mit_impact_full_report

MIT—Its Unique History, Culture, and Entrepreneurial Ecosystem
problem was too difficult to solve. It was just a
question of how hard and how long you were willing
to work.
Along the same lines, another founder said that,
because of the research and industrial ties of the
faculty, MIT students get to work on “real stuff.”
Students are “right in the middle of something big”—
topics being argued about and worked on at that
moment in the industrial world. Professors don’t
hesitate to work on real-world industrial and global
problems. Founders point out that anyone who’s at
MIT for a few years knows the state of the art in his
or her field. Other founders mentioned the importance
of ties forged at MIT with fellow students who later
become customers or co-founders: “The ‘brass rat’
[MIT’s unique and long-time traditional graduation ring
that features a beaver] opens lots of doors.”
“Pushes” on Entrepreneurship
Some environmental forces affecting the “wouldbe”
entrepreneur are the “negatives” about his or
her present employer, rather than the “positives” of
going into business. The uncertainties due to the ups
and downs of major projects often have been cited as
a source of grief, and sometimes even have led to
expulsion of individuals into a reluctant
entrepreneurial path. The evidence suggests that a
stable work environment probably would produce far
fewer entrepreneurial spinoffs than one marked by
some instability. For example, the entrepreneurs who
emerged from one large diversified technological firm
most frequently rank “changes in work assignment”
as the circumstance that precipitated formation of
their companies, followed by “frustration in job.”
One-fourth of the companies from that firm were
founded during the three years that the firm suffered
some contract overruns and laid off some technical
people, although none of those actually laid off from
this firm became entrepreneurs. The “worry about
layoff” and seeing the parent firm in a terrible state
are cited by many of that period’s spinoffs. Even at
the Draper Lab, staff was cut by about 15 percent
through layoff and attrition after the completion of
the Apollo lunar program, stimulating a number of
new firms. Ninety-two percent of the spinoffs from
the MIT Electronic Systems Lab (ESL) occurred during
an eight-year period, when only 28 percent would
have been expected if spinoffs occurred randomly
over time as a function only of total employment.
The large number of ESL projects completed during
that period is one explanation for the “lumpiness” of
new company creation.
Frustration with the noncommercial environment
in the MIT labs and academic departments bothered
some of the potential entrepreneurs. Margaret
Hamilton, founder of Higher Order Software,
exclaims: “The Draper nonprofit charter was
frustrating, especially if you wanted to get into
something exciting. There was always the sense of
living in a no-man’s land.” Many of the entrepreneurs
wanted to market specific devices or techniques.
Others had no definite products in mind but saw
clear prospects for further applications of the
technology or skills they had learned at their current
organizations. The prospective entrepreneurs usually
felt they could not exploit these possibilities at MIT
labs, because the labs concentrated on developing
new technology rather than finding applications for
existing technology. Unfortunately for their industrial
employers, many of the spinoffs from industrial
companies report the same frustration, despite the
not unreasonable presumption that their large-firm
employers should welcome at least some of these
new ideas. In Silicon Valley, too, Cooper (1986) found
that 56 percent of the new company founders had
been frustrated in their previous jobs. Yet frustration
should manifest itself more reasonably with just jobchanging,
not company-creating, behavior. Clearly,
the overall environment promoting entrepreneurship
in Greater Boston, and in Silicon Valley as well, makes
the new-company option an active choice if other
conditions are right.
As evidence of the significant historic flow of
MIT alumni-founded firms, we show in Table 10 a
small selection of prominent firms founded by MIT
graduates. (Many other companies in a wide diversity
of fields could be added to this list, such as Campbell
ENTREPRENEURIAL IMPACT: THE ROLE OF MIT 41