Episode 25 | Part One: California Dreamin'

Gregory Shepard, an entrepreneur who's built and sold 12 businesses, a recipient of 4 private equity awards, TEDx speaker, and Forbes author.

This is The Boss Podcast with Gregory Shepard.

If you ask most startup entrepreneurs what school they attended, most would likely say the school of hard knocks. And I'm a proud graduate of the school of hard knocks. But in the past decade, many schools have been intentionally cultivating the next generation of entrepreneurs. One of them is UC San Diego. My guest this week is Paul Robben, the Associate Vice Chancellor for Innovation and Commercialization at UC San Diego. Paul's been tasked to drive innovation across all areas of the campus and speed up the university's innovations in markets in California, the nation, and the world. Paul, welcome to the podcast.

Oh, thank you. I very much appreciate the invitation.

Maybe we could start out with a little bit about what the Vice Chancellor over at UCSD does.

Okay, so I manage the Office for Innovation and Commercialization. And what that means basically is we do all the traditional stuff like managing the intellectual property and transfer of technologies to industry, et cetera. But we also manage a lot of the innovation and entrepreneurship resources and training across the campus. And what that really means is that we're helping to develop the innovators of the future. We're helping to train faculty and students on what it means to be an innovator and what it means to be an entrepreneur so that they can take the incredible ideas that they all have and actually convert those into impact through the creation of companies or not-for-profits or NGOs or, or social benefit organizations, whatever is appropriate. So we basically run a whole bunch of programs across the campus that are all delivered by practitioners from the real world who come in and tell their stories. So that could be investors or CEOs or financial guys or service providers or whatever, but they're all involved in the entrepreneurial ecosystem and they come in and they basically tell their stories. These are the things that worked out for me, these are the things that didn't, right? And, and through that mechanism, we help to train our students and our faculty in the basics of entrepreneurship. Alongside that, then we bring the community to the university because really a university is just the first step in helping to develop people. I mean, it is our primary product, right? The main thing that a university produces is students. So my job is to help to produce entrepreneurial students. One of the best ways of doing that is to bring the entrepreneurial world to the university. So we bring all of these investors and entrepreneurs and people involved in the ecosystem to the university and we mix them in with the students through mentorship, programs, through company development programs, etc. So we have a whole series of these efforts across the campus, and it's really my job to run some of them but coordinate all of them. So make sure that everything that's going on across the campus is coordinated, students have access to all of the resources and a roadmap on how to access the different things in the different schools, and accelerate the development of these budding entrepreneurs.

You guys have had an incredible story. And one of the things that I recently did is went and toured the building, the brand new building that you guys built to help out with the process of this incubation of startups in the ecosystem. And I wanted to talk a little bit about the history because you guys have one hell of a track record. Maybe you could talk a little bit about the history and, uh, that you guys have in terms of the track record. And then in addition to that, this new impressive building that you guys have built?

