On this week's episode of Inside Outside Innovation, we sit down with Richard Lyons, Associate Vice Chancellor at the University of California, Berkeley, and the university's first ever Chief Innovation and Entrepreneurship Officer. Richard and I talk about the evolving role of innovation and entrepreneurship at universities, as well as some key trends, opportunities, and challenges. Let's get started.

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Interview Transcript with Richard Lyons, Associate Vice Chancellor at the University of California, Berkeley, and the university's first ever Chief Innovation and Entrepreneurship Officer

Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I'm your host, Brian Ardinger, and as always, we have another amazing guest. Today, we have Richard Lyons. He's the Associate Vice Chancellor at University of California, Berkeley, and the university's first ever Chief Innovation and Entrepreneurship Officer. Welcome, Richard.

Richard Lyons: Thank you, Brian. Happy to be here.

Brian Ardinger: I'm excited to have you on board. I think one of the first things I wanted to talk about is, what is the role of a Chief Innovation and Entrepreneurship Officer at a major university?

Richard Lyons: Ah, good question. You know, it actually, the role didn't exist four years ago. It started at Berkeley at the beginning of the year 2020. A number of universities, as you know, have launched this job category. You know, most universities that were pretty decentralized places, I like to use the phrase distributed creativity. Things happen in engineering, they happen in business, what have you.

And I think the idea was, well, could we collect ourselves and become, you know, a little bit more than the sum of our parts in terms of innovation and entrepreneurship capacity? That's one way to think about why the job was created.

Brian Ardinger: Well, you used to run, you're the Dean of the Haas School of Business. How does it differ when you're focused on, I guess, MBAs and the business side of things versus now there's more cross-collaborative curriculum and such.

Richard Lyons: Yeah, well, I love that question because it's part of what's so much fun about being in this role You know, so CRISPR, Jennifer Doudna, one of the faculty here, shared the Nobel Prize in biochemistry a couple of years ago You know, right, science. I mean, I'm like a half an inch deep in science. I'm an economist just to put it on the table.

And so, I get to mix with all these lab directors and scientists and not just Jennifer. She's just one of many but, So that idea of boundary spanning, right, in a really fundamental way, touching on people that are doing deep science, but also the social scientists and the humanists, and how do we sort of create a for all ecosystem that everybody's feeling like, yeah, well this, this serves me and is also interesting to me.

Brian Ardinger: Well, it's quite interesting, you know, we've seen a lot of trends in higher education. It seems more and more Universities are jumping on this idea of cross collaboration with business. And, you know, you've always had tech transfer and things like that. What are you seeing when it comes to trends and this kind of move to focus on entrepreneurship and innovation?

Richard Lyons: I think the trend is unmistakable. My own view is that you could go right to the mission statements of these universities, because I think 20 years ago, people might've said, you know, the deep why of this university is research, teaching and public service. And, and you still hear that phrase. But, you know, reaching out to, like, Simon Sinek's work, Start With Why, or whoever the idea might be, you know, those are really what and how.

I mean, really important what's and how's. But the deep why is, is impact. And so, if you really thought that the mission was research, teaching, and service, Then you might look at innovation and entrepreneurship and say, oh, we're a public research university at Berkeley, and you're kind of way off on the periphery. But if the deep why is impact, no, you're kind of at the center of the mission, not the only center of the mission. Even at kind of this reframe of university missions is helping people to see that, no, this stuff is mission advancing, folks. This is not mission distracting.

Brian Ardinger: Some universities get a bad rap when it comes to entrepreneurship. Maybe the old version of tech transfer where, you know, the university wanted to keep control of what was being created on the university and sharing the profits or the upside on that with the professors and venture capital and that. Can you talk a little bit about how maybe that whole tech transfer process and that has evolved and what you're seeing?

Richard Lyons: Yeah, happy to. So, I was thinking a little bit before we got together here and I thought, well, I want to present four mind blows.

