Batten Institute Annual Report 2012-13
The Batten Institute for entrepreneurship and innovation at the University of Virginia Darden School of Business presents a summary of dynamic research, programs and events hosted during the 2012-13 academic year.
ANNUAL REPORT 2012–13 ’12–’13 ANNUAL REPORT TABLE OF CONTENTS 2 FROM THE EXECUTIVE DIRECTOR 4 MISSION 5 HISTORY 6 ACADEMIC YEAR HIGHLIGHTS 8 INSPIRED EDUCATION Curricular Initiatives Experiential Programs Batten Scholarships 12 TRANSFORMATIVE RESEARCH Research Initiatives Batten Fellows Research Grants Publications 18 CONSEQUENTIAL VOICE Events Community Engagement Media Coverage 24 ENERGETIC COMMUNITY University Partners Batten Affiliates Leadership Team 28 FINANCIAL STATEMENTS FROM THE EXECUTIVE DIRECTOR MICHAEL J. LENOX ... THE i.LAB PROVIDES A BOG WHERE CREATIVITY BUBBLES UP FROM THE IMPASSIONED EXCHANGE OF ENTREPRENEURIAL INDIVIDUALS.” - W. L. Lyons Brown III At the Batten Institute, we have long operated under the hypothesis that students learn best when exposed to diverse individuals with unique backgrounds and expertise. The most promising entrepreneurial ventures and innovative ideas often emerge from multidisciplinary efforts combining a creative vision with business acumen and technological expertise. In 2008, we partnered with the Office of the Vice President for Research to create the U.Va. Entrepreneurship Cup — a pan-University concept competition involving students across Grounds and across the schools of the University. In 2009, we held our inaugural E-Conference, creating an opportunity for students, faculty, staff and alumni throughout the University and Charlottesville community to learn more about entrepreneurship and innovation and to network with one another. In 2012, we established the iDEA network, creating a network of city-based affinity groups linking alumni, students and innovators, to Charlottesville and beyond. This past year, we took perhaps our greatest step towards executing on our vision to help foster a robust entrepreneurial ecosystem at the University and in Charlottesville by creating a space where businesspeople, engineers, scientists, inventors and designers could gather to pursue their entrepreneurial passions. Through the generous gift of W. L. Lyons Brown III (Col ’82, MBA ’87) and the numerous donors that he helped rally to the cause, we were able to significantly expand the physical plant and operating scope of our Innovation Lab, renamed the W. L. Lyons Brown III i.Lab. In partnership with U.Va. Innovation and the 11 schools of the University, and under the direction of Philippe Sommer, the i.Lab provides opportunities for coaching, course work and incubation for those interested in entrepreneurship and innovation. We have opened our Incubator to the entire University and Charlottesville community. Twenty-four ventures founded by students, faculty, staff, alumni and Charlottesville community members convened in June to form the first incubator class under the tutelage of new Incubator director, Kathy Carr. Lyons said it best at our gala opening in April that the i.Lab provides a bog where creativity bubbles up from the impassioned exchange of entrepreneurial individuals. While the renovation and expansion of the i.Lab consumed much of our entrepreneurial energy during the past 12 months, we continued to execute our established and well-regarded programs. In July, 22 Darden students completed internships at entrepreneurial ventures with support from the Batten Venture Internship Program. In August, 14 students (seven Second Years and seven First Years) matriculated as Batten Scholars, enjoying full-ride scholarships to Darden to help them pursue their entrepreneurial dreams. In October, more than 150 student ventures competed in the U.Va. Entrepreneurship Cup. In November, we convened the fourth annual E-Conference, hosting more than 2 | ANNUAL REPORT 2012–13 350 attendees. In January, we held our annual venture capital bootcamp in Washington, D.C. In February, we held our first “de-risking” competition, recognizing that entrepreneurship is an effectual process requiring constant experimentation and iteration. In April, 16 ventures participated in our annual business plan competition. Throughout the year, students participated in dozens of courses on innovation, entrepreneurship, design thinking and new product development. On the thought leadership side, working with our faculty partners we continued to publish work of practical import and broad significance. Batten-affiliated faculty published nine articles and two books, Ed Hess’ Grow to Greatness: Smart Growth for Entrepreneurial Businesses (Stanford University Press, 2012), and Ed Hess and Jeanne Liedtka’s The Physics of Business Growth: Mindsets, System and Processes (Stanford University Press, 2012). In September, we held our second Jefferson Innovation Summit in partnership with the Virginia Governor’s Office and focused on the role of state and local policy in the creation of entrepreneurial ecosystems. In October and then again in April, we convened our Innovators’ Roundtable, bringing together faculty and chief innovation officers from leading companies throughout the world to discuss best practices in corporate innovation. In May, we convened the fourth annual Darden Entrepreneurship and Innovation Research Conference in partnership with the University of Cambridge and under the leadership of Darden Professor Jeremy Hutchison-Krupat. Through our teaching and research, we are confirming our hypothesis that the best innovations arise from a rich, diverse community of entrepreneurial leaders. At the Batten Institute, we operate under this belief. Our diverse team of entrepreneurial leaders are creating