This is the story of the making of a business startup engine unlike any other. Turbo-charged by the Kauffman Foundation, Kauffman Labs for Enterprise Creation is embarking on a new way to educate the most ambitious and innovative aspiring entrepreneurs to design, architect, and build the next great high-growth companies that will transform lives.
Why the focus on scale? One of the most compelling facts to emerge out of recent Kauffman-funded research is that a surprisingly small number of high-growth, young companies account for a large percentage of growth in our economy. Astonishingly, as important as these companies are to the economy, no one—not even the most-respected academics or well-heeled venture capitalists—knows what it takes to intentionally design and create high-growth, scalable success.
Like the promising startups it seeks to nurture, Kauffman Labs is the product of in-depth expertise and informed planning. But, although we are an outgrowth of many years of research and development at the Kauffman Foundation—which has invested close to a half-billion dollars in the development of classes and programs to directly and indirectly assist entrepreneurs—we do not have any magic answers for what it takes to build high-growth companies. Yet. That's why we call this Kauffman Labs. In addition to helping founders learn how to start scale companies, we will be closely studying the process to advance our understanding of high-growth entrepreneurship over the long term. We will synthesize and apply that knowledge to make the creation of scalable companies far more deliberate.
The Kauffman Labs Experience
Ambitious business founders think about—and plan—for scaled growth early on. They execute beautifully at the proof-of-concept or pilot phase. They show that their product works and is desired by the market, but they have little understanding of how to take it to the next steps to significantly grow the business.
... we will be closely studying the process to advance our understanding of high-growth entrepreneurship over the long term.
We hope to help founders prepare for this eventual and critical stage from the very beginning. We will help them understand the markets they are wading into, identify and attract the best talent in the world to help them put the right pieces in place, test the market, and iterate ideas, all while learning how to thoughtfully pivot into the next stage.
Kauffman Labs entrepreneurs will rarely spend time sitting in a classroom. When they do, they will immediately apply what they learn. We will provide tools, mentoring, networking, and in-the-field experiences that would be extremely difficult to obtain for even the most resourceful entrepreneurs. Giving entrepreneurs the ability to access the world's leading minds and market experts gives them the power to transform the direction and scale of new ventures—as long as they are capable of listening, synthesizing, and applying what each of those experts brings to the table.
We will be learning as we work with the founders who participate in Labs programs. We began this practice with a "pilot" program that was designed to work with postdoctoral researchers who were aspiring founders. The Kauffman Entrepreneur Postdoctoral Fellowship Program lasted one year and led to the next iteration of Kauffman Labs. (Read the sidebar on the next page from one of the postdoc fellows who describes what he learned from his Labs experience.) Our biggest lesson: Markets matter.
Our experience working with founders has made it starkly obvious that, to help companies start and grow fast, we needed to work with aspiring founders in similar markets. Different markets require radically different expertise, networks, bodies of knowledge, and strategies for success. The impact of markets on specific ventures is an ill-appreciated science that, if taken seriously, could lead to fundamental breakthroughs in terms of what is required to design a company for scale.
We're looking for founders who have unproven, but remarkable, potential.
Kauffman Labs will launch programs market sector by market sector. We will conduct in-depth research of sectors that are billion-dollar industries, face revolutionary changes, are uninhibited by regulatory hurdles, and attract the best and brightest minds. As we move forward, we'll bring together global experts in those industries to serve as advisors and mentors for each program. We'll tap into the experience, network, and knowledge of the Kauffman Foundation to give our founders unparalleled resources.
Our inaugural market sector is education—a booming $1 trillion market in the midst of monumental changes and ripe for transformation. Given the Foundation's roots in education, launching the Kauffman Labs Education Ventures Program seemed a perfect place to start. (See photos from a weeklong boot camp for the finalists held in November 2010 on page 180.) Other sectors will be thoroughly vetted before becoming Labs programs, but in the next three to five years, we aim to catalyze the creation of fifty to one hundred scalable companies across five to ten vertical markets.
While we hope to attract ambitious, intelligent, and teachable aspiring entrepreneurs to Labs programs, we are not in the business of picking "winners"—innovators who are already on their way to success. We're looking for founders who have unproven, but remarkable, potential. We then will foster their understanding of where they are headed to help them catalyze the creation of high-growth companies that may not have existed otherwise.
For those selected for each program, whether they are sole candidates or members of teams, Kauffman Labs is the runway, the platform, for massive success.
Labs applicants will go through a highly competitive selection process. For those selected for each program, whether they are sole candidates or members of teams, Kauffman Labs is the runway, the platform, for massive success.
There's a parallel between the institutional approach of Kauffman Labs and the right founders. Success, for both, requires unbridled ambition grounded in experience, the ability to iterate, and the right networks. It calls for a rare blend of confidence and humility—everyone involved must be open to learning. Success at Kauffman Labs requires both optimism and a grasp on reality.
Kauffman Labs is just one "startup story" presented in this section. You also will read an essay by the founders of Startup Weekend, who tell us how they are stirring up the startup world with their popular weekend retreats for entrepreneurs. An essay from a serial entrepreneur outlines a clear definition of four entrepreneur "types," which can help founders identify the tools they need, and help policymakers and entrepreneurial supporters understand what to expect from each. You'll also find a piece that shares insights coming out of a nationwide "Startup Tour" that consisted of on-site visits to some of the most compelling technology startups in the country. Finally, we have a conversation about how more women can be encouraged and supported to start high-growth companies, and the obstacles they face.