On April 5, 2018, Frank Rimalovski was interviewed by Philip Bouchard, Executive Director of TrustedPeer Entrepreneurship Advisory and CEO of TrustedPeer.
This interview was originally posted on TrustedPeer on April 29, 2018.
Philip Bouchard, TrustedPeer: How has entrepreneurship evolved during your tenure?
Frank Rimalovski, NYU Entrepreneurial Institute: I started at NYU in 2010 to start the Innovation Venture Fund as part of an effort to catalyze the level of startup activity across the university. At the time, there was a robust entrepreneurship program in the business school, but it was primarily focused on the business school. They've since broadened and expanded their mandate. I'm happy to say that we do a lot of collaboration with them. At the same time, our tech transfer office was doing a lot to support the researchers and the faculty, but the students outside of the business school were arguably underserved.
This was all happening in a time when the startup ecosystem in the city of New York was taking off. NYU was not particularly well connected with that ecosystem. MIT was incestually - in the good sense of the word - interwoven into the Boston startup ecosystem. And Stanford and Berkeley, very much interwoven into the startup ecosystem in the Bay Area. I saw an opportunity and a need in New York. Universities have historically been providers of technology and talent to those startup ecosystems, but there needed to be bridges and pathways and connections. From the very beginning that was one of the things that we endeavored to do.
As soon as we launched the venture fund in 2010, there was, figuratively speaking, a line at my door of people looking for money. But they were not businesses. They were projects and ideas. A lot of solutions in search of problems and a lot of "if you build it, they will come." There were a lot of smart people, with interesting technology and interesting ideas. But the model for the Fund was to invest alongside other seed funds and angels. At that point, and it's still true today, they weren't looking to invest in an idea, unless your last name was Zuckerberg or Musk.
I did some benchmarking with our peers, talking to and observing what Stanford, MIT, Berkeley and other schools were doing and saw that they had robust, complex, rich startup ecosystems with a lot of connective tissue with their city or area startup ecosystem. Therefore, I shifted the emphasis from trying to score deal flow to trying to create deal flow.
That had two main thrusts to it. One was trying to celebrate and hold up entrepreneurs as role models who may have gone down the path of already achieving some success. I did a lot of digging and getting out of the building talking to people, learning about all the startups that our alumni started and created a series of events and efforts to raise the profile of those entrepreneurs.
But also in both a one-to-many and, to a lesser extent initially, a one-on-one endeavor, to educate people on how startups really work. What are teams looking for as an end point, and then try to help them get there. That meant doing workshops, bootcamps, and coaching. The initial concept of the Innovation Venture Fund has blossomed into a much larger initiative that does all those things and more. In trying to create investment opportunities and helping to nurture investment opportunities was the same end goal that we had of helping our students and faculty start startups.
The Fund, however, was clearly not sufficient by itself. We took the work that the business school was already doing in their startup competition, which produced a lot of great teams, but that was just one vehicle. Today, we have a whole array of accelerators in the broadest definition of the word to help students and faculty get on the rails and moving in the right direction: help them learn how startups really work, what investors are looking for, and what are the tools and resources they can use to get there. You go from an idea or an invention and turn that into an early stage startup.
I don't want to say that it's all about trying to get to a fundraising event, but for many, that is the case and that's the majority of the kinds of teams that we work with. We focus on working with startups that are trying to achieve some level of scale. If you don't need to raise capital venture funding, great. More power to you. You'll own more of your business at the end of the day, but if you need capital, "You don't raise money because you need it. You raise money because you can raise it." In the sense that you are raising it because you have something an investor wants to invest in. As an investor, I really don't care that you need money. I want to know that I can make money by investing in your business. I tell my entrepreneurs that you're not raising money, you're selling stock. Think about it from an investor's point of view. Why would they want to buy your stock? Not why do you need the money.
PB: Why do you have multiple accelerators? How do you prevent duplication of programs?
FR: As an entrepreneur, to figure out what you're going to do, you need to talk to us because every journey, every startup, and every entrepreneur is a little bit different. It's not a 12 step, 4 step, or 2 step program that you do. Where you should focus your time and efforts and different points in time is also going to be different.
We have over 55,000 students and 18 colleges in just about every discipline at NYU. If you look at our investment portfolio it represents that same diversity. We have everything from drugs and medical devices to apps—a broad spectrum.
The reason why we have multiple accelerators is that they progress with increasing intensity. We start with a two-day boot camp and then we have a two-week sprint. Then we have an all summer long program called Summer Launchpad that looks more like a traditional accelerator. You don't have to do all three in a row, but we make them so there's not a lot of overlap between them. They build on each other.
