Beyond the Breakthrough: Rich Lyons

Rich Lyons became UC Berkeley’s inaugural chief innovation and entrepreneurship officer in January 2020, having previously been dean of the Haas Business School for a decade. For the past two and a half years, he’s been tying the ecosystem together in a way that makes everyone want to participate rather than forcing them to sign up.

Lyons tells us about the Berkeley-affiliated funds, which uniquely all donate a share of their profits back to the institution, and talks about how he helped create a programme teaching entrepreneurship, Berkeley Changemaker, that’s fast turning into one of the university’s most successful minors.

He also ponders why entrepreneurs often don’t even realise that’s what they are – with an example out of his own family home – and discusses the lessons he learned during his time as chief learning officer at Goldman Sachs.

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Transcript

Please note that the intro and outro have been omitted.

Rich, welcome to the podcast.

Thank you very much. I appreciate it, Thierry.

I look forward to our discussion. To start with, hopefully an easy one. Can you give me an overview of innovation with some headline figure?

Well, it is a big question. Thank you for framing it that way. I will start with a definition. This is just my definition, but innovation is two things. It is new ideas or new combinations of old ideas, part one, put into practice, part two. So, discovery, invention, those are not innovation. The put into practice part is important. So, with that two-part definition, there is just so much going on at any modern research university and naturally UC Berkeley being in the Silicon Valley area is just on fire in terms of all the opportunities.

So, real quickly, we have a one pager that is the top 10 sources of new ventures coming out of Berkeley because there are more than 10, and so how do we organize it? The biggest one is called SkyDeck, and it has over 200 startups in it at any given time in its accelerators and its incubators. And then CRISPR, many people feel that CRISPR’s the most important scientific discovery in the last decade or two and Jennifer Doudna, one of our faculty members, just won the Nobel Prize for the CRISPR invention. That is a platform technology, so it is really transforming a lot of life science therapeutics and so forth. So those are just a few little hints.

Amazing. I look forward to diving into quite a few of those over the course of our discussion. Where does your role fit into this structure and just how broad is your remit?

My role did not exist in 2019. In 2020 January is when the role was launched. Berkeley, like so many great research universities, I think its creativity in many ways is in its decentralization. It is a place that eschews centralization. A lot of the ecosystem that has developed that we can talk about has developed in this kind of decentralized creativity mode. The idea was, Look, we do not want to centralize anything but could a little bit of intentionality around making it more than the sum of its parts, could that be valuable for Berkeley?

So, that is what created the job description on the front end. I had served as dean of the business school at Berkeley for 10 years. I am not a scholar of innovation and entrepreneurship, but you cannot be dean of a business school in the Silicon Valley area and not think a lot about innovation and entrepreneurship in any event. So, the job was created to pull some things together, make it more than the sum of the parts, as I said, and we are having a lot of fun doing it. My team and I have been working on this for two and a half years now.

I want to dive into a few things before we take a more general view as well. You already mentioned SkyDeck, they have a fund as well. Can you tell me a little bit more about the Berkeley-affiliated funds and what makes them unique?

Sure. When we talk about the ecosystem, there are lots of accelerators and incubators, classes and programmes and things like that. But specifically, about the kind of financial infrastructure, what does that look like? So, Berkeley, like most in modern research universities has had a lot of venture capital interest over the decades in the companies that are coming out of the campus, but this brand new category of venture fund that has arisen over the last five or so years at Berkeley.

Some people call these shared carry funds. That is a bit jargon heavy. The word carry, if you are not in venture capital, is less clear, but let us call them shared return funds. And here is the idea. Again, launched about five years ago. The general partner, two important classes of participant in any venture fund, you have got a general partner and a limited partner and in all of these shared return funds at Berkeley, there are now seven of them, the general partner shares, gives back to Berkeley, half of its return.

So, the way that usually works out is the carry, the part of the total return that goes to the general partner, is generally 20% of the total return. And so, in all seven of these cases, half of that or 10% of the total return is hardwired back to Berkeley. It is not hand waving, I will make a gift, I promise, it is hardwired back to Berkeley. So, that creates this give-back mechanism that is really important to understanding why the financial ecosystem has gained so much momentum.

Is that a mechanism that you build into the contracts letting them use the Berkeley name?

Yes, very much. If you ask, Well, why would any general partner want do that? They actually have an affiliation agreement with UC Berkeley, so when you think about asset gathering, they can use that affiliation agreement. They can say, we are affiliated with Berkeley. They are legally a separate entity, of course, but the affiliation agreement allows them to use the brand, which is quite valuable. Then another big plus for these companies is they have, like I mentioned, the SkyDeck accelerator earlier. Two of these funds are connected to the SkyDeck accelerator, and those funds get special access to the companies that are coming out of the SkyDeck accelerator.

