Coller Venture Review 2018 Catalog

civ.global/cvr CATALOG (2018) $45

CVR #1: POLICY AND WELCOME / 06

《科勒风投评述》第一期：政策与创刊寄语

CVR #2: HISTORY OF VENTURE / 20

《科勒风投评述》第二期：风投历史

CVR #3: DEEP INNOVATION / 46

《科勒风投评述》第三期：深度创新

CVR #4: UNIVERSITY VENTURE / 72

《科勒风投评述》第四期：高校创业

CVR #5: CITY VENTURE / 98

《科勒风投评述》第五期: 城市风险投资

NEWS IN BRIEF / 120

文章摘要

THINKING THE WORlD OF43VENTURE POINTS OF VIEW

2018文章概览— —卷首语

Welcome to our 2018 catalog

Welcome to the 2018 Coller Venture Review catalog. Here you will fi nd the abstracts of 43 articles dealing with the evolving nature of the global venture ecosystem – with direct reference to full versions available to our members online free of charge.

Our research is organized into strands, each addressing a particular aspect of venture.

Every issue is dedicated to one such strand, as listed to your right in the table of contents of this catalog.

In the catalog, you will fi nd a diversity of articles, some of which address localized or industry-specific matters, while others present a global point of view. Some present successes and others, failures; some originate in well-developed economies, and some in emerging ones, across five continents.

The common thrust of all the articles is actionable knowledge synthesized by leaders of the venture ecosystem worldwide.

Yesha Sivan Professor and Executive Director, Coller Institute of Venture at Tel Aviv University

More than 600 such leaders have already joined CIV as active members, enjoying online access to the array of resources (articles, videos, presentations, among others) available from our institute. Some of them have received grants and awards, others have participated in our international events as guests and speakers.

If you wish to shape and impact the future of the venture ecosystem – as a public policymaker, an investor (limited or general partner), or other influencer – we invite you to likewise join our community as a member (http://civ.global/join).

Together, let us build a more effective venture ecosystem spanning the inception, creation, and nurturing of new ventures.

2 Coller Venture Review — Catalog (2018)

Ultimately, a robust and adaptive venture ecosystem improves humankind’s quality of life both directly by creating new jobs, and indirectly by creating new products and services – both leading to a better world.

civ.global/join

COLLER INSTITUTE OF VENTURE AT TEL AVIV UNIVERSITY

www.collerinstituteofventure.org

EDITORIAL BOARD

Jeremy Coller Eli Talmor Yesha Sivan (Editor-in-Chief)

Nathan Zeldes (Associate Editor)

TEAM

Ido Yavnai Hanan Cohen Vladi Dvoyris Dvir Shavit Naama Brezner Jael Fafner Shirley Zauer (Copy Editing)

Esther Rosenfeld (Proofreading)

Inna Barkan (Chinese)

DESIGN

WeDoDesign.co.il

COPYRIGHT

© 2018 Coller Holdings Ltd.

CONTENTS CVR #1: POLICY AND WELCOME Focuses on defi ning the venture ecosystem, its key players, the changing value of venture capital, and government policies to encourage and facilitate ventures.

CVR #2: HISTORY OF VENTURE Showcases our database of 160 venture-related events from the past 100 years, and derives insights from the historical development of venture ecosystems in a variety of domains – including the case of Apple and the growth of the Chinese venture capital market.

CVR #3: DEEP INNOVATION Explores the life cycle of ventures in areas such as Brain, Nanotechnology, Medical, and Water – the longer-term, investment-intensive, complex ventures that face hurdles beyond those seen in a typical IT or web-based start-up.

CVR #4: UNIVERSITY VENTURE Examines the challenges universities face in the 21st century, the age of de-monopolized knowledge, which threaten their traditional roles of research, teaching, and societal impact.

CVR #5: CITY VENTURE Elaborates on the relationship between the city and the ventures inside it, and on a city’s ability to develop, nurture, and preserve a unique venture domain that will turn it into a magnet for people, investments, and innovation.

NEWS IN BRIEF A selection of recent news covered on the Coller Institute of Venture website: http://civ.global

06 20 46 72 98 120

civ.global/ctlg

Coller Venture Review — Catalog (2018) 3

科勒风险投资研究院简介

What is the Coller Institute of Venture?

Countries around the world acknowledge the importance of innovative, fast-growing companies for future prosperity and jobs. Yet creating the conditions for such new ventures to materialize and flourish has proved remarkably difficult. It is to address this challenge that we have founded the Coller Institute of Venture at Tel Aviv University.

The recipe for success is complex, requiring many ingredients.

The most important ingredient of all – human ingenuity – can be taken for granted; however, history shows that the “seeds of ingenuity” often fall on stony ground. Even in an adverse environment, human ingenuity will triumph some of the time.

The challenge is to create fertile soil – true “venture economies” – in which it triumphs more often than not.

We believe there are three essential ingredients for a venture economy, and these are reflected in the objectives we have set for the Coller Institute:

Jeremy Coller Chief Investment Officer, Coller Capital

Eli Talmor Professor, London Business School; Founding Chairman, Coller Institute of Venture, Tel Aviv University

• Long-term capital – We will identify the conditions that will lead to compelling returns for long-term capital (e.g., pension plans, foundations, sovereign wealth funds) to invest in venture capital.

• Sources of IP – We will investigate and communicate best practice in technology translation from governments, universities, and corporates.

• Governments doing the right thing – We will promote innovation in policy-making and planning, encouraging governments to adopt best practice in legal frameworks, fiscal incentives, behavioral economics, and other parts of the public policy agenda.

We strive both to be a global hub and to make an impact on venture’s whole ecosystem.

4 Coller Venture Review — Catalog (2018)

• Global – We believe venture – the creation and encouragement of highpotential new companies – is a global concern. Our perspective is therefore global. We will draw insights and evidence from all over the world, and report our conclusions to interested parties worldwide.

• Hub – There is no shortage of information on venture. We will serve as a focal point for information, people, and tools, drawing together research, data, then inputs from third parties, and overlaying them with our own analysis and insights.

• Impact – Our ultimate aim is to improve the venture ecosystem, not simply to report its evolving nature.

We will measure our success by our ability to influence players across the venture world, from institutional investors and universities to venture capitalists and public policy-makers.

Web-based startups in Silicon Valley and Tech City are already awash with cash. Our focus is wider. We will ask how to “compress the value-chain” for deep innovation: how science in areas such as nano-materials, neuroscience, and robotics can be translated from the lab into sustainable businesses more quickly, more efficiently, and more often.

Now, it’s your turn Our logo deliberately includes a “yet-to-be-fi lled” triangle. We invite you to join our global community and help us create a more venturesome world.

科勒管理学院简介

Introducing the Coller School of Management

Professor Moshe Zviran Dean, Coller School of Management

The Coller School of Management at Tel Aviv University (Coller School@TAU) is ranked among the top management schools in the world, particularly in the area of venture and entrepreneurship where our MBA programs have been ranked Number 11 globally for their record of producing entrepreneurs backed by venture capital.

From its base in a city that has been recognized by Startup Genome as having the world’s best start-up ecosystem outside Silicon Valley, the Coller School has outstanding global reach, the result of its steadfast commitment to advancing excellence in research, teaching, and service. Over the years, we have consistently worked to enhance our standards, developing innovative programs and diversifying our teaching methodologies to provide our students with a cutting-edge learning experience.

Furthermore, Coller enjoys the vibrant community of Tel Aviv University – Israel’s largest and most comprehensive institution of higher education – home to more than 30,000 students studying in nine faculties, and more than 125 schools and departments across the spectrum of the sciences, the humanities, and the arts.

Propelled by a transformational gift announced earlier in 2016 from the Jeremy Coller Foundation, the Coller School aims to consolidate its place as a fi rst choice for aspiring innovators to build the skills, know-how, and networks for success in the world of venture.

To this end, we are: • Expanding our faculty, both tenure-track and visiting, with the best and brightest scholars in the area of venture • Establishing new research centers in a variety of disciplines on the frontiers of management education • Broadening our global curriculum and stepping up our recruitment of outstanding international students • Increasing our global outreach through international conferences, exchange, and executive education programs If you would like to join us in our efforts to advance our global venture ecosystem, ping me.

Coller Venture Review — Catalog (2018) 5

Check out CVR #1:

Welcome/policy

TO READ MORE SCAN THE QR CODE

civ.global/cvr1

Policy is at the heart of venture success Policy of venture can be examined through a number of lenses – global, national, or local; whether it is the European Union attempting to drive innovation across the continent, the U.S. government legislating supportive laws that encourage new ventures, or the municipality of Barcelona fostering the creation of a Science Park.

Thus, the first issue of Coller Venture Review – its Welcome issue – is devoted to a high-level examination of policies. Beginning with an overview of today’s global venture ecosystem, it continues with articles scrutinizing the VC model and value, the success factors governing Science Parks, and concludes with a tapestry of 44 policy components that policymakers can mix and match to optimize their efforts.

Whether you are a policymaker or an involved stakeholder, this issue is designed to leave you better informed and able to address the challenges ahead with actionable insights and models.

Coller Venture Review — Catalog (2018) 7

COLLER INSTITUTE OF VENTURE AT TEL AVIV UNIVERSITY

www.collerinstituteofventure.org

EDITORIAL BOARD

Jeremy Coller Eli Talmor Moshe Zviran Yesha Sivan (Editor-in-Chief)

Robyn Klingler-Vidra

CONTENTS THE VENTURE ECOSYSTEM FRAMEWORK: MESSY, FAST, AND GLOBAL

10

Professor Yesha Sivan

(Associate Editor)

TEAM

Yù (Zöe) Zhái Itai Asaf Odeya Pergament Ann Iveson

This article presents a generative framework for the venture ecosystem and highlights the current trends affecting the ecosystem

IS THE VC MODEL ‘BROKEN’?

Allee Zhang

12

Has the Venture Capital (VC) fund model been successful in rewarding investors with returns worth their high-risk illiquid investments?

MAIN ILLUSTRATIONS: Joe Wilson www.joe-wilson.com

COPYRIGHT

MEASURING SCIENCE PARKS’ PERFORMANCE Abraham Carmeli

14

© 2014 Coller Holdings Ltd.

How they are designed and managed to achieve optimal performance

THE PUBLIC VENTURE POLICY MENU Robyn Klingler-Vidra

Public policymakers’ tools for fostering local venture ecosystems

civ.global/cvr1

8 Coller Venture Review — Catalog (2018)

16

our Definition of Venture: NEW, HIGH-POTENTIAL AND CAPITAL BASED The term “venture” has many meanings.

We focus on what can be called new highpotential, capital-based ventures. Let’s unpack the three terms of this defi nition: New To a large degree we are focusing on new ventures, rather than restructurings, leveraged buyouts, and other later–stage initiatives. If an innovation is spun–off to start a new fi rm, be it a corporate, a national lab or a university, this will be considered a venture. We are also using “new” to distinguish new kinds of ventures. For example, if an investment in an oil field takes a standard – albeit risky – approach, this will not count as a venture for our purposes.

High-potential

Capital-based This means the ability of funding to accelerate the development of the innovation, allowing the fi rm to develop faster, capture mind share and then market share, thus generating returns for the investors. In this sense, a family-owned pizzeria will be a lifestyle business. However, if the same pizzeria, with capital and the right leadership, turns into a global chain, it will be considered a venture.

Naturally, this defi nition involves judgment calls. What is new? At what point do you gauge the level of potential? How much capital is needed? So, we need to bear in mind that these terms should be used as guides, rather than as strict defi nitions.

We will look at ventures that have the potential to create high societal value, and thus create value to investors (the investor’s value also relates to the next term, “capital based”). High value means a combination of elements that affect many people (millions and often billions), replacing older systems and creating new ones. For many, the value is in the eye of the beholder, but for the investors, high value is more absolute. Value means high returns on their investment, to compensate for the risk and the illiquid nature of their investment.

Coller Venture Review — Catalog (2018) 9

创业生态系统框架：凌 乱、快速、全球化

civ.global/ecosys

Yesha Sivan Professor and Executive Director, Coller Institute of Venture at Tel Aviv University

10 Coller Venture Review — Catalog (2018)

The Venture Ecosystem Framework:

Messy, Fast, and Global

Operating within the venture ecosystem, let alone impacting it, can be a difficult undertaking. Why is this so? Well, for one, it is forever evolving and churning rapidly before our eyes.

Even the definition of “venture” can be a moving target.

FURTHER RESOURCES

In this article, Prof. Sivan strives to methodically show us what venture means, who are the stakeholders involved in its evolution, and how they are affected by – and in turn affect – the hectic nature of venture in the 21st century.

Ernst & Young (2013) Turning the corner – Global venture capital insights and trends 2013.

The article discusses the roles of Public Authorities, Institutional Investors, Venture Capitalists, and Entrepreneurs, putting them all into context. Relevant case studies such as Intellectual Ventures, Kickstarter, Amazon Cloud services, and IBM’s Global Tech Unit are used for illustration.

The article presents the three ongoing trends characteristic of the ecosystem: • Messy • Fast • Global The current trends affecting it from the top (from the enabling side): • Rise of corporate virtual R&D

Jeng, L. A., & Wells, P. C. (1998) The Determinants of Venture Capital Funding: Evidence Across Countries. Retrieved from http://papers.ssrn.com/ abstract=103948 Mulcahy, D. (2013) Six Myths About Venture Capitalists.

Harvard Business Review, 80–83.

NVCA (2013) NVCA Yearbook 2013. National Venture Capital Association.

Vermeulen, E. P. M., & Pereira Dias Nunes, D. (2012) The Evolution and Regulation of Venture Capital Funds.

Ex Research Topics in Corporate Law & Economics, 1.

• Rise of super angels • Rise of regulation The current trends affecting it from the bottom (from the innovation side): • Rise of new treatment of ideas • Rise of innovation platforms • Rise of the early users factor

Coller Venture Review — Catalog (2018) 11

风投模式是否已经“破产”？ 对成功风投的观察：在该 资产类别中，谁赢谁输？

Is the VC model ‘broken’?

Observations on VC Success: Who Wins and Who Loses within the Asset Class?

civ.global/vcmdl

Allee Zhang Affiliate Researcher, Coller Institute of Venture

12 Coller Venture Review — Catalog (2018)

The key question is: Are most VCs bound to lose their investors’ money?

The uneasy feeling is always there: many VC investments are a poor deal for Limited Partners (LPs). Unfortunately, the issue is clouded by data that is patchy, anecdotal, and at times confusing. Some investments – the “Unicorns,” certainly – are a huge success, others are a dismal failure, and outcomes (relative to public markets) vary according to time, place, and other factors.