PB: Where does social entrepreneurship fit in to the NYU ecosystem? What is your approach to social entrepreneurship?
FR: We have worked with a lot of social entrepreneurs and we've invested in a few of them. They are for-profit ventures, just to be clear. This is what I tell our students, "If you have identified a need or a social good that you want to address, and you want to turn that into something that is serving more than one person or community, but you want to scale it, you need to develop a sustainable, scalable business model for that social venture."
If you want to reach more people and hire a staff and grow it to be a big social venture, then you need all the tools that any entrepreneur needs. Here are some questions I ask them:
- What is your business model?
- How are you going to acquire customers?
- How are you going to make money?
Even if you're not-for-profit, not-for-profit doesn't mean you're "not for revenue." Are you going to sell Girl Scout cookies? Are you going to take donations? Are you going to sell data? Are you going to sell t-shirts? What is your revenue model that's going to bring in the money you need to hire the staff to achieve your social mission and that needs to be integrated into a coherent business model.
We work with lots of social entrepreneurs. Whether or not you're going to raise money is not the point. It's how do you turn that idea into a scalable business. Not-for-profit, for profit, raise venture capital, whatever. What we put the emphasis on is how do you scale it.
We work with a lot of the other program centers within the university who work with students and faculty to help them think about, what are pressing social needs out there. How do you learn about them, how do you measure impact and then we can help them take it to the next level in terms of scale.
We have many programs and classes within the university that teach, do research, or support social entrepreneurs. We interface with all of them, and help their students turn their insights and ideas into scaleable ventures.
PB: How do you communicate NYU's culture of entrepreneurship? How do people find out about entrepreneurship at NYU?
FR: A variety of ways.
One way is leveraging our space, the Leslie eLab, physically located in middle of the bullseye of the NYU campus. Leslie eLab has a retail storefront on a street corner in New York City. It's hard to beat. It's very visible and very central.
Number two is through collaborations with colleagues in the admissions office. Every campus tour stops in front of our space, and the tour guides talk about what goes on inside. Twice a year we brief and train admissions directors and tour ambassadors so they can accurately talk about what we do.
Number three is we work with faculty and other entrepreneurship programs and related groups within NYU to evangelize who we are and what we do in our programs and what are our offerings to their students. That can mean going into classrooms and speaking with them about what we do in general or about a specific program to ensure that we have a formal and informal network of the right people who know who we are, what we do and how we can help them.
Four is an active newsletter. Everybody who visits our space or attends one of our events gets added to our distribution list. On a weekly basis during the school year, over 6,000 members of the NYU community receive our newsletter listing upcoming events, success stories, blog posts, or news about entrepreneurs who achieved some milestone.
We also tap into other communication channels that exist throughout the university through the Public Affairs and Communications Offices and make sure that our higher profile items are included. Finally, we have the ability to selectively send out, two or three times a year, a message to the entire university through the NYU-wide mail tool.
We also have two major events a year that really make a big splash on campus. One is the Entrepreneur's Festival (check out this 2-minute video) which grew out of the need to highlight and celebrate NYU entrepreneurs who have gone down the path before.
We just celebrated the 7th edition of this two-day Entrepreneur's Festival, which included:
- 3 keynote speakers who are high-profile alumni entrepreneurs.
- Panels with up-an-coming alumni, students and faculty, including a panel on "starting a startup while still in school".
- 6 workshops and over 15 roundtables
- Startup showcase of 40 or 50 current student or recent alumni entrepreneurs.
It's a massive event to highlight and celebrate entrepreneurship with the goals of inspiring others to take the initiative and educating them on what's involved, how it works and how you need persistence, dedication and passion. We try to build community within the university and by attracting our alumni, VCs and others to sponsor the events.
There have been approximately 1,000 people attending this event in the last couple of years. Attendees come from every school within NYU. After the event, we encourage them to visit us at the Leslie eLab and we add them to our newsletter to learn about all the programs and resources we offer. Not all the students who attend necessarily start a startup, but it's a good way to inspire and motivate some of them.
PB: Not everybody is a startup leader. How do you include those students who are a huge resource for making a successful startup team?
FR: Three ways.
We do Teammate Hunts to help people who don't have an idea, but have skills and a desire find each other. The way we accomplish this is surprisingly low tech, but it works. Sometimes we host them, some of the student clubs host them, and the business school also hosts them for their startup competition, so it's happening multiple times a year.