And I think all four of these are related to your question and I don't want to get too edgy, Brian. So, here's one and we don't have to talk about all four, but, but I think it really is an answer to your question. Well, first of all, If you asked a university, is it possible for a startup, or a big company, but let's think startup, to be able to access a mass spectrometer on your campus, or a DNA sequencer, or a shake table, or in on all the IP?

Is there kind of a porous way to access scientific equipment on Campus. And almost every university would say, yes, that's possible, that happens. And MP3s existed when Apple created the iTunes Store. So, Berkeley created a platform, we call it Berkeley RIC, the Research Infrastructure Commons. It's a platform with 27 labs on it, and virtually all the equipment in those 27 labs.

And you, Brian, or a company of any size, could access a mass spectrometer or a cell sorter. And own all the IP it's fully priced. But this creates this sort of porous foundry and its relationship building with a lot of these companies and so forth. So that idea of opening up the infrastructure to innovation and entrepreneurship, because there's a lot of excess capacity if we're going to be honest about it.

In fact, we even spun out a company based on this. It's called Second Labs, secondlab.com. And they're basically prosecuting this, you know, in a nationwide, worldwide way. So that's a fun platform. For us, it was a mind blower.

Brian Ardinger: The other thing that I think comes into this conversation is the whole funding aspect. How are, and how do private funds work with, you know, public education and that? Some of the trends I know that I saw recently, you were talking about some of the interesting work around shared carried funds and that. So maybe let's talk a little bit about the finance mechanism around funding innovation.

Richard Lyons: Yeah. Thanks for that. So, it actually was one of the things on my list of the four, but I'll just get right to it. So, the idea is we have eight of these, these shared carry funds. We talk about it as a platform. We actually know how to set this up and do this pretty darn efficiently now. And in all eight of those cases, so these, these are external funds. These are not funds in Inside Berkeley. They're outside entities legally.

And they have affiliation agreements with Berkeley. That's important for them because they can actually say we are affiliated with Berkeley. They can use our logos and our marks to pitch themselves to LPs and learned partners and so forth.

What's the get for the university? Half of the GP carry in each of the eight carries is contractually committed back to Berkeley. And that's a stunner. This is not, I'll make a gift, I promise. This is sort of like, no dollar pays out a carry to the GP and 50 cents if it comes to Berkeley. So, we could talk about, well, how many more might there be, and don't they compete with each other, and these kinds of questions if you want to go deeper. But the first one was launched about six years ago out of our College of Chemistry. And now they're spanning a lot of different domains and different parts of the campus.

Brian Ardinger: Are you seeing other universities adopting these new methods from this perspective?

Richard Lyons: I'm getting a lot of calls, Brian, from other universities that want some details and we're pretty, you know, universities are open-source places. We're very sharing of information and so forth. I haven't heard of any university that has developed anything quite this extensive.

Brian Ardinger: Yeah. It seems like a good partnership on both, both fronts. The other thing I want to talk about is you've seen quite a bit of success coming out of Berkeley. I think you're ranked as like the number one venture funded startups are coming out from undergraduate and other places. So talk about the success that you've seen and what do you think is contributing to that?

Richard Lyons: That's a very big question. We do have a certain geographic advantage in Silicon Valley and so forth. But, and, you know, Berkeley's just got a lot of fields, it's really strong chemistry and biology and lots of the fields, you know, machine learning, et cetera.

But you know, I think deeper than that. We created a time lapse, Brian, it's on our website, and what did the ecosystem at Berkeley, you know, the different programs, accelerators, incubators, funding mechanisms, so forth, what did it look like in the year 2000? How about 2005? 2010? 2015? Today? It's stunning how much delta there is on this time lapse, it's on our public website.

For those that are interested, I& E, Innovation and Entrepreneurship, iande.berkeley.edu. So that time lapse is there if somebody wants to see it. That long predated me. I'm not trying to take credit for this, but you know, most of these great universities, things have just sort of accelerated and accelerated, and then people talk about culture, culture, and so forth, but I'm kind of a nut for culture, right?

