Inside an MIT Incubator: What It’s Really Like to Learn Entrepreneurship at MIT

David Worrell
Thu, 14 Jul 2016 19:43:45 +0000

I recently had a chance to sit down with Nick Majer, an entrepreneurship major at the Massachusetts Institute of Technology. Nick and a team of fellow students are sequestered in the MIT business incubator called the Martin Trust Center for MIT Entrepreneurship, where they are hard at work on a startup, Politifund, that they hope will revolutionize American politics.

I asked Nick about the company he’s helping build, and also about how it is that MIT startups seem to do so well. His answers are enlightening and relevant for any growing business.

A Culture of Entrepreneurship?

David: MIT is one of the most recognized brands in the world for engineering, science, and entrepreneurial excellence. What’s it like to start a company there?

Nick: It truly is an atmosphere and culture like no other place in the world. To be in an MIT incubator means one of two things: you either achieve massive success or you fail—there is no in between. The 25,000 companies that were started out of MIT have an aggregate revenue of over two trillion dollars, employing 3 million people—comparable to the world's eleventh largest economy.

At any time, MIT has about 20 to 30 companies being started by students, so there is no shortage of support or counsel that can be obtained by our peers. Students are galvanized by the atmosphere of ambition and collaboration. To be surrounded by such impressive people definitely makes us inspired and motivates us to work even harder. We turned our 12 hour, 7 days a week work schedule into 14 hours, then to 18, just to keep up with those around us.

The Making of an Entrepreneur

David: So why is MIT so successful at producing effective entrepreneurs?

Nick: We could enumerate so many reasons, but to narrow it down to one, it would simply be the culture. Most people would say that the quality of the students at MIT accounts for its entrepreneurial success, but don’t Harvard, Stanford, and Caltech have the same quantity of "smart kids"? The reason why MIT statistically outperforms these top-notch schools is because of its innovative culture. At MIT’s Martin Trust Center, this innovation is contagious and inescapable, and with innovation being a major part of entrepreneurship, it makes sense that MIT students become effective entrepreneurs.

David: How did the Politifund team harness this energy on campus?

Nick: Well, since we do not have new and revolutionary technology, we are unlike many other startups at MIT. But we still collaborate with other startups and bounce ideas off of each other. And we did massive amounts of market research to find what people need in their lives to feel more empowered and more effective in our American political system. To meet this customer need, we created Politifund, a web-based application that allows massive groups of people to come together and raise money to hire a lobbyist to pass legislation that would collectively benefit the group.

Overall, the environment inside an MIT incubator is unbelievable and surreal at times, but starting a business in an accelerated amount of time does make reality sink in about all of the extremely hard work it will take.

Brave New Business Models

David: How will you revolutionize politics in America?

Nick: Politifund aims to radically change how our legislative system works by giving lobbying powers to everyday people through the power of crowdfunding. Traditionally only the wealthiest people and the largest companies have been able to hire an efficient lobbyist to push for the legislation that they want. With Politifund, we will bring the power of an efficient lobbyist to everyday people who want legislation passed that will benefit them as a group.

David: And what’s your secret sauce? How will you do something that no one else has done before?

Nick: With such a brave new business model at the intersection of politics and crowdfunding, there are certain assurances that must be provided to keep the customer coming back to contribute.

First off, transparency is paramount. Customers need to see exactly where their money is going. To provide this transparency, all lobbyists will be selected by a board of retired lobbyists, based on their skills and connections. Each lobbyist will be appointed to campaigns that they have the proper connections to and they will be required to send weekly emails to all those who contributed to the campaign about their progress so far. Secondly, customers must be assured that if there are not enough funds to hire a good lobbyist for the job, they can get their contributions refunded.

We will sustain ourselves with a 3 to 6 percent transaction fee, based on how many people contribute. For example, if 2,500 people commit three dollars each ($7500 total) our transaction fee will be around 5 percent, but if 5,000 people donate, we will only take 3 percent. In our model, the more people participating, the smaller a percentage we take, which incentivizes users to share their campaigns and therefore grows both the campaigns and our corporate image.

Innovation as Curriculum

David: That’s a cool twist, and very innovative. Would you say that this is a result of your MIT curriculum? Can innovation be learned or is it more about innate creativity?

Nick: The idea that MIT students are just born innovators is a complete myth. The curriculum molds you into an innovator; it forges visionaries from people who previously had no idea that they had it in them. The work of developing entrepreneurial skills comes not only from classes but competitions, extracurricular activities, and networking programs. The teachings available both inside and outside the classroom are extremely relevant and immediately valuable to the students so they attack their subjects with a greater level of interest and commitment. This results in a level of engagement that makes the whole experience more productive for students and instructors.

We’ve talked a lot about innovation, but we’re also aware that innovation is not what makes or breaks a business. For example, you could program an app that already exists but do it 10 times better, and still become successful. This is why innovation is not the most important of aspect of entrepreneurship, and why execution is.

As a way to stay grounded in the midst of all of the inventions, we use this simple equation: Innovation = Invention X Commercialization. This means if your invention cannot be commercialized, it is worth nothing in the business world. This helps us stay grounded with our target customers and provide what they really want, not what we believe they want. It’s incredibly important to keep in mind the economic reality that if you do not commercialize your inventions, it will not be an innovation, much less a profitable company.

Lessons Learned

David: I have this image of MIT students being hyper-competitive, which could thwart the sharing of ideas and diminish innovation overall. Do you see this happening?

Nick: We do talk about our work in social situations and naturally begin to push each other with subtle or not-so-subtle competitiveness. But I think what keeps us from slipping into that is a kind of “social herding” mentality. When we are learning and working on entrepreneurship, we are also collaborating with fellow students. The more we push each other, the more we learn ourselves. It’s a virtuous cycle—a feedback loop.

David: What have you learned about business at MIT that you can share?

Nick: So many lessons from classroom guest-speakers have helped us form our company. These speakers range from the head of Harvard Business School to well-respected entrepreneurs from all over the world. Perhaps my favorite was from an 18-year-old entrepreneur Jaylen Bledsoe. Jaylen has several companies and came in to talk to us about how he got started. His story was very inspirational as he told us about how he started with nothing and now owns a multi-million-dollar software company. After that class, I saw all of my peers take his speech as fuel and inspiration to work even harder and to push themselves to places they thought were unachievable.