Ken Zolot defining a new world order: Lab for startups

Ken is a dear friend, and as strong an advocate and supporter of startups as one can find around here. And not to miss, he has had an amazing training at MIT where he led several initiatives in entrepreneurship and startup development.

Here’s an article he wrote in Xconomy about his new role with the Kauffman Foundation:

A New World Order for High-Growth Firms

Ken Zolot 3/24/09

Many of my friends and neighbors may have noticed that I haven’t been in town as much lately, and that I’m spending more and more of my time in Kansas City. So why would a hardened MIT denizen who used to think that distant travel meant going to Porter Square now be flying back and forth to Missouri every week?

It’s because the Ewing Marion Kauffman Foundation, which is headquartered in Kansas City, is pioneering new ways to advance our entrepreneurial economy. Kauffman’s president Carl Schramm inspired me the other day when he noted in a CNBC interview that all net job creation over the past thirty years has come from companies less than five years old. So what can we do to keep startups flourishing? I am delighted to be joining the Kauffman Foundation team as a senior fellow as we look out over the economic future and embark on a new approach for increasing both the number of new companies formed and the chances of success for these ventures.

This new initiative is called Kauffman Laboratories for Enterprise Creation. The mission of Kauffman Labs is to create more large-scale, high-growth firms. As someone with a combination of practical experience building companies, and academic experience teaching innovation and entrepreneurship at MIT—not to mention a passion for helping people build great companies—I’m very pleased to be a part of this initiative. It’s a perfect way to continue the work I started at MIT’s Deshpande Center for Technological Innovation.

Bad times are when good people spring into action. Today, more than ever, it’s important to catalyze and accelerate the tremendous inventive spirit of the American entrepreneur. As many have said before, we’ve got what it takes to innovate our way out of the current crisis.

Many budding entrepreneurs today face an unfortunate choice between going to school, or going to the school of hard knocks. In one circle, entrepreneurs can join MBA programs, fellowship programs, or business bootcamps. In another circle, they can dive in and get their hands dirty by starting a company, trying to raise venture capital or angel funding, or moving into an incubator. For the most part, these circles have not overlapped.

The idea behind Kauffman Labs is to create a new hybrid model. In the 2009 Kauffman Thoughtbook, the Foundation’s vice president of entrepreneurship, Bo Fishback, talks about the model of a conservatory, where students not only learn music theory but also play music. This is emphatically not the model most business schools follow today, as the New York Times noted in a well-reported March 15 article. B-schools are still trying to shake their legacy DNA of training the future CEOs of General Motors or the next generation of bankers and consultants. No self-respecting entrepreneur would think that he or she can learn how to run a startup by getting an MBA. Schools of Engineering are still struggling to understand their approach to teaching innovation, a discipline that runs contrary to traditional funding and tenure models.

Academic institutions, to be blunt about it, are the stodgy old incumbents in today’s innovation economy—and I say this as a faculty member at a school that is a hotbed of entrepreneurship. Don’t get me wrong—there are plenty of wonderful things that will always happen at MIT and could only happen at MIT. I am thrilled to continue my role at MIT in parallel with my Kauffman work. But there are many things that cannot happen within the walls of MIT, nor should they. I want to help make those boundaries easier to understand and navigate. It’s time for a disruptive new model, a hybrid between education and company creation.

Entities like Puretech Ventures, led by Daphne Zohar (an Xconomist like myself), are perfect examples of what we at the Kauffman Foundation would like to see more of. Puretech is not trying to be a classic life sciences venture capital firm, but is in the business of creating companies. That may include sprinkling in a little money, but it’s also about validating the science, identifying market needs, and building great leadership and advisory teams. Xconomy has already written about a new Kauffman program that will place “Entrepreneur Fellows” at Puretech and other organizations, and Lesa Mitchell, Kauffman’s vice president for advancing innovation, has spoken prolifically on this topic.

If you take the best of what entrepreneurs might get out of Puretech, the best they might get out of an MBA, and turbo-charge it by adding the best they might get out of accelerators and incubators like Y Combinator, TechStars, DreamIt Ventures, The Foundry, Bizdom U, or the Cambridge Innovation Center, that’s where we’re trying to go. If you connect all of these things through a coordinated mother ship, you get a new level of scale, quality, institutional memory, patience, and also a certain silo-busting neutrality. The Kauffman Foundation is in a unique position to make this happen.

There’s a movement in the philanthropic world to touch the people you’re trying to help directly, rather than giving money to others and hoping they will do it. By creating a new entity to focus on high-growth companies, the Kauffman Foundation will be going directly to the customer, and doing it with its talented people and its quality control. But we’ll also be practicing what we preach; we will be figuring out how to grow and create a high-scale model for fostering entrepreneurship as we go. As my mentor Desh Deshpande likes to say, this is a contact sport. Rather than developing a stagnant formal curriculum for an aspiring entrepreneur to be on the receiving end of, we want entrepreneurs to have a setting in which they can live the messy process and be able to draw on vital resources and kindred spirits. This involves getting in there and living the process with the entrepreneurs. It is real-time, iterative, and immerses us all in action-learning.

With the economy crippled, venture capitalists running from risk, and startup exit opportunities nonexistent (at least for the foreseeable future), somebody needs to create a new world order for high-growth companies. By weaving together many of the initiatives that the Kauffman Foundation already has underway—and building a few new ones from scratch—we will be following a natural progression. In short, we will create the sorts of companies that Mr. Kauffman wanted his foundation to spawn.

And that’s why I’m developing an appreciation for Kansas City, and why my wife is the one out walking our dog these days.

