The Government, Startups, and Incubators

Full disclosure: we’re fans of the NSF in part because they are funding improvements to StartUpHire that we’re working on.

Steve Blank has recently been recruited by the NSF to start a new venture. It’s not a startup, though; calling it an incubator isn’t quite correct, either.  We have some of the smartest people in the world working in academia, and the NSF has found a new way to encourage those folks to use their smarts to make things.  It’s one thing to research a new way to detect explosives, it’s another thing entirely to make a product to put that research to use. By combining the startup acumen of someone like Steve Blank with the far-reaching vision of the NSF, we are seeing the next great wave of businesses started.

There’s something that sets this incubator initiative apart from other incubators: the funds are not going toward a stake in the company – those receiving the money won’t give up any equity in what they are building.  The goal is to prepare the nascent companies for investment by venture capital firms.

What, you might ask, is the government getting out of this?  Two things.

  • New companies have ever been the engine of growth for the US economy.  The more successful startups, the faster the economy grows.
  • The more successful companies there are, the larger the tax base for the government to draw on.

In a nutshell:

The gamble was that we could train Professors doing hard-core science, who had never been near a startup or Silicon Valley, to get out of the building and talk to customers and Pivot as easily as someone at a web startup.

The results of the startup experiment, according to Huffington Post:

Nineteen of the 21 teams are moving forward in commercializing their technology.

Wow.  Next they’re going from a $1 million budget to a $20 million budget. Can’t wait to see what will be accomplished.

One Response to “The Government, Startups, and Incubators”

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