What are sort of the shared behavioral norms and values that drive some of this? So, questioning the status quo, right? There aren't that many university presidents that would come out and say, you know, our university. We're all about all about questioning the status quo, but Berkeley does. I mean, short thought, it's in Berkeley's history. It's part of our DNA That's a pretty helpful cultural construct.

And then the last thing I would point to is we have a bunch of macro wind in our sails, by which I mean, so for example, the University of California, 10 campuses, Berkeley is one, has a governing board called the Board of Regents in California.

And the Board of Regents issued a report in 2021. It came out in May, and it's publicly available, and they basically said, we should go even faster and further in terms of innovation capacity. I mean, they were proposing things that many people thought were so radical. That even the office of the president of the UC system was saying, wow, too fast, too radical, but it's very rare that we get, you know, so much support from above. So it's a constellation of a lot of factors.

Brian Ardinger: You mentioned you took this role and I think it was January 2020, right before COVID kind of hit and probably changed the world. I'm curious, what did you think this role would be, I guess, going into it versus how the world changed and where it's going today?

Richard Lyons: Interesting. Well, you know, COVID obviously changed a lot of things, you know, just one very, very quick story. I mentioned this Berkeley Research Infrastructure Commons, right? This platform was for sort of providing excess capacity to the startup world. But that actually was a pain point that was expressed during COVID because we were doing some of this pre COVID, right?

We were using some of our facilities and renting them out on the outside. You know, not so much. And then once COVID is like, we couldn't let any non UC employee into any of our labs. And it shut that business down. Now that business was small, but those expressed pain points, they were calling me in my office and my team and saying, is there anything we can do?

And it's sort of like, well, we can address this small pain point in this one lab. Or, it also pointed to this idea that, huh, is there a platform opportunity here? Is this a much bigger opportunity than we realize? So, there's a famous economist, economic historian, Toynbee was his last name, and he talked about the challenge response mechanism.

You're challenged by something, and then it triggers an innovation, triggers an idea, and you realize, wait a minute, that could get big. That's one piece of it. The second piece of it is also this, well, I'll give you an example. When we think about tech transfer, which does report into me, we normally have a lot of people think, well, what's the royalty level on how are you managing your IP portfolio?

Yeah, that's true. But I'm a finance back. I'm an economist. I do kind of financial economics. Anyways. How do we equitize? Here's a big opportunity I was not seeing three or four years. How do we equitize more of our upside? So, if somebody says, yeah, yeah, yeah, we do licensing negotiations and we get equity in startups as well.

So, I'm like, yeah, well, so does Berkeley, but it's sort of like, we now have three or four new pipes through which we are acquiring equity for not just IP, but for like acceleration services. How about for directly for research, like research for, for IP? What is that trend, or research for, for equity? What is that transaction?

I just mentioned we floated our first company. I mentioned the Second Lab, but the idea is that's like a builder VC function. Right. We created that. We allocated the cap table for crying out loud. We'd never done that before. And it's sort of like, ooh, this is getting interesting. Now, we're a public research university.

So, it's like, is there a place too far? You'd better be going into this stuff with your eyes open. But we think we are. But that idea of equitizing upside and participating in that nonlinear upside in a much greater way, that's an eye opener for us.

Brian Ardinger: Well, it's also about where do you create the value and capturing that value from the services and the intelligence and everything else that you put into a particular new idea to get it off the ground and keep it moving.

Richard Lyons: Exactly.

Brian Ardinger: Maybe I want to pivot a little bit and talk, you've obviously been around a lot of startups. And worked with founders and that. I'd love to get your insights into what are you seeing from the startup world? What are some common mistakes and challenges that new innovators should be looking out for as they launch their new ideas into the world?