So, is the VC model broken, or isn’t it?

FURTHER RESOURCES Kaplan, N. & Lerner, J. (2009) It Ain’t Broke: The Past, Present, and Future of Venture Capital.

Mulcahy, D. (2012) We have Met the Enemy…and he is Us, Ewing Marion Kauffman Foundation.

This article tries to tackle the question by identifying concrete metrics, collating the results of multiple studies, and comparing data from the U.S. and European VC scenes. As might be expected, it shows that there is no single answer – but it does share many insights about the details. And these details matter because they show that VCs as an investment strategy are under attack from multiple alternative asset classes.

Coller Venture Review — Catalog (2018) 13

衡量科技园的表现 清华科技园、帝国理工学院 西校区及15个其他科技园

Measuring Science Parks’ Performance TusPark, Imperial West, and 15 other Parks

civ.global/parks

Abraham Carmeli Professor of Strategy and Management, Tel Aviv University

14 Coller Venture Review — Catalog (2018)

Everybody loves Science Parks. Co-locate a university, science/tech-based companies large and small, accelerators, and other stakeholders, and all that knowledge and energy is sure to percolate through and create venture value.

Yet not every Science Park is guaranteed to succeed; indeed, they can also fail, and there are known factors that can affect the likelihood of success and failure.

Prof. Carmeli studied numerous Science Parks on three continents, and examined their strategies, circumstances, and outcomes. He concludes that while these parks can foster the creation of new knowledge and innovation – and drive the economic development of the regions hosting them – they must overcome challenges to attain that success. In particular, they must optimize their interaction with local government, their business model, strategy, and infrastructure.

The article presents a comparison table of 14 Science Parks in 12 countries, providing data on their size, headcount and company counts, and focus areas. Case studies of the Imperial College White City campus in London and TusPark in Beijing go into more detail.

FURTHER RESOURCES Carter, N. (1989) Science Parks, Taylor & Francis.

Ferguson, R. & Olofsson, C. (2004) Science Parks and the Development of NTBFs - Location, Survival and Growth.

The Journal of Technology Transfer, 29(1), 5–17.

Löfsten, H. & Lindelöf, P. (2002) Science Parks and the growth of new technology-based firms – academic-industry links, innovation and markets. Research Policy, 31(6), pp.859– 876.

Coller Venture Review — Catalog (2018) 15

公共创业政策清单 政府当局能够采用的44项政策

The Public Venture Policy menu 44 POLICIES Public Authorities can Take

civ.global/44plcy

Robyn Klingler-Vidra Senior Research Fellow, Coller Institute of Venture

16 Coller Venture Review — Catalog (2018)

There are numerous policy approaches that can be applied or combined to encourage a venture ecosystem’s health.

Understanding these policies is critical. This article presents 44 policies, classified into eight categories: funding, taxation, regulation, clusters/networks/institutes, attracting talent and investment, stock market access, technology infrastructure/ government procurement, and education/training. Each policy is illustrated with examples and commentary.

Addressing areas from government loans to IP legislation, from entrepreneur training centers to open borders, from primary school curricula to telecom infrastructure, the author first informs the policymaker – and then adds a word of caution: it is risky to try too many approaches at once. Overengineering the ecosystem is dangerous, too. You need to adapt the policy to local conditions – and this article gives you the raw material to choose from, modify, and combine into the viable strategy you need to successfully navigate the ecosystem.

FURTHER RESOURCES Lerner, Josh (2009) Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed — and What to Do About It. Princeton: Princeton University Press.

Tech City (2013) Tech Powers the London Economy: The Tech City 3rd Anniversary Report.

Gulinello, Christopher (2005) “Engineering a Venture Capital Market and the Effects of Government Control on Private Ordering: Lessons from the Taiwan Experience,” George Washington International Law Review, 37(4): 845-883.

Coller Venture Review — Catalog (2018) 17

· Executive Education · Executive MBA · Executive MBA/MPA · Full-time MBA · Master’s in Management · PhD

TOP IN GERMANY: ESMT

European Business School ranking Financial Times

ESMT Berlin Schlossplatz 1 10178 Berlin ESMT Berlin Campus Schloss Gracht Fritz-Erler-Straße 1 50374 Erftstadt www.esmt.org

Ranked by

Accredited by

Founders and benefactors of ESMT

Check out CVR #2:

History of Venture

TO READ MORE SCAN THE QR CODE

20 Coller Venture Review — civ.global/cvr2

Catalog (2018)

Design the Future by Using the Past How is the Sputnik launch connected to the invention of the Internet? What can we learn from the relationship of war and technological development? These are the kinds of questions that we asked when we set out to look at the History of Venture. Our goal was to create a database capturing the History of Venture in the tumultuous century starting with World War I, and thereby enable the study of individual events, of the relationships between events, and of the highlevel insights that would emerge.

This research project placed in our hands an invaluable resource for studying venture and innovation and the factors impacting their success, and inspired much of the present issue of Coller Venture Review.

We then put it at the disposal of researchers of Venture and History everywhere, along with our design considerations which are described in this issue.

The CIVHOV database reveals multiple insights, especially when you look across the sweep of the century for commonalities and interesting conclusions. These are shared in the article “Key Insights From a Century of Venture.” The database itself is shared here in two forms, a timeline and a data table, the full database can be accessed electronically by CIV community members on the CIV web site, and can inform your own research. Articles about specific cases of venture evolution in different locales – for example, the development of Apple and the growth of the Chinese venture capital market – complete this issue.

Read all about it – and accept our invitation to engage with the CIVHOV database by adding content and collaborating in our research.

Coller Venture Review — Catalog (2018) 21

COLLER INSTITUTE OF VENTURE AT TEL AVIV UNIVERSITY

www.collerinstituteofventure.org

EDITORIAL BOARD

Jeremy Coller Eli Talmor Yesha Sivan

CONTENTS Overview of History Issue: Rationale and Content

(Associate Editor)

Professor Yesha Sivan Dr. Robyn Klingler-Vidra

Robyn Klingler-Vidra TEAM

Ido Yavnai Ann Iveson Odeya Pergament Dvir Shavit Noa Mondrowicz Jane Utting (Copy Editing)

Grace Liu (Chinese)

24

DESIGN THE FUTURE BY USING THE PAST

(Editor-in-Chief)

26

KEY INSIGHTS FROM A CENTURY OF VENTURE Lessons from the Coller History of Venture Database Professor Eli Talmor What can we learn through a centurial (1914-2014) analysis of major events in venture?

DESIGN

WeDoDesign.co.il

COPYRIGHT

© 2015 Coller Holdings Ltd.

28

HISTORY OF VENTURE DATABASE: METHODOLOGY AND RATIONALE How and why do you choose the most important events from the past century?

THE HISTORY OF VENTURE

TIMELINE

Chronological illustration of key events in each CIVHOV category

1910

1911

1912

1913

1914

1915

1916

DISCOVERY

1917

1918

30

1919

INVENTION

#8005

INNOVATION

VENTURE

TABLE

Detailed presentation of the CIVHOV entries and their impacts on venture and the world

#8001

World

EVENT

#8004

Investor AB

ORGANIZATION

FACTOR significant ownership positions in each company it invests in, allowing it to impact key decisions. It is focused on Sweden but also on the greater Nordic area.

#8003

Blood

OTHER

The domestic electric refrigerator keeps food from spoiling by using the cooling effect of a decompressing gas to cool the thermally insulated chamber where the food is placed. This technology, which replaced ice-cooled ‘Ice Boxes’, was introduced in 1913 and mass-produced by Frigidaire after 1916. The introduction of Freon in 1928 expanded the refrigerator market during the 1930s and provided a safer, low-toxicity alternative to previously used refrigerants; the later discovery that CFC refrigerants harm the ozone layer caused Freon to be banned in 1994 and replaced by other gases.

The Enigma was an electro-mechanical, rotor-based cipher machine used for enciphering and deciphering secret messages. It is famous due to its widespread use by the German armed forces in WWII and to its successful cracking by the British cryptanalysts at Bletchley Park. Enigma was invented by the German engineer Arthur Scherbius in 1918, and was sold for commercial use before being improved and adopted by the German military.

58 Venture Finding — 2015-1— History Issue

civ.global/cvr2

22 Coller Venture Review — Catalog (2018)

32

TULIPS, GOLD RUSH, AND DOTCOM Riding the Next Bubble

34

Professor Dave Valliere Explaining why bubbles in the venture ecosystem happen again and again

APPLE'S DNA Socially Connected Inventors and Technologies

36

André Vermeij How much did Steve Jobs drive Apple's innovations? Analyzing the dynamic networks producing Apple's edge from 1978–2014

CORPORATE ADVENTURE IN VENTURE Do Giants Create Giants?

38

Professor Gary Dushnitsky Google, Intel, and Pfizer: The historic rise of corporate venture capital and its implications for the venture ecosystem

GROWING THE VENTURE DRAGON: CHINA A Regional Case Study

40

Professor Manhong Mannie Liu Key developments in China's Venture Capital market 1985–2015 and forecast for the future

SEEDING A VENTURE WOLF: BALTICS A Regional Case Study

42

Linas Sabaliauskas Before Skype was Skype: How public investors fueled the growth of the Baltic venture capital market 1990–2014

Coller Venture Review — Catalog (2018) 23

什么是 以史为鉴，设计未来 科勒风险投 资研究院?

Jeremy Coller Chief Investment Officer, Coller Capital

Eli Talmor Professor, London Business School; Founding Chairman, Coller Institute of Venture, Tel Aviv University

civ.global/past

Yesha Sivan Professor and Executive Director, Coller Institute of Venture at Tel Aviv University

Robyn Klingler-Vidra Lecturer, King’s College London; Fellow, Coller Institute of Venture at Tel Aviv University

24 Coller Venture Review — Catalog (2018)

Design the Future

by Using the Past

What does the past have to do with the forward rush of venture in the 21st century? A great deal, claim the authors of the introduction to this issue of Coller Venture Review. The history of venture is full of examples of both successes and failures: consider the meteoric rise of the small start-up Skype, and the obscurity of the small start-up Vocaltec which had the earlier claim to computer-based telephony. Why did Skype succeed? Why did Vocaltec not? What lessons can future investors and entrepreneurs learn from this difference?

FURTHER RESOURCES

However revealing specific cases may be, they are not enough in isolation: a wider context is required to generate the required insights, which often bridge multiple decades of history. This is where the History of Venture database at the heart of this issue comes in: it provides the context and will enable future research. Meanwhile, the articles that follow focus on specific aspects and case studies.

Skype: #HOV8135 in our History of Venture database

Coller Venture Review — Catalog (2018) 25

对100年来风险投资的主要观察 科勒风投历史数据库 中的经验教训

Key Insights from a Century of Venture Lessons from the Coller History of Venture Database

civ.global/keyi

Eli Talmor Professor, London Business School

26 Coller Venture Review — Catalog (2018)

Sometimes you have to step back and take a holistic view of a knowledge base. Read this article to share in seven key insights we derived from the wealth of information in the Coller Institute of Venture’s History of Venture database (CIVHOV).

By considering the database’s entries holistically, comparing and abstracting from the details, the following insights became evident:

FURTHER RESOURCES Ante, Spencer E. (2008).

Creative Capital: Georges Doriot and the Birth of Venture Capital.

Cambridge, MA: Harvard Business School Press.

Jones, G. and Wadhwani, R.D. (2007) “Entrepreneurship and Business History: Renewing the Research Agenda” Harvard Business School Working Paper 07-007.

1. It isn’t only technology 2. Individuals matter 3. The free flow of ideas is an enabler 4. Wars are engines of innovation 5. Supportive legislation and regulation are a necessity

Klingler-Vidra, R. (2014) “The Public Venture Policy Menu: Policies Public Authorities Can Take” CVR #1a: 36-42.

6. Timing innovations is difficult 7. The truth is elusive Each of these insights, which this article explains and supports with specific historical examples, is an open invitation for both research and action. But then, the insights are just a start; the true value of our ongoing work is in enabling the main actors of the venture ecosystem (policymakers, limited partners, venture capitalists, and entrepreneurs) to gain a unique creative direction for your endeavors, and help us expand this unique store of knowledge by sharing your ideas regarding entries, insights, and how you use them.

Coller Venture Review — Catalog (2018) 27

风投历史数据库：方法论与结构 如何及为何从过去100年 中选择最重要的事件

History of Venture Database: Methodology and Structure civ.global/hovdb

Nathan Zeldes Research Affiliate, Coller Institute of Venture at Tel Aviv University

How and why we choose the most important events from the past century

Ido Yavnai Research Fellow, Coller Institute of Venture at Tel Aviv University

28 Coller Venture Review — Catalog (2018)

Designing the Coller Institute of Venture’s History of Venture database (CIVHOV) was a challenge on many fronts. We had to define what taxonomy to use, which entries to include, and what information to record for each entry. Lacking a precedent, we made our choices so as to move beyond the obvious and extend the database to cover the entire venture ecosystem: not just technology, but also organizations, legislative acts, historical events, and any other items that had an impact on venture in the century we chose to cover (1914–2014).

DISCOVERY

INVENTION

We ended up with eight classes of entries:

Idea Generation entries

Enabling entries

Discovery

Organization

Invention

Event

Innovation

Factor

Venture

Other

INNOVATION

VENTURE

Our criteria for which entries to include (though of necessity tempered by subjective judgment) were that an entry must satisfy one or more of the following:

EVENT

• Be significant on its own merit • Have a disruptive impact on a current business model, and change the way people live

ORGANIZATION

• Be an enabler, becoming a platform on which a new branch of innovation is founded • Attain commercial impact as the basis of a viable product line

FACTOR

Read this article for more detail and other design decisions that gave the CIVHOV database its current usefulness.

OTHER

Coller Venture Review — Catalog (2018) 29

THE HISTORY OF VENTURE (1914–2014) - SAMPLE 1914

DISCOVERY

1915

1916

INNOVATION

VENTURE

Refrigerator

A new object, device, or idea that did not exist previously and was created for the first time by the inventor.

A change in something that already exists, which improves it by applying better ideas or methods than were in use previously.

#HOV8003

Blood transfusion

An undertaking to achieve a certain goal, often involving some difficulty or risk.

#HOV8001

An occurrence that happens at a definite moment or specified duration in time.

EVENT

World War I

#HOV8004 Investor AB

ORGANIZATION

FACTOR

A group of people working together for a shared purpose.

A circumstance, fact, or influence that affects the matter at hand.

#HOV8002

Ford Model T

OTHER

1918

1919

Something that already existed but was not known about until detected and made known by its discoverer. #HOV8005

INVENTION

1917

An entry not belonging to any other class.