value in numerous ways for a wide variety of stakeholders. We are not standing still. We are continually innovating in our efforts to enrich Darden and the University of Virginia community. With this in mind, the next year promises to be one of exciting changes and opportunities. I will be transitioning from my role as executive director to the role of academic director. Director of research, Sean Carr, will be assuming the title of executive director and Philippe Sommer, director of the Center for Entrepreneurial Leadership and the i.Lab, will be taking on additional responsibilities as an associate with U.Va. Innovation. These leadership changes will allow us to better leverage our talents and accelerate even further our growth and impact. “THROUGH OUR TEACHING AND RESEARCH, WE ARE CONFIRMING OUR HYPOTHESIS THAT THE BEST INNOVATIONS ARISE FROM A RICH, DIVERSE COMMUNITY OF ENTREPRENEURIAL LEADERS. These are exciting times at the Batten Institute. We welcome and encourage you to become involved and to contribute to our burgeoning ecosystem. Michael J. Lenox Associate Dean and Executive Director, Batten Institute; Samuel L. Slover Professor of Business Administration; Darden School of Business 3 MISSION The Batten Institute seeks to improve the world by creating knowledge about the transformative power of entrepreneurship and innovation and by cultivating principled, entrepreneurial leaders. To fulfill its mission, the Institute has adopted a fourpronged strategy. FRANK BATTEN SR. 1927–2009 TRANSFORMATIVE RESEARCH Create thought leadership through a diverse portfolio of research projects of consequence to business and society. CONSEQUENTIAL VOICE Engage leaders through a broad array of channels to directly influence the world of practice. INSPIRED EDUCATION Cultivate the next generation of entrepreneurial leaders through rigorous academic and experiential programs. ENERGETIC COMMUNITY Foster a diverse and collaborative community of scholars, students, alumni and practitioners. 4 | ANNUAL REPORT 2012–13 HISTORY In 1996, University of Virginia alumnus Frank Batten Sr. and his family gave the Darden School a generous gift to be used for the establishment of a community of scholars and practitioners who would pursue leading edge research and develop educational programs in entrepreneurship and innovation. In 2000, after a subsequent gift from Frank Batten Sr., the former CEO and chair of Landmark Communications and founder of the Weather Channel, the initial community formally became the Batten Institute. Today, the Batten Institute encompasses a research center focused on academic scholarship and Darden’s Center for Entrepreneurial Leadership, focused on student activities. The extensive programs and initiatives supported by these units bring together scholars, students, alumni and business leaders, fostering a diverse and energetic collaborative community in support of the Institute’s mission to create knowledge and improve society. OVER $370,000 in grants are awarded at U.Va.-wide competitions annually MORE THAN 70% OF DARDEN STUDENTS TAKE ENTREPRENEURSHIP COURSES 23 BATTEN VENTURE INTERNSHIPS FUNDED ANNUALLY OVER $1 MILLION awarded annually in scholarships Since 2000, more than 150 GRANT-FUNDED PROJECTS undertaken by more than 75 scholars BOOT CAMPS, WORKSHOPS AND FAIRS offered in venture capital, entrepreneurship and design thinking BATTEN INSTITUTE 42% OF INCUBATOR COMPANIES REMAIN ACTIVE AFTER FIVE YEARS 5 2012–13 ACADEMIC YEAR HIGHLIGHTS INNOVATORS’ ROUNDTABLE In October, approximately a dozen innovation officers representing top U.S. corporations gathered with Darden faculty members at the University of Virginia for a daylong Socratic dialogue on the use of technology to further corporate innovation. In May, the group reconvened at Montalto, maintained by the Thomas Jefferson Foundation, to discuss managing information portfolios. SEP 2012 OCT 2012 E-CONFERENCE: PATHWAYS TO ENTREPRENEURSHIP Approximately 350 Darden alumni and students, as well as students from other U.Va. schools and the local community, gathered for a full day of panels and workshops by Darden faculty, entrepreneurs and venture capitalists. The conference began with Darden’s annual student concept competition. NOV 2012 UVA ENTREPRENEURSHIP CUP The fourth annual Entrepreneurial Concept Competition, the U.Va. Cup boasts entries from multiple schools and awards more than $35,000 in nondilutive funds. JEFFERSON INNOVATION SUMMIT FOR THE COMMONWEALTH In recognition of Virginia’s Year of the Entrepreneur in 2012, the Batten Institute and the Office of the Governor of Virginia gathered a diverse and influential group of 60 policymakers, entrepreneurs, executives and thought leaders at Darden to discuss how best to create and sustain a society of entrepreneurs and innovators in the commonwealth. 6 | ANNUAL REPORT 2012–13 MAY 2013 DARDEN AND JUDGE ENTREPRENEURSHIP AND INNOVATION RESEARCH CONFERENCE More than 60 researchers from around the world gathered for the fourth annual Darden Entrepreneurship and Innovation Conference. Hosted by the Batten Institute and this year co-sponsored by The University of Cambridge’s Judge Business School, the conference brought together a broad range of scholars for an engaging series of paper presentations and discussions. APR MAY 2013 2013 W.L. LYONS BROWN III INNOVATION LAB AT U.VA. EXPANSION OPENING The i.Lab is a University-wide initiative that creates a nexus for entrepreneurship and innovation education. Its mission is to foster deep cross-collaboration with no boundaries, across disciplines, schools or ways of thinking. The i.Lab provides coaching, courses and incubation to students, faculty and community members innovating the future. BATTEN INSTITUTE 