The 2020s are the decade of Venture Education

We are preparing for Conception X's 2020 programme, which starts in February.

As far as I know, Conception X is unique amongst both university programmes, and technology accelerator and incubator programmes. The Conception X programme bridges university deep tech PhD research, and startup technology companies.

Conception X is the launch of practical venture education in the PhD research context. The programme combines business school coursework, technical MVP product development, and practical skills through mentorship and coaching.

Together, this is a new framework for generating spin-out companies:

1. PhD research +
2. Business education +
3. MVP development and testing +
4. Practical skills and leadership training

= New technology companies from PhD research

Operational Conception X companies have raised over $5M to date. Further, PhD candidates in Year 1 or 2 of their work receive ongoing support to translate their research into new commercial applications. Thus even though we are two cohorts in, we have not yet begun seeing the true capability of this venture education framework. The best is certainly yet to come.

For accepted candidates who participate in the programme, Conception X de-risks the process of venture creation. While the majority of other leading programmes require a full-time commitment – leaving PhD work behind – Conception X leverages PhD work. Conducting the venture creation process in parallel with PhD work changes the future of work of these candidates.

There are four outcomes we have identified for participants in the programme:

1. Build an MVP and turn PhD research into an operational company. These are generally teams of third-year students who worked together during their doctorates, and now want to make the step of building a company. They are the best candidates for receiving venture investment during or immediately after the programme.
2. Begin the process of translating PhD research into a product. These are often individuals or pairs of first- or second-year students. Their research is well underway, and Conception X provides the framework to move that research toward commercial realities. We are still collecting data, however early indications are commercialisation strategies not only better position students for eventual spin-out companies, but also make their work more competitive for grant funding.
3. Increase candidate competitiveness in the job market. Not all research is suitable for translation into spin-out companies, and not all Conception X participants want to launch their own startups. For these participants, the framework provides them with competitive advantage in the job market, compared with PhD candidates who have not received business education, delivered an MVP, and learned practical leadership skills. We see new career paths unfolding for these candidates. Access to roles at venture backed companies. Higher salaries and/or better positions with large corporates. Generally more, and better career opportunities available as Conception X augmented world-class research coursework with venture education and deep networks to match.
4. Double down on academia. Venture or corporate life is not for everyone. Candidates complete the programme and having seen the venture and business worlds in greater detail and high fidelity, choose to redouble their focus on academic careers. For these candidates, not only have they received the framework training and education, but also, they emerge with renewed clarity about their work. We believe undertaking venture education and opting back into academic careers will be exceptionally powerful, as academic careers continue to become increasingly competitive.

We call this the Conception X Sorting Hat, of sorts. And as mentioned, so far it is unique amongst offers from both universities, and accelerator and incubator programmes. We know launching new ventures is not for all PhD students. We do believe that venture education is exceptionally powerful for those PhD students that choose and are chosen to undertake it.

We estimate the value of the Conception X programme to be ￡75,000 / $100,000  per candidate / candidate team. We know venture education is already changing people’s lives. And we believe this is only the start of one of the greatest changes to both academia and business in contemporary history.

Applications for Conception X Cohort III open now. Apply by 17 January: https://www.conceptionx.org/students/

Provocation: 2020s are the decade of Venture Education 

Universities are moving both startup technology frameworks and venture capital funds within their walls and under their brands. The traditional path to founding or joining new technology companies was to graduate from university, join a corporate employer, and then found a startup company.

Increasingly, universities incorporate the same networks and tools that accelerators use. They raise venture funds and realign academic coursework. As venture capital firms and accelerators increasingly compete with universities, so will universities become more like venture capital firms and accelerators.

The last 10 years in global venture capital and what it means for the future of education

Not only was December 2019 the end of the year, it was also the end of the decade. 2010 started in the aftermath of the global financial crisis and ends with the world beset by climate change and politically divided. Global poverty in the developing world continues to fall, while technology drives both unparalleled transparency and uncertainty in the developed world.

The same advances that bring truly global online communities, renewable energy, and social justice also spawn economic uncertainty, profound questions about the future of work, and political extremism and disruption. For many, the future has never seemed brighter. For many, the future has never seemed so competitive.

While we often overestimate what can happen in a year, we also often underestimate what can happen in a decade. As we leave the 2010s behind and turn toward 2020, we find ourselves at crossroads, both as individuals and as societies. Technology increasingly makes everything possible, while also cannibalising the core networks, structures, and systems that underpin our lives, careers, and places in global society. In a single decade, we moved from the carcass of American mortgage debt, to a multipolar world where technologically startups are increasingly strategic national players.