30 Coller Venture Review — Catalog (2018)

#HOV8174

Enigma cipher machine

timeline 1920

1921

1922

1923

1924

1925

#HOV8006

1926

1927

1928

1929

#HOV8010

Insulin

Penicillin

#HOV8008

#HOV8011

Air conditioning

#HOV8007 Vaccines

Synthetic Polymers

#HOV8009 Bell Labs

#HOV8012

Stock Market Crash

#HOV8013

The Macmillan Committee

Coller Venture Review — Catalog (2018) 31

THE HISTORY OF VENTURE (1914–2014) - SAMPLE #HOV

TITLE + DATE

DESCRIPTION

8001

WORLD WAR I 1914

World War I (WWI) was a global war centered in Europe that took place between 1914 and 1918. It involved all the major world powers in one of the deadliest conflicts in history, and had major repercussions in multiple spheres of politics, culture, and technology.

8002

FORD MODEL T 1914

The Ford Motor Company’s Model T was the first affordable automobile, and the car that opened up travel to middle-class Americans. The key to Henry Ford’s success was the development of a superbly efficient, mass production assembly line. Revolutionizing traditional manual production, it enabled, in 1914, the streamlining of the assembly process down to only 1.5 hours – a new car was produced every three minutes. That year Ford produced more cars than all the other automakers combined.

8003

BLOOD TRANSFUSION 1914

Blood transfusion is the process of putting blood from one person into another’s circulation. This requires extracting the blood from a donor, optionally processing and storing it for some time, and putting it into the recipient without adverse (or lethal) effects. In 1914 sodium citrate was discovered as an anticoagulant, allowing storage of blood for days in blood banks. A primary earlier advancement was the discovery of human blood groups (O, A, and B) by the Austrian Karl Landsteiner in 1901, without which blood transfusion could be lethal.

8004

INVESTOR AB 1916

Investor AB is a Swedish investment company. Its business model is based on significant ownership positions in each company it invests in, allowing it to impact key decisions. It is focused on Sweden but also on the greater Nordic area.

8005

REFRIGERATOR 1916

The domestic electric refrigerator keeps food from spoiling by using the cooling effect of a decompressing gas to cool the thermally insulated chamber where the food is placed. This technology, which replaced ice-cooled “ice boxes,” was introduced in 1913 and mass-produced by Frigidaire after 1916. The introduction of Freon in 1928 expanded the refrigerator market during the 1930s and provided a safer, low-toxicity alternative to previously used refrigerants; the later discovery that CFC refrigerants harm the ozone layer caused Freon to be banned in 1994 and replaced by other gases.

8174

ENIGMA CIPHER MACHINE 1918

The Enigma was an electro-mechanical, rotor-based cipher machine used for enciphering and deciphering secret messages. It is famous due to its widespread use by the German armed forces in WWII and to its successful cracking by the British cryptanalysts at Bletchley Park. Enigma was invented by the German engineer Arthur Scherbius in 1918, and was sold for commercial use before being improved and adopted by the German military.

32 Coller Venture Review — Catalog (2018)

civ.global/hovtbl

TABLE

IMPACT ON VENTURE PATHWAY

IMPACT ON THE WORLD

WWI applied multiple novel technologies, being the first war in which tanks, telephony, radio, armored cars, tanks, and aircraft were put to use, as were chemical (gas) weapons.

More than nine million combatants and seven million civilians died as a result of the war; it had a massive impact on the course of 20th-century civilization. As two examples, it led to the founding of the League of Nations, precursor of the UN; and it was a catalyst for near universal suffrage in the United Kingdom and Germany.

The assembly line was a giant leap forward and had immense influence on manufacturing and processing across numerous products. The Model T was a major economic multiplier. Popularizing the use of cars revolutionized personal and family travel, and created a whole new market and economic boost that included steel production, improved infrastructure, more and better roads, more shops, and finally more motels as people traveled more often and farther.

This is a prime example of gradual advances over three centuries, gated by growing scientific understanding.

The ability to store and transfuse blood was first used on a wide scale in WWI, and is credited with saving numerous lives since then in treating hematological diseases, during surgeries, and in treating accident- and battle-related injuries.

Investor AB was created by the Wallenberg family when Swedish law changed to prohibit banks from owning shares in industrials. The company promoted Sweden’s strong industrial presence across the engineering and medical sectors. It is the pioneer of building businesses in the investment manner referred to today as private equity (and venture capital).

By allowing food to be stored for much longer without spoiling, the refrigerator has had a significant impact on lifestyles worldwide. It permits the buying of food in bulk, with attendant cost savings, and enables the consumption of cold beverages and ice cream. The freezer enables an entire industry – frozen food and usage model.

The need to crack the Enigma drove the establishment of the cryptanalysis program at Bletchley Park, one of the first largescale collaborative scientific groups of its kind, and triggered the development of a sequence of computing algorithms and hardware that was instrumental in the invention of the modern computer.

The German belief in Enigma's infallibility, coupled with their unawareness of the British success in deciphering its transmissions, gave the Allies an advantage that is said to have shortened WWII by some two years.

Coller Venture Review — Catalog (2018) 33

郁金香泡沫、淘金热、互联网风投 下一个风投泡沫呢?

Tulips, Gold Rush, and DotCom Riding the Next Bubble

civ.global/tulips

Dave Valliere Associate Professor of Entrepreneurship & Strategy at Ryerson University

34 Coller Venture Review — Catalog (2018)

Speculative bubbles can wipe out investors in great numbers, yet nobody seems to learn their lessons. Prof. Valliere tries to explain why this clearly irrational behavior persists by examining the phenomenon from a historical perspective.

The article identifies key bubbles in five centuries from the History of Venture. It compares the attributes of representative bubbles from the Dutch tulip bubble in 1637, through the South Sea bubble, the British railway mania of 1846, the California Gold Rush, the great stock market crash, and on to more recent ones such as the Dotcom bubble and the Subprime crisis of 2008.

The reason why bubbles happen again and again, the author argues, is because of the bounded rationality of venture actors. These players in the venture ecosystem convince themselves that each bubble is in fact not a bubble; that it is somehow different from previous ones. This negates their ability to learn from the bitter experience of their predecessors, with the inevitable disastrous outcome for their own investments.

FURTHER RESOURCES Simon, H.A. (1972) “Theories of bounded rationality” in McGuire, C.B. and Radner, R. (eds.), Decision and Organization, Amsterdam, NL: NorthHolland Publishing.

Stiglitz, J.E. (1990) “Symposium on bubbles” Journal of Economic Perspectives, 4(2): 13-18.

Valliere, D. and Peterson, R. (2004) “Inflating the bubble: examining dotcom investor behavior”, Venture Capital, 6(1): 1-22.

To avoid being trapped into making the same error, you would do well to heed Valliere’s concluding advice, which also draws on the historical lesson: avoid accepting the hype, identify the likelihood of a bubble as it forms, and adopt the ”pickaxe” philosophy – remembering that in the California Gold Rush the group of entrepreneurs that came out ahead were not the eager prospectors, but the shopkeepers who sold them tools and supplies.

The dotcom bubble:

#HOV8129 in our History

of Venture database

Coller Venture Review — Catalog (2018) 35

苹果公司的遗传基因： 用社交网络连接的发明家与技术

Apple’s DNA Socially Connected Inventors and Technologies

civ.global/apple

André Vermeij Founder and Owner, Kenedict Innovation Analytics

36 Coller Venture Review — Catalog (2018)

Apple is a famous success story, but how this came to be is often obscured by the general admiration for the company and its famous founder.

This article brings state-of-the-art tools of social network analysis to bear on a fascinating problem from the history of venture: how exactly did Apple evolve its outstanding success, and what role did Steve Jobs’s exceptional abilities play in this story?

The author uses the dataset of the company’s prolific patenting activity from 1978 to 2014 as raw material, and utilizes the 9,663 patents and 5,272 unique inventors it contains to track, over time, the shape and composition of the social networks responsible for producing Apple’s patents. The patent publication rate is shown to have risen from one per year in the late 1970s to 2,231 in 2014. While this in itself is not surprising, the changes in time in the visualizations of Apple’s internal inventor networks, and their relationship to different product lines and organizational units, highlight what has been going on during the company’s growth.

FURTHER RESOURCES Blondel, V.D., Guillaume, J.L., Lambiotte, R., & Lefebvre, E. (2008).

Fast unfolding of communities in large networks. Journal of Statistical Mechanics: Theory and Experiment, 10: 10008.

The findings made visible through this network analysis technique show how Apple’s technology and inventor networks grew exponentially over the years; how clusters of related technologies and inventors emerged, evolved, and stabilized over time in connection to many of Apple’s key product lines; and how highly connected individuals – Steve Jobs certainly, but also various other key inventors in specific technology areas – acted as bridges between the different technology clusters in ways that also evolved over time.

Apple Inc.: #HOV8084 in our History of Venture database

Coller Venture Review — Catalog (2018) 37

企业在风投市场冒险 大企业可以创造大企业吗？

civ.global/giants

Gary Dushnitsky Associate Professor of Strategy and Entrepreneurship, London Business School

Corporate Adventure in Venture Do Giants Create Giants?

38 Coller Venture Review — Catalog (2018)

This article reviews the rise and implications of CVCs (Corporate Venture Capitalists) – a subset of the VC community comprised of large companies that invest in ventures in a systematic manner that they view as a component in a corporate strategy. It lays out the special attributes of these investors, which are different from other types of venture capitalists: corporate venture capitalists – such as Pfizer Ventures and BMW i Ventures – are unique in their interest in non-financial return on investment and the depth and breadth of services they can bring to the companies they invest in.

Prof. Dushnitsky takes a historical view and outlines four distinct waves in the history of CVCs from the 1960s to the present.

The mid-1960s saw many American corporations start CVC programs, but this wave crashed after the oil crisis and related macroeconomic changes in the 1970s.

The 1980s saw CVC energized again due to the growth in techdriven opportunities and increased legislative flexibility. This time it was the 1987 market crash that reversed the growth of CVC. The 1990s experienced an explosive growth in Internet-related ventures, leading to a wave of CVC activity that stalled with the 2000 crisis in the public markets.

FURTHER RESOURCES Alvarez-Garrido, E. & G. Dushnitsky. (2013) “Publications and Patents in Corporate VentureBacked Biotech,” Nature Biotechnology, 31 (June): 495-497.

Dushnitsky, G. (2012) “Corporate Venture Capital in the 21st Century: An Integral Part of Firms’ Innovation Toolkit,” in Cumming (ed.) The Oxford Handbook of Venture Capital. Oxford: Oxford University Press.

Gompers, P. and Lerner, J. (2000) “The Determinants of Corporate Venture Capital Success: Organizational Structure, Incentives, and Complementarities,” in Morck, Randall (ed.)

Concentrated Corporate Ownership. University of Chicago Press.

The recent wave started in the mid-2000s and involves a wide range of sectors and geographies, the establishment of longerlived CVC programs than before, and a serious increase in the extent of investment – for instance, US$12.31 billion in 2014 in the United States alone.

Corporate VC is having an impact on the innovation and venture ecosystems. It has the means and motivation to invest in Deep Innovation ventures (those stemming from basic research breakthroughs and requiring substantial resources and more than 10 years to materialize); it has the resources and know-how to help bridge the chasm between science and commercial product; and it can help integrate entrepreneurial hubs across global geographies.

Cisco Investments:

#HOV8121 in our History

of Venture database

Coller Venture Review — Catalog (2018) 39

“风投巨龙”的成长——中国 一项区域案例研究

civ.global/vdra

Manhong Mannie Liu Director and Professor at Venture Capital Research Group, Center for Fictitious Economy and Data Research, CAS

GROWING THE VENTURE DRAGON: CHINA A Regional Case Study 40 Coller Venture Review — Catalog (2018)

The eyes of the world are on China’s remarkable economic growth; but while China’s venture capital market – the world’s second largest as of 2015 – imitates that development, few people are aware of it.

In this article, Prof. Liu explores the history of the venture capital market in China from 1985 to 2015. This market grew from US$518 million to US$16.8 billion between 2001 and 2014. It began as a strictly government-funded activity, but at the turn of the century regulation was changed to encourage VC activity, and private and then foreign investments drove the market higher and higher. The article shows in detail – with accompanying data – the rise of foreign investment, the developments of local stock markets and the VC nurturing measures taken by national and, provincial governments.

FURTHER RESOURCES Chen, Youzhong Chen, Liu, Manhong Mannie and Liao, Junxia (2011) China Venture Capital: 20 Years' History, China Development Press.

Cheng Siwei, Report for China Venture Capital Forum 2008 (in Chinese).

Technology SME Innovation Fund 1999 Annual Report.

The author concludes with predictions for the next stage that we can expect in this lively evolution. She expects an increase in government funding and financial reform, a strengthening of the local VC ecosystem through driving changes in education and culture, and a stronger domestic IPO market.

Chinese economic reform: #HOV8118 in our History of Venture database

Coller Venture Review — Catalog (2018) 41

“风投之狼”的培养——波罗的海地区 一项区域案例研究

SEEDING A VENTURE WOLF: BALTICS A Regional Case Study

civ.global/wolf

Linas Sabaliauskas Managing Partner at TRINITI, a pan-Baltic legal practice

42 Coller Venture Review — Catalog (2018)

Estonia, Latvia, and Lithuania became independent of Soviet rule in 1990, and have undergone a rapid transformation into modern Western democracies. Over the ensuing 25 years they have grown a successful venture ecosystem, a process from which the author draws useful lessons for other regions.

FURTHER RESOURCES

The key factor in this story is the enabling role of public entities – government organizations and International Financing Institutions (IFIs) – in empowering the creation of the venture ecosystem. The article outlines the three phases of the ecosystem’s growth, and shows the influence that investing bodies such as the European Bank for Reconstruction and Development (EBRD), the U.S. Agency of International Development (USAID), and other IFIs have had on getting the process underway and driving it forward.

The influence of these bodies is not limited to making capital available; they also empowered the education of the local venture players – government institutions and VC fund managers. The IFIs have the patience and long-term outlook needed to get the ecosystem firmly underway, at which point local VC firms can begin to fund, sponsor, and educate local entrepreneurs and managers.

http://www.ifc.org/ wps/wcm/connect/ a7aa6e00487ca3809d7abd

Baltic American Enterprise Fund – IFC factsheet:

84d70e82a9/Balaef. pdf?MOD=AJPERES IMF World Economic Outlook Database 2014.

Mezo, J., Bagi, A. (2012) “Crisis Management in the Baltic States,” MPRA Paper, 40366: 428.