7 INSPIRED EDUCATION 8 | ANNUAL REPORT 2012–13 DARDEN ENTREPRENEURSHIP PROGRAM The Batten Institute provides a broad array of academic and experiential programs for students supporting dozens of exciting course; a business incubator; full-time internships; business plan, effectual de-risking and concept competitions; design-thinking workshops; boot camps, mentorship opportunities; and scholarships. AT A GLANCE #5 IN THE U.S. FOR ENTREPRENEURSHIP THE PRINCETON REVIEW FOR ENTREPRENEUR MAGAZINE, 2014 CURRICULAR INITIATIVES 35 ENTREPRENEURSHIP COURSES 70% OF DARDEN STUDENTS ENROLL IN ENTREPRENEURSHIP AND INNOVATION COURSES #1 RANKED FACULTY BY THE PRINCETON REVIEW, 2011 BATTEN INSTITUTE EXPERIENTIAL PROGRAMS SCHOLARSHIPS 139 UNIQUE VENTURES AND 354 10 FULL ENTREPRENEURS/ PARTICIPANTS HOSTED IN THE BUSINESS INCUBATOR SINCE 2000 SCHOLARSHIPS AWARDED ANNUALLY, VALUED AT $1.1M FOR THE 2012–13 ACADEMIC YEAR PROGRAMS AND INITIATIVES $370,000 AWARDED IN CONCEPT AND BUSINESS PLAN COMPETITIONS IN THE ACADEMIC YEAR (FUNDING PROVIDED BY THE BATTEN INSTITUTE, THIRD SECURITY, VONAGE, THE GALANT CENTER CHALLENGE AND PARTICIPATING SCHOOLS U.Va.-WIDE) • VENTURE FAIR FOR DARDEN ALUMNI AT REUNION • LAW CLINIC WITH U.Va. LAW SCHOOL • i.LAB INCUBATOR • PARTNERSHIP WITH SILICON VALLEY INCUBATOR • INNOVATION LABORATORY • DESIGN-THINKING WORKSHOPS • MENTORSHIP NETWORK Inspired Education | 9 INSTITUTE-SUPPORTED COURSES SOLVING BUSINESS CHALLENGES IN REAL-WORLD SETTINGS BIOINNOVATION A multidisciplinary course drawing students from Darden, U.Va.’s Department of Biomedical Engineering, and the schools of nursing, architecture, engineering and medicine. Students collaborate across disciplines to identify and frame clinically based challenges at the U.Va. Health Center. CORPORATE INNOVATION AND THE DESIGN EXPERIENCE The course examines how design thinking and innovation principles can be used to enhance the value and accelerate the development of business opportunities that deliver organic growth. Students learn to apply design methodologies and innovation tools by working in teams on a live, corporate project, in close proximity to a client company who has real problems to solve. 10 | ANNUAL REPORT 2012–13 CURRICULAR INITIATIVES The Institute’s research arm supports scholarship that advances the fields of entrepreneurship and innovation, and this research often manifests itself in novel, forward-thinking new courses, such as Corporate Innovation & the Design Experience, New Product Development and Starting New Ventures. Research supported by the Institute also takes the shape of groundbreaking initiatives, such as the i.Lab at U.Va., a nontraditional, flat-classroom teaching environment that includes a design-build studio where students can transform their ideas into physical prototypes. A number of Darden’s new entrepreneurship and innovation courses are steeped in design and multidisciplinary thinking and are taught in the i.Lab at U.Va. Students pursuing an MBA at Darden may elect the entrepreneurship concentration. The concentration lays the foundation for a deeper understanding of corporate and entrepreneurial success, covering topics such as how to create value not only through new products or services, but with novel technologies, business concepts, organizing structures, transaction/financing mechanisms, distribution channels and market segmentation. EXPERIENTIAL PROGRAMS Darden’s program in entrepreneurship builds on all of Darden’s academic offerings with a range of experiential programs and initiatives, providing students the critical skills they need to create successful businesses after graduation. The experiential programs include a business incubator, numerous competitions (including support for national and global competitions), funded internships, workshops, boot camps and mentorship opportunities. These programs enjoy a broad level of student participation and interest. Beginning in May 2013, the U.Va. i.Lab Incubator is hosting 24 companies for the 2013–14 academic year, including both those founded by current students and those founded by members of the local community. To date, 42 percent of incubator-launched or supported companies remain active enterprises after five years. The Batten Institute sponsors three major competitions each academic year: the Darden Concept Competition (which leads into the U.Va. Entrepreneurship Cup), the Effectual De-Risking Competition, and the Darden/U.Va. Business Plan Competition. Overall, a total of $85,000 was awarded at these competitions during the 2012–13 academic year. The Institute also actively develops or supports alumni and student entrepreneurship groups and networks, such as Darden’s Entrepreneurship and Venture Capital Club, Darden’s Business Innovation and Design Club, the Innovators, Designers and Entrepreneurs in Action at U.Va. (iDEA) networking group on LinkedIn, and U.Va.’s Entrepreneurship and Innovations Committee of the Student Council, a group that connects entrepreneurs from various schools across U.Va. BATTEN SCHOLARSHIPS Ten full scholarships are awarded annually to incoming Darden MBA students interested in starting their own ventures or becoming innovative leaders at established companies. One of the 2012–13 recipients is profiled below: Lucas Rogers (Class of 2013) spent the summer of 2012 in the Darden Business Incubator further developing Mobile Motions, his venture that will offer a smartphone app which allows the user to perform various functions through motion control by tapping into technology native to the phones. Rogers’ Batten Scholarship and acceptance into the Incubator program provided the funding, time and space needed to create a prototype. In coming to Darden after working as an engineer