Richard Lyons: Yeah, well, thanks for that. You know, I, being in a business school, we talk a lot about leadership, and leadership is a word that means a lot of different things to different people, and it's often very situational. It's like, all right, what kind of leadership is needed here or there. So sometimes it's hard to generalize, but let me do my best, because I had a chance to give a talk recently, and I organized my talk this way.

So, what are the top seven? What are the top leadership mistakes that founders make? You could do a talk on what are the top seven mistakes that founders make, but I wanted to focus it on leadership, and we don't have to go through all seven, but actually why don't I read all seven and then we can talk about any of the ones that are important.

Number one, founder mistake number one. This I'm reading from my slide here, needing to prove to your people how smart you are. Mistake number two, starting with, starting the phrase with, no, but, or however. Leadership mistake number three, family, i.e. the team, the company is my family, versus hard choices. Number four, an excessive need to be me. Number five, Playing Favorites. Number six, Refusing to Express Regret Slash Weakness. And Number seven, Claiming Credit We Don't Deserve.

Brian Ardinger: Yes, as I work with startup founders and that, those are, again, like you said, common mistakes that folks kind of run into. If you were to rank or talk about which ones. are most likely for founders to fall into. Where are you seeing that?

Richard Lyons: There's no one perfect way to lead. At Berkeley, we talk a lot about confidence without attitude. And it's sort of like, Oh, you know, that might be the exactly the right way to be a leader in this or that larger organization. But we know that there are a lot of founders out there, it's sort of like their attitude is, is how they got funded, for crying out loud. Right.

I'm not saying anything that, you know, won't invite, you know, a counter view on this. This idea that needing to prove to people how smart you are. You're not the founder or CEO unless you're smart. I mean, I think more people look at that kind of behavior and think there's insecurity there. Now, maybe some people say, I want to fund insecurity.

Insecurity is the, you know, the engine I want to fund. But I think increasingly, people are basically saying, if you're really, the team you need to motivate can see that a mile away, that's one that, that comes through a lot. And I think this, a second one is, you know, claiming credit we don't deserve. I'm going to, I'm going to touch that one.

Almost everybody says, like, share credit and take the responsibility on yourself, and it's like, you know, Good to Great, or a hundred different books kind of make this point. And you say, yeah, yeah, yeah, what's next? It's like, no, people can read that a hundred times and still fall into this trap. And we do, because we're human beings, right?

It's sort of like, look at me, and it's like, well, I need to be looked at me, or my, my venture funders won't be excited in my next round, and it's sort of like, uh, be, be careful with that logic. I think people, people overdo that.

Brian Ardinger: Absolutely. Well, this has been a fantastic conversation. Maybe the last thing, core topic I want to talk about is, maybe some of the trends that you're seeing. You've been, obviously, and see a lot of research coming out of the university. See a lot of new trends being in Silicon Valley. What are some of the things that you're most excited about or nervous about, uh, in the years to come when it comes to startup innovation?

Richard Lyons: So, a huge part of the things I'm super excited about, we have a program we call ACE, Accelerating Careers in Entrepreneurship. These are internship opportunities, mostly for undergraduates in startups. And it's sort of like, you can't get that after you graduate, or maybe you can, maybe you can find that, it's just hard, right?

And so we have this program ACE, it's like, okay, that's cool, I can imagine other universities haven't. But it's sort of like, no, we place. 800 undergraduates per year in the ACE program. And when we do these information sessions to see if they're interested, we do three a year, and if you sum up the students that actually come to the information session, it's around 2,500. So it's sort of like, oh my gosh, they want access, right? They want to see into things.

And so that kind of incipient openness to startups and, and the ecology of entrepreneurship, and that's a super exciting one. Here's one that's more challenging and maybe I'll close on this one. We're all working hard on this, but I'm a nut for culture. I've used that word already in, in our discussion. So, this idea of behavioral norms, what are these shared norms that we have and kind of the values underneath them?