The outcome of this successful evolution is that the Baltic states now enjoy a vibrant venture ecosystem poised to drive the economic growth and sustainability of the region’s economy.

Skype: #HOV8135 in our History of Venture database

Coller Venture Review — Catalog (2018) 43

30TH ANNUAL

14-16 November 2017 Four Seasons Hotel, Hong Kong GLOBAL PERSPECTIVE, LOCAL OPPORTUNITY

The 30th Annual AVCJ Private Equity & Venture Forum is the largest and most influential gathering of private equity and venture professionals in Asia.

NEW AD

BOOK BEFORE

4 August to SAVE UP TO

US$900

Confirmed KEYNOTE SPEAKERS this year include: Christopher Ailman

Daniel A. D’Aniello

Jonathan Lavine

Dave McClure

Chief Investment Officer CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM (CALSTRS)

Co-Managing Partner BAIN CAPITAL

Chairman and Co-Founder THE CARLYLE GROUP

Founding Partner 500 STARTUPS

Key forum statistics in 2016 1,000+ Attendees

530

Organisations

330

Limited Partners

175

Expert Speakers

34

Countries

Customer Enquiries: Email us at enquiry@avcj.com Registration Enquiries: Anil Nathani T: +852 2158 9636 E: book@avcj.com Sponsorship Enquiries: Darryl Mag T: +852 2158 9639 E: Darryl.Mag@avcj.com

av cjfo r u m . c o m

Join your peers

#avcjforum #avcjhk #avcj30th

Check out CVR #3:

Deep Innovation

TO READ MORE SCAN THE QR CODE

civ.global/cvr3

Can Venture Go Deep?

Issue 3 of the Coller Venture Review looks at one of the more difficult kinds of innovative ventures: Deep Innovation.

We define Deep Innovation as inventions that are enabled by basic research or a scientific breakthrough. Unlike what we see in the ubiquitous digital/internet/cyber start-ups, these usually entail substantial resources (US$5-100 million), and may take years (5-20) to materialize. Notable examples can be found in the sectors of: • Pharma • Water venture • Nanotechnology • Brain tech Because of the sheer size of the required effort, these innovations are notoriously difficult to bring to commercial success. The oft-used metaphor is “crossing the valley of death,” that gulf between the research laboratory and industrial application that neither academia nor industry may have the will or patience to traverse.

The ten articles in this issue examine this theme from many angles, in domains from Nanotechnology to Food Tech and from Pharma to Materials Science. The authors come from backgrounds as diverse as academia, industry, and venture capital. Between them they share success stories and lessons learned, which will inform and enlighten you as you consider deep innovation in any field of science and technology.

Coller Venture Review — Catalog (2018) 47

COLLER INSTITUTE OF VENTURE AT TEL AVIV UNIVERSITY

www.collerinstituteofventure.org

EDITORIAL BOARD

Jeremy Coller Eli Talmor Yesha Sivan

CONTENTS

(Editor-in-Chief)

DEEP INNOVATION: SOLVING HUMANITY’S BIG PROBLEMS NEEDS MORE COMMITMENT

(Associate Editor)

An overview

(Associate Editor)

Professor Yesha Sivan

Robyn Klingler-Vidra Nathan Zeldes

50

Dr. Robyn Klingler-Vidra

TEAM

Ido Yavnai Odeya Pergament Noa Mondrowicz Dvir Shavit Sagi Shavit Jane Utting (Copy Editing)

Grace Liu

DEEP INNOVATION A LA TAU NANOTECH CENTER Institutional Case Study

52

Professor Yael Hanein

(Chinese)

STAFF WRITERS

Rebecca Bierman Deborah Moher Orily Pratt DESIGN

WeDoDesign.co.il

COPYRIGHT

© 2016 Coller Holdings Ltd.

Multidisciplinary approach that strives for business leaps

DEEP INNOVATION IN THE MEDICAL DOMAIN A LA BOSTON'S CIMIT

54

Institutional Case Study Professor Steven C. Schachter et al.

Crossing the chasm from academia to industry

DEEP INNOVATION AND BRAIN VENTURES Domain Case Study

56

Dr. Dana Bar-On

Advancing solutions for debilitating conditions

DEEP INNOVATION AND PHARMACEUTICAL VENTURES Domain Case Study Ram Waisbourd Crossing the Valley of Death

civ.global/cvr3

48 Coller Venture Review — Catalog (2018)

58

DEEP INNOVATION WITH GRAPHENE TECHNOLOGIES

60

Technology Case Study Professor Daniela Baglieri et al.

Recombinant capabilities and patent portfolio strategies

DEEP INNOVATION IN WATER VENTURES Domain Case Study

62

Roy Wiesner

Big opportunities and challenges

DEEP INNOVATION IN FOOD VENTURES Domain Case Study

64

Niccolo Manzoni

Feed humanity more, and healthier

DEEP INNOVATION WITH IRRIGATION TECHNOLOGIES

66

Technology Case Study Dr. Yoav Zeif

Netafim — Growing more with less

THE CHALLENGES OF DEEP INNOVATION: FROM AMERICAN ACADEMIA TO THE MARKETPLACE Policy Case Study Professor Zeev Rosenzweig Melissa Muth How the U.S enables small- and medium-sized enterprises.

68

深度创新：解决人类难 什么是 题需要更多付出 科勒风险投 资研究院?

Jeremy Coller Chief Investment Officer, Coller Capital

Eli Talmor Professor, London Business School; Founding Chairman, Coller Institute of Venture, Tel Aviv University

civ.global/dpin

Yesha Sivan Professor and Executive Director, Coller Institute of Venture at Tel Aviv University

Robyn Klingler-Vidra Lecturer, King’s College London; Fellow, Coller Institute of Venture at Tel Aviv University

Deep Innovation: Solving Humanity’s Big Problems Needs More Commitment

50 Coller Venture Review — Catalog (2018)

Deep Innovation ventures – those that are enabled by basic research or a scientific breakthrough, and that usually require substantial resources and five to 20 years to materialize as a commercial success – are capable of transforming human existence. Unfortunately, they often begin with a group of scientists who are unaware of the commercial application of their work, or even of a problem in need of such an application. Therefore, they may end up publishing a paper and moving on to other things. How to prevent this is a recurrent theme in the present issue.

FURTHER RESOURCES

The authors outline and discuss a number of challenges – some financial, others organizational and cultural – which apply across multiple research domains. These include, among others: • Need for cross-sector collaboration • Academic silos • Need for institutional solutions • Finding problems for solutions • Need for patience and risk-taking The authors point out that at the end of the day, the crucial factor for enabling Deep Innovation is commitment – and more commitment: commitment from the key players, including policy makers, investors, researchers, and entrepreneurs. This includes time commitment, commitment to high risk tolerance, commitment to invest capital – commitment to see the innovations make it across the valley and actualize their potential for doing good.

Coller Venture Review — Catalog (2018) 51

特拉维夫大学纳米科学 技术中心的深度创新 机构案例研究

Deep Innovation a la TAU Nanotech Center Institutional Case Study

civ.global/nano

Yael Hanein Professor of Electrical Engineering at Tel Aviv University

52 Coller Venture Review — Catalog (2018)

What has brought the Tel Aviv University Center for Nanoscience and Nanotechnology to its current glory? This vibrant hub of research and cooperation has already spun off multiple successful ventures, in spite of the challenges inherent in Deep Innovation in academia.

It is very difficult to make university nanotech research cross the chasm into commercial relevance. Prof. Yael Hanein, the vital force behind the center, provides insight into the successful resolution of these challenges, among which are the required massive investment in infrastructure, the gap between academic mores and the needs of industry, and the necessity for multidisciplinary collaboration. The TAU Nanotech Center has implemented the following solutions:

FURTHER RESOURCES Schmidt, Karen, F. (2007) “Nanofrontiers: Visions for the Future of Nanotechnology” Woodrow Wilson International Center for Scholars. Available at: http://www. nanotechproject.org/ file_download/files/ PEN6_NanoFrontiers.pdf

• It has gradually and methodically built a comprehensive system to provide facilities for the entire Nano research community in Israel.

• It has incorporated a group of “entrepreneurs in residence” who proactively assist and guide researchers to forge the required relationships with industry.

• It has instilled a “Nano Culture” among the many researchers working in its facility, which consists of a mindset and day-to-day interactions that encourage the sharing and exchanging of views between researchers and students from diverse academic backgrounds.

There are invaluable lessons here for other domains of Deep Innovation activity in academia.

A nanoscopic marvel:

#HOV8102 in our History

of Venture database

Coller Venture Review — Catalog (2018) 53

波士顿医学与创新技术融合中 心(CIMIT)的医学领域深度创新 机构案例研究

Steven C. Schachter Professor of Neurology at Harvard Medical School; Chief Academic Officer and Program Leader of NeuroTechnology at CIMIT

John Collins Chief Operating Officer at CIMIT

Michael K. Dempsey Entrepreneur-in-Residence and Accelerator Program Leader at CIMIT

Diane Spiliotis Chief Finance and Information Officer at CIMIT

John Parrish Professor of Dermatology at Harvard Medical School; Chief Executive Officer at CIMIT

civ.global/medi

Steven C. Schachter

Deep Innovation in the Medical Domain a la Boston's CIMIT Institutional Case Study

54 Coller Venture Review — Catalog (2018)

The Healthcare field is facing major crises, including the aging of the population, the need to increase access for all to the best standard of care, and societal imperatives to contain healthcare-related costs. Unfortunately, there are many challenges to innovation in this domain, where researchers tend to work in siloed laboratories, without the entrepreneurial acumen and collaborative paradigms needed to implement their ideas.

This article showcases CIMIT, the Consortia for Improving Medicine with Innovation and Technology, a Boston-based cooperation of universities and hospitals (founded by Massachusetts General Hospital, Brigham and Women’s Hospital, MIT, and the Draper Laboratories) whose meticulously constructed suite of integrated methods and processes implements a solution to this difficult state of affairs. Referred to collectively as the CIMIT Model, the methodology described in the article is able to find, fund, and facilitate collaborations across disciplines and geographic regions. These successfully drive innovative solutions to unmet medical needs, from concept to patient care. The model starts with an intimate understanding of the medical needs, identifies collaborators who can work together on these, and provides leadership, facilitation, and resources to guide them through a detailed “innovation cycle” that progresses toward useful, commercially viable outcomes.

FURTHER RESOURCES Parrish J, Schachter S, Carleton P, Dempsey M, Spiliotis D, Collins J. CIMIT: a model for accelerating the healthcare innovation cycle. IEEE Pulse 2014;5(1):46-54.

Parrish J, Schachter SC, Dempsey MK, Collins, John. Facilitating translational research.

J Invest Dermatol 2015;135:1463-65.

The CIMIT model works: as of 2015 it has generated 458 patents, 2,293 peer-reviewed publications, and an investment

by CIMIT of US$55 million in 228 solutions, which have received US$1.1 billion in follow-on funding from commercial companies and other entities. Given the model’s effectiveness, CIMIT is now building on its success in the United States to link hubs of medical innovation across the world into a network of consortia to address important regional healthcare imperatives.

At the forefront of Biomedical R&D: #HOV8144 in our History of Venture database

Coller Venture Review — Catalog (2018) 55

深度创新与大脑科技初创企业 专业领域案例研究

Deep Innovation and Brain Ventures Domain Case Study

civ.global/brain

Dr. Dana Bar-On Head of Industry-academia Cooperation at the Sagol School of Neuroscience at Tel Aviv University

56 Coller Venture Review — Catalog (2018)

There is a very alarming gap in brain space. Central Nervous System (CNS) diseases are rightly seen as “the plague of the 21st century,” with nearly 100 million people in the United States alone suffering from CNS disorders, resulting in an annual economic cost of more than US$760 billion. In Europe, these disorders affect 38 percent of the citizenry and account for a third of the overall disease burden on society. At the same time, six of the ten largest pharmaceutical companies sharply reduced their CNS-targeted drug development efforts in the 2009-2013 time frame.

Dr. Bar-On’s article deals with the unique challenges of the brain field and the obstacles that have so far led to the situation where we have no cure or disease-modifying therapy for any brain disorder, resulting in a massive abandonment of the field by big Pharma firms. Fortunately, 2015 showed signs of growing interest in brain cure R&D, expressed in new initiatives and innovation models set to bring industry, government, and academia back into the complex game of Neuroscience. This auspicious development has been empowered by a number of factors: • The appearance of new tools – e.g., Big Data analysis – which significantly increase the chances for a quantum leap in the next few years

FURTHER RESOURCES Betz, U.A., and Tidona, C.A. (2015). Outcubation – where incubation meets outsourcing. Nature biotechnology 33, 20-21.

Choi, D.W., Armitage, R., Brady, L.S., Coetzee, T., Fisher, W., Hyman, S., Pande, A., Paul, S., Potter, W., Roin, B., et al.

(2014). Medicines for the mind: policy-based ‘pull’ incentives for creating breakthrough CNS drugs.

Neuron 84, 554-563.

IOM (Institute of Medicine). 2015.

Financial incentives to encourage development of therapies that address unmet medical needs for nervous system disorders: Workshop summary. Washington, DC: The National Academies Press.

• Promising early indications from trials of two new treatments for Alzheimer’s disease • New models for incubating CNS innovation collaborations at the industry/academia interface These new developments could bring the search for desperately needed cures back on track, offering new hope to brain disorder sufferers.

Coller Venture Review — Catalog (2018) 57

深度创新与制药初创企业 专业领域案例研究

civ.global/pharm

Ram Waisbourd Vice President, Transformational Initiatives and Operations, Global Research and Development, Teva Pharmaceutical Industries

Deep Innovation and Pharmaceutical Ventures Domain Case Study

58 Coller Venture Review — Catalog (2018)

Modern pharmaceuticals can work wonders to improve and prolong life, but new and better medicines are notoriously difficult to develop.

In this article, the vice president of R&D of Teva, a worldleading Pharma company, focuses on what he terms “The Valley of Death,” the gap between academia and industry where many promising ideas go astray. The article takes us through the nine stages of the long journey from innovative idea to approved medicine:

FURTHER RESOURCES

• The first three stages – early novel pathway exploration, target discovery, and target validation – happen in academia.

• The last four, involving clinical development and registration, belong in the Pharma industry.

• And the two in between, discovery and pre-clinical, together comprising the Translational Research phase, could be funded by either domain but are typically underfunded by both.

