MIT Climate and Energy Ventures class spins out entrepreneurs — and successful companies
In 2014, a team of MIT students in course 15.366 (Climate and Energy Ventures) developed a plan to commercialize MIT research on how to move information between chips with light instead of electricity, reducing energy usage.After completing the class, which challenges students to identify early customers and pitch their business plan to investors, the team went on to win both grand prizes at the MIT Clean Energy Prize. Today the company, Ayar Labs, has raised a total of $370 million from a group including chip leaders AMD, Intel, and NVIDIA, to scale the manufacturing of its optical chip interconnects.Ayar Labs is one of many companies whose roots can be traced back to 15.366. In fact, more than 150 companies have been founded by alumni of the class since its founding in 2007.In the class, student teams select a technology or idea and determine the best path for its commercialization. The semester-long project, which is accompanied by lectures and mentoring, equips students with real-world experience in launching a business.“The goal is to educate entrepreneurs on how to start companies in the climate and energy space,” says Senior Lecturer Tod Hynes, who co-founded the course and has been teaching since 2008. “We do that through hands-on experience. We require students to engage with customers, talk to potential suppliers, partners, investors, and to practice their pitches to learn from that feedback.”The class attracts hundreds of student applications each year. As one of the catalysts for MIT spinoffs, it is also one reason a 2015 report found that MIT alumni-founded companies had generated roughly $1.9 trillion in annual revenues. If MIT were a country, that figure that would make it the 10th largest economy in the world, according to the report.“’Mens et manus’ (‘mind and hand’) is MIT’s motto, and the hands-on experience we try to provide in this class is hard to beat,” Hynes says. “When you actually go through the process of commercialization in the real world, you learn more and you’re in a better spot. That experiential learning approach really aligns with MIT’s approach.”Simulating a startupThe course was started by Bill Aulet, a professor of the practice at the MIT Sloan School of Management and the managing director of the Martin Trust Center for MIT Entrepreneurship. After serving as an advisor the first year and helping Aulet launch the class, Hynes began teaching the class with Aulet in the fall of 2008. The pair also launched the Climate and Energy Prize around the same time, which continues today and recently received over 150 applications from teams from around the world.A core feature of the class is connecting students in different academic fields. Each year, organizers aim to enroll students with backgrounds in science, engineering, business, and policy.“The class is meant to be accessible to anybody at MIT,” Hynes says, noting the course has also since opened to students from Harvard University. “We’re trying to pull across disciplines.”The class quickly grew in popularity around campus. Over the last few years, the course has had about 150 students apply for 50 spots.“I mentioned Climate and Energy Ventures in my application to MIT,” says Chris Johnson, a second-year graduate student in the Leaders for Global Operations (LGO) Program. “Coming into MIT, I was very interested in sustainability, and energy in particular, and also in startups. I had heard great things about the class, and I waited until my last semester to apply.”The course’s organizers select mostly graduate students, whom they prefer to be in the final year of their program so they can more easily continue working on the venture after the class is finished.“Whether or not students stick with the project from the class, it’s a great experience that will serve them in their careers,” says Jennifer Turliuk, the practice leader for climate and energy artificial intelligence at the Martin Trust Center for Entrepreneurship, who helped teach the class this fall.Hynes describes the course as a venture-building simulation. Before it begins, organizers select up to 30 technologies and ideas that are in the right stage for commercialization. Students can also come into the class with ideas or technologies they want to work on.After a few weeks of introductions and lectures, students form into multidisciplinary teams of about five and begin going through each of the 24 steps of building a startup described in Aulet’s book “Disciplined Entrepreneurship,” which includes things like engaging with potential early customers, quantifying a value proposition, and establishing a business model. Everything builds toward a one-hour final presentation that’s designed to simulate a pitch to investors or government officials.“It’s a lot of work, and because it’s a team-based project, your grade is highly dependent on your team,” Hynes says. “You also get graded by your team; that’s about 10 percent of your grade. We try to encourage people to be proactive and supportive teammates.”Students say the process is fast-paced but rewarding.“It’s definitely demanding,” says Sofie Netteberg, a graduate student who is also in the LGO program at MIT. “Depending on where you’re at with your technology, you can be moving very quickly. That’s the stage that I was in, which I found really engaging. We basically just had a lab technology, and it was like, ‘What do we do next?’ You also get a ton of support from the professors.”From the classroom to the worldThis fall’s final presentations took place at the headquarters of the MIT-affiliated venture firm The Engine in front of an audience of professors, investors, members of foundations supporting entrepreneurship, and more.“We got to hear feedback from people who would be the real next step for the technology if the startup gets up and running,” said Johnson, whose team was commercializing a method for storing energy in concrete. “That was really valuable. We know that these are not only people we might see in the next month or the next funding rounds, but they’re also exactly the type of people that are going to give us the questions we should be thinking about. It was clarifying.”Throughout the semester, students treated the project like a real venture they’d be working on well beyond the length of the class.“No one’s really thinking about this class for the grade; it’s about the learning,” says Netteberg, whose team was encouraged to keep working on their electrolyzer technology designed to more efficiently produce green hydrogen. “We’re not stressed about getting an A. If we want to keep working on this, we want real feedback: What do you think we did well? What do we need to keep working on?”Hynes says several investors expressed interest in supporting the businesses coming out of the class. Moving forward, he hopes students embrace the test-bed environment his team has created for them and try bold new things.“People have been very pragmatic over the years, which is good, but also potentially limiting,” Hynes says. “This is also an opportunity to do something that’s a little further out there — something that has really big potential impact if it comes together. This is the time where students get to experiment, so why not try something big?” More