Ken Zolot is a Senior Fellow at the Ewing Marion Kauffman Foundation, a Senior Lecturer at MIT, and a founder of several MIT-spawned startups.


One Response to Ken Zolot defining a new world order: Lab for startups

  1. entrepreneurshipeconomist says:

    Recession, Far From Over, Already Setting Records

    Dane Stangler and Bo the Harvard MBA Fishback will never link to this, as their #1 job is to make sure that Carl Schramm’s image is exalted even as the economy crashes after seven years of of Schrammenomics.

    The economy is in Schrambles, as Bo Fishnback and Dane Stangler come up with new buzzwords to shout as they fly over America in first class, celebrating their massive salaries from the once venerable Kauffman Foundation (now dominated by tyrannical, failed schrammenomics) which have also allowed Carl Schramm to buy himself a George Eastman Kodak Medal and fund a vanity press devoted entirely to displacing the intellectual giants and Nobel Laureate economists who could save the eccnomy–Ludwig Von Mises and F.A. Hayke. schrammenomics is all about dumbing down the economy so as to make Schramm look good, as his insipid, dull, anti-intellectual book GOOD CAPITALISM (SCHRAMMENOMICS/BO FISHBACK MBA BUZZWORDS) BAD CAPITALISM (HAYEK & MISES) left out both Mises and Hayek.

    Regarding Carl Schramm’s Recession, The New York Times reports:

    The two areas in which this is already the worst recession since 1960 are employment and industrial production. The number of jobs in the country has fallen by 3.9 percent, exceeding the 3.2 percent decline in the 1981-82 recession. Economists generally expect those numbers to get worse before they stabilize.

    The 15.4 percent fall in industrial production, while worse than in previous recessions, is better than in some countries. The worldwide recession has slashed both production and international trade, and the impact is being felt most in export-driven economies in Asia.

    The fourth category used in the coincident indicators is manufacturing and trade sales, a broad picture of total transactions in the economy. Adjusted for inflation, that has fallen 10.8 percent since the peak, a bit more than the decline in 1981-82 but not yet close to the 14.8 percent decline in the 1970s recession.

    And yet Schramm continues flying around congratulaing his Statist friends:

    F.A. Hayek warned us about Carl Schramm’s Tyranny: Mises Warned us of Carl Shramm’s/Dane Stangler’s Post Office
    April 24, 2009 by entrepreneurshipeconomist
    “[Socialists] promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office.”” –Ludwig Von Mises predicting what the Kauffman Foundation would become after seven years of tryannical, corporate-CEO, personal-profiteering, anti-intellectual, anti-entrepreneurial Schrammenomics.

    “Those fighting for free enterprise and free competition do not defend the interests of those rich today. They want a free hand left to unknown men who will be the entrepreneurs of tomorrow…” –Ludwig Von Mises talking about why Carm Schramm goes to the $ 3,995.00/head Milken Institute to address his fellow corporate-statists on Kauffman’s dime, instead of funding innovators, true academics, entrepreneurs, entrepreneurship, and inventors who are losing their homes and businesses as the eocnomy withers after seven lonmg years of Schrammenomics and Schramm funnels himself and his growthology buzzword-bloggers millions from the Kauffman endowment (which was meant to go to entrepreneurs, true academics who are not afraid to quote Hayek and Mises, and innovators), while pretending to serve the innovators and entrepreneurs Schramm opposes in his characterless actions and by saying one thing while doing another.

    I sit on a man’s back, choking him, and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by any means possible, except getting off his back. –Tolstoy Writings on Civil Disobedience and Nonviolence (1886)

    F.A. Hayek/Mises warned us about Carl Schramm et al.’s Temporal Tyranny, where he hires thug deputies such as Dane Stangler to backdate research and make it look like Schrammenomics embraces the Austrains, when, in fact, he compeletly ignores them in word, deeed, spirit, and action.

    Because Schramm has hijacked the $2.5 billion Kauffman foundation, he runs it as a top-down dictarorial CEO would, with every action motivated by self-preservation as the Nobel in economics slips further and further beyond his intellectually-inept reach. Sycophantic lockstepping lawyers such as Dane Stangler will never call Schramm out, as thier salary depends on supporting Statist Schrammenomics above truth, beauty, and reason, and they will go so far as to backdate Kauffman research to serve their master.

    Carl Schramm did not build Kauffman, and it is time for him to step down.
    Carl Schramm is not Kauffman, and it is time for Carl Schramm to step down.
    Carl Schramm does not own Kauffman, and it is time for Carl Schramm to step down.
    Kauffman did not will for his vast welath to become a Schrammenomics vanity press, and it is time for Schramm to step down.
    Kauffman did not will for Schramm to use a $2.5 billion warchest to pen and promote insipid, self-serving books lauding Schrammenomics while completely ignoring intellectual diants such as L.V. Mises and F.A. Hayek, and it is time for Carl Schramm to setp down.
    Nowhere in the foundation’s charter did it stipulate that Carl Schramm was to lord over the Kauffman Foundation for all of entirety as the economy withered, crashed, and died; and the netrprnuerial spirit was replaced with Schrammenomics

    The most important elements in entrepreneurship are character and integrity. The most important elements for Statists/Schrammeconomist are the lack of character and integrity and the ability to use words to mislead and deceive while laying claim to a dead entrepreneur’s estate. While Hayek and Mises used words for truth, Schramm uses words for mere personal profit, and then when his lackluster, anti-intellectual, unscholarly works fall short, he has to try and put all better economists out of business by leveraging his $2.5 billion warchest. Imagine if Hayek and Mises had used a $2.5 billion warchest to put their competitors out of business. They would never do this. For they had character and integrity, which Schramm the self-serving tyrant/Statist completely lacks.


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