In 1999, I left a tenured position in a French university to create a software company in Seattle. This was the high of the dot com boom when investors would put a seven figure valuation on any PowerPoint presentation. We had quite a ride until March 20, 2000 when the NASDAQ peaked.
After the boom came the bust…
Soon, it became obvious that there might be a more rewarding use of my time than trying to keep afloat a sinking ship.
After the last meeting of the board, one of the directors, Rick Jones, gave me a copy of Michael’s Gerber best-seller, the “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It.”. E-myth stands for “entrepreneurial myth”.
The books dispels the myths surrounding starting your own business and shows how commonplace assumptions can get in the way of running a business. It describes the steps in the life of a business from entrepreneurial infancy, through adolescent growing pains, to the mature entrepreneurial perspective, the guiding light of all businesses that succeed. The book describes how the lessons of franchising can be applied to any business whether or not it is a franchise. Finally, it draws the distinction between working on your business and working in your business.
There are very few business books I have read several times. This is one of them.
We are a business
When I left my academic career in 1999, I looked at the move as a one-way trip. Life is full of surprises and in 2006, I was fortunate enough to be given an opportunity to start a research group at the Virginia Bioinformatics Institute at Virginia Tech.
My approach of this new challenge has been influenced by the seven years I spent in industry. I have always considered my research group as a small business. More specifically, it is a profit center of VBI, which is itself a profit center of Virginia Tech.
Our main customer is the federal government. We provide services related to the mission of some of government agencies (National Institute of Health, National Science Foundation, USDA, etc.) through grants and contracts. Our sponsors are the customers when our group leads the research project, when I am the Principal Investigator (PI). However, when we support a project led by another PI, the project PI is our customer.
We are competing to get a share of the limited budget of the agencies and programs that match our expertise. Our competitors are other scientists working in the same field at different universities but also in our home institution, sometimes even in our department. In addition to competing with academic groups, we are also competing with large and small companies that specialize in providing services to the government. Some of these companies are extremely successful and generate large profits. They must be doing somethig right.
Considering the very low success rate of grant applications (10-15% depending on the agencies), being good is not good enough. Excellence is a requirement at all phases of the funding cycle from the bidding process to the execution of current grants and contracts. Excellence means being able to submit more high-quality proposals. It also means getting the most of existing resources. Like anybody, I would always like more funding. However, there have been times when we had more funding than we could handle. This translated into grants that did not result in all the deliverables we had promised.
A couple of years ago, we realized that unless we dramatically improved all aspects of our operations, there was a good chance that our group would go out of business. Of course, being part of Virginia Tech we would not have faced bankruptcy. People were at risk of losing their jobs nonetheless. VBI’s leadership might eventually reallocate resources until a point when the existence of the research group would be in jeopardy.
We collectively embarked on a process to systematically improve all aspects of our operations. The purpose of this A-myth blog is to openly share some of what we learned along the way with the hope that it might be useful to research group leaders in academia and industry. The blog will point to material that we will publish in other sections of this web site.
The A-Myth? A-Myth stands for “The Academic Myth.” We want to challenge the conventional wisdom that research groups in academia should not be managed as businesses. It is tempting to take cover behind our non-profit status, our noble pursuit of knowledge, and other excuses to dismiss the idea that management methods used to run for-profit organizations do not apply to academic research groups or research institutes. Our metrics of success may not be the same but we will see that the methods to reach our own success may not be that different.
What do you think? Have you ever worked for a very well managed organization in academia or industry? Do you see some fundamental differences between the two worlds that may call for specific management methods?