for General Motors, Rogers “always envisioned myself as an entrepreneur. … I keep a journal of ideas and a list of problems with solutions. This was an opportunity to work on one of those.” BATTEN INSTITUTE DEVELOPING NEW PRODUCTS AND SERVICES Students from several schools come together to use the basic tools of new product development in the context of a hands-on, teambased, product or service development project. Using the resources of the workshop in the i.Lab at U.Va. and those at the School of Engineering and Applied Science, students develop their ideas into working prototypes. Along the way they are led through concept generation and selection, iterative design, intellectual property management and product economics. This highly popular course is regularly over-subscribed despite expansion to three sections. Inspired Education | 11 TRANSFORMATIVE RESEARCH 12 | ANNUAL REPORT 2012–13 RESEARCH INITIATIVES The Institute supports a diverse portfolio of research initiatives in entrepreneurship and innovation. Current initiatives address five topics of critical importance to society: ENTREPRENEURIAL FINANCE ENTREPRENEURSHIP EDUCATION Faculty Leader: Susan Chaplinsky Financial capital plays an important role in launching and growing most entrepreneurial ventures. However, robust data on financing events and investor networks for businesses is scarce, as most companies are private and face limited reporting requirements. The Batten Institute’s Entrepreneurial Finance Initiative takes a rigorous approach to developing data and analyses that explore how entrepreneurs in public and private business build investor networks and finance their operations. Faculty Leader: Saras Sarasvathy Recent decades have brought an explosion in activity in the field of entrepreneurship education, with the number of U.S. colleges and universities offering courses related to entrepreneurship growing from just a few in the 1970s to more than 1,600 today. Yet no consensus has been reached on how entrepreneurship should be taught or even whether the existing programs are having the desired impact. This initiative seeks to illuminate effective strategies for teaching entrepreneurship and to better understand the outcomes of these programs. ENTREPRENEURIAL INNOVATION AND SUSTAINABILITY Faculty Leader: Andrea Larson Global concerns about sustainability have resulted in a wave of new products, processes, technologies, markets and ways of organizing business — inside firms, through supply chains and across vast networks of stakeholders. This initiative focuses on the mechanisms by which entrepreneurship and innovation can simultaneously drive a firm’s market success and discover solutions to critical societal challenges. BATTEN INSTITUTE INNOVATION AND GROWTH Faculty Leader: Edward Hess Shrinking markets, unrelenting competition and swiftly evolving technologies challenge the vitality of every business enterprise, large and small. This initiative examines how innovation can be the engine for sustained, internally generated business growth. ENTREPRENEURSHIP IN EMERGING DOMESTIC MARKETS Faculty Leader: Greg Fairchild New businesses are crucial for sustained economic development. This initiative supports research projects focused on entrepreneurs and the ingredients of entrepreneurship: seed-stage capital, mentors, sound social institutions and a culture that welcomes new ideas and educates and supports those who pursue them. 13 BATTEN FELLOWS BATTEN FELLOWS 2000–13 selected list JOEL BROCKNER The Implications of Crisis Management for Corporate Innovation, Creativity and Change CLAIR BROWN Innovation Dynamics in the Electronics Sector JOHN SEELY BROWN Learning in the Innovation Process GERD GIGERENZER Consumer Responses to Product Innovation ROGER GORDON Corporate Taxation LUTZ HILDEBRANDT Driving Innovation Through Marketing and R&D Synergies 14 | ANNUAL REPORT 2012–13 The Batten Fellows Program brings prominent and highpotential thought leaders to the Darden School of Business to further their research and to enrich our community. 2012-13 BATTEN FELLOWS William Gartner is the Spiro Professor of Entrepreneurial Leadership at Clemson University, and he is one of the co-founders of the Entrepreneurship Research Consortium, which initiated, developed and managed the Panel Study of Entrepreneurial Dynamics. He has used his fellowship to investigate “entrepreneurial narrative,” which is a concept that he developed to describe the trend of relying on entrepreneurs sharing “war stories” in entrepreneurship classes as a method for conveying knowledge about the entrepreneurial process and mindset. Gartner has generated a novel literature review of this area of investigation. To advance the research, he has collected primary data about how these stories tend to skew material aspects of the entrepreneurial experience. These outcomes have the potential to be published in peer reviewed journals, book chapters, and in practitioner-focused outlets to help entrepreneurship teachers maximize their effectiveness. Dali Ma is an assistant professor at the Drexel University LeBow College of Business and has expertise in the sociology of entrepreneurship. During his fellowship, he has sought to understand how social structural processes and positive psychological traits influence the likelihood of starting a new business. Ma has focused on positive psychological traits because people with them tend to be more susceptible to entrepreneurship. During his investigations as a Fellow, he has constructed a positive psychology index based on traits like optimism, self-efficacy and future orientation, and has isolated how social structural turbulence caused by significant life events and social capital impacts