Two cents: the difficulty of university startup programs
Hugh Stephens writes his take on the challenges university programs see, and what this means for Galileo. This post was originally sent to Galileo investors as part of our regular updates. Subscribe here for our community update emails.
Universities across Australia are now investing heavily in startup and entrepreneurship programs, by our measure over $85 million as poured into the space and mostly in the last few years.
One of the biggest challenges for Galileo (like every other Venture Capital firm) will be ensuring that there are enough high quality founders and startups, or commonly referred to as ‘dealflow’, that fit our investment thesis.
A big part of our efforts to identify the top young entrepreneurs will be startups sourced through on-campus accelerator programs like INCUBATE at the University of Sydney or The Generator at Monash University.
However, while there are some well-established programs (INCUBATE, MAP at the University of Melbourne), many other universities are still very early in their journey, with 1–3 “graduated startup classes”.
It takes time and concerted effort to build a good university accelerator (just ask Galileo Co-founder, James Alexander). There are two main components:
- The program itself: the contents of the workshop and accelerator program (often around 6-12 weeks)
- Demand generation: ensuring that there is adequate “good idea flow” of students coming into the program
Each of these things is a huge post all to itself. Typically, people focus a lot on (1) — the content of the program (and associated mentors etc). The content of the program is obviously very important!
We spend a lot of time talking to students participating and graduating from university programs, and much of the feedback you hear is generally what you’d expect — quality of mentors is important, as well as having program staff who hold startups accountable and challenge them. As I commented to a group of students recently, programs should push founders to the point of being uncomfortable (not beyond!) in their growth targets.
However in my opinion, demand generation is just as if not more important, and frequently very under done. You can have an incredible program, but if you don’t have talented student startup founders wanting to participate, it’s not very useful.
We’re seeing increased activity in this area — in particular through “pre-accelerator” or “ideation” programs. However, someone needs to be responsible for the hustle and work involved in getting the message out. Chatting to students in every opportunity possible is a lot of work (guest lectures, attendance at careers fairs, even posters around campus — there’s a chicken and egg problem that case studies of successful startups having gone through the program helps!).
There is a risk that universities will adopt a “build it and they will come” mentality, which is exactly what we tell startups not to do!
For us, the Galileo fund requires good young entrepreneurs and startups to be entering and participating in university programs (and for Galileo’s brand to become well known among students). We keep a close eye on the activities of universities around the country to identify what is working and what isn’t, and help other universities adopt these techniques.
We believe that that there is already enough great seed and pre-seed startups graduating from university programs –– thats why we’re launching Galileo, however there is still a lot of opportunity left on the table.
We look forward to working alongside universities to keep unlocking talent within their community, and create great startups they can celebrate.