The author looks in detail at the economic and organizational constraints that can destroy the process during the Translational Research phase. He then reveals a number of potential solutions to this problem, some driven by industry, some by governments, others by private foundations. Examples are initiatives by government, industry, and private non-profits that fund and encourage translational research; government initiatives aiming to bring together academics and industry personnel; and companies trying to change the intrinsic economics of translational research – a change that is perhaps the most critical to future success in this domain. Much remains to be done, but the efforts described are steps in the right direction.

For a prime example of pharmaceutical R&D, check #HOV8106 in our History of Venture database

Coller Venture Review — Catalog (2018) 59

应用石墨烯技术深度创新 技术案例研究

Daniela Baglieri Professor of Strategic Management at the University of Messina

Francesco Paolo Appio Research Fellow at the University of Pisa

Fabrizio Cesaroni

Associate Professor of Management at the University of Messina

civ.global/grpn

Daniela Baglieri

Deep Innovation with Graphene Technologies Technology Case Study

60 Coller Venture Review — Catalog (2018)

This article takes an innovative approach to mining patent data in order to gain understanding of how corporate strategies affect Deep Innovation success.

Creating Deep Innovation in the exciting new field of Graphene nanotechnology requires the creation, recombination, and integration of the scientific and technological knowledge from multiple sources. Corporations can do this in a variety of ways, and the strategy they choose can have a deep effect on their results.

To examine these corporate strategies, the authors employed an original approach and analyzed the patent portfolios of 14 leading firms in Graphene R&D, numbering between them 1,538 patent families. They characterized these according to the origins and nature of the knowledge they embody, differentiating between scientific and technological sources.

The study found remarkable differences in the strategies of different firms, and showed that the interplay between the scientific and technological knowledge bases played a key role in determining the innovativeness of these firms and their ability to develop deep Graphene-related innovations.

“Ambidextrous” companies that are able to integrate knowledge from diverse domains of science and technology are seen to have an advantage in creating novel Graphene-related products embodying Deep Innovation. Companies that focus more on technology sources may be destined to play other roles as the industry consolidates, but will be less successful in groundbreaking innovation.

FURTHER RESOURCES Baglieri, D.; Cesaroni, F.; and Orsi, L. (2014) Does the nano-patent ‘Gold Rush’ lead to entrepreneurial-driven growth? Some policy lessons from China and Japan, Technovation, 34, 12, 746-761.

Callaert, J.; Van Looy, B.; Verbeek, A.; Debackere, K.; and Thijs, B. (2006) Traces of prior art: An analysis of non-patent references found in patent documents, Scientometrics, 69, 1, 3-20.

Cesaroni, F.; and Baglieri, D. (2012) Navigating the markets for technology.

How does patent analysis support partner selection in nanotechnology?

In Capaldo A. (ed.), Advances in Strategy and Organization, pp. 83-107.

Milan: McGraw-Hill.

This detailed study of Graphene strategies is naturally instructive for companies in other R&D domains.

Graphene: #HOV8138 in CIV’s History of Venture database

Coller Venture Review — Catalog (2018) 61

水相关初创企业的深度创新 专业领域案例研究

Deep Innovation in Water Ventures Domain Case Study

civ.global/watr

Roy Wiesner CEO, Hutchison Kinrot

62 Coller Venture Review — Catalog (2018)

Can you make a profit from Water ventures? A commonly held perception is that you cannot. Roy Wiesner, the author of this article, begs to differ, bringing his considerable experience to examine both sides of this issue.

The article outlines the unique issues besetting Water as an investment domain: • There is a general perception that water should naturally be a “free” resource, leading to regulated prices well below actual cost.

• Water projects require massive capital expenditures, with a long return on investment (ROI) delay.

• In many countries, the water sector is highly fragmented (there are more than 50,000 water utilities in the United States alone).

• The sector is heavily regulated by risk-averse authorities.

It then explains how, despite these obstacles, Water is poised to become a major field of venture in the coming years. The increasing global need for water and the droughts that thwart it lead to many new opportunities for innovative companies that work on control, monitoring, desalination, reclamation, and waste water management. The demand for innovation in this space is also linked to the emergence of Smart Cities and the smart water network technologies they require.

FURTHER RESOURCES Lux Research Inc., “Making Money in the Water Industry.” Excerpt available at http://www. luxresearchinc.com/ news-and-events/pressreleases/read/new-andprofitable-opportunitiesremain-600-billion-water Global Water Intelligence, “What are the real economics of smart water networks?”

(2013) – https://www. globalwaterintel.com/ insight/what-are-realeconomics-smart-waternetworks Cleantech Group “i3 Quarterly Innovation Monitor – Water & Wastewater,” Q4 2014.

Report available at http:// www.cleantech.com/ reports/

Last, a promising trend can be found in the Water-Energy Nexus – the close link between water and energy production projects. With water playing a crucial role in both oil extraction and thermoelectric plant operation, the dwindling water supply produces strong incentives for the energy sector to fund relevant water technology programs.

As the article concludes, “water is on its way to becoming one of the main focus areas of corporate investors in the Clean-Tech space, offering a clear promise for meaningful and profitable investments.”

Coller Venture Review — Catalog (2018) 63

食品初创企业的深度创新 专业领域案例研究

civ.global/food

Niccolo Manzoni Office of the Chairman at Coller Capital

Deep Innovation in Food Ventures Domain Case Study

64 Coller Venture Review — Catalog (2018)

Because food production is seldom thought of as an area of innovation, this article is a real eye-opener. Over the past decades, food technology has made food plentiful and affordable. Yet this paradigm is heading for a crisis, because – as people are increasingly noticing – this bounty has come with significant hidden costs to the public’s health, social equity, animal welfare, and the planet’s natural environment.

This article presents the birth of a group of companies reinventing the way we think about food through revolutionary innovative technology. By applying knowledge from biotechnology and medical science, data analysis, and food science, they are working to displace entire categories of food as we know them today. For example, there is a race on to produce meat that never saw an animal yet replicates the sensory experience of the food we know, at an affordable price, without harming the Earth’s ecosystem. Other traditional foods are also being replaced.

FURTHER RESOURCES MIT Business Report - High-Tech Food Chain – http://www. technologyreview.com/ news/537576/foodtechnology-for-all/ National Geographic – The Future of Foods Series - http://food. nationalgeographic.com/ The New York Times Magazine – The Extraordinary Science of Addictive Junk Food - http://www. nytimes.com/2013/02/24/ magazine/theextraordinary-science-ofjunk-food.html?_r=0

The timing is right: even while the technology brings such ambitious developments within reach, the food industry is ready for disruption and consumer expectations encourage it to consider change. The author describes four levels of innovation that these changes can follow: • Reducing costs by improving well-known manufacturing processes; e.g., plant protein extraction methods that produce meat-like texture • Innovations in business model; e.g., the emergence of indoor vertical farming • Data science and computational advances; e.g., application of deep machine learning to huge datasets of plant species’ attributes to identify replacements for animal product components • Application of biotechnology to food production; e.g., producing meat and milk in vitro There are many challenges ahead, from manufacturing hurdles to the entrenched food supply chain; but the companies working on these innovations – with intriguing names such as Beyond Meat and Impossible Foods – certainly mean business. To get an idea of what you may literally find on your plate in a decade or two, read this article.

Food Tech innovations: #HOV8117 in CIV’s History of Venture database

Coller Venture Review — Catalog (2018) 65

应用灌溉技术深度创新 技术案例研究 耐特菲姆： 投入更少，收获更多

Deep Innovation with Irrigation Technologies Technology Case Study: Netafim – Growing More with Less

civ.global/irig

Dr. Yoav Zeif President of the Americas division and Head of Product Offering and Marketing, Netafim

66 Coller Venture Review — Catalog (2018)

This article describes the story of Netafim, a company that began with one man’s idea – the concept of drip irrigation – and became a world leader in irrigation solutions.

Netafim’s slogan, “Grow more with less,” refers to more crop output with less water – an equation that can mean life or starvation to millions of people in a world of growing population and increasingly scarce water resources. And Netafim is achieving this with a vengeance – one cited case study shows a 30-40 percent yield increase while reducing water consumption.

FURTHER RESOURCES

This impressive success story required not only a constant focus on technological innovation but also a strategy for making this innovation welcome in an inherently conservative customer base distributed throughout many countries in both the developed and the developing world.

There is much to learn from the methods Netafim employed to succeed in this difficult market: • A focus on continuing technological innovation • Direct interaction with end users in more than 110 countries through full-fledged subsidiaries • Partnering with influential local and international organizations to bring innovation to the farmers in their reach • Dedicated, professional employees who provide to end users excellent service grounded in a passion for revolutionizing agriculture through the company’s technology Read the article for details and informative case studies illustrating this proven methodology.

Drip irrigation: #HOV8057 in CIV’s History of Venture database

Coller Venture Review — Catalog (2018) 67

深度创新面临的挑战：从 美国学术界到商业界 政策制度案例研究

civ.global/dpch

Zeev Rosenzweig Professor and Chair, Department of Chemistry and Biochemistry at the University of Maryland Baltimore County

Melissa Muth Graduate student at the Department of Toxicology, University of Maryland School of Medicine

The Challenges of Deep Innovation: From American Academia to the Marketplace Policy Case Study

68 Coller Venture Review — Catalog (2018)

Deep Innovation can’t thrive in a vacuum; it requires a supportive environment.

This policy case study examines the strategies applied by the U.S. government, through its science funding agencies, to enable the development of new technologies or products based on scientific discoveries in U.S. academic institutions.

This has been a long-standing challenge, with the time to market of many academic discoveries being as long as 20 years, and many of them never making it across the “Valley of Death” at all. Recognizing this challenge, the U.S. National Science Foundation (NSF) has developed new programs with the specific objective of shortening the transition.

This article describes traditional and new U.S. programs that aim to spur economic development based on basic science and engineering discoveries, including: • The Small Business Innovative Research (SBIR) and Small Technology Transfer Research (STTR) Programs • The NSF’s Grant Opportunities for Academic Liaison with Industry (GOALI) and Semiconductor Research Corporation (SRC) partnership

FURTHER RESOURCES George S. Ford, Thomas M. Koutsky, and Lawrence J. Spivak, “A Valley of Death in the Innovation Sequence: An Economic Investigation”, September 2007, Report prepared for the U.S. Department of Commerce.

Steve H. Barr, Ted Baker, Stephen K. Markham and Angus L. Kingon, “Bridging the Valley of Death: Lessons Learned from 14 Years of Commercialization of Technology Education”, Academy of Management Learning and Education Journal, 2009, 8(3), 370-388.

• The NSF Innovation Corps (I-Corps) program The article also describes the challenges faced by U.S. academic institutions and commercial organizations during the process of technology or product development, for example, intellectual property protection and potential conflicts of interest. Finally, it highlights the importance of innovation education in facilitating the transition from basic science discovery to product development.

Coller Venture Review — Catalog (2018) 69

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rachel (usa) | class of 2014 company innovator: microsoft

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Check out CVR #4:

university venture

TO READ MORE SCAN THE QR CODE

civ.global/cvr4

Can Venture Make or Break Universities?

A university’s ability to create ventures and interact with them is becoming a critical survival skill. After all, the lack of this ability is what made Harvard lose out to Stanford. And it will get worse...

Univenture – University Venture – stems from the realization that the global venture ecosystem in the 21st century is changing, and the role of academia in it is of necessity going to change as well. The traditional roles of universities – Creation of knowledge (=research), Transfer of knowledge (=teaching), and Societal Service through the use of knowledge – will remain, but their relative extent and nature are certain to change in ways still not fully understood; and universities are slow to identify the best way they can adapt and integrate into the overall venture ecosystem – which is itself a moving target.

The necessity of coping with all this is sure to keep university players awake at night. Our CVR #4 shares ideas, case studies, successes, and caveats to help cope with – and survive – this challenge.

Coller Venture Review — Catalog (2018) 73

COLLER INSTITUTE OF VENTURE AT TEL AVIV UNIVERSITY

www.collerinstituteofventure.org

EDITORIAL BOARD

Jeremy Coller Eli Talmor Yesha Sivan (Editor-in-Chief)

Robyn Klingler-Vidra (Associate Editor)

Nathan Zeldes (Associate Editor)

CONTENTS DE-KNOW-POLIZATION Universities facing the de-monopolization of knowledge research, teaching, and service

76

Professor Yesha Sivan Dr. Robyn Klingler-Vidra

TEAM

Ido Yavnai Odeya Pergament Vladi Dvoyris Dvir Shavit Naama Brezner Jane Utting

STOP: wanting to be Harvard; CAUTION: you are not in Silicon Valley; GO: your own Univenture path

Grace Liu

Katharine Ku

(Copy Editing) (Chinese)

DESIGN

WeDoDesign.co.il

COPYRIGHT

© 2016 Coller Holdings Ltd.

STANFORD’S UNIVENTURE SECRET SAUCE Embracing risk, ambiguity, and collaboration

78

What is the secret of Silicon Valley’s success?

(Hint: It’s all in the attitude)

UTAH’S CREATION OF A UNIVENTURE OASIS IN THE DESERT 100+ university spin-outs in five years

80

Dr. Norris Krueger

A recipe for a successful Univenture program (and some hurdles to beware of)

THE UNIQUENESS OF STEM CELL ECOSYSTEMS Lessons in matching local culture

82

Professor Adam Bock David Johnson Why carelessly copying “best practices” from Stanford or MIT can kill your Univenture program

CRAFTING A SILICON SAVANNAH Univenture in an emerging context Wilfred Mutua Mworia

civ.global/cvr4

How to build a “Silicon Savannah” in a challenging environment

74 Coller Venture Review — Catalog (2018)

84

THE NATIONAL SCIENCE FOUNDATION’S LEAN STARTUP PUSH I-Corps as a model for international Univenture

86

Professor Michael Ehrlich

Learn what the U.S. has been doing to direct academic innovation into commercial success

ONE STROKE, MANY COLORS – UNIVENTURE AT IIT MADRAS Programs, stakeholders, and their relationships

88

Professor Thillai Rajan A. Professor Ashok Jhunjhunwala

How wealth creation can be reconciled with universities’ traditional roles so everyone wins

90

EUROPE’S BID FOR A UNIVENTURE BREAKTHROUGH The case of a newly designed Univenture ecosystem Jean H. A. Gelissen

The EU’s gambit to close the innovation gap with the U.S.