positive psychological traits important to the origin of entrepreneurship. Susan Cohen recently earned her Ph.D. at the University of North Carolina Kenan-Flagler Business School in the area of strategy and entrepreneurship. During her fellowship, Cohen investigated business accelerators, which are intensive entrepreneurship education programs that facilitate venture gestation. Specifically, she looked at accelerators’ role in reducing entrepreneurs’ startup risks through compressing the learning necessary for venture success into ever smaller time periods while not compromising the quality of learning. There are several findings. First, learning is accelerated by information overload created by time-compressed interactions with external advisers that delay implementation rather than spur it. Second, learning is accelerated by expert transfer that builds absorptive capacity in nascent ventures that lack it. Finally, learning is accelerated by peer coopetition — related ventures that are concurrently rivals and helpers. More broadly, this study contributes to organizational theory by bringing to light the central but heretofore hidden role of learning-coordination costs. This study also contributes to strategy by challenging the widely held assumption of time-compression diseconomies and to entrepreneurship by pioneering academic research on the purpose and effectiveness of accelerators. RESIDENT FELLOW MICHAEL JENSEN The Agency Costs of Overvalued Equity HENRY MINTZBERG Designing Strategy, Designing Global Management Education HOWARD STEVENSON Insights on Global Entrepreneurship: Education, Policy and Practice DALI MA Positive Psychological Traits in Social Structure: A Life-Course Analysis of The Resident Fellows program is new this year and is offered to Darden faculty members. In addition to research funds, the fellowship affords professors the opportunity to reduce their teaching responsibilities in order to focus on research opportunities. Sam Bodily is the John Tyler Professor of Business Administration and the first Darden faculty member to be accepted into the new Resident Fellowship program. His research investigates the balance between the risks that entrepreneurs must take and the risks that investors are willing to tolerate. In order to build a deeper understanding, Bodily has identified incentive-compatible mechanisms for entrepreneurs to reduce startup risks; developed models of a promising subset of mechanisms and demonstrated their effects on the entrepreneur, investors and interested parties; and carried out a risk analysis of these mechanisms in order to identify those that individually or in combination might achieve the greatest reduction of risk and the greatest incentive to innovate at the lowest cost. the Origin of Entrepreneurship CHARLES “CHIC” THOMPSON Focus: Creative Leadership PAUL JUNGER WITT Innovation and the Business of Film A complete list of fellows and descriptions of their research are available at www.batteninstitute.org. BATTEN INSTITUTE transformative research | 15 RESEARCH GRANTS Each spring, the Batten Institute solicits grant proposals from faculty members of the University of Virginia who are conducting rigorous and relevant research about entrepreneurship and innovation that results in high-impact intellectual outputs consistent with the missions of the Darden School and the University. 2012-13 GRANT RECIPIENTS Raul Chao and Jeremy Hutchison-Krupat: “The Collaborative Search Process” Ming-Jer Chen: “The Ambicultural Orientation and Entrepreneurship in Asia” Drew Hess and Tom Bateman (McIntire School of Commerce): “Breadth and Depth of Scientific Achievement” Edward Hess: “The Conundrum of Innovation and Execution Excellence” David LeBlang (College of Arts & Sciences): “Migrant Entrepreneurs, Remittances and Venture Capital in Emerging Markets” Michael Lenox: “Policy Drivers of the Direction of Innovative Activity: An Examination of the Role of Public Policy in Driving Green Innovation” (renewal) Jeanne Liedtka: Book projects — Solving Problems with Design Thinking: 10 Stories of What Works and Designing for Growth: A Field Guide Sonal Pandya (College of Arts & Sciences): “The Political Economy of International Venture Capital and Private Equity” Christopher Sprigman (School of Law): “Measuring Innovation in Intellectual Property: Experimental Studies” 16 | ANNUAL REPORT 2012–13 PUBLICATIONS BOOKS The Knockoff Economy: How Imitation Sparks Innovation Christopher Sprigman and Kai Raustiala New York: Oxford University Press, 2012 The Strategist’s Toolkit Jared Harris and Michael Lenox Charlottesville: Darden Business Publishing, 2013 ACADEMIC ARTICLES Liedtka, J. and Parmar, R. 2012. “Moving Design from Metaphor to Management Practice,” Journal of Organizational Design. Liedtka, J. and Ogilvie, T. 2012. “Helping Managers to Discover Their Appetite for Design Thinking,” Design Management Review. York, J. and Lenox, M. 2012. “It’s Not Easy Building Green: The Intersection of Private and Public Institutions in the Adoption of Voluntary Certification Standards.” Working Paper. Hutchison-Krupat, J. and R. Chao. (2013). “Tolerance for Failure and Incentives for Collaborative Innovation,” forthcoming in Production and Operations Management. Venkataraman, S., Sarasvathy, S.D., Dew, N. and Forster, W. 2013. “Of Narratives and Artifacts.” Academy of Management Review, 38(1): 163-166. Read, S. and Sarasvathy, S.D. 2012. “Co-Creating a Course Ahead From the Intersection of Service Dominant Logic and Effectuation.” Marketing Theory, 12(2): 225-229. Sarasvathy, S.D. 2012. Danish Translation of “What Makes Entrepreneurs Entrepreneurial.” Kognition and Pedagogik. BATTEN BRIEFINGS Batten Briefings is a series of research reports that