Here's how a Teammate Hunt works. We get a group of people in a room, where everybody who has an idea gets 60-90 seconds to describe their idea and what they're looking for. Once we get through that half of the room, we'll ask the other half of the room—all the people who don't have an idea but have a skill and and interest—to come up and introduce themselves and describe their skills. And then we say, "Talk amongst yourselves," and then they go meet each other and then we have them also put that into a Google Doc where they put their email addresses. You know what? It works.
The other thing that we do is provide a wall at the Leslie eLab we a call the "Got it/Need it board." It has two sections - "Got it" and "Need it" -where you can post your name, your skills, what you're looking for, and your contact information. That works, too. We ask that people put a date on it and every few months we take them down because they're old and that creates new space for others.
The third way is, you know, what I just call "hanging around the hoop," if you get the basketball metaphor, which is coming here and attending workshops and being a little extroverted and meeting people and that's very organic. It's hard to measure and monitor or even instrument, but that works as well.
PB: How do you view the difference between a course taught in the classroom on entrepreneurship versus the hands-on entrepreneurship that you provide at the Institute?
FR: We've been working with faculty in different schools across the university to blur that distinction by getting more of them to offer experiential hands-on entrepreneurial classes. That comes from the fundamental belief that entrepreneurship needs to be taught experientially.
Let me explain that by analogy. You can think about either poker or surgery. You don't have to be a poker player or a surgeon to appreciate this, but you can learn only so much through lectures, videos and textbooks. You're really not going to learn how to be a great poker player or, hopefully, even a mediocre surgeon until you start doing it. We fundamentally believe the same thing is true about entrepreneurship.
In the Leslie eLab and in all of our programs, we use the idea, invention or concept as a vehicle to teach how to be an entrepreneur, rather than doing generic lectures and workshops. We believe the same should be true in the classroom. Not to say there's not a role for the more didactic model of teaching, but at some point, just like as we train physicians, you've got to start "doing it" as part of the pedagogy.
We've worked with faculty in half a dozen schools to teach experiential-based entrepreneurship classes. We do that not to create more startups, but rather to teach a broader spectrum for the students' entrepreneurial skills. We have found that a majority of people who take experiential-based classes don't necessarily want to launch a startup, but they do want to learn the entrepreneurial skills and entrepreneurial mindset which are going to be useful to them in almost everything they do.
Implicit in our philosophy is that being an entrepreneur is about figuring out how to satisfy a customer need at scale. Every business has customers. Even if you're a researcher, you have customers—those people who fund you. Certainly consulting, investment banking, or any product manager, even if you're an engineer, this is going to be a helpful skill. If you don't believe me, just look at how many Fortune 500 companies are trying to get more entrepreneurial and build that muscle in their enterprise.
If you go to the Lean Startup conference in San Francisco, you'll find it's all Fortune 500 companies who attend. That's who Eric Ries and Steve Blank are consulting to. They're consulting to big companies and that's what the big consulting firms are doing for those companies as well.
PB: Does the Institute train faculty in entrepreneurship?
FR: We've done that by partnering with VentureWell. We sponsor our faculty to attend a VentureWell program that teaches experiential entrepreneurship. Then we leave it to them to be the ones who get a course developed and listed.
PB: Do you have corporate relationships for experiential learning projects for student entrepreneurs?
FR: We focus primarily on students and faculty who want to start a startup and leave corporate projects to the executive education program offerings at the university. I have noticed that my colleagues that do corporate projects tend to be the ones whose entrepreneurship programs are part of the business school because there's better alignment. It's just not in what we do in terms of the business development to bring those kind of customers to help them.
PB: How do you promote connections to the New York City community?
FR: We bring in investors and entrepreneurs to lead workshops, roundtable discussions and the like, and also to mentor and coach our teams. Particularly in our more immersive accelerator type programs, but also on an a la carte basis. Whether they're a lawyer looking for clients or an investor looking for deal flow or an entrepreneur who might be looking for talent, it's in their enlightened self interest. We find people want to be involved and want to help. And that's not just our alumni. We're very fortunate in New York City.
The advice I would offer my colleagues is to figure out a way to find the people in your ecosystem, whether or not they're alumni, who want to be involved and who want to give back. It brings an additional dose of reality to enforce the lessons and guidance that we offer. It makes it real for the students. They want to meet people who are really doing it on a daily basis. And it helps pave the way for developing a network of people when they're leaving the university. They will already have a network of potential partners to collaborate with as mentors, advisors, coaches, lawyers, and investors when they leave.
PB: How important is mentoring for your programs? How do you select and train mentors?
FR: Mentoring is at the core of everything we do from a la carte coaching to being integrated into our accelerators and programs.