So that is an advantage that an arms-length fund would not have. Then finally, these shared carry funds or shared return funds also have access to participation rights that Berkeley owns by virtue of past licensing agreements that Berkeley has signed with startups. So often, if we acquire equity as UC Berkeley in startups through a licensing agreement, it also gives us rights to future investments in later rounds for those companies and we can, as long as these funds are affiliated with us, which all the shared return funds are, we can share those rights. So, that is a very very large benefit for these funds.

Does that mean that the general partners, or perhaps even more so the limited partners, are usually UC Berkeley affiliated in some sort of way? Maybe alumni if they know that some of their money is going to get back to the university rather than their own pockets?

I love that question. The answer is definitely, yes, a lot of alumni are very attracted to these funds, but so are a lot of. The LP economics of limited partner economics that most of these funds, this one outlier which I will mention, but the LP economics is 100% private, so it is neat. I am getting a private return. I am not giving up any of my return. And I am also benefiting indirectly the campus. So, a lot of alums really like that deal. Now, one of the shared carry funds, the GP is sharing half of its carry, but also the LPs are sharing 25% of their return.

Now, those are definitely alums. That is a case where it is like all right. But if you add that up, so LPs normally get 80% of the return because the GP gets 20%. If I am giving up 25% of 80%, that is 20% of the total return, plus the 10% that is coming from the GP, that is 30% of the total return on the fund that is coming back to Berkeley. We only have one fund that looks quite like that, but the category is expanding, and it is the most recent fund that has been added to the seven.

That is amazing. An important return as well. It is not small money we are talking about here. Well, hopefully not small money.

Well, that is right. And our instinct was, Let us just add the AUM, the assets under management, in this new fund to the ones that we already had, but actually, it is not apples to apples. The other one is wonderful, but 10% of the total return of the others was coming back to Berkeley, whereas 30% of the total return on this one is coming back to Berkeley. It is like, 3x is potent.

 Hey, if I may, let me just put a footnote on exactly this conversation. So, this has not been announced publicly and I cannot give you any detail, but spurred on, motivated by the fact that we have this category and it is growing so fast and it is doing so much both for the companies and the founders and for the university.

We just received a gift to create an eighth shared return fund, but the gift is coming to the university and will establish the university as sole LP in a new fund where Berkeley gets all the LP return. And in fact, owns the paid in capital because it was a gift. So, this category is growing in ways that we could not even have forecast two years ago.

I look forward to hearing more about that when it is public. Thank you for sharing that. Another interesting recent initiative that you formed is the Bakar BioEnginuity Hub. Can you talk about this one as well a bit?

Sure. There are so many elements of these expanding, developing ecosystems at modern research universities, and the Bakar BioEnginuity Hub is our most recent big shiny object. I think it is actually genuinely unique, and certainly unique at Berkeley, but genuinely unique in the country, and I think the world. So real quickly, it is a science space. That is the most important first feature. When startups go into this space, they actually lease benches. It is like, how many benches do you need? We are going to be doing science in here. It is mostly life science, but life science also crossed with engineering, with material science and with other fields. It is not a pure life sciences play.

So anyway, the idea is it is not office space, it is lab space. That is number one. Number two is any lab space at UC Berkeley historically that a startup or anybody generated some IP in was owned by the university. That is just the way it works. But this is an IP safe space where the IP that is created in this building, which is a UC Berkeley building, it is not a 501(c)3 non-profit something outside. It is actually a UC Berkeley building. But with this IP safe space, the startups that are in there own all the IP from that space. And then the third one is its scale.

There are 50 or 60 companies in there. It is just a remarkable space. It was an old art museum, old, it was a former art museum. They moved it. The architecture is absolutely stunning when you go in there and so you walk in there, it is like, Wow, have we come a long way? All these companies, they are doing their own work and we are integrating the companies and connecting them to the university in fresh ways. So, it is not just like, this looks like a private incubator. It is like, No, it is being connected to our undergraduates, to our graduate students, to our post docs, to our faculty. We have several faculty startups that are in there.

There is also the Berkeley Research Infrastructure Commons, which I thought was quite interesting. Can you tell me about that?