address important and timely topics in entrepreneurship and innovation. The reports are offered free of charge online: www.darden.virginia.edu/batten/briefings Innovators’ Roundtable Series: Symphonic Improvisation — Creating a Culture of Innovation Competency Innovators’ Roundtable Series: The Double-Edged Sword of Collaboration Technologies Special Report: Prison Break — Can Entrepreneurship Solve the Recidivism Problem? JOURNAL OF BUSINESS VENTURING The Institute is a long-standing supporter of the Journal of Business Venturing (JBV), the premier scholarly journal devoted to entrepreneurship and innovation. JBV is ranked by the Social Science Citation Index as one of the most influential management journals. From 1995 to 2009, Darden Professor S. Venkataraman served as editor-in-chief. Darden faculty Michael Lenox and Saras Sarasvathy currently serve as field editors. Sarasvathy, S.D. 2013. “MAZES Without Minotaurs: Herbert Simon and the Sciences of the Artificial.” European Management Journal, 31: 82– 87. Venkataraman, S., Sarasvathy, S.D., Dew, N. and Forster, W. 2012. “Whither the Promise? Moving Forward With Entrepreneurship as a Science of the Artificial.” Academy of Management Review, 37(1): 21-33. BATTEN INSTITUTE transformative research | 17 CONSEQUENTIAL VOICE 18 | ANNUAL REPORT 2012–13 EVENTS Conferences, workshops, and speaking events provide the Institute with a platform to foster critical conversations with key stakeholders throughout the year. IDEAS TO ACTION TOUR Since 2009, Batten-affiliated faculty members have traveled to major cities to discuss their research with alumni, prospective students and community members. HOUSTON, TEXAS Professor Greg Fairchild Bert Smith, CEO, Prison Entrepreneurship Program SUNNYVALE, CALIFORNIA Dardenâ€™s Entrepreneurs-in-Residence, Plug and Play NEW YORK, NEW YORK Philippe Sommer, Director of the Center for Entrepreneurial Leadership BOSTON, MASSACHUSETTS Trip Davis, former President of the Darden School Foundation and Senior Associate Dean for External Relations JEFFERSON INNOVATION SUMMIT FOR THE COMMONWEALTH SEPTEMBER 2012 Summit delegates looked deeply into the many underleveraged opportunities within Virginia and identified strategies to help build more dynamic and robust entrepreneurial ecosystems. Drawing from these exchanges, delegates prepared a Policy Playbook to outline the best way forward for Virginia, potentially setting a benchmark for other states across the nation. www.jeffersoninformationforum.org BATTEN INSTITUTE Consequential Voice | 19 W.L. Lyons Brown III (Col ’82, MBA ’87) addresses a capacity crowd at the expanded i.Lab opening celebration. Brown donated generously to the creation of the new state-of-the-art incubator, along with 50 other donors and friends. i.LAB REOPENING: 11 APRIL 2013 OPENING OF THE EXPANDED W.L. LYONS BROWN III INNOVATION LAB AT UVA Celebration and Community Pitch Competition THIS IS MORE THAN JUST AN INGENIOUSLY DESIGNED PHYSICAL SPACE … IT REFLECTS HOW WE VIEW OUR ROLE AS PART OF THE UNIVERSITY OF VIRGINIA AND THE WORLD FAR BEYOND.” – Robert F. Bruner, dean of the Darden School of Business 20 | ANNUAL REPORT 2012–13 Several hundred people from across the University and the Charlottesville community convened at the i.Lab, located in Darden’s Sponsors Hall, for an afternoon of speakers and activities designed to showcase the remodeled collaborative space, home to an expanded business incubator. The opening event included presentations from current incubator businesses and innovation and design exercises led in the i.Lab classroom by Darden professors Jeanne Liedtka and Bidhan (“Bobby”) Parmar. The last portion of the event included a crowd-sourced community competition, “U.Pitch.C’ville Decides,” organized by the Batten Institute and the Tom Tom Founders Festival, which celebrates innovation and the arts in Charlottesville. The winner was Kenny Schulman, whose business, Eat. Drink. Play., connects visitors to Charlottesville with locals who can share the best the region has to offer. Schulman won $5,000 and an opportunity to participate in the i.Lab’s 2013-14 incubator class. THE i.LAB WILL ENABLE STUDENTS ACROSS THE UNIVERSITY TO LEARN ABOUT, CONCEIVE, LAUNCH, GROW AND ENGAGE WITH ENTREPRENEURIAL VENTURES THROUGH A DIVERSE ARRAY OF EDUCATIONAL AND EXPERIENTIAL PROGRAMS.” – Philippe Sommer, i.Lab director “JEFFERSON WAS A POLYMATH, SO I THINK HE WOULD APPRECIATE THE FACT THAT THE i.LAB WILL BRING TOGETHER FACULTY, STUDENTS AND LOCAL ENTREPRENEURS FROM SUCH A VAST RANGE OF DISCIPLINES AND INTERESTS TO COLLABORATE ON BUSINESS VENTURES. – Teresa Sullivan, U.Va. president BATTEN INSTITUTE Consequential Voice | 21 COMMUNITY ENGAGEMENT The Institute’s website, www.batteninstitute.org, provides an important connection to members of the Batten community and beyond. Site features include news, information about the Institute’s major initiatives, brief articles on supported projects, profiles of Batten-affiliated researchers and professionals, links to academic articles and teaching cases, and events listings. FACULTY LEADERS FORUMS The Batten Institute supports the formation of online forums, communities centered on the topics of entrepreneurship and innovation. The Society for Effectual Action, spearheaded by Darden Professor Saras Sarasvathy, is dedicated to the groundbreaking form of entrepreneurial thinking known as effectuation. Effectuation fundamentally reframes how entrepreneurship is researched and taught around the world, and how its principles are taught and applied in several Darden entrepreneurship courses and programs. Design@Darden provides resources for academics and others interested in teaching design thinking, and Darden's Center for Entrepreneurial Leadership is applying a design-based methodology to help Darden’s students through the product conception and innovation stages of developing a new business. i.Lab at U.Va. creates a nexus for entrepreneurship and innovation education. Its mission is to foster deep cross-collaboration with no boundaries, across disciplines, schools or ways of thinking. The i.Lab online forum facilitates information exchange among i.Lab Incubator participants and the larger entrepreneurial community. The site also features programs, courses and entrepreneurial activity at U.Va. and beyond. 