We look for people who really have done it, have been out there, have built startups, have failed and/or succeeded and learned. They're people that we know. We don't take applications for mentors. It's got to be someone we've met, can look them in the white of their eyes, can hear how they talk, and be sure that they share our philosophy of coaching.
One, they have to genuinely want to give back and help, and two, we try really hard to be Socratic in that we don't make decisions for our entrepreneurs. We want to help them figure out how to make decisions. So that means asking them the hard questions. It means challenging their thinking, sometimes being a little provocative. We strongly believe in the radical candor school, to be relentlessly direct in the feedback we provide.
There's no point in telling someone "That's a great idea," when it's a terrible idea. Or, "You did a great job," when they did a crappy job. We try to be honest and straightforward with them and ask them the hard questions, but by the same token, I'm never going to tell anybody "That's a terrible idea." For example, if someone were to ask me, "What do you think of my idea?" I would say, "What are you asking me for? I'm not your customer. So tell me, what do your customers think of your idea? And how do you know?" Those are much more helpful things that I could say than telling them I think it's a great idea. The truth is, it doesn't matter if I think it's a great idea. Unless their customer is an investor or the head of an entrepreneurship center, it doesn't matter.
We don't do any substantive training for mentors, but we do give them guidance and a lot of it is around being Socratic, not giving teams the answers, not making decisions for them, not acting like you're their boss, but rather on how to be an honest broker.
We view ourselves as the primary care team and we outsource or supplement what we do with specialists—people who have some additional subject matter expertise or knowledge.
And that's the way we do this at scale. Our Institute team meets with several hundred student teams a year. And some subset of them we may outsource to an external mentor. Before we do, we need to figure out why and what you need and where you are. We use a primary care model to diagnose their needs and how they can best be helped. It might not even be talking to a mentor. It might be going and talking to a customer or something else.
PB: How does the Institute support NYU alumni?
FR: We're only giving NYU students half an education if we stop the day that they graduate. We continue to work with them that summer and we still support them after. But, we don't open the door to just any alumni. If you were an alumna and you started a startup today, I wouldn't be reaching out to you to tell you how we can help you. However, as long as you got started while you were here we'll continue to support you. In particular, if you were engaged with us and our programs before graduation, then we want to see you continue on with some measure of success.
PB: What's your strategy for the next two years?
FR: Over the last few years we've observed the following pattern. We have things like the Entrepreneurs Festival at the top of the funnel and we have the Fund right at the very narrow end or bottom of the funnel. What we found was that we did a great job of pushing people into the top of the funnel. We've had over 100,000 visits to the Leslie eLab in three and a half years, from over 20,000 unique individuals!
But as we move closer to the narrow end of the funnel, particularly with our summer accelerator, we were finding that there were a lot of teams who were surfacing for the first time at that point. Meaning they're graduating and applying to participate in an accelerator, but we really didn't know them. They may have come here before. They may have attended a workshop, but they weren't really engaging. They weren't taking advantage of mentorship and coaching. And as recently as last year, we didn't have the bootcamps and sprints to fill that gap. That's the biggest change we had over the last year and we're already starting to see the fruits of this new pipeline.
Using a metaphor of a funnel, the funnel had holes in the middle. Students were going in the top, then out, then coming back and trying join our accelerator or get funding when really they didn't have much more than an idea and they're about to graduate. Consider that the average amount of time between founding and raising your seed round is around 2.4 years! If you're just getting started as you're graduating and you're not independently wealthy, you have a problem.
That was the insight that we had. How could we get people engaged and working on the right things early on in their journey at NYU? That's why we have lightweight accelerators, bootcamps and sprints, to help them get started, and get them focused on better understanding their customers.
In our two-day bootcamp we help them understand that a product is not a business. To think about it as a business, you've really got to think about your customers. What are their pains? How severe is the pain? How much are they willing to spend to solve this pain? What do they use, dislike or like today? Use this information to inform and then test. And that's when we go into the sprints, which is rapid experimentation and testing and still more intensive customer discovery.
Then you have the foundational knowledge of who your customer is and what they value and all that other stuff in order to build that business. So by the time you're getting ready to graduate, you're moving toward that notion of product-market fit already. It's beyond the idea, it's now an early stage business and then we can use a more traditional accelerator model with the intensive 9-week program over the summer to help get them to whatever the definition of escape velocity is for that startup. Not that they're ready to raise a seed round at the end of summer, but they're much closer.
Learn more about the NYU Entrepreneurial Institute's marquee accelerator: The 9-week long NYU Summer Launchpad!
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