Sure. Thanks for asking about that. That is not unrelated to what we just talked about, the Bakar BioEnginuity Hub, but it is independent of that. So, I am going to talk about this one like I am pitching. So, let me go pitch you, Thierry, this idea. So, the idea is, we have all heard of the share economy. You own an auto, you use it 1% of the time. We have got Uber, we have got Lyft. How do we better utilise valuable assets in society or the built environment and Airbnb and so forth? So, question, what is the percentage capacity utilization of scientific instruments on a UC Berkeley campus? How about on a Sunday? So, in the limit, we are 90% of the way to this vision. Pulling out my iPhone. My phone is like, mobile app. I am a small company, startup perhaps I do not even need to be in the Bay Area.

I need a mass spectrometer. I need a DNA sequencer. I cannot afford that kind of thing myself. I can access one on a Sunday evening over these hours at UC Berkeley for this price. Fully priced. I own all the IP if I lease it over this five-hour period or 10 hour period, or whenever it is. DocuSign, click through contract. It does not have to go to risk. What does your insurance look like? How do we do that? Then it goes to legal and so forth. No, no, no. That is why it is a platform. We are building this research infrastructure commons platform.

So, if somebody says, Sum it up in one sentence, I say it AWSises scientific instruments on a great research university campus. Ooh, that sounds cool. So, going back to what we were just talking about, the Bakar BioEnginuity Hub, it is like these are among the best companies anywhere. It is like they could be an incubator space and be using bench space anywhere, but it is like, ah, and I can actually access a mass spectrometer on a Berkeley campus or DNA sequencer or all this other stuff. Like, yes, that is one of the infrastructural add-ons that is making the ecosystem that much more potent.

I find it very interesting that when you think about innovation, you are not just thinking about innovation on campus, but also how to bring in external innovation.

Well, thanks for that, because I think when we talk about the ecosystem and when we map it on our campuses, it is like, what shiny objects do we have inside the tent? What programme, what incubator, what accelerator, what courses and so forth? This is opening the boundary of the tent.

It is making it much more permeable. There was already permeability because we have lots of continuing interactions with startups and innovating companies. Not just startups, but also innovating corporates. But this brings that whole tent boundary to a new permeable level.

How do you tie all those different parts together under one ecosystem or vision?

That is all the time we have, Thierry, thank you very much for your question.

That is the thousand-pound gorilla at most universities because we operate wonderfully decentralized and again, do not centralize me, but can we bring some intentionality of coordination? That is basically why my job was created, and I think the quick answer is, think about a platform, first of all, this is actually the mantra that we are using on the Berkeley campus. How do we take what we have been doing, all this distributed success in lots of different domains, and create platforms that serve all of us, create those out of the distributed success or fragmented success that we already have? I think that is what networks and platforms, businesses, and technologies are all about.

It is like, if their network affects the platform, then more people use it, the more value you have yourself in using it. I am an economist, that is what network economics is all about. So, the idea is, somebody could say, look, you have to put a benefits lens on everything you are doing. All right, every potential user has to see a benefit. It is, okay, yes, that is true, but if you create a platform that has these network effects, then the whole campus starts saying, hey, I would rather play than not play. I would rather participate than not participate.

And the silos start to see enough of a value proposition in coordinating and building a common platform. A couple of examples. The research infrastructure comes, we just talked about it. Were some labs doing this before? Yes, they were. And it was incredibly clunky. You have to go through risk, you have to go through legal, I mean, companies were walking away.

It is just like, really? We are five weeks down the road, we do not even know when we are going to be able to use the machine? Now there is a platform. We have 20 labs that have put themselves on the platform. We did not force anybody to go on the platform. Another example is internship for undergrads. It is like, Build a platform where we can all benefit together, or how about projects? We have all these courses that take projects and do commercialisation and translational research based on those projects. Yes, you can have every course sourcing projects on its own, or you can create a projects platform where all of a sudden now people with projects are saying, I am going to fire my project onto the platform. So, the users of projects, these courses and so forth are saying, This is much better than what we used to have.

That makes sense. I think originally when I asked in my questions that I sent to you, I also asked whether there was a risk of the individual parts losing their uniqueness. But from the sounds of it, it is almost strengthening their uniqueness by playing together.

I think it does. At the end of the day, it is discretionary, and Berkeley is not a ‘you must participate’ kind of a place. So, any lab that does not want to put itself on the Berkeley Research Infrastructure Commons, the Berkeley RIC, does not have to. If their programmes are courses that it is like, no, I have my clientele for projects, I do not really need to be on that platform. That is just fine. It really is about, look, you have to win the hearts and minds by making the platform valuable enough, and that works with the ethos at Berkeley.

You have mentioned the intentionality about innovation already. How can a university be more intentional about innovation and specifically collaborating with the private sector?