But if we're really going to get, not just universities, but more broadly. I mean, if you're thinking about trying to get a geography or a city or some other area, and it's like, we're trying to create, you know, another Silicon Valley, what have you. But let me give you a couple of subversive things that we've done to try and accelerate culture change at Berkeley.

And it's not like we have a giant problem on this, but it's like, there's more, there's better, there's, we can be more mission advancing. So, two things that we did, and I'll point to these. One, we posted on our website, that website I mentioned before, INE.Berkeley.edu, the top 100 faculty founders at Berkeley.

My speculation, but if you did that 10 years ago, you'd get a call from a bunch of faculty saying, take me off that list. It's like, I'm a scholar first, right? That's it. But nobody has suggested that they be taken off. And a lot of users of Berkeley, you know, VCs and so forth, love that list. It's like, that's cool.

Here's another one, even more subversive. We posted, I guess I shouldn't be saying this on, on a podcast. We posted to that same website a memo. It was a memo from the system wide, the 10-campus provost, chief academic officer, to all the chancellors, effectively the presidents of the 10 UC campuses, and that memo was from 2022, 2022, that memo says innovation and entrepreneurship activity on behalf of our faculty is going to be weighted positively in tenure and promotion.

It's like, Oh, that's a watershed. That's a watershed. Now people say, Oh, people knew about the memo. It's like, I'm going to post the darn memo. We're going to post the memo because the posting is part of how the culture continues to advance. But getting, getting that culture advanced part is something we have, we have more work to do on.

Brian Ardinger: Well, that's a very interesting point. When you think about professors, there are a lot of professors that don't want to be entrepreneur. They want to, you know, focus on their research and, and, and do that. And a lot of them shouldn't be founders per se, you know, that's not what they want to do. How's that coming to play out in reality?

Richard Lyons: Great, great question and a very important question because they, look. We don't have Bell Labs anymore. I mean, our great universities are doing the basic research, right? Pure curiosity driven research. And they need to continue to do that. That's an, that's a sine qua non. That's just an essential feature of what a great research university is.

And we can't lose that. So, if one of the unintended consequences of talking about all this downstream activity and ecosystem and so forth is that we pull our greatest researchers and our greatest universities away from basic research, that will be a very negative unintended consequence.

So, when I mention that memo that memo does not say, and if you are not doing this stuff, you will be penalized. It is very clear about that. We have a lot of room and must maintain that room for basic research, and we now have more room for people. By the way, I should, Jennifer Doudna, Nobel Prize, right? And the idea is, if she's still doing basic research, you bet your life.

Now, is she also interested in her research having impact? Absolutely. So how do you square that circle? You've got graduate students, you've got postdocs, you've got all these other levers, right? So, the idea that our research is going to get into the larger world does not mean our great researchers have to go out and themselves start coming.

For More Information

Brian Ardinger: Richard, this has been a fantastic conversation. I really do appreciate you coming on Inside Outside Innovation. And sharing what you're seeing out there in the world, real world. If people want to find out more about yourself or more about Berkeley and that, what's the best way to do that?

Richard Lyons: Well, thank you for that. You know, I think what I've mentioned, one of the websites I-A-N-D-I-N-D, innovation, entrepreneurship, id.berkeley.edu, the second website for Berkeley, it's a little bit, it's a way finding website mostly aimed at students, but it might be helpful to people and that would begin, BEGIN.berkeley.edu.

And that's got a bunch of directories, you know, here's the funding mechanisms, here are the accelerators, here are, you know, all that sort of thing. And I think between those two websites, people would be able to see a lot of what's going on.

Brian Ardinger: Excellent. Well, again, I thank you for coming on the show and looking forward to seeing all the great things coming out of Berkeley in the future.

Richard Lyons: Thank you, Brian.

Brian Ardinger: That's it for another episode of Inside Outside Innovation. If you want to learn more about our team, our content, our services, check out InsideOutside.io or follow us on Twitter @theIOpodcast or @Ardinger. Until next time, go out and innovate.

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