LOOKING FOR A SECOND MIRACLE ON THE HAN RIVER The roots of South Korea’s leading Univenture ecosystems: KAIST and POSTECH

92

David S. Lee

How universities can work with both public and private partners to engage with a rapidly changing venture ecosystem

MEASURING UNIVERSITY VENTURE: A PROPOSED FRAMEWORK Holistic parameters for measuring impact

94

Professor Peter T. Gianiodis Professor William R. Meek

Why our Univenture metrics are broken, and how we can achieve better success by replacing them

Coller Venture Review — Catalog (2018) 75

知识去垄断：面对知识研究、 教育及服务去垄断化的大学

civ.global/dmon

Yesha Sivan Professor and Executive Director, Coller Institute of Venture at Tel Aviv University

Robyn Klingler-Vidra Lecturer, King’s College London; Fellow, Coller Institute of Venture at Tel Aviv University

De-knowpolization

Universities facing the de-monopolization of knowledge research, teaching, and service

76 Coller Venture Review — Catalog (2018)

The change looming over universities is a symptom – their absolute control over the production and application of knowledge is being de-monopolized. In most cases, universities are currently neither the best places to do research, nor the best places to teach or learn, and no longer the best in creation of new ventures for the benefit of society. Universities used to own the Inception, Transfer, and Use of knowledge, but now they stand to be replaced:

FURTHER RESOURCES

• In research – because cutting-edge R&D can be carried out (and funded) very effectively in leading corporations

A seminal book that connects disruption and universities: The Innovative University: Changing the DNA of Higher Education from the Inside Out, by Clayton M. Christensen and Henry J. Eyring (JosseyBass, 2011).

• In teaching – because the emergence of MOOCs (Massive open online courses) and other online learning options makes knowledge accessible anywhere, and at a cost nowhere near the prohibitive, and rising, tuition fees of academia

A project attempting to evaluate all universities worldwide based on their web presence: Webometrics Ranking of World Universities, http://www.webometrics. info/en

• In service – enabling innovative ideas to turn into ventures – because the creation of new ventures is increasingly driven by the financial and industrial worlds

For more information about Harvard’s US$100 million Breakthrough Starshot project, http://www. breakthroughinitiatives. org/Research/3

Read this article for a review of the quandary universities face and the ways they can turn it into a new leadership opportunity.

The World Wide Web: #HOV8107 in CIV’s History of Venture database

Coller Venture Review — Catalog (2018) 77

斯坦福高校创业的制胜法宝 接受风险、模糊和协作

Stanford’s Univenture Secret Sauce Embracing risk, ambiguity, and collaboration

civ.global/stan

Katharine Ku Executive Director, Office of Technology Licensing, Stanford University

78 Coller Venture Review — Catalog (2018)

Silicon Valley is world famous for its successful ventures, from the world-changing invention of the microelectronics industry by Fairchild and Intel to Google’s meteoric success. This situation is, in turn, closely tied to Stanford University’s influence. Ms. Ku, who as executive director of the Office of Technology Licensing (OTL) at Stanford has firsthand experience with this success story, tells us it’s all about the unique culture and attitude that formed in the hi-tech valley.

Stanford is a university that revolutionized a valley that revolutionized a world – and understanding what made this possible is critical to any Univenture stakeholder.

Following an overview of the valley’s engagement with technology and venture, this article pinpoints the key factors behind this success story:

FURTHER RESOURCES Stanford University Office of Technology Licensing (OTL): https://otl.stanford. edu/ Stanford University OTL annual report 2013/2014: https://otl.stanford.edu/ documents/otlar14.pdf The Interdependency Of Stanford And Silicon Valley,

by Ritika Trikha: https:// techcrunch.com/2015/09/04/ what-will-stanford-bewithout-silicon-valley/

• High tolerance for risk, experimentation, and failure • Collaboration among entrepreneurial programs on campus • Maximizing the licensing of multiple technologies through flexibility and negotiator empowerment The Stanford secret sauce is a blend of these factors, and the results have changed the way you live and work – which is another story.

The birth of Silicon Valley: #HOV8037 in CIV’s History of Venture database

Coller Venture Review — Catalog (2018) 79

犹他大学——创造沙漠 中的高校创业绿洲 五年孕育过百家高校衍生公司

Utah’s creation of a Univenture oasis in the desert civ.global/utah

Dr. Norris Krueger Research Fellow, Center for Global Business Research at University of Phoenix; Founder, Entrepreneurship Northwest

80 Coller Venture Review — Catalog (2018)

100+ university spin-outs in five years

This is the story of the rise and fall of a Univenture program. It presents a fascinating double-barreled case study, with critical insights into how a Univenture program can be made a success, and what pitfalls must be avoided to keep it sustainable over time – both very useful lessons for other universities.

In its heyday, the Univenture program at the University of Utah in the previous decade was characterized by excellent outcomes – it tied MIT by creating more than a hundred start-ups in some five years. And then came the winding down of the program. Dr. Krueger looks at the driving factors behind this story through a lens of four relevant elements: • Visible, vocal leadership that establishes a clear vision • Understanding and managing the local context • A culture supporting risk-taking and entrepreneurship • Extensive ecosystem engagement The article describes the inherent tension between a program leadership that repudiated “business as usual” and a bureaucracy that pushed back. As long as the first prevailed, the program saw excellent results; the eventual departure of key drivers allowed inertia to take over again.

FURTHER RESOURCES Brittain, J. (2011) Commercializing University Technology, Keynote presentation to the National Governors’ Association, www.nga. org/files/live/sites/NGA/ files/ pdf/1005SMALL Feld, B. (2012). Startup Communities: Building an Entrepreneurial Ecosystem in your City.

John Wiley & Sons.

Krueger, N. (2005) “Unleashing Idaho.”

In Putting It All Together: The role of Entrepreneurship in Economic Development, U.S. Small Business Administration and the Ewing Marion Kauffman Foundation, Washington DC.

Coller Venture Review — Catalog (2018) 81

干细胞领域生态系统的独特性 适应当地文化的经验教训： 威斯康星大学、爱丁堡大 学、斯科尔科沃科技学院

civ.global/stem

Adam Bock Associate Professor of Management at Edgewood College

David Johnson Ph.D. Candidate at University of Edinburgh Business School

The uniqueness of Stem cell ecosystems

Lessons in matching local culture: WISCONSIN, EDINBURGH, SKOLKOVO

82 Coller Venture Review — Catalog (2018)

Do you want to copy Stanford or MIT? Heck, everybody wants to BE Stanford or MIT. But after you read this article, you may have second thoughts.

The article looks at three Univenture ecosystems dealing with the same leading-edge domain: stem cell research for regenerative medicine. Case studies of different programs from Wisconsin, Edinburgh, and Skolkovo are compared, and the conclusions are that Univenture – particularly in the area of regenerative medicine – succeeds best in environments where: • The local entrepreneurial ecosystem is supported – with priority over specific inventions • Programs prepare entrepreneurs to learn from failure • They promote knowledge exchange across boundaries • They customize, not copy, in order to fit the local culture

FURTHER RESOURCES Bock, A.J. & Johnson, D. (2015) Entrepreneurial ecosystems: Fixing the triple helix. The European Business Review. Nov/Dec: 70-74.

Graham, R. (2014) Creating universitybased entrepreneurial ecosystems: Evidence from emerging world leaders.

MIT-Skoltech Initiative.

Krattiger, A. et al. (2007).

Intellectual Property Management in Health and Agricultural Innovation: A Handbook of Best Practices.

MIHR-PIPRA: Oxford.

This is a cautionary lesson for those who try to become a new “Stanford” by blindly copying “best practices.” What works in one environment may very well fail in another.

Successful collaborations should be locally relevant, not copies of successful models from elsewhere; and policies that support the health of the entire ecosystem, rather than the success of specific innovations, are the most likely to generate long-term benefits.

Stem cell therapy developed: #HOV8125 in CIV’s History of Venture database

Coller Venture Review — Catalog (2018) 83

精心打造肯尼亚“大草原硅谷” 新兴国家背景下的高校创业

Crafting a Silicon Savannah

Univenture in an emerging context civ.global/svna

Wilfred Mutua Mworia M.Sc. Student, University of Nairobi; Founder, Afrinnovator

84 Coller Venture Review — Catalog (2018)

It’s easy to do University Venture in the United States or Europe. Starting a Univenture drive in Africa is a whole different story...

University Venture programs are clearly of critical importance to Kenya’s economic future, but with the country’s first university less than 50 years old, its universities are still exploring what works and what does not in this context.

This article derives insight from interviews with the leadership of two programs that are exploring the emerging phenomenon of Univenture in Kenya: • The C4D Lab at the University of Nairobi, the leading public university in Kenya • iBizAfrica at Strathmore University, the country’s leading private university The author uses these interviews to inform a broad analysis of the African venture landscape. He shows that Africa’s universities not only have to catch up with the rest of the world and ramp up research activity, they also have to link academia and research to commerce and industry, drive entrepreneurial culture, propagate the necessary skills, and provide a meeting place for like-minded people to meet and collaborate. The stakes are high indeed: success in the Univenture endeavor will significantly drive job creation and inclusive growth in the quest to elevate Africa’s economies.

FURTHER RESOURCES Africa Union (2014), “Science, Technology and Innovation Strategy for Africa 2024,” http:// hrst.au.int/en/content/ science-technology-andinnovation-strategy-forafrica-2024 Forbes Insights (2015), “Job Creation in Sub-Saharan Africa: Entrepreneurs.

Governments.

Innovation,” http:// www.forbes.com/ forbesinsights/djembe/ index.html Juma, C. (2016), Education, Research, and Innovation in Africa, http://belfercenter. ksg.harvard.edu/files/ JumaDP-EducationAfrica2.pdf

Coller Venture Review — Catalog (2018) 85

美国国家科学基金会推动 低成本初创企业发展 创新团队计划——国 际高校创业的典范

civ.global/unsf

Michael Ehrlich Associate Professor, New Jersey Institute of Technology; Co-Director, NJ Innovation Acceleration Center

86 Coller Venture Review — Catalog (2018)

The National Science Foundation’s Lean Startup Push I-Corps as a model for international univenture

How does America do it?

American venture is the envy of many. The United States prides itself on the ideals of the ambitious self-made entrepreneur and the existence of unlimited opportunities, and can show impressive results. In reality, however, as this article shows, these results owe much to federally enacted regulations, laws, and support structures that empower the move from hopeful ambition to a commercially successful venture.

During the post-WWII period, Congress enacted a series of new laws that directed public resources toward innovation and the commercialization of research.

Many of these U.S. legal initiatives became models for international adoption. Examples are the Higher Education Act of 1965; the Public Works and Economic Development Act of 1965 (PWEDA); the Patent and Trademark Law Amendments Act of 1980 (Bayh-Dole Act); and the America COMPETES Act of 2007 and 2010.

This article surveys these initiatives and focuses in detail on I-Corps, a flagship program launched by the NSF in 2011. This program has been able to rapidly evolve and grow by operating within the existing legal framework.

FURTHER RESOURCES Making Connections: Evaluation Project to Assess Best Practices in EDA’s University Center Program, https:// www.eda.gov/tools/ files/university-centers/ Evaluation-of-UC-BestPractices.pdf Council on Governmental Relations (COGR). October 1999.

The Bayh-Dole Act: A Guide to the Law and Implementing Regulations, http://www. umventures.org/sites/ umventures.com/files/ COGR_Bayh_Dole.pdf Link, Albert N. and John T. Scott.

2010. Government as entrepreneur: Evaluating the commercialization success of SBIR projects.

Research Policy. Vol 39, Iss 5, June 2010, pp. 589-601.

I-Corps has expanded to consist of multiple components: • An I-Corps curriculum for training science and engineering teams in Lean Start-up principles • I-Corps Teams, which are eligible for grants of up to US $50,000, are composed of the principal investigator (an academic), an entrepreneurial lead (a student), and a business mentor.

• I-Corps Nodes serve as hubs for education, infrastructure, and research which engage scientists and engineers in innovation; they also deliver the I-Corps Curriculum to I-Corps Teams.

• I-Corps Sites are academic institutions that catalyze the engagement of multiple local teams in technology transition and strengthen local innovation.

Characterized by rapid experimentation and prototyping that mimics the performance of start-up ventures, the I-Corps program is an excellent candidate for future adaptation worldwide.

Bayh–Dole Patent Act: #HOV8091 in CIV’s History of Venture database

Coller Venture Review — Catalog (2018) 87

画一笔，添多彩——印度理工 学院马德拉斯分校的高校创业 项目、股东及二者之间的关系

civ.global/iitm

Thillai Rajan A. Professor, Department of Management Studies at the Indian Institute of Technology Madras

Ashok Jhunjhunwala Professor, Department of Electrical Engineering at the Indian Institute of Technology Madras

88 Coller Venture Review — Catalog (2018)

One stroke, many colors – Univenture at IIT Madras Programs, stakeholders, and their relationships

FURTHER RESOURCES

Why does the India Institute of Technology in Madras succeed at Univenture? Because it takes an inclusive, holistic approach.

The authors tell us that this success required interaction with a wide range of stakeholders, each with their set of expectations:

Indian Institute of Technology Madras: https://www.iitm.ac.in/

• Current students – want more practical venture education • Faculty and staff – want the capacity to engage in venture

Rural Technology and Business Incubator (RTBI): http://www. rtbi.in/ IITM Research Park: http://respark.iitm.ac.in/

• Corporations – want more collaboration • Alumni – want to contribute expertise and capital • The government – provides tax incentives and expects outcomes that support national needs • Last but not least, society at large – increasingly demands access to IITM’s expertise Recognizing the importance of engaging with all these stakeholders, the institutional infrastructure that supports venture creation and nurturing should have multiple strands that cater to the needs of these different segments.

The authors illustrate this point with detailed cases of value creation and nurturing, and lessons learned. They identify the different components of the venture creation and nurturing process, and illustrate how they contribute to deepening the engagement with different stakeholders.

Various initiatives at IIT Madras are described, highlighting the results of the venture creation initiatives across different stakeholders.

The authors’ findings will benefit readers in other universities venturing into Univenture.

Coller Venture Review — Catalog (2018) 89

欧洲努力争取高校创业新突破 实例：一个新设计的高 校创业生态系统

Europe’s bid for a univenture breakthrough The case of a newly designed univenture ecosystem

civ.global/eitp

Jean H. A. Gelissen Action Line Leader Health and Wellbeing at EIT Digital, the Netherlands

90 Coller Venture Review — Catalog (2018)

Can European innovation catch up?

Europe needs innovative ventures. And yet it is facing a significant innovation challenge, where good ideas are too rarely turned into new products or services – despite an excellent academic research base, dynamic companies, and creative talent.

The continent needs a breakthrough in order to meet this challenge, or it will fall behind – and it knows this. One response it took was the establishment by the European Union of the European Institute of Innovation and Technology (EIT), whose goal is to advance the capacity to innovate across the European Union, with specific societal goals in mind.