Well, there is so much of that already going on and it changes every day. So, there are always, I think, more and better. Just a couple quick points. One, an obvious one, navigability. When we show people, Look at this array of opportunities at Berkeley, it is like really just much larger than there was 10 years ago. How the heck do I navigate? How, who do you have to know to do this? And that is a big deal because I was dean of the business school for 10 years.

You might think, well, at least you had your finger on the pulse of the ecosystem. 60% of them I knew almost nothing about, there were chunks that obviously I knew a lot about. So, it is navigability, and just to give you a concrete example. It is simple, but we created, I mentioned it before, a one pager, the top 10 sources of venture flow from UC Berkeley. Here is the name of the programme, here is what they do, here is the contact person’s email. It is like, simple.

Even people that have been working with Berkeley a lot as outside stakeholders and users, they might know 5, 6, 7 of these, but they did not know about all 10. Navigability is number one. I think number two is companies say, oh, we are customer-centred. Well, alright, what does greater user-centricity of a university look like? Now, we are not businesses, so the idea that the way we drive our mission is to serve businesses better. Look, our mission is a little different than that, but at the end of the day, our mission is impact.

The deep why of a university is impact. How we do that is teaching, research and service. And when you start to frame the university that way, it is like, How do we dial up our impact? How do we make mission advances by stepping even more deeply into innovation and entrepreneurship and connecting with outside users and players that can basically, there they are force multipliers in the impact space. That frame helps us even at the university to say, We can stay aligned with our mission. We can continue to do the right thing, but we are going to magnify our impact.

You have previously spoken about the fact that UC Berkeley focuses on inclusivity versus the exclusivity of private universities like Harvard. How does that approach impact the entrepreneurial culture on campus?

First of all, Berkeley’s scale. Berkeley runs at the undergraduate level, so, thinking undergrads now, at roughly five times the scale. Every elite private university you would come up with. If you named 10 great private universities, they are all 7,000, 8,000, 8,500 total undergraduates.

Berkeley has about 40,000, so we are talking 5x. That is just bodies. But then you actually look at the demographics and in fact, Berkeley’s cut 50% more, just in percentage terms, 50% more low-income students. So, if you measure that by Pell eligibility, are there different ways to measure this? But 50% more. So, instead of something like 16, 17, 18, 19%, Berkeley is up at 26, 27, 28%.

So, if you are 5x the size and you are 1.5 times, in percentage terms, low income, and of course that is just one-dimension, socioeconomic diversity. So, that is a starting point. Then Berkeley, also the idea it is a ‘for all’ kind of a place.

We are a public university, and so the idea is we are really here to serve. Every university, public and private, is trying to be more inclusive in the way that it delivers innovation and entrepreneurship. We are not the only ones pushing hard on that, but we start with these initial conditions of size and percentage low income that are quite different from others.

Then the last point that I would make is we have made a big effort to try and make the way we teach entrepreneurship more inclusive. And real quickly, it is something we could talk about more if you are interested, but we launched a programme called The Berkeley Changemaker. We are not the first university used the word changemaker, but we have registered the trademark Berkeley Changemaker. You put the word Berkeley in front of the word Changemaker exciting things happen because of Berkeley’s history.

But there are a lot of undergraduates that do not see themselves as entrepreneurs, as founders, as venture capitalists and so forth. It is like they do that, other people do that. They come in that way, most 18, 19, 20-year-olds would. But changemaking. We launched a course called The Berkeley Changemaker two summers ago. It is like, the proof is in the pudding. Is it resonating? Over 500 incoming students signed up for the course, and changemaking is a frame within which one can learn how to be more entrepreneurial in their thinking.

It is an embracing way to get people started in this direction.

When I did my research for this, I think I came across Berkeley Changemaker. I was not quite sure what to make with the term, but it sounds like it is a really interesting initiative actually.

It is growing very fast. In two years, it has reached 15% of all Berkeley undergraduates. It is becoming a minor on campus. There are a lot of minors that are very successful where it is like, Look, this minor works with these majors and so forth, but Berkeley Changemaker, which is three content pieces. Somebody said, well, you are handwaving a bit, Changemaker.

It is three things — we now have 17 courses in this programme — all of them share three things. Critical thinking, communication, collaboration. Critical thinking, communication, collaboration. On collaboration, like team skills. There is a thing called team skills. Most 18-year-olds do not have a sense for that. Communication, especially oral, and critical thinking or problem-solving skills. So, anyways, those are things that cut across many different majors, arguably all of them. And we think the minor is going to become the biggest minor on campus within a few years.

Wow. That is amazing. Perhaps on that note, what are some of the opportunities in UC Berkeley’s ecosystem at the moment?

Many, and it would be true of every university, every counterpart of mine that you would talk to. I think part of it is, well, what do you put your finger on? Because there are hotspots all over the place. I will give you a couple of examples.

