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But the compulsion to re-examine the sponsorship model doesn’t come from these sorts of criticisms, which the lab has been shrugging off successfully for 15 years. Nor does it come from corporate reluctance to keep the money flowing. Rather, it stems from the fact that over the past five years an even more generous provider of funding has emerged: U.S. capital markets. Suddenly, the Media Lab has found itself competing with billion-dollar startups on its own turf. The VC-backed startup strategy is “a higher-octane model than ours,” concedes Pentland.

Media Lab students have gone with the flow: Most used to take jobs with sponsors after graduating, but now the majority end up in a startup, often one they’ve founded around their work at the facility-and sometimes before finishing their degrees. Lab faculty are finding that in this new, more fluid environment, the Media Lab sponsorship arrangement actually entails more constraints than researchers at conventional institutions face. That’s because sponsors have the rights to everything developed in-house-and faculty aren’t supposed to take their work into their own startups or make private deals to sell it to anyone else. Students, though, aren’t constrained in these ways-and faculty members sometimes sit on the boards of their students’ companies. Conceivably, a professor could form a company and have it become a sponsor in order to get rights to his or her own work, but the lab made this approach less appealing by limiting faculty ownership of sponsor companies to 5 percent.

Some professors have managed to start companies related to their work anyway-most prominently Maes with Firefly, a Web comparison-shopping concern recently purchased by Microsoft, and Joe Jacobson with E Ink, which is developing new types of electronic paper that act like displays. But these spinoffs have reportedly engendered resentment within the lab and among sponsors. (Maes says she’ll be leaving at the end of the coming academic year, but insists her departure is amicable and motivated only by her desire to spend more time with her family and work with nonprofit organizations.)

To remain competitive in a VC-mad world, the lab appears set to reshape or augment the sponsorship model. Negroponte has held high-level meetings with MIT’s provost and engineering dean (see “Rough Sailing at the Media Lab,” TR March/April 2000). The aim, says Gershenfeld, is to win university approval for a scheme that would enable the facility to partner with other investors in startups based on its technology. Faculty wouldn’t directly own equity in the resulting firms, but some of the profits from the lab’s stake could flow to them-a plan he acknowledges could have dramatic effects. “The new revenue-sharing and IP [intellectual property] policies will make us look more like a company than a research lab,” crows Gershenfeld.

Pentland envisions an even more radical metamorphosis. He suggests the lab might evolve into a “meta-incubator,” essentially working with large companies to help them establish startups around Media Lab and other technologies, with venture capitalists and business-school partners coming aboard. “To many companies we’d look like a consultancy,” he says. “That ought to be worth a couple of hundred thousand [to a corporate sponsor].” Pentland says he has had informal talks about the plan with faculty at MIT’s Sloan School of Management, but adds that other universities also might be involved.

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