The Ewing Marion Kauffman Foundation: Entrepreneurship and Success




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Video title: The Ewing Marion Kauffman Foundation: Entrepreneurship and Success
Released on: November 19, 2009. © PharmaVentures Ltd
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In this interview, Lesa Mitchell, VP Kauffman Foundation, Ewing Marion Kauffman Foundation, talks to Dr Fintan Walton about:

• the Foundation’s origins and its focus on entrepreneurship
• its research and policy pathway
• Translational Medicine Alliance
• the Council for American Medical Innovation
• how the Foundation measures success
The Ewing Marion Kauffman Foundation origins and its focus on entrepreneurship.
Fintan Walton:
Hello and welcome to PharmaTelevision news review here in San Francisco at the BioPharm America Conference. On this show I have Lesa Mitchell, who is Vice President at the Kauffman Foundation, which is based in Kansas City here in the USA. Welcome.
Lesa Mitchell:
Thank you. Thank you for having me.
Fintan Walton:
Pleasure. And it is, because Kauffman Foundation is a very interesting foundation. It's founder was one of the founders of a pharmaceutical company here in the US. Can you tell us a little bit about the origins of Kauffman Foundation?
Lesa Mitchell:
Sure. Mr. Kauffman essentially worked in the pharmaceutical industry for Lincoln Labs as a Sales Representative and didn't believe that incentive alignments were set up right and so he literally created his own company by grinding up oyster shells in his basement, which became (indiscernable) created the first osteoporosis foundation. And ultimately developed the one of the largest pharmaceutical companies in the US at the time, first billion dollar drugs on the market, listed as a America's 100 best companies was eventually acquired [PharmaDeals ID = 18363] by Hoechst Marion Roussel then became Sanofi-Aventis and obviously now a new company, so we have a, a rich history from Kansas city to Bridgewater, New Jersey to Frankfurt to Paris.
Fintan Walton:
Okay. That's excellent. Now the key thing about the Kauffman Foundation is it's focus as I understand it on entrepreneurship all the various component parts that allows great entrepreneurship to take place?
Lesa Mitchell:
Yes.
Fintan Walton:
So how does the foundation support such a policy?
Lesa Mitchell:
Sure. So Mr. Kauffman believed that the most important asset that he had developed in his life was the literally the ability to create a company from scratch and grow it and spend many years mentoring other early stage entrepreneurs, and so he literally created the foundation under the premise that we would take those lessons forward and help others start and grow companies. So the foundation has essentially two separate pathways, one is a research and policy pathway, we are the largest funder of economic research on the topic of entrepreneurship which means everything from the innovative outcomes of early stage research to the financial pipelines of venture capital state funding models et cetera and all the way to firm formation both in the Life Science arena as well as others. We also fund programmatic initiatives. We created an organization called the translation or medicine alliance and the reason that we created that organization is we saw a vacuum in the space of connecting what we call rock-star scientists, so scientific founders at universities who've created the great technologies whether they be in Life Science or other spaces working with CEOs of disease philanthropies, Debbie Brooks is here with me at Biopharma, Babil [ph] Cystic Fibrosis a number of the other foundations that, that are -- are not your father's type of foundation, but they're really foundations who are spurning innovation and creating in many cases new firm formation. And then lastly bringing in heads of R&D of big pharma or biotechnology companies from around the world who have found ultimately that they can sit aside all alone, but they must partner with rock-star scientists and disease philanthropies and all together they will move science forward.
Kauffman Foundation's research and policy pathway.
Fintan Walton:
Right. So too clearly with entrepreneurship this two components as you've already out lined in rough way. One is people you know is all about the individuals and their ability to become entrepreneurs, the other is the environmental policy the way in which communities work or house at even a higher level and government level work?
Lesa Mitchell:
Yes, yes.
Fintan Walton:
Key question is can you create entrepreneurs or entrepreneurs are born?
Lesa Mitchell:
Yes we hear that question a lot. And obviously, if we didn't believe that you can foster entrepreneurship, and I will use that word instead of create we wouldn't be doing what we were doing. So, so there is a great deal of evidence that in fact we can enable the fruits of early stage innovation to entrepreneurship. Now you know one of the interesting I think outcomes of research over the last many years is relative to entrepreneurship in new firm formation there are multiple components there is the original founder who sometimes is not the entrepreneur who does not stay with the company and then there is in fact the entrepreneur and then there is the earlier stage management team and even the external advisory board that is way pre, I would say funding in firm formation. And it is in fact all of those components and then the add on component of especially in Life Science the role of venture capital, the role of angel capital and we believe it is enabling their pipeline not only the individuals to have the skills that are needed in the knowledge to take technologies forward but also the support mechanisms whether that be country level policy or whether that be, what is the role of a university in working in partnership with industry and we spend a great deal of time as a matter of fact on my way next week to Europe to run a conference a daylong conference with a number of other foundations and they had a OECD Innovation Strategy, some people from the Eu that are interested in innovation and look at what are the country level context and enablers from a policy perspective and from an educational perspective that need to be put in place as lessons from the fruits of entrepreneurship from the United States to various places in Europe, India as well as others.