That is when I was dean, we launched a couple of dual degree programmes. These were undergraduate engineering plus business, cross training engineering plus business, a programme called MET, Management, Entrepreneurship and Technology. Then more recently we launched a life science plus business dual degree programme. And these things have just exploded in terms of demand. Students really love this cross training idea, and I think historically, you often got science-based or engineering-based undergrads saying, Well, I am going to go on and get my MBA, which is a fine trajectory, but I think when you code business and science in an 18 year-old’s mind at the same time, it is not like two different loads, two different concepts, it really integrates in a quite fundamental way. So, I point to that as number one.

There is cross training. Now we have graduate programmes that are master’s programmes, MBA plus Master’s in engineering, but this cross-training category I think is red hot. That is number one. Then I think the second one is, incubators, accelerators, Berkeley has a lot of it, as I said, so do other universities. I think there is a lot of magic in at the top of the funnel. How do you get more students that do not even know there is a funnel or know there is a funnel, but again, it is, they do that, other people do that, I do not do that, that is not what I do? Get them to look in the funnel, get them to get their hands dirty, get them an internship at a startup.

We created a programme, a quick example, on campus, it is called the ACE programme, Accelerating Careers and Entrepreneurship. It is focused on undergrads and its internships, and most of them are unpaid, but we have so many startups coming through Berkeley that there are just tons of opportunities. And I was speaking to the woman who runs SkyDeck, who is really running this programme on the front end, and I said,

So, how many interns are we placing? I thought she was going to say 20 or 30 or 50. She said 800 last week, and 1400 undergraduates came to the information session to find out what this thing actually was. Those are situations where it is like a lot of young people not knowing that they want to be a founder and exactly what they want to do, but it is like, I want to demystify this startup thing. And it is like, well, we are going to plug you into a startup. It is the best way to do it.

I was not expecting you to say 800 either. That is amazing.

Yes, I think the energy is on the ground, and so providing these platforms of opportunity for undergrads to jump into it, that is the second category of very exciting, new opportunity.

I am almost afraid to ask, but what are the challenges that you are facing at the moment?

Well, there are challenges always, so I think part of it, I see this myself, basic research, curiosity-driven research, you do not have Bell Labs anymore. Universities is where that happens. When we find out that the universe is expanding at an expanding rate and Saul Perlmutter, a Berkeley physicist, won a Nobel Prize. We are teaching the world.

It is like that probably is not going to be an app or a product or a therapeutic anytime soon, but this is really fundamental. So, when you start thinking about some of this downstream innovation and entrepreneurship stuff, part of it is, Look, if we do not stay connected to the mission of the university, then there is a place too far down this road. I will give you a super concrete example. Bakar BioEnginuity Hub, we have already talked about it.

Now, you could imagine an instantiation of the Bakar BioEnginuity Hub, where it is like, that is really cool, and it looks just like a private incubator that leases bench space. So why is it not just that? Well, because we have programming that integrates learning opportunities, development opportunities for our undergrads in their internships and things like that, for our graduates, postdocs. So, you start layering on the mission.

So, I think that is one of the biggest challenges is, I get as excited, you can probably tell by the way I am talking, by all this stuff that is happening, but at the end of the day, there is a place too far for a great public research university, and we have to make sure that we continue to pull ourselves back to the core mission in what Berkeley needs to do. We would never want anybody to hear what we are doing or hear our excitement and think they no longer value curiosity-driven research. That cannot happen and we are trying to remain sensitive to that.

That makes sense. You do not want to get caught out by your own success.

I will not mention the university, but I remember reading an article in, it was quite a while ago, maybe 10 years ago, and it had university name inc. Boom, need I say more? It is like, What are the values and mission that define us and. Anyways, that is not a challenge in the sense that it is sinking us. It is a challenge in the sense that, keep an eye open for this stuff.

A big change that has recently happened is July 1, UC changed its rules to account for innovation and impact when assessing promotion and tenure. It is obviously early days as we are recording this. It is about three weeks ago. How do you hope this will shift the culture at Berkeley? So much you can speak to it across the system.

I think it was a real red-letter day. It is a big change in policy. I saw, as so many other people did, the memo that came out. So, the University of California’s 10 campuses, as you surely know, and there is a systemwide office. So, the systemwide provost, the systemwide chief academic officer, sent a memo to all the chancellors, the presidents of the underlying 10 campuses who use the term chancellor. And the memo basically said, we are going to start to weight positively innovation and entrepreneurship activity in promotion and tenure decisions for faculty.