22 | ANNUAL REPORT 2012–13 iDEA (Innovators, Designers & Entrepreneurs in Action) via LinkedIn is a burgeoning network of University of Virginia alumni, both new and experienced in the entrepreneurial sphere, and other leaders. Members share successes and opportunities, including events held around the country. In addition to the main group, there are several regional subgroups. e+i NEWSLETTER Creative Risk Reduction Darden Professor Samuel Bodily uses the tools of quantitative risk analysis to develop low-cost incentives for entrepreneurs and fresh approaches to venture financing. RECENT TOP POSTSRecent Darden’s Forbes.com Blog BIG DATA, SMALL BETS BY ROBERT CARRAWAY “Big data and small experiments — “De-Risk” Your Idea Before You Quit Your Job Darden students will learn to “de-risk” their business ideas in a new competition that challenges them to prove that their product ideas can overcome the most common risks. Teaching Design to MBAs Darden professor Jeanne Liedtka gives students the tools to find opportunities amid uncertainty. In the process, she takes them, and herself, well beyond what’s comfortable. what could appear more seemingly incongruous? Yet the truth is: These two trends, one from the world of analytics, the other from the world of innovation and change, can be powerfully combined to drive sustainable success in a highly uncertain world.” THE IMMINENT SHAKEOUT? DISRUPTIVE INNOVATION AND HIGHER EDUCATION BY MIKE LENOX “Much has been made of ‘flipping the classroom’ with MOOCs, but at a Socratic case-based school like Darden, we have been flipping the classroom Sign up for the e+i Newsletter by emailing email@example.com MEDIA COVERAGE During the 2012–13 academic year, the Batten Institute’s programs and faculty affiliates appeared more than 100 times in national and international media. for over 50 years.“ HOW TO INNOVATE — WITHOUT A MIRACLE BY JEANNE LIEDTKA “We talk about innovation, we fervently wish for it, and we wait for miracles — for Moses to part the waters … Maybe instead of waiting for someone to part the waters for us, the other 99 percent of us need to get real and start building some bridges.” BATTEN INSTITUTE 23 ENERGETIC COMMUNITY 24 | ANNUAL REPORT 2012–13 UNIVERSITY PARTNERS The Batten Institute partners with many units and organizations at the University of Virginia. These partnerships are critical to delivering programs and events to enhance the scope of the Institute’s efforts. In 2012–13 the Institute partnered with: the Office of the Governor of Virginia to host the Jefferson Innovation Summit for the Commonwealth; all 11 schools of the University and the University’s Office of the Provost and Office of the Vice President for Research to launch the newly expanded W.L. Lyons Brown III Innovation Laboratory; and with several schools to host the U.Va. Entrepreneurship Cup competition. Institute-affiliated faculty members play a key role in shaping the continued evolution of the fields of entrepreneurship and innovation through both their teaching and research. Finally, the Institute also works closely with student organizations. In 2012–13, the Center for Entrepreneurial Leadership collaborated with Darden’s Entrepreneurship and Venture Capital Club and the Business Innovation and Design Club, and the Institute is a strong supporter of the university-wide E*Society formed by Darden students in 2009. SCHOOL OF ARCHITECTURE COLLEGE AND GRADUATE SCHOOL OF ARTS & SCIENCES MCINTIRE SCHOOL OF COMMERCE SCHOOL OF CONTINUING AND PROFESSIONAL STUDIES CURRY SCHOOL OF EDUCATION SCHOOL OF ENGINEERING AND APPLIED SCIENCE SCHOOL OF LAW FRANK BATTEN SCHOOL OF LEADERSHIP & PUBLIC POLICY SCHOOL OF MEDICINE SCHOOL OF NURSING BATTEN INSTITUTE Energetic Community | 25 BATTEN AFFILIATES SAMUEL E. BODILY ANDREA LARSON SARAS D. SARASVATHY John Tyler Professor of Business Associate Professor of Business Isidore Horween Research Associate Administration; Area Coordinator, Administration Professor of Business Administration; Quantitative Analysis Jamuna Raghavan Chair Professor in DAVID LEBLANG Entrepreneurship, Indian Institute of RAUL O. CHAO J. Wilson Newman Professor of Governance Management, Bangalore Assistant Professor of Business Chair, Department of Politics, College of Arts Administration and Sciences SUSAN CHAPLINSKY MICHAEL J. LENOX Tipton R. Snavely Professor of Business Samuel L. Slover Research Professor of Administration Business and Associate Dean; Academic KATHRYN M. SHARPE Director of the Batten Institute Assistant Professor of Business JAMES D. SAVAGE Professor, Department of Politics, College of Arts and Sciences Administration MING-JER CHEN Leslie E. Grayson Professor of Business JEANNE M. LIEDTKA Administration United Technologies Corporation Professor PAUL J. SIMKO of Business Administration Associate Professor of Business Administration and Associate Dean, MBA for ROBERT L. CROSS Associate Professor of Commerce and ELENA LOUTSKINA Management, McIntire School of Commerce Assistant Professor of Business Administration Executives THOMAS C. SKALAK Vice President for Research and Professor GREGORY B. FAIRCHILD E. Thayer Bigelow Associate Professor of