to be careful.”
So what are the best avenues for large companies to bring startup innovation into their organizations?
At the conference, startup founders testified to the diverse values established industry partners can offer startups. David Lucchino’s Semprus Biosciences invented a polymer coating for medical products, but had to convince a medical device manufacturer to work with the startup to develop a catheter. Lucchino, SF ’06, later sold the company to another medical device company. Yoel Kelman, MBA ’14, closed series A funding on his home heating company Ecovent in June. Emerson Electric, a Fortune 500 company, led that round.
And as innovation shifts to smaller companies, responsibility for employee growth and training has shifted from private industry to colleges and universities like MIT, Bulović said. The institute also serves as a facilitator of networking and collaboration.
John Chisholm, the chair and president of MIT’s worldwide alumni association, said managers looking to partner with or acquire startups, innovation, and talent, should consider mentorship and leadership roles through programs like the MIT Venture Mentoring Service and MIT alumni clubs. Shoe leather helps, too.
“Very often the smallest booths at the trade shows, the 10-by-10s at SEMICON or at Consumer Electronics Shows, will be the newest innovations that haven’t been discovered yet,” Chisholm said.
Still, most members of a closing conference panel said a sink-or-swim mentality, a sense of personal ownership, and efficiency at finding new markets give startups an advantage in developing innovative ideas.
“The world is changed by small groups of people who are committed, so I don’t think you should expect that innovation’s going to shift to not coming out of startups anytime soon,” said Reshma Shetty, PhD ’08, the co-founder of Ginkgo Bioworks. “It’s an efficient innovation vehicle, so why run from that?”