UC Berkeley innovation pioneer, Andre Marquis says successfully commercialising university research is key to growing Australia’s startup sector – just as it was in Silicon Valley’s formative years.
“The problem with entrepreneurship is no one can can pick winners,” says the serial Silicon Valley entrepreneur.
“95 per cent of startups fail, if they’re trying to do something truly innovative.
“Only 12 per cent of venture capital firms outperform the stock market,” he told the audience at Monash Business School’s Tech & Innovation: A bias towards action event in Melbourne.
“Seven per cent of angel investments generate 75 per cent of the financial returns.
“If you can’t pick winners beforehand? How do you run a process, where you can actually test and try to find the winners? Well, that’s what Silicon Valley is.
“There’s somewhere between 30,000 and 40,000 startups in Silicon Valley.
“So when you’re like, oh my God, all these amazing things come out of Silicon Valley, it’s only because we fail 20 times more than everybody else.”
The size and scale of Silicon Valley can make it difficult for other regions to compete, he says.
“That’s the challenge for an economy like Australia, how can you build entrepreneurship when you don’t have as big of an economy in certain areas, or you don’t have as many startups.”
Invest to innovate
Marquis speaks from first class experience – he ran UC Berkeley’s Entrepreneurship Program for six years, founded the University’s Innovation Acceleration Group and heads up Hypershift, which develops enterprise-scale architecture for rapid and continuous business model innovation.
One highlight of the industry integration within the program for some students is a study tour to the University of California, Berkeley, to meet entrepreneurial leaders in Silicon Valley like Mr Marquis.
Mr Marquis believes such programs are critical to the health of Australia’s startup space, believing government can help stimulate startup ecosystems by funding university-industry research and initiatives that drive innovation towards commercialisation.
“I think it’s really important for government to look at making modern investments that are going to have huge results in terms of creating entrepreneurship ecosystems.”
Creating a Silicon Valley
While Silicon Valley is held up as the epitome of free market entrepreneurialism, he says it’s important to remember the world’s leading tech hub, was originally born out of government funding.
“Silicon Valley exists because in World War Two, the government funded radar detection, electronic countermeasures,” he says.
“The government funded all these companies that spun out of Stanford University and UC Berkeley.
“Then it moved to silicon chips, which were used in missiles and in defense systems.
“That is the government, essentially creating an industry by funding their most advanced use cases.
“Yes, they were funding university research, but the money was going to create new companies.”
He says the Monash Business School’s Entrepreneurship program, run by Professor David Gilbert, is a prime example of an Australian university initiative, successfully collaborating with industry to drive innovation.
“David is a very forward thinking leader, who understands the things you need to do to have a leading edge, world class, entrepreneurship program – and he has lots of business experience himself.
“So the fact that Monash hired someone who has both the academic experience and the business experience, who is bringing that to bear, is really smart.”