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University spinouts

So I needed a strategic marketing heuristic to filter out potential spinout company opportunities from Australian universities because taking each opportunity equally seriously isn’t very time efficient.

Reflecting back on what I learned from Michael Porter at HBS I’ve come up with the 6P’s of successful university spinouts opportunities:

Product: they need something to sell on day one. I hate research projects masquerading as companies. And even if those early revenues are tiny, it’s that customer engagement that drives a company to do something useful.

People: your academic cohort that are promoting the investment opportunity need to be willing to leave their academic jobs when the company is funded. Risk and commitment – nothing ventured means nothing gained.

Publications: the founders must be willing not to publish their papers on the subject, ever. This as a show of commitment to the cause and proof that they’ve left their former stupid academic lives behind. It also prevents the founders from creating useless prior art that hamstrings the company’s later IP strategy.

Patents: I don’t want any. Universities can’t patent because they don’t have any commercial context. If there’s going to be patents we’ll do that in the company.

Promotion: the founders need to be able to promote the opportunity, shamelessly. In the progressive Utopia that we live in, bullshit trumps truth every time, so you need your founders to swallow any scruples they may be harbouring, and to be willing to say anything or do anything on order to get cheap capital.

Polemic: ideally you want your academic founders to be at war with the University, especially with its useless administrator and senior manager types. This is simply a display of intelligence and character, which will be useful later on when the going gets tough.

Note well, this 6P filter is for companies that you intend to be genuinely successful in a market place. It’s not for your pump’n’dump (Ponzi scheme) investment opportunities.

If you’re doing a pump’n’ dump you just need 2Ps – People and Promotion.