Sure. Yeah. So the university, I mean, UC San Diego as a campus has always been a relatively strong powerhouse in this area of entrepreneurship, right? You know, if you go back to the traditional kind of measures in terms of new technologies that are developed and licensed to industry and new companies and so on, we've always been up there at the top of the rankings. But about 5 years ago or so, the Chancellor wanted to ramp the whole thing up. So he created this new Office of Innovation and Commercialization with the goal of making sure that all of the resources, as I said, actually were coordinated, were talking to each other, that we identified any of the gaps in the system and that we tried to fill those gaps and that we removed any of the barriers so that if there were legal barriers or agreement barriers or resource gaps that were proving to be a barrier, for example, that we remove all those. And in that way, that we accelerate all of this entrepreneurial activity. And over the past 5 years or so, we've effectively doubled all of this activity. So we've almost doubled the number of companies that are coming off the campus every year. The last year for which there are nationwide numbers on this, the campus is number 3 in the country in terms of just the number of companies that are spun off, you know. And as we follow these companies, we're It's not just the numbers; it's the sustainability and the durability of these companies. They're raising more money. The five-year survival rate, etc., is all increasing. The quality of these companies is increasing. So, you know, we've put a lot of effort into this, and I think it's it's really paying off. And we're a national leader at this point. The latest initiative in this whole area is the Design and Innovation Building that you referred to. It's a portal, basically. It's it's a portal for the community to access all of this entrepreneurial talent. and ideas that are coming off the campus. And it's also a portal for all of the entrepreneurial students and faculty to access the resources that they need to bring their ideas down the commercial pipe, if you like. So in this building, we've put all of the resources needed in this innovation pipeline, everything from teaching students the basics of entrepreneurship. We have a whole floor dedicated to rapid prototyping and assembly. We've put the design lab in there to talk about human-centered design and customer acquisition. And then we have a whole commercial floor where we have dedicated space to the entrepreneurial community themselves. So if you are an entrepreneur on campus, you come to this building, you get everything you need to go from idea to company launch. You have all of the resources, you have all of the education, and you have the future management, the investors, the service providers, everything you need in one place to launch your company and get the impact that you're looking for. So it's really creating a microcosm of the innovation ecosystem that we have here in San Diego, which is pretty unique, actually. I mean, a lot of universities have put a lot of these elements together in different ways. But to bring all of this together, it's really the first time that I've seen it.

It's the first time I've seen it too. I've never seen anything done so well. I said that on a on one of my social media posts after I toured it. I was, I was like, I've never seen anything so well done. It's like an entire ecosystem in a building. It's, it's really remarkable.

That's, that's really it, you know. And we hope that this is the place that you can't afford not to be in if you're, you know, anywhere in San Diego trying to do any of this entrepreneurial stuff.

Or anywhere in the country. I mean, for that matter, you know, we work with a lot of universities. I haven't seen, you know, at Boss Startup Science, and I haven't seen a single university with a structure like yours anywhere, even to the likes of, you know, the Stanfords and the Harvards and the MITs and stuff like that. Nobody has put it together so well. And the way that the building is designed, where basically each floor is like an elevation in the life cycle of a startup, it's just so well done. It's just really beautiful. And anybody that is looking for a university, this is— I— this is the first place I would go. If I was an entrepreneur.

Well, thank you for that. So the building is at the front door of the campus, and that's making a statement. There's a new light rail system which has just come to campus, and the stop for that light rail is right at the front door of this building. The new transit hub, which brings all of the students and faculty on buses, right there at the back door of this building. So we're making this statement that, you know, the way that we beneficially impact the community is through design, innovation, entertainment, creativity. And the Chancellor really is accentuating this statement by putting this facility right at the front door of the campus, where if you were just, you know, Joe Public coming to visit the campus, this is the very first thing you're going to see.

Yeah, I think it's amazing. I was just blown away by it because I had never seen anybody do it so well. I did a lot of tours of different universities, specifically their entrepreneurial area, and I'd never seen anything like— I was just— I'm still blown away by it, and I think it's a privilege To be able to go in there and source deals as an investor as well. I wanted to ask you another question. This may be a loaded— well, it's definitely a loaded question. How do universities like UCSD prepare entrepreneurs for tomorrow today?

Yes, very good question. So I think there's many ways to answer that, right? First of all, you have to create an environment that encourages them to dream of a better future. And I know that sounds a little bit kind of corny, but, you know, you really need to surround them in people that encourage them to think out of the box, that encourage them to dream of something that has yet to exist. And that's really why the Design Lab actually is in the building that we just talked about as well. So you have to create that environment to allow them to understand that taking risk is a good thing. Failure is not a bad thing so long as you learn from it, right?

Mm-hmm.