Now, there are lots of different decision categories that a university makes, but in some people’s minds, none are so fundamental as promotion and tenure decisions of their faculty. It is an absolutely ‘the keys to the kingdom’ kind of domain, and that memo sent a fascinating message. Now, to get back to your question, I think that memo was itself a reflection of how much culture change has already happened. It is not like the provost stepped out and said, oh my gosh, I am going to have arrows in my back and the the regents are gonna… It is like, no, you had a ton of culture change over the last 10 or 15 years. I think this will add to it in an important way.

What caused some of that culture change in the last 10 or 15 years? Well, I think we created, and so have other universities, but we created proof of concept funding. Sort of translational research funding. So, faculty that want to take their fundamental, basic science and do some translational work, not necessarily themselves, but in their labs. Oh, I have a postdoc that is going to do this work, or a grad student. It is not necessarily, oh my gosh, you just took Saul Perlmutter off the basic research line, and now he is trying to make a product out of the expanding universe or something. Oh gosh, do not do that.

The reason I mention this is, it is not a ton of money, but it is a chunk. It is a hundred thousand dollars for three years. So, this launched at Berkeley about 10, 12 years ago and seven or so per year. So, 70 or 80 of these have been given out. I and other people were all on the selection committee, but this last year there was seven given out, but 43 faculty put in an application, and this is specific, it is not start a company, you want some money to start. No, it is, do you want some money to do translational research so that you can bring your science, mostly science, closer to market? And the provost was championing it and lots of the senior-most people on campus, it is like, Let us celebrate the winners of this award and celebrate the people that are applying.

That is just one example of the kind of thing that over years starts to send a message that impact through innovation and entrepreneurship from our greatest scientists and other faculty is a good thing and is mission advancing. And so, I think the fact that there actually is going to be a section in these tenure and promotion cases that says, this person is doing that. As opposed to 20 years ago, it might have been a situation where somebody says, I do not think I am going to mention this in my tenure case, my self-evaluation that will go into my tenure case, I am going to leave that out. Some people might react negatively to it, more people are likely to react negatively to it than positively to it, I will just leave it out. That is not going to be happening in the future.

That is a strange thought that it would be weighted negatively if you have done any kind of translational research.

Sorry to interrupt, but let me try and justify that from my side. I have been a dean. As an academic administrator, faculty are capable people. They have lots of opportunities and there is something called a conflict of commitment policy. Faculty have very little control. It is not, you do not have to clock in today. You do not have to clock out at five and so forth. So, there are a lot of degrees of freedom, which is appropriate for creative researcher times.

But the idea is, wait, you spent like 70% of your time building a company last year? You were a full-time faculty member and we paid you as a full-time faculty member, and then you did it again and again and again. At what point does, it is like conflict of commitment. Your research went from five papers a year to one paper a year.

Your published work or, I am using extreme examples. But we are in a job description where conflict of commitment is a real thing and faculty do need to manage that, So, I think in an environment where you cannot prove that you have been doing less research because you have got all this outside activity going on, then it is like, Okay, maybe I will not mention it.

I guess that goes back to the idea that you need to be wary of the runaway success challenge, that you still need to do the foundational research and you still need to be a university.

Great point. I think that that is it. That is really key.

We have talked quite a bit about where students fit in. Where do postdocs and perhaps even alumni fit into your vision for the ecosystem?

We, and other universities, are taking a much more of a systems thinking approach than we ever did before. You start in building ecosystems by saying, Hey, we need some courses and programmes for our students, and then you start realising, oh, we have got some alums that are willing to advise the students or do some mentoring and then you start, oh, we could bring some projects in from some corporations, or some projects in from a startup, ideas of various kinds.

And then you start saying, Look, what are all the player categories and how do we build platforms that integrate the player categories in ever deeper ways? And I mentioned earlier this idea of a platform that basically builds out projects. So, if you thought about… So I’m an economist. If you thought about the supply side — econ jargon — of that platform, it is like, well, who is putting projects in?

Well, you have an awful lot of corporations that would say, I have got some projects I would love to have people work on, but you would have VCs that might say, ah, there are this pet project we think might go somewhere, can we get some work done on it? Or founders that are, it is not what they are currently working on, but they would like some incubation of an idea, et cetera.

For example, I will go into postdocs. Berkeley, like other great research universities, we have about 1500 tenure line faculty. The sort of core faculty that are trying to get tenure or already have tenure, about 1500 across the whole university. At any given time, Berkeley has about 1500 post postdocs on campus. These are people with doctoral degrees, post-doctoral. They are PhDs.

