Rice Alliance Taps Northwestern’s Hochberg to Boost Entrepreneurship
Rice University has brought some of Northwestern University’s entrepreneurial prowess to Houston. While a team from the Chicago-area institution did not win this year’s Rice Business Plan competition—healthtech startup Innoblative came in 4th—Northwestern teams won the previous two years, and consistently place in the finals.
In July, Yael Hochberg, a Northwestern professor of finance who focuses on entrepreneurship and the financing of startups, will take a new position at Rice, both teaching in the Jones School of Business and as the new academic director of the Rice Alliance for Technology and Entrepreneurship, a group formed to bring together Rice’s business, engineering, and natural sciences schools to boost entrepreneurship.
“Rice is a fabulous platform; what Rice Alliance is doing to foster entrepreneurship is extremely attractive,” she says. “There’s probably not as much interaction between the Jones school and the rest of the university as there could be in areas related to entrepreneurship, such as engineering, computer science, natural sciences.”
She says she hopes to be the point person bringingeach of these factions together and encouraging a more cross-disciplinary approach to entrepreneurship at Rice. Texas’s booming economy provides fertile ground for an entrepreneurship educator, she added.
“In looking at what’s happening in Houston—the economic strength of the city—there is a massive amount of potential in the region,” she says. “There are so many things going on, not just in Houston. There’s a lot that’s attractive about Texas as a growing state.”
Hochberg, who was in Houston this past weekend attending the business plan competition, is now back in Chicago, tying up loose ends and preparing for her move south this summer. She starts at Rice July 1.
Here is an edited version of our conversation:
Xconomy: What will you be doing at Rice?
Yael Hochberg: Rice hired me to come in to the Jones School and run the entrepreneurship program, as part of a newly endowed entrepreneurship chair. I get the lofty title of academic director of Rice Alliance, and I’ll work with Brad [Burke, the alliance’s director] to take a leadership role in building the next iteration of the entrepreneurship program at Rice. I’ll work together with the provost’s office, the engineering department, the business world, and the Rice Alliance to take Rice forward another step to keep up with how entrepreneurship is evolving, to bring more entrepreneurial activity into the university.
I’ll be teaching undergrads to start out. One of the things students don’t have access to is a basic set of classes that can teach them how to turn an idea into their own Google or Rackspace or whatever it may be. We’re going try to build an entrepreneurship minor. More generally, we want to be able to prepare both clinical and engineering students to be able to build companies of their own. There have been entrepreneurship-area coordinators, but academic director is a new position.
If you look at where Houston is going, look at sectors that are expanding and finding interesting new technologies, Rice is in a great position to capitalize on that.
X: What is your background in entrepreneurship? What were you doing at Northwestern?
YH: I’m an engineer by training. I have a degree in industrial engineering and management. I worked for a while as a programmer at Oracle, and then a startup spun out of it. I went to the Stanford business school, and then I left to go to a startup but it was shut down when we couldn’t raise another financing [during the financial crisis]. I went back to Stanford and wrote a dissertation on the venture capital industry.
I was an entrepreneurship professor at Cornell and went to Kellogg [Northwestern] in 2005, where I was a finance professor, creating new programs for them surrounding venture capital and entrepreneurial finance, how to evaluate early stage startup opportunities.
X: Tell me about working with Northwestern startups.
YH: [She laughs.] Well, the last two teams that won [the Rice business plan competition] were students of mine in the venture capital program. Many, many people are to be given credit for what’s going on at Northwestern, at the Farley Center [for Entrepreneurship and Innovation], and the engineering and business schools, to create programs that have experiential aspects and cross-pollination aspects.
Both teams have gone through what we called NUventions, a class in which we handed students technology at the university and we handed them some money and some mentors, and we spent a couple of quarters building an actual business. We’ve helped students understand what roles other types of functions bring to the table. Engineers understand the value-add for a person who has management skills. The business students value someone who speaks to the technology on the team. Those are the kinds of efforts that have paid off for Northwestern in many ways.
It’s a new way of approaching entrepreneurial education, co-taught by academics and people from the industry. Cross-pollination was something I picked up from Stanford. They were one of the few places doing it. MIT’s been doing the co-teaching for a couple of years. This is no longer a class where you learn about how to write a business plan.
X: Will you be starting a “NUventions” at Rice?
YH: It won’t be so much, “let me bring what Northwestern had to Rice.” But this is a good time now to step back and look at best practices, at MIT, Northwestern, Stanford and a small group of other universities that are thinking about this in a concrete fashion. This is a clean slate from which to build a program from ground up and take all the strengths that Rice brings to the table, as well as look at what’s been successful in other places.
X: What are the main challenges to building up Rice’s program?
YH: The major challenge is making sure that everyone stays on board and with the same goals and coordinating visions. We’ve got to be making sure people are getting behind things with not just words but also actions. Usually the stumbling blocks come from institutional inertia: we have something and it’s good enough. As long as everyone is willing to stay focused and acknowledge that we have an opportunity to build something new, we can do a lot of great things.
Houston still needs things in the ecosystem that might take longer to accomplish. We’re looking at high-growth and more technologically complex business, different from the traditional business built in Houston. We could facilitate the development of this with a large space where lots of startups are sitting together with great tech infrastructure available. If you look at why Chicago has had such an inflection point, the city does a lot to lay down a technology infrastructure. It got Google into the city, the 1871 co-working space. Techstars Chicago is there at 1871.
Houston could easily support another tech accelerator. There are people who are trying to build those spaces. You have Redhouse, Start Houston, Surge. You can see these things starting to emerge. Owlspark [the student accelerator at Rice] is struggling to find space. One of the things that I hope will happen is that, over the next few years, we’ll see more spaces like this to try and really build an entrepreneurship cluster.
X: So, you will be up against your former colleagues next year at the Rice competition?
YH: I hope so. I love working with students on startup plans. I intend to offer my support to whatever student groups need it. I will admit that I was kind of hoping to see Northwestern win this year. I was glad to see Innoblative in the final six.
But A-76, the Rice startup, came in second, which was great to see. There is a lot of potential running around Rice and, as we build programs, it should help a lot of the groups start up. It will take a concerted effort. There are challenges surrounding how we leverage the technology at the Texas Medical Center, the university, and take that IP into a startup instead of just licensing it away to a large corporation or having it sit on a shelf somewhere.