And really get out of yourselves and think of something different and new and disruptive and impactful. You also have to give them the tools to be able to get there. So, you know, we're a university, right? A lot of what the faculty do in their research, for example, are things that we're only going to see as the general public 10 years and 20 years from now. So there is a rich resource across the campus of tools that can be used to encourage this type of, you know, futuristic thinking, if you like, as well. So we can access that. And you just really need to bring people from the community into the— into this whole environment.

And, you know, it has to be a permissive environment which allows our entrepreneurs I think that one of the unique things is like, you know, when you started in 2015, so what, about 6 years ago, you were asked to create a dynamic innovation ecosystem that turns ideas into products that solve big problems and small problems. And it seems to me that that whole timeframe has led up to this innovation building where you've essentially done that innovation ecosystem that's referred to in here in one building. So when we talk about— because this word innovation, right? When we talk about innovation, how do you and UCSD define innovation? Is it based on a certain sector or vertical or a problem they're solving, or how do you guys define innovation? Because it's used all over the place.

It's actually overused, right? You know, in some ways I just want to get away from the world altogether. How do you define innovation? I mean, you know, very— if you ask 10 people on the campus how they define innovation, you're going to get 10 different answers. But very simply, for me, it's idea to impact, right? Having an idea that has an impact, that, you know, that can be developed into something that has an impact. I mean, there's, there's plenty of ideas on campus and everywhere, but they actually have to Yeah, for them to go through a process to have some sort of an impact in our community, that's the real sort of innovative piece of this.

Mm-hmm.

And the other piece of this is diversity. And this is something that the building does very well. I think one way that we have accelerated the development of the innovators of the future, if you like, as you just asked me about, is you've got to bring different people to the table. You've got to bring different students to the table and different faculty and different community people to the table. You know, if you put 4 engineers around a table, you're going to get a very different result than if you put 4, you know, 2 engineers and a dancer and an economist, right?

Mm-hmm.

Even if you're looking at the same problem. And I think true innovation is where you get this diversity of perspective. And it's one of the sort of foundational cornerstones of this building. We're not in any school, we're not in any department, we're not constrained, I guess, by the structures that those, those things confer on something. And so we can bring people together in very, very flexible ways. So that to me is really what innovation is about. It's bringing together these different perspectives around ideas that can be developed into something that has real benefit and real impact on you and I in the community.

It's the first time I've seen a scenario in a university where they have allowed that department or division or whatever you call it the freedom to run the way entrepreneurship actually runs. Because what I found a lot of times is that they have the same confinements, but they call it entrepreneurship. They don't work together, right? The place that's incubating entrepreneurs needs to be just as free-flowing as the entrepreneurs themselves. And you guys have done a really good job with that.

You have to have a license to fail. That has to come from the university as well, you know. And it is actually a bit of a, you know, It's an anathema to some extent of, you know, to the academic system, right? I mean, students are kind of told if you don't get an A in everything, you're no good. Whereas we teach the opposite almost, you know, in entrepreneurship. If you don't fail, you're not risking, you know, and if you're not risking, you're not, you're not really getting out there kind of stuff. So you really have to sort of break the mindset almost in some ways and provide them this kind of protective environment to allow Allow them to go off and do things that they are not taught in the academic system.

Yeah, I love this because, you know, you look at people like Richard Branson and Elon Musk and Steve Jobs and all the folks that just kind of left, you know, Bill Gates has kind of left universities because they wouldn't allow them to do what they needed to do independently. And what you guys have done is turn this thing on its head and said, well, if that's the nature, the organic nature of entrepreneurship, let's just provide Yeah, and put it alongside the academic system, right?

There is big value in the academic system, you know, don't get rid of that, obviously. I mean, I work in a university, that'd be silly, right? But tap into it as well, you know, really leverage it through the research portfolio that we have to develop these tools of the future. But put something alongside of that that complements it, and that really is how you accelerate the innovators of the future.

