Mission of Creative Destruction Lab Founder is to Create a Canadian AI Ecosystem

466

Dr. Ajay Agrawal is the Peter Munk Professor of Entrepreneurship, Professor of Strategic Management, and founder of the Creative Destruction Lab at the University of Toronto’s Rotman School of Management.

Describe what happens at the Creative Destruction Lab (CDL).

The CDL is a seed-stage program for massively scalable science-based companies. Some start-ups come from the University of Toronto community, but we now also receive applications from Europe, the U.S. (including Silicon Valley), Israel and Asia.

We launched the program in September 2012, and each autumn since, we’ve admitted a new cohort of start-ups into the program. Most companies that we admit have developed a working prototype or proof of concept. The most common type of founder is a recently graduated PhD in Engineering or Computer Science who has spent several years working on a problem and has invented something at the frontier of their field.

The program does not guarantee financing, but the majority of companies that succeed raise capital from the CDL’s Fellows and Associates — a carefully- selected group of individuals who themselves are serial entrepreneurs and early-stage investors. Throughout the year, our MBA students work with the start-up founders as part of a second-year elective course, helping them develop financial models, evaluate potential markets, and fine-tune their scaling strategies.

To date, more than 100 start-ups have come through the Lab. When we launched, we set a goal of generating $50 million in equity value created in terms of the aggregate value created by companies that went through the Lab. When we finished our fifth year in June 2017, we had exceeded $1.4 billion in equity value created.

What exactly does the Lab provide to entrepreneurs?

Start-up founders benefit from a structured, objectives-oriented process that increases their probability of success. The process is orchestrated by the CDL team, while CDL Fellows and Associates generate the objectives. Objective-setting is a cornerstone of the process. Every eight weeks the Fellows and Associates set three objectives for the start-ups to achieve, at the exclusion of everything else. In other words, they define clear goals for an eight week ‘sprint’. Objectives can be business, technology or HR-oriented. Our Fellows and Associates—all volunteers—are critical to the CDL’s success.

Tell us more about the CDL Fellows and Associates.

We have designed a marketplace — a community that functions under a set of rules and norms — that facilitates efficient transactions between first-time founders and experienced entrepreneurs, many of whom are also investors. Often, the two sides don’t know each other until the rookie founder seeks out the experienced entrepreneur/investor when raising capital. Knowing very little about the entrepreneur, the investor usually says no, but occasionally says yes, at which point they are very committed. By the time we hit the end of the academic year, the Fellows and Associates have met with the ventures many times, and they’ve gotten to know each other. Furthermore, the entrepreneurs have demonstrated their ability (or inability) to deliver against an aggressive set of objectives through several cycles. We don’t require Fellows and Associates to invest, but they can — and many do.

Read the source article at Rotman School of Management.