At the Andreessen Horowitz academic round table (see past post), there was various advice, some of it contradictory, for professor-types interested in starting companies. I should start by saying that all of this is my interpretation of the advice, and the various people involved are not responsible if I've gotten it wrong. Certainly further opinions are welcome.
At the research level, Nick McKeown expressed some of his rules for research projects.
1. Pick a problem that is intellectually interesting.
2. And improves the practice.
3. And industry doesn't like (yet).
His idea (my interpretation!) was that if industry liked the idea, then the problem wasn't out there enough in terms of a time horizon. Also, given the resources in industry, if industry really liked an idea, they could throw more resources at it than researchers at a university. This idea had some pushback. For example, Michael Franklin said the AMPLab at Berkeley had a lot of enthusiasm from industry, and that the industry support and interest was very positive in terms of their success. (AH very recently funded a startup that came out of the AMPLab. And the AMPLab is very impressive in terms of its resources, including people -- lots of great faculty.)
I will say that part of Nick's conception resonated with me. When I've expanded my research into new areas, I've found at times that people in that area can be very negative. And when that happens, it often turns out to be the most interesting research. The work on low-density parity-check codes from way back when was roundly criticized by multiple old-guard coding theorists when we first presented it, and then suddenly there were entire sessions at coding theory conferences on the subject. If you're inspiring angry reactions, you may indeed be on to something in your research. (Of course, as he also acknowledged, you may also just be wrong.)
Another key issue that arose was "commitment". The VCs at AH expressed some skepticism for professors who wanted to take a year (or maybe two) off to help set up a company but then hand it off and go back to their regular job. Besides investing in an idea, they're investing in a team, and it's not a great sign if the team leader isn't committed. Also, there's the feeling that that sort of change in leadership can have a huge transition cost. (Also, I think, as I mentioned previously, they really seem to like working with tech CEO's. Handing a company off may remove the "tech" leadership.) They were fine with a model where it was professors and graduate students starting a company, and the commitment was coming from the graduate students; in that case, a "part-time" professor founder could be workable.
I personally think the "commitment" issue can be a challenge. It's a problem for me, with liking my regular job so much.
There was various talk about patents. Most of the crowd were against making them a priority in starting a business, and recommended not getting them. A patent, it is said, is just a license to sue, and who needs or even wants a license to sue? Making your work open-source to get excitement and interest, and then commercialize after that point, can be a very successful business model, and maintains the academic desire to get the basic work out to a wide audience. But perhaps most importantly, as an academic, patenting your work means dealing with your school's version of the Technology Licensing Office, and nobody says anything good about their Technology licensing offices. (Even the west coast schools -- the best anyone said is that generally theirs would stay out of your way.) A patent gives your TLO license to ask for whatever percentage of your soon-to-be company they feel like asking for, and until they sign off, it can be hard to get a VC interested in a company where another entity holds the patent. And generally speaking, your success is not their performance metric.
(Two quick additional points related to TLOs. Many noted that most TLOs have been brought up by the medical school/biology groups in the university, where patents matter a lot and licensing is a strong way to go. That's much less so in CS tech. Also, while you'd think TLOs would be thrilled to have professors/graduate students start companies, get very wealthy, and donate back to the university -- that doesn't seem to be their model, as enlightened as it might seem to us.)
I certainly know some cases where patents at least seem to me to have been important to "startup" companies. (Akamai/Limelight?) But the rest of what was said seemed to make a lot of sense.
One thing the VCs emphasized is the importance of timing. They said the idea behind many startups had actually been around for a while, the subject of study in universities or labs, but often the timing has to be right to make the move into the product space. Sometimes other technology has to catch up, or something else in the environment has to go your way. A lot of "failures" may not be failures of the idea, but just not the right timing.
It was expressed that startups that have a mission to change the world in some interesting way were better off than startups whose mission was just to make money. In particular, it can help recruit the best and the brightest, creating a very powerful positive feedback loop. Simply stated missions -- Google says theirs is to "organize the world's information and make it universally accessible and useful" -- can be quite powerful. The cynical might question people's motivations and whether money is really what's behind the mission, but either way, missions can be useful.
Finally, and perhaps this isn't so surprising, but the best way to connect with VCs is probably through personal connections. If you know someone that's worked with the VCs, get them to introduce you. The VCs apparently get thousands of proposals sent to them a year, and very few of those get consideration. Having someone they trust vouch for you means a lot in terms of them being willing to make time to listen to you. That's not unlike aspects of academia (the importance of letters for jobs/graduate school; in some cases connections being helpful for getting funding from industry). While not surprising, it seems worth saying.