Do tech stars need a degree? MIT’s Ito says yes, puts sponsor money where his mouth is


Joi Ito is a busy guy.  The director of the prestigious MIT Media Lab writes and speaks on myriad subjects from emerging democracy to internet freedom. He invested early in lots of interesting startups — including Flickr(s yahoo),, Kickstarter and Twitter.

MIT Media LabAnd now he’s backing a new project that would let corporate Media Lab sponsors fund students’ startups after they graduate, according to this Scott Kirsner story in The Boston Globe.  That means big name companies including Samsung, Panasonic, AOL(s aol) etc. could pony up to fund a stipend for MIT graduates to build the company or technology of their dreams.

This is still early stage. Asked to comment on the report, an MIT spokeswoman said “the program has not yet been approved or funded, so the story was a bit premature.”

Industry-funded academic research projects are problematic. Critics say that private companies use universities, which often are publicly funded,  as petri dishes for their own R&D purposes. Company-funded college research can also lead to squabbles over  who owns intellectual property rights of work done at the school but partially or wholly underwritten by private industry.

Here’s the crux of the issue from Kirsner:

“One key purpose of the new fund, Ito explained to me recently, will be to encourage students to finish their degrees before they start companies. “We want students to stay focused while they’re here,” he said. But once they’re done, the fund will provide a six-month stipend to lay the groundwork for their company, and help make sure that the new venture has clear rights to the intellectual property they developed while at the Lab. (In the past, there has been a somewhat vague non-exclusive right granted to students to commercialize technologies that they worked on while at the Lab, Ito said.)”

The idea of encouraging college researchers to stick around for their diplomas is actually of note. Obviously MIT has a vested interest in its students completing their coursework, but some in tech say this is a waste of time and resources. These skeptics include early Facebook(s fb) investor Peter Thiel who has funded two classes of Thiel Fellows. These young technologists get money to leave school and pursue their work. His argument is that it’s better for promising talent  just to get to it rather than put in their time at college, running up huge student loan debt.

That’s a premise that Upstart, founded by Google(s goog) veteran David Girouard, for example, finds troubling. Upstart invests in promising graduates of specified schools in return for a percentage of their future earnings. Again, you have to graduate to get that Upstart money.

Whatever happens with Ito’s new project, it’ll be interesting to see how this plays out.


Don Park

This is pretty cool but more interesting would be a program that allows corporate sponsors to direct what sponsored students learn to fit their needs, customizing or grooming future hires if you will. One potential problem with such a program is with allowing corporate sponsors access to school databases, raising privacy issues.


Bill Gates, Mark Z, Steve Jobs, Larry Ellison and Howard Huges….all drop outs… it the person or the environment? Plus imagine the court cases on any of these guys? It just takes a single precedent to invalidate this system. Given enough money on the table this will get quickly dismantled.

H. Murchison

LOL here we go again with the “you need school”. Paying back school loans is tough enough but now you got VC that want to grab a lien on your future earnings as well? Steve is spot on this is Indentured Servitude 2.0. Couldn’t have said it better.

Anyone with the brainpower to get into a MIT or Cal Tech or other prestigious institute of higher learning is there for the contacts.

Paul brings up a great analogy. Do we expect kids that are ready for the Professional leagues to stick around and lose valuable years.

I think the need for higher education in the country is on the decline. If you got the smarts and the ability to network and get around the right people you can make things happen. And that really is in the spirit of America. This country rewards people who do smart things in and outside of the classroom. The trick is finding your niche and making something happen.

Paul Lancaster

Sounds to me like these universities see the writing on the wall that the most talented individuals are no longer “easy money”. They are now at risk of not contributing their IP to institutions and these institutions are trying desperately to keep the students “interested” in graduating rather than just going directly to start-ups. The Sea Change is underway. Degrees mean less than they used to in a very competitive and intensely innovative marketplace. Why not just start an incubator for the most talented individuals and allow them to be free of having to take basket-weaving in favor of getting started on their true passion immediately. It’s like the NCAA argument for keeping kids in college football or basketball when they can get paid now for their talents.

Matt Eagar

I don’t understand why it is problematic for private industry to contribute research dollars to publicly funded institutions. Japan has very strict limits on funding that their academics can receive from the private sector, and it severely handicaps the kinds of research projects that get funding there. By comparison, MIT in particular was early to embrace the participation of private industry (the Media Lab is but one embodiment of this mindset), and the result has been one of the world’s strongest research institutions. Especially with tightening government coffers (sequestration, anyone?), we should be thrilled to see private dollars funding both research and student degrees – things that might go away otherwise.

In fact, this is really a two-way street, as the DoD and other government agencies have made it a focus over the last couple of decades to try to source as much as possible from commercial, off-the-shelf (COTS) sources in order to save the government money. The reality is that the more uses we find for a given technology (i.e., the bigger its scale), the cheaper it is for everyone, whether we are speaking about academics, government, or private industry.

Steve Ardire

Ito kinda clever offering another hook or incentive for big name companies already funding MIT programs.

NET NET: the competition with incubators and investment players that already do university and seed capital like Intel Capital is intensifying.

I also think the Upstart model which invests in promising graduates of specified schools in return for a percentage of their future earnings sounds like indentured servants 2.0 ;)

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