“With the Pioneer Fellowship Programme the number of high growth spin-offs is expected to increase”
Stefan Kyora11.01.2016 13:31
Last Tuesday ETH Zurich announced a record number of spin-offs. We talked with Marjan N. Kraak, Head of the Spin-off group, ETH Zurich - ETH Transfer, about the record, the potential and the share of high-growth companies among the spin-offs.
Mrs Kraak, what are the reasons for the spin-off record?
After nearly 20 years of experience and around 330 spin-offs founded, we have a strong tradition of entrepreneurship at ETH Zurich. Over the years several successful spin-offs have come out of ETH Zurich e.g. Sensirion, Glycart, Covagen, InSphero, Procedural, Dacuda, Optotune and GlycoVaxyn to name just a few and these spin-offs are role-models for the new ones.
We have different programmes supporting young talents, for example our ieLabs offer a lot of benefits for entrepreneurs-to-be. In addition to workspaces (laboratories and offices) the ieLab offers opportunities for the Pioneer Fellows and existing spin-offs for networking, coaching, preparing for further financing of their business idea or seeking industrial partners. We are continuously building up the ETH spin-off community enabling the new ETH spin-offs to benefit from the experienced ones. It is noticeable that ETH students are very interested in starting their own business which is a promising sign for the near future.
There are many entrepreneurship and support programmes out there. What makes the Pioneer Fellowship Programme special and why can it motivate young scientists to start their own business? Are there other important support programmes?
Over the last 10-15 years Switzerland has built up a great landscape of support programs, something that is also reflected in the constant high number of spin-offs coming out of ETH Zurich.
The Pioneer Fellowship Programme offers a grant of 150’000 CHF for one or two people for 18 or 12 months, respectively. The project must be based on their Master or PhD project at ETH Zurich and enables them to continue their project in a more applied way and to bring the business case forward. During the programme the Pioneer Fellows participate in regular talks from industry experts, investors, marketing or regulatory specialists, etc. and they will talk to customers and improve their pitches. A very important element in the programme is the individual coaching from people who have already founded a company. Often we have former spin-off founders who are motivated to support a Pioneer Fellow for a longer period.
Another very important startup support programme is Venture.ch, the Swiss-wide Business Plan competition. In 2015 many Pioneer Fellows were among the top 10 business plans and business ideas. With Venture.ch a huge Swiss network of experts and coaches is available for the entrepreneurs and has already opened up many doors for the founders. Another program worth mentioning is Venture Kick. With Venture Kick the startups get valuable feedback to the business ideas and business plans while the entrepreneurs can win CHF 10k, CHF 20k and in the third round even CHF 100k. CTI Entrepreneurship also offers many courses and CTI coaching is another very valuable offer from the government.
The number of spin-offs per year varies between 20 and 25 since 2007. Is it a goal of ETH Zurich to increase the number or is the potential exhausted?
First of all we are very happy with this record of 25 and the potential is not yet exhausted. Nevertheless the goal is not to increase the number of spin-offs per year as such but rather supporting the quality, sustainability and high growth potential of ETH spin-offs. ETH has the goal to bring technologies out of ETH into the market and spin-offs are very good vehicles for that. With the creation of more high growth spin-offs it will automatically lead to the creation of more jobs and we know that the jobs at ETH spin-offs are typically highly qualified jobs such as engineers, software developers, biotechnologists, etc. Based on a study we also know that the survival rate of ETH spin-offs over the first 5 years is over 90%.
The study about the performance of spin-offs which was published in January 2015 showed that most of the companies stay small: In the past 315 spin-offs created between 2’600 and 3’500 jobs. What do you think are the reasons for that and will this change in the future?
Small is relative – some have grown to truly international companies which can be seen in the examples above, employing more than 30 people and expanding worldwide. Sensirion is even employing over 600 people worldwide. Growth of the spin-offs will depend on different factors, the technology and its market potential, the scalability of the business and of course the market, as well as a bit of luck. Last but not least, it also depends on the founders and their strategy, are they willing to go for a high growth or a lifestyle company? With the Pioneer Fellowship Programme the number of high growth spin-offs is expected to increase in the future.
In December an expert committee published recommendation regarding the support of entrepreneurship in the ETH domain. One of the ideas is a seed or venture fund created by the institutions of the ETH Domain. Do you think this would make sense?
Money in general is a topic of high importance for spin-offs. At present it won’t be our goal to use tax money for a venture capital fund. Nevertheless ETH Zurich has already started several programmes such as the Pioneer Fellowship Programme, the Venture Business Plan competition and Venture Incubator to support the spin-offs in the starting phase.