Now, not all of them are in STEM fields or obviously connectable to innovation and entrepreneurship, although increasingly our humanities and social sciences are connecting to what we are doing. We could come back to that, but the idea was, okay, how are we integrating them into the ecosystem? And so, we just recently built a programme called PostX where we are going to integrate them in various ways, but in part by just demystifying them when they arrive. When you onboard a postdoc, are they taught a little something about the ecosystem?

There is something that actually even predated this PostX programme called the Berkeley Postdoc Entrepreneurship Programme, BPEP. So, there are these little clubs, but a lot of postdocs do not even know these clubs are there. So, going back to the macro level, the idea is, systems thinking, lots of users, lots of player types. How do we build it all out with a platform mentality in ways that keep the ecosystem developing as widely as we can get it developed?

You have already mentioned you are an economist. You were a dean of the Haas School of Business before you took on your current job in January 2020.  How did you get started in innovation and entrepreneurship? What first piqued your interest?

Well, I grew up in a town called Los Altos, which is right among many towns right in the heart of what people think of as Silicon Valley. There were people in my high school whose parents were Fairchild Semiconductor founders, and I do not come from a tech family, but that was in the water. I had a general contractor’s license when I was younger and I built hot tubs and decks.

I had a little construction business. Anyways, my two older brothers, seven and eight years older than I am, and I remember my parents used to take us to Half Moon Bay and we would fill this big red station wagon, this woody painted sides with pumpkins around in October. Then we would bring them back and my brothers and I would sell pumpkins before Halloween in the US at the end of our block.

Anyways, I come from a family that is geared that way, so that was in my blood. But it was not really until I got to Berkeley and got to see, wow, there are a lot more to this game than anything that I had thought about. So, I think especially as dean of the business school, it is like, Well, this is just innovation. At some level, it is where value comes from. New ideas put into practice.

It is like, is there another source? Is there another source of advancement, that we could talk about small or sustaining innovation, and breakthrough innovation?  We can start to parse the space, but it is like continuing to do what we have always done is not how a society advances, either in terms of its culture and civilization or in terms purely of its economics.

So, I think that really wide angle is like, this is the root source and how do we understand it better?

One last comment if I could on this topic, and this one is more personal. My daughter is a first-year student at another university. She is very happy. She is 19 right now. Two years ago, she is doing the application thing and she asked me, Hey dad, what do you think I should write essays on? And I said, well, why do not you write an essay on the company you started, the company you founded it? She said, I do not have a company. Nicole is her name. I said, Nicole, you do actually. You, like many of your friends, you sell used clothing, sweatshirts, stuff like that on the internet. You have to price it, you have to ship it. If it ships too late, you have to deal with a bad customer review. It is like, that is her business. She said, I have not started a business. Nicole, your dad is the chief entrepreneurship officer. Yes, you have!

Anyways, the simple point is people do this stuff that they do not recognize what it is and so, it is like, Yes, everybody is in the game now. The gig economy, we all get it. We are all entrepreneurs now. No, we still do not all get it. Even those of us that are doing it in our lives. And so ultimately that is part of it. It is like this epiphany, this light goes off and it is like, Man, this connects to so much more of what life is about than just this startup and that series B financing.

Speaking of epiphany and learnings, you were chief learning officer at Goldman Sachs. What lessons did you bring back from those I think two years it was you worked for them?

The big one was about culture. I became a culture nut at Goldman Sachs and whatever one thinks about that company’s culture, they are very intentional about culture and as an academic, most of my life has been in the academic world. I had never seen what intentionality looked like and because I was the chief learning officer, I was in the HR group, and so I was interacting mostly with the senior-most HR, they called it human capital management, the HCM group.

So, I got to see what levers are pulled to manage culture in the company. It is like, how do we onboard? You want to see intentionality? Here is intentionality for you. It is just like, wow, never even seen this. So, I think a lot of people from my industry, by which I mean presidents of universities or deans of colleges and units, it is like we were not geared to think deeply about culture.

So that was the big… I came back and maybe it is like to somebody with a hammer, everything looks like a nail. But almost everything I am thinking about is has this cultural dimension, like, how do you get faculty culturally to be more oriented in this direction? How do you shift the culture around this, that, or the other thing? It is hard to think about, for me, a change management project that does not have a big culture dimension to it.

My next question, and you are probably in a better position than most people when I ask them this, but if you had a magic wand, what is the one thing you would change about innovation and entrepreneurship?

Well, I think I had hinted at it before. I think I would like it if everyone would recognize the root source quality of innovation and entrepreneurship. By which I mean it is like you could say, oh, there is innovation and entrepreneurship, there is operations, there is marketing, there is technology.