FURTHER RESOURCES European Institute of Innovation and Technology (EIT): https:// eit.europa.eu/ EIT Digital: http://www. eitdigital.eu/ EIT Digital Wellbeing: http://www.eitdigital. eu/innovationentrepreneurship/healthand-wellbeing/

EIT Digital, a Knowledge and Innovation Community (KIC) within EIT, has consistently mobilized talent, ideas, technologies, investments and business across Europe and beyond to stimulate open disruptive digital innovation.

With centers spanning the continent, its mission is to foster digital technology innovation and entrepreneurial talent for economic growth and quality of life.

The Health and Wellbeing action line within this effort focuses on the application of digital innovation to slow down the growth of health care expenses, while maintaining the quality of life of Europe’s aging population – a goal applicable to other geographies as well. This article describes how this program works and shares some exciting results, including: • gymCentral – a virtual gym application for training and rehab from home that integrates live coach support, sensors, and social interaction • GameBus – a serious game that stimulates physical and cognitive activity, provides a personalized gaming experience, and rewards teams for sharing healthy social, cognitive, and physical activities • Memorizon – an ICT tool based on a recognized method to manage symptoms of cognitive impairment for people with early symptoms of dementia By enabling these ventures, EIT catalyzes the missing venture capability and mindset while solving very pressing problems for people and for society – a definite win/win.

Coller Venture Review — Catalog (2018) 91

寻找汉江上的第二个奇迹 韩国领先高校创业生态 系统之根源：韩国科学技 术院和浦项工科大学

Looking for a second miracle on the Han River civ.global/hanr

David S. Lee Senior Lecturer, School of Business, University of Hong Kong

92 Coller Venture Review — Catalog (2018)

The roots OF SOUTH KOREA’S leading univenture ecosystems: KAIST and POSTECH

How can a university become a locus for venture? Two relatively young, yet highly regarded universities in South Korea – a public and a private one – are investigated in this article, and contribute to our understanding of how universities can work with public and private partners, at home and abroad, to achieve this goal. The article reviews the unique histories of: • KAIST (Korea Advanced Institute of Science and Technology), a leading public university designed under the guidance of Stanford’s legendary Fred Terman • POSTECH (Pohang University of Science and Technology), founded with a government directive to emulate many of Caltech’s attributes The interaction with industry and the South Korean government, and legislative acts aimed to facilitate technology transfer, add layers of insight to this survey of a nation’s wellthought-out Univenture strategy.

FURTHER RESOURCES Thomas Allen & Rory O’Shea, Building Technology Transfer within Research Universities: An Entrepreneurial Approach, Cambridge University Press, 2014.

Michael Porter, On Competition (particularly Chapter 7, Clusters and Competition: New Agendas for Companies, Governments, and Institutions), Harvard Business Review Press The “Terman Report” that was prepared for the United States Agency for International Development outlining what is now KAIST. The report can be found at: http://large.stanford. edu/history/kaist/docs/ terman/

Korea Technology Advancement Corporation (KTAC): #HOV8163 in CIV’s History of Venture database

Coller Venture Review — Catalog (2018) 93

衡量高校创业——建议框架 衡量影响力的全面参数

civ.global/meas

Peter T. Gianiodis Merle E. Gilliand Professor of Entrepreneurial Finance, Palumbo Donahue School of Business at Duquesne University; Associate Professor of Strategy and Entrepreneurship, College of Business and Behavioral Science at Clemson University

William R. Meek Associate Professor of Entrepreneurship, School of Business Administration at the University of Dayton

94 Coller Venture Review — Catalog (2018)

Measuring university venture: A proposed framework Holistic parameters for measuring impact

As quality guru H. James Harrington said, “If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.”

FURTHER RESOURCES

But while many universities measure their success in venture creation, all but a few elite universities have achieved only modest impact. Given this gap, the authors suggest that universities, as well as their key stakeholders, should reevaluate the prevailing metrics used to evaluate Univenture.

After all, using the wrong yardstick is certain to lead to wrong results.

Grimaldi, R., Kenney, M., Siegel, D. S., & Wright, M. (2011). 30 years after Bayh–Dole: Reassessing academic entrepreneurship.

Research Policy, 40(8), 1045-1057.

To date, many universities have utilized a profit-oriented framework, focusing solely on two parameters: • The number of new firms formed • The amount of licensing revenue Only evaluating these two measures limits universities and is not conducive to them effectively managing stakeholders.

To address these limitations, the authors have developed a complementary hybrid framework that incorporates more diverse performance metrics reflecting the needs of a wider variety of stakeholders, including faculty, administrators, entrepreneurs, politicians, existing firms, and stewards of the natural environment.

Link, A. N., Siegel, D. S., & Wright, M. (Eds.). (2015). The Chicago Handbook of University Technology Transfer and Academic Entrepreneurship.

University of Chicago Press.

Smith, S., Ward, V., & House, A. (2011).

“Impact” in the proposals for the UK’s Research Excellence Framework: Shifting the boundaries of academic autonomy.

Research Policy, 40(10), 1369-1379.

Coller Venture Review — Catalog (2018) 95

Check out CVR #5:

city venture

TO READ MORE SCAN THE QR CODE

civ.global/cvr5

The Self-Sustaining City-State The City Venture research strand looks into the relationship between the city and the ventures inside it, taken both individually and as an entire ecosystem. Here we define the essence of venture as the creation of new companies that develop ideas, innovations, and models, and turn these into businesses.

Issue 5 of Coller Venture Review presents the Employment Black Holes model – namely, how can a city successfully cope with a globalized world, where talents, jobs, and money move freely from one location to another; and how can it develop, nurture, and preserve a unique domain that will turn it into a “black hole” — a magnet for people, investments, and innovation?

The issue elaborates on this concept in eight original feature articles and 11 CIV City Cases presenting key factors in the development of urban venture ecosystems in the USA, Europe, China, and Israel.

Coller Venture Review — Catalog (2018) 99

COLLER INSTITUTE OF VENTURE AT TEL AVIV UNIVERSITY

www.collerinstituteofventure.org

EDITORIAL BOARD

Jeremy Coller Eli Talmor Yesha Sivan

CONTENTS EMPLOYMENT BLACK HOLES

(Editor-in-Chief)

The key to the wealth of cities

(Managing Editor)

Professor Yesha Sivan Nathan Zeldes

Nathan Zeldes TEAM

Ido Yavnai Odeya Pergament Vladi Dvoyris Naama Brezner Dvir Shavit Shirley Zauer (Copy Editing)

Esther Rosenfeld (Proofreading)

Grace Liu

102

How to make ventures generate enduring cities in a global reality

THE ROLE OF VENTURES IN STRENGTHENING THE FABRIC OF THE CITY The case of Chennai

104

Professor Thillai Rajan A. Vikram Kapur

(Chinese)

DESIGN

WeDoDesign.co.il

COPYRIGHT

© 2017 Coller Holdings Ltd.

How city and ventures created a win/win reality

HYPER-LOCAL VENTURE DEVELOPMENT Implementation of a Health IT Cluster in Newark, NJ

106

Professor Michael Ehrlich

Applying cluster theory to local venture development

THE “TECH” OF TWO CITIES Why Hong Kong failed where Shenzhen succeeded

108

Professor Horace Yeung Professor Flora Huang

Two neighboring cities – but what a difference!

THE BUSINESS KIBBUTZ The culture that leads the Jerusalem venture ecosystem

110

Hanan Brand Helen Wexler Wendy Singer

3,000 years of the past, and a bright future

RENO’S VENTURE GAMBLE Leveraging Tesla’s Gigafactory civ.global/isu5

To access this issue follow the QR Code

Professor Jack Wroldsen

The strategy that is taking Reno from derision to riches

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112

114

DEALING WITH POLITICAL CHANGE Assessing London’s post-Brexit competitiveness Eze Vidra

Will the ecosystem survive this bombshell?

116

KEY FACTORS OF CITY SUCCESS How capital, institutions, and psycho-cultural cultural behavior promote economic growth Professor Robert Huggins

Does your city have what it takes?

118

CIV CITY CASES

CHENNAI, 1998–2015

From the epicenter of small business to venture

NEWARK NJ, 2014–2016

Implementation of a Health IT Cluster

HONG KONG, 1997–2016

A lackluster pearl of the orient

SHENZHEN, 1979–2016

From low-tech to hi-tech

JERUSALEM, 2012–2016

Building on three thousand years of innovation

RENO, 2000–2016

Rebranding a tarnished reputation

SHANGHAI, 1999–2016

The road to venture and innovation

TURIN, 2000–2016

The blooming of an entrepreneurial ecosystem

DÜSSELDORF, 2010–2016

Redefining local competitiveness

BERLIN, 2010–2016

How Berlin rose to become Europe’s start-up hub

TEL AVIV, 2010–2016

The start-up city of the start-up nation Coller Venture Review — Catalog (2018) 101

就业黑洞

civ.global/bholes

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Yesha Sivan

Employment Black Holes The key to the wealth of cities

Professor and Executive Director, Coller Institute of Venture at Tel Aviv University

Nathan Zeldes Director of Research, Coller Institute of Venture at Tel Aviv University

102 Coller Venture Review — Catalog (2018)

How are Black Holes critical for your city’s enduring prosperity?

The authors of this article use this cosmological analogy to illustrate a major problem facing city leaders – and to show its solution. As a city leader, you should heed their message! The problem is that in the flat, smooth world of the 21st century the desirable jobs that make cities successful are easily sucked away to other cities and countries. They all go away – talent, results, successful firms, and ultimately jobs – pulled in by those cities that are attractive to founders, investors, and employers. The authors liken this to the effect of cosmology’s black holes: a city that is recognized as the best place to be for a given domain will suck in all the action in that domain, the way Israel pulls in Cyber/IT ventures, Shenzhen is a focal point for hardware ventures, Houston attracts energy ventures, and Silicon Valley pulls in anything hi-tech.

The article then points out the solution you need: a city wishing to retain enduring jobs and success must create its own black hole in a domain where it has an “unfair advantage,” ideally based on a local attribute or resource that can’t move elsewhere. This model leads to practical advice for city (and regional) managers. They are told how to identify a city’s enduring domain, avoiding generic areas that can disappear and focusing on local strengths that cannot; how to develop this domain into becoming a black hole while avoiding the pitfalls that might stifle it; how to enlist external support correctly, and how to always be looking for the next unfair advantage.

FURTHER RESOURCES KPMG (2014). Magnet Cities: Decline | Fightback | Victory https://assets. kpmg.com/content/ dam/kpmg/pdf/2015/03/ magnet-cities.pdf Florida, R. & King, K. M. (2016). Rise of the Global Startup City: The Geography of Venture Capital Investment in Cities and Metros across the Globe. http:// martinprosperity.org/ media/Rise-of-the-GlobalStartup-City.pdf Smith, Adam (1776). An Inquiry into the Nature and Causes of the Wealth of Nations.

Examples of successful black holes and their underlying advantages will give you ample food for thought, which can be processed into crucially valuable outcomes for cities wishing to survive and thrive in the new world we live in.

Coller Venture Review — Catalog (2018) 103

创业在加强城市发展中扮演的角色

civ.global/scial

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Thillai Rajan A. Professor, Indian Institute of Technology Madras and International Research Affiliate, Coller Institute of Venture

Vikram Kapur Principal Secretary, Industries Department, Government of Tamil Nadu

The role of Ventures in Strengthening the Fabric of the City The case of Chennai

104 Coller Venture Review — Catalog (2018)

A city can support ventures... and should, because ventures return the favor in ways you might not expect.

This article shows how the presence of venture can energize the hosting city, leading to a virtuous symbiotic equilibrium. It uses as a case study the South Indian city of Chennai, founded in 1639, which is one of the thriving metropolitan cities of India today.

After introducing us to Chennai and to the role of large (“Tier 1”) cities in the world of venture in India, the authors proceed to show the impact of ventures in two domains: reinforcing the economic fabric of the city, and reinforcing its social fabric. Chennai is a center of four economic sectors: Healthcare, Automobiles, Movies and Music, and Information Technology. Ventures are playing a key role in sustaining the leadership position of the city in these sectors. They have augmented existing capacity, pushed forward the industry frontiers, introduced new processes to bring about greater efficiency, and facilitated a change in mindset by breaking new ground. Meanwhile, they also play a role in the social sector through their ability to achieve depth impact, offer niche services that public agencies themselves are unable to provide, and design technology-driven solutions to enhance the delivery of civic services.

The article provides numerous examples from diverse domains, all demonstrating this symbiosis between the city and its ventures. If you thought that the only effect of ventures was in the jobs and profits they created, read this article and think again!

FURTHER RESOURCES India Venture Capital and Private Equity Report 2016: Inspiration and Momentum for the Gladiators: A Study and Analysis of the Startups. Indian Institute of Technology Madras, Chennai, 2016.

India Venture Capital and Private Equity Report 2013: Convergence of Patience, Purpose, and Profit: An Analysis of Impact Investments in India. https://www. researchgate.net/ publication/271854873_ India_Venture_Capital_ and_Private_Equity_ Report_2013_-_A_study_ of_impact_investments Rajan A. T. & Jhunjhunwala, A. (2016).

One stroke, many colors – Univenture at IIT Madras. Programs, stakeholders, and their relationships. Coller Venture Review, 4: 80–90. civ.global/iitm

Coller Venture Review — Catalog (2018) 105

超本地风险投资的发展

Hyper-Local Venture Development Implementation of a Health IT Cluster in Newark, NJ

civ.global/health

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Michael Ehrlich Associate Professor and Co-Director of the NJ Innovation Acceleration Center, Martin Tuchman School of Management, New Jersey Institute of Technology

106 Coller Venture Review — Catalog (2018)

Here is an application of the Cluster Theory to making one’s city a success.

Michael Porter’s Cluster Development theory has drawn much attention from policymakers and economic development practitioners since its 1990 inception, being seen as a way to enhance economic and employment growth within urban centers. Yet efforts based on it have had limited success due to the lack of a coherent underlying theoretical framework unifying clusters with venture incubation understanding.

In this article, Prof. Ehrlich extends the cluster development theory to incorporate business incubators, accelerators, science parks, and co-working spaces as hyper-local clusters, whose success is based on the same determinants identified

by Porter. This theoretical framework focuses on fostering successful hi-tech startups through the scale-up phase.

And this article goes beyond the theory to share a real-life success story: it provides a case study of the implementation of a Health IT cluster in Newark, NJ, as a demonstration of the development of a hyper-local cluster in practice. This program, funded by JPMorgan Chase, builds on existing regional strengths: the presence, in close proximity, of significant healthcare assets including hospitals, health insurers, medical device and pharmaceutical companies, and many other healthcare participants. Specific program details, implementation strategies, and promising early outcomes are shown.

