MIT Startup Exchange Program: Creating Powerful Synergies
Most successful entrepreneurs understand that inventing a clever or disruptive technology alone will not be enough to attract clients. Business development entails communicating with the right people in the organizational hierarchy, among other things. Aspiring entrepreneurs, on the other hand, frequently undervalue the importance, expense, and difficulty of creating strategic alliances.
According to a McKinsey report from 2020, 75% of startup respondents believe corporate ties are very crucial. More recently, a study conducted by Innovation Leader in collaboration with MIT Corporate Relations looked at the changing landscape of startup-corporate engagement and found that getting introductions to the right person in the right company was the most difficult aspect of starting a formal engagement with a large corporation for 61.7 percent of startups.
The MIT Startup Exchange thrives in this particular area. It has been bridging the gap between MIT-connected entrepreneurs and industrial partners since its founding in 2014. The program, which now includes around 1,400 MIT-connected businesses actively working or under evaluation at any given moment, facilitates nearly 600 private meetings a year between MIT-connected entrepreneurs and industry, all of whom are members of the MIT Industrial Liaison Program (ILP). ILP, the Institute's most comprehensive portal to the Institute, is the largest and oldest program of its kind, allowing corporate partners to tap into MIT resources to address current difficulties and predict future needs.
The MIT Startup Exchange was founded as a reaction to the changing business landscape. The conventional model of corporate R&D, which saw corporate laboratories like AT&T's Bell Labs driving technological innovation, had all but vanished, and huge firms were turning to startups in record numbers for innovation. The needs of MIT ILP member companies paralleled this trend. "The germ for MIT Startup Exchange was sown at an MIT Corporate Relations-ILP strategic planning session — we witnessed rising interest on the side of ILP member firms to obtain access to MIT-connected startups," says Karl Koster, executive director of MIT Corporate Relations.
MIT Corporate Relations' newest initiative created the way for entrepreneurs with affiliations to MIT departments, labs, and centers to engage with decision-makers from global businesses as firms turned outwards for innovation. The MIT Startup Exchange's member companies are either based on licensed MIT technology or were formed by MIT academics, staff, or alumni. The Engine, MIT's rigorous tech venture firm, has a portfolio of firms that are being considered for the platform. Currently, 82 percent of the firms working with the program have an MIT graduate as a co-founder, 19 percent have an MIT faculty co-founder, and 15% are based on licensed MIT technology.
"The bread and butter of the MIT Startup Exchange is managing targeted introductions, which is a valuable asset given how much money startups normally invest in corporate collaborations," explains ILP Program Director Irina Sigalovsky. "We have the ability to play a big influence in the growth of a startup."
Tulip, an MIT spinout that democratizes edge technology for front-line operations, has profited from the MIT Startup Exchange's highly-vetted, focused relationships. "Right from the start, the Startup Exchange and ILP connected us with top worldwide manufacturers like BMW, Porsche, the Defond Group, and Arauco." "Being a part of the MIT Startup Exchange gave us credibility early on, and we were able to convert many of these introductions into Tulip customers," says Natan Linder, Tulip's co-founder and CEO. "As we expand our global footprint, we're looking forward to working with the Startup Exchange and ILP to provide our platform to others in the industry," Linder says.
The program gets involved when a startup has developed a minimum viable product and is ready to engage with corporations. MIT Startup Exchange program director Marcus Dahllöf notes, "We look for B2B tech businesses with new solutions to complex business problems." "The best time to contact us is when you've established your company, sorted out your IP, and developed a product that a company can test."
MIT Startup Exchange, in collaboration with MIT ILP, uses an extensive database of several hundred companies from 36 countries across industries and sectors to provide targeted introductions for startups founded by MIT innovation ecosystem experts, such as Thomas Leurent MS '01 and David Knezevic '11, co-founders of predictive digital twin pioneer Akselos. Today, Akselos' technology safeguards multibillion-dollar assets for some of the world's top energy companies. However, when Akselos and ILP member company Shell were introduced by MIT Startup Exchange in 2015, the MIT spinout had fewer than 20 workers. It did, however, have a core product based on cutting-edge MIT simulation methods. Based on the initial MIT Startup Exchange-brokered encounter, Akselos and Shell would sign a three-year agreement.
