Learning through experience

Assistant Professor Matthew Marx brings new insight into institutional barriers

Matthew MarxMatthew Marx

Matt Marx was still in high school when he started thinking of ways to make computers easier to use. “My Dad was an electrical engineering researcher,” he says, “and we had one of the very early computers at home. So I learned to program when I was in eighth grade, and soon started thinking that it would be a lot easier if you could talk to your computer instead of remembering all of these arcane commands.” It seems it wasn’t too long before Marx was working to make that exact idea into a reality. After earning a BS in symbolic systems from Stanford University and an SM in media arts and sciences from MIT, he went on to develop speech recognition technologies with a number of small start up companies in both Boston and California.

During this time Marx developed seven patented technologies, and, as VP of services at Tellme Networks, he led a team of 75 in growing annualized revenue from $5 million to over $100 million. But he also began to notice a number of very important institutional barriers, which can significantly hinder the ability of small, newer companies to compete.

Now, as assistant professor of Technological Innovation, Entrepreneurship, and Strategic Management he brings his entrepreneurial expertise to MIT Sloan, where he continues to research the often unseen systematic barriers that small companies are burdened with.

A second look at employee non-compete agreements

Through his experience working in managerial positions in both Boston and Silicon Valley Marx says he began to notice a number of important differences between these two business climates, especially in regard to employee non-compete agreements.

Enforced in Massachusetts but not in California, non-compete agreements prevent employees from taking a job with a competitor for a full two years after leaving a company. And though they were originally intended to protect trade secrets, Marx found that they there were a number of unintended side effects.

Marx discovered that in the mid eighties, the state of Michigan changed from a California-like approach to non-compete agreements to one more similar to that used by Massachusetts. Marx was then able to use the state as a sort of test case. While he found that much of the workforce stayed in their jobs longer after the change, he also found that more specialized workers like nanotech experts or speech recognition specialists were left with far fewer in-state options, and were often far less willing to take a risk with a small company.

“A lot has been written about the difference between Boston and Silicon Valley,” says Professor Marx “People are always looking for the secret sauce that made Silicon Valley what it is and I thought that even if it is not the secret sauce, maybe this is one of the key ingredients that people just aren’t aware of.”

A tighter coupling

“I have only been here a couple of months now, but it has been like coming home in a way because I went here for grad school and I have been coming to seminars at MIT for years. They have a group here that is really focused on innovation and entrepreneurship and I think what is unique about MIT is that it really links the research on entrepreneurship with the practice. As a researcher and a faculty member your focus is on your research, but things are happening all around. You get the sense that the students here are thinking about starting companies. They’ve got great technical ideas that they want to get out into the world, and I just feel like there is a bit tighter coupling here than at other places I’ve been. The Entrepreneurship Center is really vibrant and active; it isn’t just some office somewhere. We coordinate the courses with them. So they know what the students are studying and they know what we are teaching.”

Related Links