Fintan Walton:
So entrepreneurship can lead to more entrepreneurship, so it is a cascade?
Lesa Mitchell:
Yeah.
Fintan Walton:
It is you can create clusters of entrepreneurship?
Lesa Mitchell:
Yes.
Fintan Walton:
In a way?
Lesa Mitchell:
Yeah.
Fintan Walton:
So part of that is creating the local community. I am gonna use the word community it could be a university, it could be a town, a city where entrepreneurship, we are here in San Francisco --
Lesa Mitchell:
Yes.
Fintan Walton:
Northern California which could be described --
Lesa Mitchell:
You're at the hub [ph].
Fintan Walton:
as one of the birth places of entrepreneurship?
Lesa Mitchell:
Yes.
How is entrepreneurship model working in United States.
Fintan Walton:
So from your perspective even a country like United States which is famed for it's entrepreneurship, is the model working, in other words is the institutions, government policy right still or it's there is much more work to be done even in the United States?
Lesa Mitchell:
Yeah there is much more work to be done and frankly it's difficult to answer your question because it depends as always, specially in the space of Life Science there is -- there is a significant amount of more work to be done. I mean I think there are lessons from our brother [ph] and other verticals whether that be the semiconductor industry or the IT industry that they, they really learned about what's precompetitive technology? What's competitive technology? What is the government fund? And what does venture capital fund? And I think they frankly did a better job of that in some of those other, other verticals and we've struggled with that in the field of Life Science. And so -- I mean as an example as an outcome of the Human Genomes more than 200 companies were created, of those companies about 17 are left. And so one then has to ask the question what is success, was it good that we spent billions of dollars funding companies around the world as an outcome of the human genome, but to discover the timing wasn't right, science wasn't there yet, we were patenting technology too early. I mean unfortunately it's in the Life Science arena we don't know what we don't know when we didn't know it. And so only now I think are we literally sitting in the room behind us is discussion about you know what do you do to put humpty dumpty back together again.
Fintan Walton:
Sure.
Lesa Mitchell:
And that the industry is in, I believe Eli Lilly was in, the Wall Street Journal yesterday for reducing headcount by 1000's --
Fintan Walton:
Yeah 5000.
Lesa Mitchell:
Pfizer and, and Merck and others have been the same. And so clearly we are seeing a reform of the industry, and at the same time that requires both philanthropy and early stage technology companies to really rethink what is the role of a company. What is, can I develop targeted therapeutics kind of in a vacuum as a brand new technology company alone or the panel that I held this morning was you know how do philanthropist that are really doing venture philanthropy how do large companies, and how do ventured backed companies and the government all work in partnership together to take things forward. So to say is it broken, yes I absolutely do believe that it is. But I also believe that we are embarking on an entirely new journey of new kinds of companies that will frankly reframe the industry and what it looks like. And that's what entrepreneurial endeavors have done for many, many years.
Fintan Walton:
But isn't entrepreneurship not just required at the very early stages of a company but isn't it also required for major corporations?
Lesa Mitchell:
Absolutely.
Fintan Walton:
So, the concept is not simply what you can do in your garage or in your back, back room at home, but also --
Lesa Mitchell:
Yes.
Fintan Walton:
what you can do in the cooperate headquarters in New York?
Lesa Mitchell:
Yes. I mean unfortunately what's extremely difficult is if you are a big company with a significant amount of capital assets to quickly change that boat it's changing a crew ship in a lake you know being able to do that is extremely difficult, so this is, this is kind of my point though is I think big companies are absolutely having to relook at what are their strategies, is it good to diversify, is it not good to diversify and internal entrepreneurship as we would call it must be alive and well or they are going to fail.
Translational Medicine Alliance and it's aim
Fintan Walton:
Sure. So let just go to the translational alliance that you talked about earlier. What is that, and what is it's, what's it's aims and what are you look forward from that (indiscernable)?
Lesa Mitchell:
Sure, so as a foundation an interestingly enough as a foundation of entrepreneurship which is somewhat of an oxymoron what we find is that significantly we play a role in creating new organizations or even creating new models that aren't ready for prime time in terms of for profit vehicles and there really is no one else in that space to do it, so, so an example literally down the street from us is an organization that [Indiscernable 0.11.41] runs that was originally funded by Grey Davis called QB3, we at the Kauffman Foundation call it a proof of concept centre or a translational medicine centre. And I think Gavin Newsom the Mayor of San Francisco this morning called it an innovation hub, so you could called it whatever you want but it essentially is transforming the role of the university in taking a one step further in terms of really adding commercial value to technology while it is still in a not for profit mechanism. And so we have spent a significant amount of time and money essentially doing research on those models to frame them for the rest of the world and published a paper on this last year and what we've -- we felt the need to create the translational medicine alliance, we are the seed funder of an organization called Science Comp, Science Commons we are the seed funder of The Institute for Pediatric Innovation and all three of those organizations were funded by the foundation, Kauffman Foundation because we literally saw a space where nobody was doing work to bring people together in a coordinated fashion that could help them figure out how to gain greater value from the -- their technology while still in enough for profit.
