September 2005

The Entrepreneurship Ecosystem

Continued from page 2

By Katharine Dunn

Invention Rewarded
Entrepreneurship starts with novel ideas, and MIT is long on them. Each year, according to the TLO, Institute scientists receive more than $750 million in sponsored-research funding, which leads to about 400 new inventions. The TLO has more than 3,000 patents in its portfolio. MIT routinely ranks among the top three universities in the country in patents received, according to the U.S. Patent and Trademark Office. (In 2004, the top two were the University of California system and the California Institute of Technology.)

The campus organization that most visibly promotes invention is the Lemelson-MIT program, established in 1994. Lemelson awards a $30,000 prize annually to an MIT senior or graduate student who shows promise as an inventor. In 2005, David Berry won for his synthetic protein to treat stroke patients. Berry was also a runner-up in the $50K this year for a different project. Outside the Institute, Lemelson awards prizes to established inventors (the $500,000 Lemelson-MIT Prize has been called the "Oscar for inventors") and provides grants that enable teams of high-school students around the country to work on inventions. Flemings calls the Lemelson program the "precursor" to the Deshpande Center, founded in 2002, in that it deals with the earliest stages of invention. Deshpande executive director Krisztina Holly '89, SM '92, says the center, which has already spun out seven startup companies, fills a void on campus, focusing on later stages of innovation and creating a bridge between professors and industry.

"Academia creates wondrous technology that gets lost in drawers," says Douglas Hart, SM '85, professor of mechanical engineering. In 2003, Hart received a $250,000 Innovation Grant from Deshpande to prepare his research on single-lens 3-D imaging systems for outside funding. The center also offers Ignition Grants, awards of up to $50,000 to fund what Holly calls early-stage "wild and wacky ideas" that could use a jump start.

After Hart and his research team won the Deshpande grant, Holly suggested they enter the $50K. Holly says that Hart was a "reluctant entrepreneur," and he agrees. "I wasn't sure how entrepreneurship was going to be viewed in academia," he says. "I came from an era where your job was to be a faculty member and teacher, not spin out companies." But Hart decided that receiving business guidance under the auspices of the engineering school was safe enough.

At a $50K event in fall 2003, Hart and his students met two Harvard Business School students and decided to team up with them. That spring, their team, Brontes Technologies, won a runner-up prize in the $50K. They ran into a wall, however, in seeking financing: the venture-capital community resoundingly rejected their plan to use the technology in manufacturing, saying the market wasn't right. So Hart and his colleagues adjusted the focus of their business plan to find a different way to use the technology. They settled on a dental application: scanning teeth instead of making plaster molds of them. The venture capitalists were impressed, and the company spun off with $8 million in funding.

"The Deshpande Center added legitimacy to the technology," says Hart, who especially liked that all Deshpande grant proposals are peer reviewed by MIT faculty. "And the $50K added legitimacy to the business plan." Still, Hart says that with all the advice and support his team received--including access to volunteer business mentors through MIT's Venture Mentoring Service--his best resources were other faculty members who had also started companies.
"People may say [to an academic], 'If you wanted to go into business, why didn't you go into business?'" says Hart. "Deshpande says, 'Look, business needs you.'"