FURTHER RESOURCES Bollingtoft, A. & Ulhoi, J. P. (2005). The networked business incubator – leveraging entrepreneurial agency?

Journal of Business Venturing, 20: 265–290.

Delgado, M., Porter, M. E., & Stern, S. (2014).

Clusters, convergence, and economic performance. Research Policy, 43: 1785–1799.

Haltiwanger, J., Jarmin, R., & Miranda, J. (2009).

Jobs Created from Business Startups in the United States. Kauffman Business Dynamics Statistics Briefing, Kauffman.org.

During the first two years, 50 early stage companies were recruited to join the program. These companies are already successful startups with products/services, customers, and revenues (averaging over US$2 million during the last 12 months). Early results have shown impressive employment and company revenue growth rates. Ongoing efforts focus on building and maintaining momentum to help companies achieve sustainable scale.

Coller Venture Review — Catalog (2018) 107

双城“技”

civ.global/pearlr

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Horace Yeung Assistant Professor, University of Leicester

Flora Huang Associate Professor, University of Essex

The “Tech” of Two Cities Why Hong Kong failed where Shenzhen succeeded

108 Coller Venture Review — Catalog (2018)

This is a fascinating comparative case study of two world systems that fate placed together. There is much to learn from both sides of the equation!

Hong Kong and Shenzhen are located side by side geographically, but have very different histories, grounded in two radically different socio-political systems. As a Special Administrative Region, Hong Kong has a high degree of autonomy and will maintain its British-incepted capitalist system until 2047. In contrast, Shenzhen is subject to the socialist economic system of China. Hong Kong used to be an economic superstar in the region: Milton Friedman referred to it in 1990 as the best example of a free market economy.

On the other hand, Shenzhen was described as a “sleepy border town” in southern China. The story is entirely different now when Shenzhen is comparable to, if it has not already outshone, its once proud neighbor. Shenzhen’s Nanshan district, home to a huge hi-tech industrial park, is now China’s richest, with a higher per capita GDP than even capitalist Hong Kong, and the city is the cradle of tech giants such as Huawei, ZTE, and Tencent.

FURTHER RESOURCES Huang, F. & Yeung, H. (2015). ‘One country two systems’ as bedrock of Hong Kong’s continued success: Fiction or reality? Boston College International & Comparative Law Review, 38(2): 191–224.

Huang, F. (2010).

Modernising the Chinese capital market: Old problems and new legal responses. International Company and Commercial Law Review, 21: 26–39.

Yeung, H. (2015). A tale of two cities – the development and reform experiences of Shenzhen and Shanghai. Journal of Chinese Economic and Business Studies, 13(4): 369–396.

This surprising development begs for an explanation, and this article seeks to provide it. The authors compare the two cities with respect to their economic development, discuss the institutional differences that might account for their respective growth stories, and, finally, consider the possible synergy between the two. Shenzhen’s rise was driven by the Chinese government’s resolve to make it a success through its designation as a Special Economic Zone enjoying advantages and incentives conducive to the attraction of capital and talent. It used its advantage to transform itself from light industry to high value-added technology manufacturing, and to assert itself as China’s prime innovation hub. However, the government is intent on leveraging the advantages of both cities through its creation of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, a national level initiative to combine the core strengths of Hong Kong and Shenzhen in an attempt to boost the existing tech centers to a new level.

Coller Venture Review — Catalog (2018) 109

商业基布兹（集体农场）

civ.global/kbutz

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Hanan Brand Founder and Chairman, Made in JLM

Helen Wexler Head of Jnext, Jerusalem Development Authority

Wendy Singer Executive Director, Start-up Nation Central

The Business Kibbutz The culture that leads the Jerusalem venture ecosystem

110 Coller Venture Review — Catalog (2018)

Meet an extraordinary story of urban transformation – and discover a “secret sauce” that could be used to transform your city as well.

Jerusalem is best known as an ancient city at the spiritual center of three faiths, not what you’d associate with hi-tech venture. It is therefore unexpected and extraordinary that the city was listed in 2015 as #1 in a Time Magazine ranking of emerging tech hubs worldwide.

This is doubly significant given the complexities facing the city and its entrepreneurs: from economic depressions to the “Brain Drain” of young talent leaving to move to Israel’s center; from bouts of violence to the under-representation of the ultra-Orthodox (Haredi) and Israeli Arab communities in hi-tech, this is not an easy city. And yet in the years 2012–2016 the city has experienced a technological renaissance, with an explosion of new startups founded, accelerators created, and VC funds established. As of 2016 there are more than 400 start-up companies in Jerusalem, 200+ of which were founded in 2014 and 2015 alone; tech investments have increased fourfold, from US$70 million in 2012 to US$272 million in 2015; and there has been an unprecedented surge in tech events all over the city, from only a handful a year to more than 350 in 2015.

FURTHER RESOURCES Cutler, Z. The ancient city of Jerusalem is seeing rebirth as a tech hub. https://www. entrepreneur.com/ article/246468 Shamah, D. Tel Aviv, Jerusalem among world’s top tech cities. http:// www.timesofisrael.com/ tel-aviv-jerusalem-amongworlds-top-tech-cities/ Reback, G. Hanan Brand: Jerusalem’s venture success bodes well for other Israeli cities. http://www.geektime. com/2015/12/13/ hanan-brandjerusalems-venturesuccess-bodes-well-forother-israeli-cities/

The article seeks to identify the contributing factors that have led to these facts. It claims that the recent success of the Jerusalem tech ecosystem has been due to a unique “Business Kibbutz” model, in which the relevant layers of the tech ecosystem combined forces to create a highly connected and supportive tech scene, leading to a sense of local pride and a strong integrated community. Jerusalem’s technological success can be emulated by other cities, and serve as a model for ecosystem and community building, based on the creation of a business atmosphere where the city’s startups, R&D centers, academic institutions, service providers, investors, and the municipality all work in collaboration to promote each other and the city’s tech ecosystem as a whole.

Coller Venture Review — Catalog (2018) 111

里诺的风险投资赌博

Reno’s Venture Gamble LEVERAGING Tesla’s Gigafactory

civ.global/tesla

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Jack Wroldsen Assistant Professor, Spears School of Business, Oklahoma State University

112 Coller Venture Review — Catalog (2018)

Here is a little city that did exactly the right things to attain success. If the city you manage is not a Silicon Valley, there are lessons here that could be of great benefit to you.

Reno, Nevada used to be the butt of jokes across America, but today it is growing a viable venture ecosystem that’s ushering in a bright future. And it’s doing it in an unusual manner: instead of the usual hi-tech startups, this “Biggest Little City in the World” is leveraging its unique assets to specialize in a completely different, yet very effective, niche.

Reno’s strategy is threefold: First, to stay true to itself: rather than trying to compete with Silicon Valley, it seeks to attract technology firms to invest in non-glamorous areas that fit Reno’s industrial identity and benefit from its unlimited real estate: data centers, e-commerce fulfillment warehouses, manufacturing plants, and solar farms. Then, with an industrial technology base established, it set up a supportive regulatory environment that enabled it to notch a big win: Tesla’s lithium battery gigafactory, which immediately rebranded Reno’s reputation as a place for the most innovative companies to do business. Finally, it capitalized on the resultant momentum to pursue urban revitalization to attract young professionals to the city center and integrate its university into an emerging venture community.

FURTHER RESOURCES Muro, M. (2011). Unify, Regionalize, Diversify: An Economic Development Agenda for Nevada. The Brookings Institution.

Northern Nevada Regional Growth Study, 2015-2019 (2015).

Economic Planning Indicator Committee (EPIC) Report.

Borland, W., Croce, J. A., & Seline, R. (2011). The SILVER Spark for Nevada: Sustainable Innovation Leading a Vital Economic Renaissance.

Nevada Institute of Renewable Energy Commercialization.

This article takes us through the evolution of Reno from derision to riches, a story that shows how a combination of humility and pluck, aided by well-planned action at the state and city levels, can create success in surprising ways even in unlikely places.

Coller Venture Review — Catalog (2018) 113

应对政治之变

Dealing with Political Change Assessing London’s post-Brexit competitiveness

civ.global/brexit

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Eze Vidra Chief Innovation Officer, Antidote

114 Coller Venture Review — Catalog (2018)

Will the London venture ecosystem survive the turmoil of Brexit?

This article provides new and actionable understanding of the London venture community’s ability to survive, or even thrive, in a post-Brexit context.

With Brexit looming, the uncertainty about London’s economic future is at its peak. The government’s Tech City policy initiative, launched in 2010 by then prime minister David Cameron, led to a transformation of London. It marked the inception of London as a major venture hub, attracting founders from all over Europe and catapulting London into becoming a leading Fintech cluster. But can Tech City survive without being part of Europe and the single market?

To offer new answers to these important questions, this article examines the durability of key components of London’s Venture Fabric: availability of talent, access to capital across stages and the density of network required to make startups scale. Insights are based upon primary data collected through a survey of London-based entrepreneurs, asking how Brexit has affected staffing, funding, and the vibrancy of the capital’s venture network. Findings were triangulated by interviewing leading members of the London venture ecosystem in October 2016.

FURTHER RESOURCES Prime Minister David Cameron announces East London ‘Tech City.’ https://www.gov.uk/ government/news/pmannounces-east-londontech-city Hogarth, C. UK tech sector raises $3.6bn in venture capital in 2015. https://www.ft.com/ content/fad8a17a-b38e11e5-b147-e5e5bba42e51 Cause for optimism as UK tech rises to Brexit challenge. http:// www.techcityuk.com/ blog/2016/07/techreaction-to-brexit/

The survey results pointed to three critical arenas in which Brexit is affecting the London venture ecosystem: (1) access to talent; (2) uncertainty; and (3) access to capital. Based on the presented details, the author recommends that government set up the right regulatory environment to ensure that tech continues to be at the forefront post-Brexit by doing the following: 1. Secure access to international talent, with a focus on technical talent, through appropriate visa systems 2. Empower start-ups to conduct international business in the new reality 3. Take action to ensure there is enough venture capital to support the growth of the tech industry At the same time, the onus is on the tech community to organize itself and educate the administration as quickly as possible on the needs to keep the UK at the forefront of tech.

The start-up community should also consider approaching the underlying societal issues that triggered Brexit to begin with – it can be, and should be, part of the solution, not just of the problem.

Coller Venture Review — Catalog (2018) 115

城市成功的关键因素

civ.global/culture

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Robert Huggins Professor and Director of Research, School of Geography and Planning, Cardiff University

KEY FACTORS OF CITY SUCCESS

How Capital, Institutions, and Psycho-Cultural behavior Promote Economic Growth

116 Coller Venture Review — Catalog (2018)

Here is an article that tries to solve a key mystery that keeps city leaders awake at night: why do some cities succeed while others don’t?

It’s an easy observation that some cities are better able to foster venture and innovation than others. Wouldn’t it be nice if we knew how to predict – and how to change – the success of a given city? What are the factors that determine this variation in the outcomes that can make or break a city’s future? While there are many factors involved – availability of investment and resources, the skills of the workforce, the availability of entrepreneurs and innovators, the collaborative ecosystems, and more – there is little of the needed understanding of how these factors are related or connected.

This article – which is based on a review, critique, and synthesis of a wide range of empirical and conceptual literature – aims to develop a systemic model that can connect both the structural and behavioral determinants of the innovation and growth capability of firms within cities.

From the structural perspective, cities are portrayed as urban growth systems where capital availability and the quality of institutions play a key role in promoting firm level innovation and growth. However, this capital and associated institutions may lack effectiveness unless a city contains significant numbers of individuals, especially entrepreneurs, with the behavioral, cultural, and personality traits that allow them to act as agents of innovation. Therefore, behavioral systems – encompassing the culture and psychology of cities – can be considered to underpin the functioning of city growth systems and subsequent innovation and growth.

FURTHER RESOURCES Huggins, R. & Thompson, P. (2016). Sociospatial culture and entrepreneurship: Some theoretical and empirical observations. Economic Geography, 92 (3): 269–300.

Obschonka, M. et al.

(2015). Entrepreneurial regions: Do macropsychological cultural characteristics of regions help solve the “knowledge paradox” of economics?

PloS one, 10(6): e0129332.

Storper, M. (2010).

Why does a city grow?

Specialisation, human capital or institutions?

Urban Studies, 47: 2027–2050.

The article describes a range of behavioral, institutional, and capital factors that shape the ability of firms within cities to innovate. Institutions and capital form the city growth systems within which ventures operate and evolve, while the behavioral systems of cities will help shape the type and nature of entrepreneurs, as well as the ventures they establish and the forms of innovation they engage in. The author concludes that there is a need to consider innovation institutions in the form of the incentives and constraints to creating and embracing new technology, as well as conventions in relation to the financing of innovation and norms regarding the “restriction” or “freedom” of ideas.

Although such conventions are likely to stem from national and supra-national level institutions, more localized formal and informal institutions also play a role.

Coller Venture Review — Catalog (2018) 117

CIV CITY CASES E

B

H I G D

C A

civ.global/ccc

118 Coller Venture Review — Catalog (2018)

F

In this issue we present 11 CIV City Cases, each devoted to a single city. These describe, in a standard format, the experience of each city in developing its venture ecosystem, with special attention to the strengths and weaknesses, key factors, and institutions that affect the city’s success. They conclude with lessons – both good and cautionary – that can inform other cities as they evolve their strategy.

A

CHENNAI, 1998–2015

B

NEWARK NJ, 2014–2016

C

HONG KONG, 1997–2016

C

SHENZHEN, 1979–2016

D

JERUSALEM, 2012–2016

E

RENO, 2000–2016

F

SHANGHAI, 1999–2016

G

TURIN, 2000–2016

H

DÜSSELDORF, 2010–2016

I

BERLIN, 2010–2016

D

TEL AVIV, 2010–2016

The 11 CIV City Cases included were mostly written by authors residing in those cities, thereby trading objectivity for first-hand experience. The selection was determined by responses to our call for papers; we expect to extend it in future, and therefore invite submission of more cases. If you have intimate knowledge of the venture ecosystem story of your city, please contact us at CityCase@civ. global to discuss converting it into a new CIV City Case.

From the epicenter of small business to venture Implementation of a Health IT Cluster A lackluster pearl of the orient From low-tech to hi-tech Building on three thousand years of innovation Rebranding a tarnished reputation

The road to venture and innovation The blooming of an entrepreneurial ecosystem

Redefining local competitiveness

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How Berlin rose to become Europe’s start-up hub The start-up city of the start-up nation

Coller Venture Review — Catalog (2018) 119