"MIT Startup Exchange and ILP have been a really effective approach for Akselos to engage with key clients and partners who come to MIT with a desire to innovate," Knezevic says. "With Akselos, some of the major ILP members have unlocked new innovation curves that will enable them to boost return on equity in existing heritage markets and enter new strategic sectors while assisting Akselos in broadening its customer base," he continues.
MIT Startup Exchange also provides a busy program of events, workshops, and showcases to assist foster networking and partnerships between startups and corporate leaders. Members who register can speak at one of the more than 20 events held throughout the world. Workshops concentrating on technology sectors ranging from aerospace and robotics to cancer and energy regularly draw capacity numbers in non-pandemic years. "On a good day, a startup can walk away with up to a dozen high-quality leads from one of our events," Dahllöf explains.
Artificial intelligence, life science, new materials, and creative design technology were among the topics covered at the 2018 MIT Research and Development Conference. It brought together 400 business leaders to hear from ten MIT-affiliated firms, including Silverthread, the premier software economics startup, which is a member of the MIT Startup Exchange. "This was arguably the most fruitful conference we've gone to since huge firms were there with the stated aim of building collaborations," Dan Sturtevant PhD '13, co-founder and CEO of Silverthread, said after the event.
Aria Pharmaceuticals (previously twoXAR) and Catalia Health were among the MIT-connected firms that presented at the 2018 Startup Exchange Silicon Valley Showcase at GE Ventures. "People from ILP member businesses were there to do business and were quite eager to partnering with MIT startups, which is a terrific setup heading into a meeting," says Cory Kidd, PhD '07.
MIT Startup Exchange has not only survived, but thrived in the face of the coronavirus pandemic. The shift to virtual events in 2020 resulted in a considerable increase in both corporate attendance and startup presentations to corporations. MIT Startup Exchange had sponsored 13 startup-focused events with 235 firms presenting to 1,284 ILP corporate member participants by the time Corporate Relations closed the books on the fiscal year 2021. Although virtual events are intrinsically more accessible than in-person events, the ongoing increase in attendance is a testament to the program's adaptability, among other factors.
MIT Startup Exchange continued to promote community and build ties while accelerating knowledge transfer in unpredictable times. It brought together corporates and startups innovating in areas like disease monitoring and contact tracing, supply chain, and big data implementation to define digital identity for Covid-related purposes and beyond when economies came to a halt.
Corporate and startup members were enthusiastic about the digital approach, thanks in part to their faith in the Institute. MIT has been accelerating and amplifying societal and industrial progress since its founding in 1861, supporting an interwoven system of the scientific and practical that encourages innovation and engagement with industry. It's a long history of invention, as evidenced by the recent development of messenger RNA vaccines. MIT's Center for Cancer Research, where Nobel Laureate Phillip Sharp, now an Institute Professor, undertook significant research in the 1970s that unveiled the potential of mRNA. Robert Langer, who is currently a David H. Koch Institute Professor, pioneered innovative ways to deliver medications, including mRNA, in the 1980s. Langer went on to co-found Moderna with Noubar Afeyan PhD '87, a fellow MIT alumnus, and others.
Today, MIT-affiliated startups are carrying on the legacy. Consider Witricity, an MIT spinout and early member of the MIT Startup Exchange, which has licensed its revolutionary wireless-charging technology to IHI, a leading supplier of aerospace engines and car turbochargers as well as resource, energy, and environmental goods. For example, Nara Logics, a company with deep MIT origins, is collaborating with Procter & Gamble to help the multinational realize the potential of data-driven marketing aided by cutting-edge artificial intelligence. These are just a few of the success stories that MIT Startup Exchange promotes: the union of high-caliber talent and cutting-edge technology given by an MIT-connected startup with a high-quality enterprise looking for an injection of innovation and entrepreneurial spirit.
The need for innovation is more pressing in a world plagued by climate change, public health crises, and geopolitical developments that ripple across the corporate landscape. The MIT Startup Exchange is a one-of-a-kind convening force, bringing together entrepreneurs, multinational businesses, and academia to forge tremendous synergies that may transform the world.