But it is like there are no different dimensions. It is like, no, when you start thinking about innovation and entrepreneurship, as I started, you know, new ideas put into practice, it is like this is the root source of how societies evolve. Whether you are thinking about the private sector or the public sector or the civic sector, this is not just a commercial economic point, and I think the more people can see its richness and its very general relevance, that would be what I would love to have happen.

That is a good wish. We have already mentioned a few researchers.  I think you have mentioned Jennifer Doudna, obviously CRISPR, and she has founded Mammoth Biosciences among others. But can you give me some examples of US Berkeley companies?

Sure. Happy to. They’re long lists, but the earlier vintage companies that we have all heard of. If you thought about Apple, Steve Jobs everybody has heard of. Steve Wozniak, fewer people, but Steve Wozniak is 100% Berkeley, and many people feel that Steve Wozniak was in some ways a technical genius behind some of the early Apple development.

Intel — Andy Grove, Berkeley guy. Tesla — Marc Tarpenning. That is a little more recent, of course, but Musk did not found Tesla. Marc Tarpenning is a Berkeley guy. He was not the sole founder of Tesla, but in fact, Marc Tarpenning is still an advisor for our SkyDeck accelerator. Imagine if you were doing a battery company or a mobility company, and your principal advisor in an accelerator is Marc Tarpenning. It is like, oh, that sounds valuable. Thank you very much.

But more recently, companies like Databricks, so AI, Databricks has been a terrifically successful company. It came out of Berkeley AI, Berkeley EECS, Electrical Engineering and Computer Sciences, and in fact, just a quick Databricks story and I will not mention their names. So, it is very public. But two of the faculty that co-founded Databricks each made $25m gifts back to Berkeley to create a new, they are calling it the Gateway Project in Data Science, which is their expertise. So, that feedback loop back into the strength of the university. Anyway, Databricks.

You mentioned Mammoth Biosciences. There are many really cool companies that are coming out of baseline CRISPR technology, and that is really important for Berkeley. Then even something a lot more on the consumer space like Warby Parker, Dave Gilboa, one of the founders at Warby Parker, is a Berkeley undergrad alum.

Nice. So quite a varied range of companies, which is always interesting to hear.

I think that is going to be true of most great research universities. There is just so much stuff we do and the students we bring in have such varied interests and, just to underscore the point again, we talk a lot about the private sector, but there is a lot of public sector innovation that is going on. There is a lot of civic sector innovation going on.

I served for a while on a… one of our alums created a university in Africa, in Ghana. It is called Ashesi University. It has been running for 20 years and it is just, it is a breakthrough success story. Anyway, you would have to call this innovation and entrepreneurship. You created an enterprise, built it, obviously with a hell of a lot of other people. Anyway, so I think as we start thinking about how wide angled Berkeley is and bringing the humanists to the table, bringing the more sort of human-centred design, bringing the social scientists to the table, that is part of I think the next ways.

Well, you are definitely the first guest I have had on the podcast who has talked about someone who went on to found a university, so that is very unique.

Yes. Patrick Awuah is his name, and he is just an extraordinary human being.

He really sounds it. We are almost out of time. Is there anything else we have not covered that you want people to know about UC Berkeley?

Well, you touched on so many of these elements. I think here is one of the things to conclude with, and it relates to several of the things that we talked about. Ultimately, if you say, Look, how do we sustainably fund great research universities in the future?

And when you start looking, we mentioned these shared return funds earlier, and we also talked briefly about, Berkeley acquires equity in startups as part of its licensing negotiations. So, those are two separate equity instruments. Those are two separate ways that Berkeley benefits from the big non-linear payoffs that sometimes happen in the startup world. We also now for some of our incubators at Skydeck and elsewhere, part of the quid pro quo back to the university is a little piece of equity. So, we are building out these equity portfolios.

You have to make sure to do it in ways that remain consistent with the mission and values of the university. But, one of the things, the macro, we did not really talk about this, but I will close with this. It is possible that if you looked at all these ways for Berkeley to participate and all the value and benefits that it is creating through equity participation, that that stream of revenue back to Berkeley, as lumpy as it will be, will on average be as large as what the state of California gives to Berkeley, within a generation and maybe within 10 or 15 years.

Now that is a bold statement. Somebody can say, Show me the math. I want to see what this is looking like. But if you actually looked at the trajectory of those shared return funds and then you looked at that gift that just came in to create a fund where Berkeley’s the sole LP, and then you start looking at some of these other new pipes through which Berkeley’s acquiring equity, you start realising, ooh, maybe. It is worth thinking about.

Wow. I think those are some very good closing words, and I look forward to following that journey.

Ah, thank you, Thierry. I appreciate it.