In 2010, technology startups were the domain of far-away technologists and investors in California’s Bay Area. In 2020, technology startups and venture capital are global industries, and increasingly, the future of work for university students. As demographics and economics reshape graduate programmes and traditional employment pathways, startup companies emerge not as an exception, but now as a new rule. A formal sector with its own development trajectory alongside academic, corporate, and public sectors. 

Universities now not only prepare students to join companies, but progressively the role of the university is to prepare their students to build companies.

In the next sections, I will make the case that startups and venture capital investment are as much a part of the education sector, as part of the finance and technology sectors.

The decade in global venture capital investment

In 2018, $254B in venture capital was invested around the world. If the global venture industry was a single company, it would be the world’s 12th largest measured by revenue between Apple ($266B) and Berkshire Hathaway ($247B).

In the decade between 2009 and 2018, $959B of capital was invested around the world. We estimate the following distributions:

Seed: $46B – idea/MVP

Early-stage: $351B – early product / product-market fit

Late-stage: $559B – scale / growth capital

Annual total venture investment across all stages grew 600% from 2009 to 2018 – an average of 25% p.a. Seed investment has been a breakout performer in the OECD, up 850% from $700M to $7B. The United States remains the world’s largest venture market at all levels, including seed. 

The US alone invested $300M at seed in 2009, and $5.7B in 2018 – a formidable +40% p.a.

Europe invested $4.1B total at seed, growing from $290M to $850M p.a., over the same period. The leaders in total value invested are the continent’s largest economies:

1. France: $1.1B; 27%
2. Germany: $685M; 17%
3. United Kingdom: $650M; 15%

Across all stages, Europe invested $70B between 2009 and 2018, 7% of worldwide total. The average across Europe per capita was $130, with some countries nearly tripling that:

1. Switzerland; $3B total; $347 p.c.
2. Sweden; $3.2B total; $319 p.c.
3. Ireland; $1.4B total; $293 p.c.

And finally, the counties with the most aggressive growth of venture investment per capita:

1. Lithuania; 36% p.a.
2. Hungary; +22% p.a.
3. Ireland; +14% p.a.

To put venture capital investment into context, the top 200 exits between 2009 and 2018 generated total exit valuations of $981B on $83B of invested capital. A ratio of $11 in exit value created per $1 in venture. Assuming that ratio remains the same in the 2009 – 2018 period, the near $1T invested creates exit values of at least $11T – the net worth of the Indian subcontinent.

As the venture capital market expands, it both creates new structures and reshapes existing structures. It is one of the most powerful tools in human history for advancing both human capability, and personal and societal wealth creation.

What venture is doing is formalising the process of developing new technologies and taking them to market. At the core of venture capital is risk management, which enables nearly unlimited direct investment in potential futures. As venture capital increases in power and reach, it also innovates itself to further extend its reach. Venture capital is a viral business model.

The virus spreads, and the future of technology is just as likely to be in France, Hungary, Sweden, or Switzerland as it is in Silicon Valley.

From the rise of venture capital, to the rise of accelerator programmes

Here are the number of companies run through the Y Combinator technology accelerator programme in Silicon Valley / San Francisco:

2005 – 2008: 101 (25 p.a.)

2009 – 2013: 472 (95 p.a.)

2014 – 2018: 1098 (220 p.a.)

Read: Bryant Hobart: YCombinator is unbundling education

As of 2018, over 8,000 companies ran through 190 programmes worldwide, raising $65B in capital. Top accelerators programmes start to mimic top universities. Fixed-term programmes with rigorous acceptance criteria and standards, and prestigious alumni networks. Previously, employers favoured job applicants from top universities. Similarly, investors favour teams from top accelerator programmes.

The global venture capital market was accelerated by record low interest rates around the world. As VC grew, it spawned accelerator programmes to source, manage, and de-risk investments. 

If venture capital firms replace corporate employers with startup capital, and accelerators offer brands, programmes, and alumni networks rivalling universities, what positions do today’s corporate employers and universities play?

For corporate employers, the future is unclear. The speed at which large multinationals are replaced at the top of public market indices continues to advance. 

For universities, the future is clearer. The role remains similar, although how they execute the role already vastly changes. Universities are places students go to both learn and mature into workers, citizens, and leaders. 

The fundamental concept of the university has been refined over a millennium, yet they are dynamic as they are static. Not only are universities shaped by changing societies, they also respond to and shape societies.

Increasingly, universities incorporate the same networks and tools that accelerators use. They raise venture funds and realign academic coursework. As venture capital firms and accelerators increasingly compete with universities, so will universities become more like accelerators, incubators, and VCs. – NR