LUANN J. LYNCH Business Administration Professor of Business Administration of Biomedical Engineering CHRISTOPHER SPRIGMAN Professor of Law, School of Law MARY MARGARET FRANK PEDRO MATOS Associate Professor of Business Associate Professor of Business Administration Administration YAEL GRUSHKA-COCKAYNE ANTON S. OVCHINNIKOV Assistant Professor of Business Assistant Professor of Business SANKARAN VENKATARAMAN Administration Administration MasterCard Professor of Business THOMAS J. STEENBURGH John L. Colley Associate Professor Administration; Senior Associate Dean for MICHAEL E. GORMAN SONAL S. PANDYA Professor, Engineering & Society, School of Assistant Professor, Department of Politics, Engineering and Applied Science College of Arts and Sciences Faculty and Research RAJKUMAR VENKATESAN Bank of America Research Associate ANDREW M. HESS BIDHAN L. PARMAR Assistant Professor of Commerce, McIntire Assistant Professor of Business School of Commerce Administration EDWARD D. HESS GAL RAZ Professor of Business Administration and Associate Professor of Business Batten Executive-in-Residence Administration 26 | ANNUAL REPORT 2012â€“13 Professor of Business Administration LEADERSHIP TEAM ADMINISTRATION SEAN CARR Executive Director and Assistant Professor (as of 1 October 2013) B.A., Northwestern University; M.S., Columbia University; MBA, Ph.D., University of Virginia Darden OUTREACH AND COMMUNICATIONS JOYCE SMARAGDIS Associate Director of Outreach B.A., University of Virginia; M.A., Virginia Polytechnic Institute and State University School of Business MICHAEL LENOX DERRY WADE Executive Director (through 1 October 2013) Assistant Director of Communications Academic Director and Associate Dean A.B., Smith College; M.A., University of Virginia (as of 1 October 2013) Samuel L. Slover Research Professor of Business Administration; B.S., M.S., University of Virginia; Ph.D., Massachusetts Institute of Technology DEBBIE WHITE Associate Director of Operations B.A., University of Virginia; M.A., George Washington University CENTER FOR ENTREPRENEURIAL LEADERSHIP PHILIPPE SOMMER Director, Center for Entrepreneurial Leadership Director, i.Lab at U.Va. Associate, U.Va. Innovation B.A., Amherst College; MBA, Columbia University GAYLE NOBLE Office Manager KATHRYNE CARR Pan American Business School Director, i.Lab Incubator B.A., Alleghany College RESEARCH DIVISION MALGORZATA “GOSIA” GLINSKA Senior Research Associate MJ DOUGHERTY TOMS Associate Director, Center for Entrepreneurial Leadership B.A., Williams College; MBA, Yale University B.A., University of Gdansk, Poland; M.A., Boston University; MFA, University of Virginia VERONICA MCMILLION ANDREW KING Special Projects Manager B.A., University of Virginia Senior Research Associate B.A., The University of the South; M.S., Oxford Brookes University SHIVON SCOTT i.Lab Program Manager B.S., Cornell University; M.S., Rutgers University BATTEN INSTITUTE 27 FINANCIAL STATEMENTS research division center for entrepreneurial leadership EXPENSES admin FY 12 (Actual) CASH FLOW income expenses FY 14 (Budget) Administration $397,391 $431,905 $436,583 Outreach $334,796 $198,323 $134,273 Subtotal $732,187 $630,228 $570,856 CEL Staff $354,030 $486,256 $618,600 Outreach $39,355 $47,600 $58,000 Incubator $164,399 $472,000 $138,322 BVIP Interns $73,970 $145,000 $184,750 Competitions $45,231 $46,000 $71,750 Course Support $35,477 $34,400 $100,000 Batten Scholarships $653,900 $971,60 $1,097,400 Subtotal $1,366,362 $2,202,856 $2,268,822 Researchers $435,447 $472,005 $477,686 Faculty Research Grants $110,512 $250,000 $200,000 Batten Fellows $1,945 $20,000 $30,000 PhD Student Scholarships $72,943 $79,251 $49,374 Faculty Salary Support $1,031,027 $1,250,000 $1,250,000 Conferences $601,686 $124,865 $154,600 Subtotal $2,253,560 $2,196,121 $2,161,660 TOTAL OPERATING BUDGET $4,352,109 $5,029,205 $5,001,338 Spendable Balance $2,618,455 $2,924,776 $3,576,776 Endowment Interest $4,517,880 $3,426,678 $4,326,024 --- $971,600 $1,097,400 Craddock Fund $16,000 $45,000 $20,000 20 Account (E-Conference) $30,505 $30,505 $33,000 E-Conference Registration Fees $3,044 $2,350 $3,050 Scholarships $91,000 $111,000 $148,000 W. L. Lyons Brown III i.Lab Renovation __ $1,300,000 __ Adjustments __ $40,000 __ Total Income $4,658,429 $5,927,133 $4,878,226 Operating Expenses $(4,352,108) $(5,029,205) $(5,001,338) W. L. Lyons Brown III i.Lab Renovation __ $(1,670,763) __ Total Expenses $(4,352,108) $(6,699,968) $(5,001,338) ENDING BALANCE $2,924,776 $2,151,941 $2,028,829 Scholarships 28 | ANNUAL REPORT 2012–13 FY 13 (Estimated) BUDGET Income to support the Batten Institute is provided by an endowment created by Frank Batten Sr. and his family. As of June 2013, the market value of the endowment had reached approximately $113 million. The annual budget from this endowment is $5 million for fiscal year 13–14. 9% Administration 4% Outreach 25% Faculty Salaries 12% CEL Staff 3% BATTEN INSTITUTE Conferences 3% BUDGET $5,001,338 1% Ph.D. Scholarships 1% Incubator 4% BVIP Interns FY 2013–14 Batten Fellows 1% 4% Competitions Faculty Grants 2% Course Support 9% Researchers 22% Scholarships Percentages are rounded to the nearest whole number. Administration Center for Entrepreneurial Leadership Research Division Administration $436,583 CEL Staff $618,600 Researchers $477,686 Outreach $192,273 Incubator $138,322 Faculty Grants $200,000 BVIP Interns $184,750 Batten Fellows $30,000 Competitions $71,750 PhD Scholarships $49,374 Course Support $100,000 Conferences $154,600 Scholarships $1,097,400 Faculty Salaries $1,250,000 TOTAL BATTEN INSTITUTE $5,001,338 Financial Statements | 29 CONTACT E-MAIL WEB BATTEN@DARDEN.VIRGINIA.EDU WWW.BATTENINSTITUTE.ORG TWITTER @BATTENINSTITUTE @DARDENESHIP @DESIGNATDARDEN