Germany is one of the world's top locations for cutting-edge research. At the same time, spin-offs from science are rare. Why is this? The research project at the Entrepreneurship Research Institute of the Technical University of Munich is the first to examine the psychological factors and conditions of founders in science. Initial interim results have now been presented.
On behalf of the Joachim Herz Foundation, the research team at the Entrepreneurship Research Institute of the Technical University of Munich (TUM ERI) monitored more than 100 entrepreneurial teams, many of them at the TUM's Spin-Off Center, over several months. The study participants were surveyed using weekly online questionnaires and interviews to determine the challenges scientists face when launching their ideas.
Challenge No. 1: No success without teamwork
Fundamentally, an innovative technology alone is not enough to successfully establish a company. Scientists generally lack the market knowledge to assess which ideas have the potential for commercialization. Therefore, they should bring colleagues with industry and startup experience onto the team as early as possible, ensuring that perspectives and needs from business and industry are taken into account from the very beginning.
However, a lack of knowledge of market mechanisms is only one factor. The dynamics within the group also play a major role, according to the TUM ERI research team: Many founding teams find it difficult to find a collaborative and straightforward path. This applies both to deciding what the product should be able to do and to the question of how best to implement this vision.
“The founding teams then begin to discuss more and more issues without being able to commit to a common line and ultimately fail,”
explained Nicola Breugst, Professor of Entrepreneurial Behavior at the TUM Entrepreneurship Research Institute. She continues:
"As a result, universities and other start-up support institutions should not only focus on imparting technology and market knowledge, but should also offer soft skills courses, such as team-oriented coaching, as an important component for effective start-up support."
Challenge No. 2: More pragmatism, less perfectionism
At the same time, the study shows that potential founders from academia must abandon their high standards: Following the motto "fail fast and early," founding teams are encouraged to validate the marketability of their solutions early on by confronting potential customers with immature prototypes. However, testing and gathering feedback at a very early stage contradicts the scientific mindset, in which immature knowledge does not provide a basis for decisions and communication with others. These different ways of thinking and approaches also complicate the feedback culture in interdisciplinary teams, which are so crucial for entrepreneurial success: "Scientific perfectionism" does not always correspond to "entrepreneurial pragmatism."
"The initial results of the study show that even interdisciplinary academic startup teams with similar starting situations and challenges take very different development paths. Teams that listened less to the expert advice from our incubator and were essentially lost in their decision-making processes were generally unsuccessful,"
explained Holger Patzelt, Professor of Entrepreneurship, TUM Entrepreneurship Research Institute.
"Scientists should also learn from the pragmatism of start-up companies by daring to consult potential target groups and key stakeholders, even with unfinished prototypes. They certainly share the character traits of curiosity, risk-taking, and openness to new ideas—after all, scientists have to engage in research projects that, in the worst case, produce no results—which is an important prerequisite for a spin-off."
The three-year research project aims to understand fundamentally relevant, yet often neglected, psychological processes in academic spin-offs. To this end, the team is investigating how scientists become founders and which influences support or inhibit this process.
“Lack of risk-taking? Or fear of failure?”
At the same time, it's about understanding how interdisciplinary founding teams collaborate successfully, find compromises, and develop shared company values. Another goal is to discover why some chairs produce more startups than others.
"We have an excellent education system and support opportunities for entrepreneurs in Germany. Yet, few people in Germany actually start businesses, or they give up too early. Why is this? Mindset? Lack of risk-taking? Or fear of failure? How can we encourage scientists to experiment more? I'm therefore excited about the final results of this study,"
says Nina Lemmens, board member of the Joachim Herz Foundation. The final results will be presented in Berlin in early 2021.
