15 May 2008
Why isn’t there a Stanford in Montreal?
Posted by Alistair Croll under: Startups .
Last Night’s Founders & Funders dinner was a great networking event. Montreal’s Patrick Lauzon and Austin Hill brought together many of Montreal’s early-stage entrepreneurs, as well as investors from firms like Inovia and Montrealstartup.
Austin kicked things off with a question about Montreal’s innovation, and the lack of university-fostered entrepreneurship similar to what one sees in Boston or San Francisco. Put another way: Why isn’t there a Stanford in Montreal?
I can kick around the old platitudes about Canadians being risk-averse; When Coradiant did its Series A, we didn’t pursue Canadian investment and I may have burned a few bridges by being vocally against them; but since then, firms like Desjardins and FTQ have been great partners for Coradiant. Newer Canadian firms like Ventureswest, iNovia and MSU get points for being more open to risk.
Raymond Luk of Flow Consulting suggested that another problem is the lack of mid-level companies who are successful, but haven’t become the next Google. One shouldn’t be ashamed of building a sustainable, $20M-a-year company, and yet many investors look at them with disdain, calling them “lifestyle companies.”
I think there are two fundamental problems standing in the way of educational investment:
Intellectual property transfer
The number of people at last night’s dinner who criticized McGill’s policies on intellectual property, either taking technology out of the school or working with the school to flesh out an idea, was astonishing. What I heard suggested a bureaucratic culture of entitlement, where the school expects up-front reward with none of the risk. I haven’t heard their side of the story myself but the bad press that precedes them was surprising and consistent.
By contrast, Stanford let Google, Yahoo and Sun walk down Sand Hill Road to investors with their inventions. And they reaped the rewards: Google has been a great benefactor, Yahoo’s founders have donated tens of millions, and everyone wants to go to Stanford to get into startups.
Imagine if McGill wanted 50% of revenues for Rutherford’s radiation?
Two words: Y-combinator dorms
A common complaint of business school students is their lack of access to real work experience. To address this, schools run co-op work terms. But what if you want to start a company? Sure, you can intern somewhere else; but the Legend of Zuckerberg, Gates and Dell says you’d better build it while you’re still in school.
Waterloo University launched a dorm focused on startups. This seems like a great idea. McGill and Concordia should go even further: Fill a dorm with aspiring entrepreneurs, schedule lectures and guest speakers, pump students full of Guru, give them an EC2 instance, better broadband, monitoring tools, a managed CVS, and a dedicated IT admin. Then watch what happens.
Is there a silver lining?
As evidence, consider Montreal’s Ecole Polytechnique, which has far more relaxed policies about IP generated in school and incubates startups internally. It’s produced many entrepreneurs, with several success stories. The bigger universities like McGill and Concordia should pay attention: Stop guarding IP jealously, and build vehicles for incubation as part of the curriculum.
It may also be the lack of a wealthy instigator. Waterloo has Research in Motion nearby, and the Valley is chock-full of instigators. It’s not clear whether Montreal has a similar benefactor/rabble-rouser to shake things up. But it’ll take a titan to storm the halls of academia and challenge the status quo.