Why Should You Launch Your Start-up in a University?

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Start-up businesses are critical to the national economy and job creation all over the world. University-based incubator (UBI) programs have become focused on supporting the formation and growth of start-ups. It is widely acknowledged that practice-based education programs which encourage the launch of start-ups at universities have enhanced student employability and bridged the gap between the classroom and industry. Furthermore, there has also been an augmentation in the number of Accelerator programs at universities throughout the world. The relationship between UBIs and Accelerator programs can be illustrated in the graphic below.

When starting a business, a potential entrepreneur’s evaluation is dependent on the entrepreneur’s level of business knowledge and ability to put this information into effect. A start-up’s success is also determined by several factors, including the character and intelligence of its founders, and the environment in which it is located. Therefore university graduates are establishing their businesses or working with start-ups that align with their passions and beliefs. The success of Stanford University in the United States in attracting over $76 billion in investments serves as a notable example of a successful university-based start-up. Stanford’s success has been ascribed to a well-publicized trend of corporations narrowing the skills gap by educating employees/students on-site.

The chart below compares Stanford University’s funding for new firms to that of other prestigious American colleges :

The popularity of university-based enterprise/start-ups has created an opportunity for them to take advantage by :

  1. Establishing links with reputable universities and aligning their launch with developments/trends in further or higher education institutions
  2. Strategic alliances between start-ups and universities have proved to be beneficial for both parties in terms of growth, innovation, and profitability

This results in benefits such as :

  1. Students have a platform to learn and share their experiences in creating new businesses
  2. Creating employability opportunities to meet talent shortages

There is a demand in organisations for personnel who can share their values and are open to new experiences. When businesses hire from universities, they aim at recruiting bright, ambitious, talented, open-minded young people who have already been vetted by businesses through university-based start-up schemes and industry engagement. Multiple sources confirm that university-originated hires tend to stay longer in businesses which are attributed to their high-level understanding of business values and embedded culture. Additionally, the mix of familiarity and ambition leads to a happy working environment leading to longer employee retention.

Various studies highlight that university students possess traits of being open and willing to share knowledge with their colleagues which in turn makes them valuable employees in the business. Therefore, there is a chance of current university students eventually transforming into future star employees in organisations around the world. Such opportunities for knowledge sharing and transfer may act as an opportunity to develop mentorship skills in their teams.

Another prominent benefit of university-based start-ups in education is an ideal environment for a business’s brand image. Studies have identified that businesses’ who associate their brand with education and progress are always effective from a public relations perspective. Therefore, businesses that are willing to educate and invest in students that are regarded as the future from a national perspective, position themselves to garner a substantial level of respect from external stakeholders.

University-based start-ups may support as well as strengthen a business’ culture. Easing new colleagues who have been trained via courses/training planned by the business may lead to the brand’s values and mission inspiring these new colleagues. The business culture may be an avenue for talented individuals targeted as future leaders to transition seamlessly into the business. Such students/new employees can be potential ambassadors for a business’ brand. Therefore, such individuals are regarded as the backbone of a business that binds all characteristics of the business together. Students demonstrate their eligibility to work for a start-up by demonstrating the suitability of their traits with the start-up’s culture through undertaking courses/training provided by the business as part of the university-based start-up initiative.

Despite the various benefits highlighted for university-based start-ups, the possibility of students overexerting themselves should be considered.  The over-exertion is attributed to their high level of passion but low level of practical life experience. Alternatively, experienced employees maybe involved to mentor such individuals, which would mean an increased workload for the experienced employees.

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