Fintan Walton:
So translational alliance, the concept of translational alliance is bringing in entrepreneurship in the sense as well as -- as well as taking from within --
Lesa Mitchell:
Yes.
Fintan Walton:
so it's importing?
Lesa Mitchell:
Yes.
Fintan Walton:
Is that correct?
Lesa Mitchell:
Yes. I mean, again the critical element here is helping to define the new models, what are the new entrepreneur models that will both accelerate innovation in the what I would call I guess pre-commercial format and then when it becomes for profit what are the new models in the for profit context that are fundable, sustainable and will grow. And we're -- we're spending our time and money trying to create those tools.
The Council for American Medical Innovation
Fintan Walton:
So where do you operate at a, at a national level or even a federal level within the United States or elsewhere I mean are you trying to set changes in the way government work, works at a federal level as well?
Lesa Mitchell:
Yes. So I am flying from San Francisco to Washington DC and tomorrow morning I will hold a briefing with hopefully Congressional staffers and others in collaboration with a new organization in Washington DC called The Council for American Medical Innovation. And this organization was literally put together in DC as a vehicle that would take up issues that would inform Congress, The National Institute of Health and others in Washington about policy that needs to take us forward. I mean it's -- we're thrilled in the United States that Francis Collins has been named the new head of The National Institute of Health . I think there are a number of initiatives that have been started at The National Institute of Health that are going in the right direction, but frankly not funded at all at the level that needs to be funded, the discussion in our panel earlier this morning was the fact that not only the Fox Foundation but industry is having to come together and fund things like biomarker consumptions in order to even define the road map forward in a fore profit way that's something that the government agency should be funding. So our hope in Washington is that we can take a new lens to what we have been funding, we have $40 billion worth of research funding at the government level in the United States alone, and let's take a look at what's worked, what's not worked and how do we need to reframe that funding to fund specifically precompetitive technologies and let the fore profit people whether they are entrepreneurs or big companies take it to the next level from there.
How the Kauffman Foundation measures success.
Fintan Walton:
Right. So how does an organization like the Kauffman Foundation measure success? What are the parameters that you look for
Lesa Mitchell:
Yeah.
Fintan Walton:
key deliverables?
Lesa Mitchell:
Yeah. So that's both an easy and a difficult question, ultimately while we are interested in entrepreneurship Mr. Kauffman's long-term interest was economic growth re large. And that's a global number not a local number. I was reading in the New York Times today discussion about how we were even evaluating what is economic growth.
Fintan Walton:
Right.
Lesa Mitchell:
So I understand that, but that is literally our longer-term metric until therefore we have to take, think about it as a pipeline and look at what are those indicators that can help us understand that we are going in the right direction from both a new firm formation but frankly you know if you look at global numbers of firm formation they're very misleading, because -- and we've had these discussions with Gordon Brown in the UK before, you know the numbers of new starts in England look phenomenal and in many cases better than the United States, but they don't grow. And so while the number of starts of new firms is, is clearly an indicator growth and growth in terms of revenue is the ultimate outcome not even job, job growth because we are a global world and especially in the Life Science frame work, so a company might start here in San Francisco have 30 employees, but you know have 200 in the UK and another 300 in Bangalore, but the revenue and tax model is predominately sitting right here in San Francisco and so they need to be happy about that even though they only have 30 employees.
Fintan Walton:
Right.
Lesa Mitchell:
So there are multiple indicators...
Fintan Walton:
Right.
Lesa Mitchell:
of growth, but growth is ultimately what we care about.
Fintan Walton:
Lesa Mitchell, it's fascinating to learn more about the Kauffman Foundation and it's drive to bring in on -- more entrepreneurial shift not just in the US but worldwide. Thank you very much indeed.
Lesa Mitchell:
Thank you.
Richard Seabrook
Vice President
Lesa Mitchell is a Vice President with the Kauffman Foundation. She is responsible for leading the Foundation's initiatives to advance innovations. Mitchell joined the Foundation in 2003. She has been responsible for the Foundation's frontier work in understanding the policy levers that influence the advancement of innovation from universities into the commercial market. Under Mitchell's leadership the Foundation is identifying critical research opportunities, defining and codifying alternative pathways and identifying new models to foster innovation. Prior to joining Kauffman Foundation, Mitchell's professional background included consulting for global pharmaceutical clients such as Takeda and Eli Lilly. She spent twenty years of her career in global executive roles at Aventis and Quintiles. She has a bachelor's degree from the University of Kansas and volunteer's time on various regional boards.
The Ewing Marion Kauffman Foundation
The Ewing Marion Kauffman Foundation is often referred to as one of the largest foundations in the United States -- or as the world's largest foundation devoted to entrepreneurship.