Yeah, I think that's a great point. Yeah, I agree. I think that there is, you know, the creativity is one line and then the academic curriculum, if you will, is a separate line, right? So if you don't have the background of the academics, how are you supposed to optimize and operationalize the creative side? So you guys do a really good, really good job balancing that out. I've never seen anything like it. It's why I wanted to have you on the show, because I was just like, this is— the building symbolizes the way that you think about entrepreneurship, which I haven't seen anywhere.

Cool. That's very gratifying to hear.

When you look at UCSD and you think about the university sectors, right? So we're in San Diego, and San Diego is, you know, a lot of health and medical and pharma and that sort of thing. But you guys seem to have a broader range of businesses coming out of UC San Diego. Is there any specific type of businesses, vertical or sectors, that you guys seem to have more than others?

You know, one answer to that is if it exists, we probably cover it, right? I mean, we have, we have 2,000 faculty, you know, we have $1.5 billion research portfolio, we have schools in just about everything kind of thing. So it is actually true to some extent to say that, you know, we cover just about everything. But of course, there are things that we are stronger in. And I think where the magic and the innovation side occurs is if you match the strengths of the university to the to the strengths of the community. You mentioned biotech. Absolutely, of course, we are incredibly strong in the life sciences and the health sciences and oncology, neurology, all of those things. To be honest about it, the biotech industry wouldn't be what it is if it wasn't for the university being here for the past 60 years as well. But there's other sectors. I mean, oceanography, right? The whole thing was started with Scripps Institution for Oceanography. And it is one of the world's leaders in ocean sciences, climate sciences, etc. So that's another huge strength which crosses so many different sectors right now. And then, you know, you look at the tech side, we have data, AI, ML, robotics, healthcare delivery systems, etc., which we are massively strong in as well. And a lot of those, I think, are going to be even more important in the future for the simple reason that San Diego is a military town. You know, a quarter of the economy here is military, driven primarily by the Navy. But they are more and more looking to the academic world in order to stay current on their technologies as well, especially in areas like UAVs, AI and logistics and other things. And so there's a huge opportunity to work, you know, with the military in developing those technologies as well. And in fact, you know, if you look back historically, I mean, the university was formed By a partnership with military contractors, the camps that were here in the city, all getting together and saying, we need to give this land over to the development of a university. So it's a very nice sort of circular thing.

Benefit, right? It's totally reciprocal. So let's talk about that a little bit. So do they engage in helping out with these, you know, these deals, these entrepreneurs that come out with ideas? And do you guys have connections with some of the local government and private sectors to help these entrepreneurs out? How do you help these entrepreneurs from the point that, you know, they have an idea and it's validated and they've raised a little money? Outside of that, I know that there are certain programs that help introduce these businesses to government.

Yeah, so we— I mean, it depends on the company, depends on the government agency, etc., right? But for the most part, we have very good relationships across the board, and most companies are very open to helping us in any types of programs that are about workforce development. So, you know, as soon as we go to them and kind of say, we want you to help us better prepare students so that they can, you know, perform efficiently in your sector, it's always an open door. So we're always able to engage them in those types of programs. The same is true for government. With government, they have a little bit more difficulty maybe in figuring out how to do it. But they're certainly very willing to do it. And the same is actually true for the military. I mean, we have, you know, large programs with the Naval Information Warfare Center, for example, and we're developing much bigger programs now with the Navy as well across the whole workforce development piece. So we have, you know, a lot of relationships there. We're developing all sorts of new programming now where we're getting more entrepreneurial, if you like, in these workforce development programs. So we kind of go out to companies and say, hey, you guys are huge and inflexible to some extent, right? And I know there's a whole bunch of problems you have out there, but just because of the sort of structures that you have, you find difficult to dedicate the resources to solving them. Why don't you tell us what they are and we'll put groups of students around them to solve your problems? And in that way, we're training the students on the culture of your operations so they're better prepared when they get to you. So it is a workforce development thing, but we're also training the students in entrepreneurship because it's all about team building and leadership and all those other critical elements of entrepreneurship. So there's a lot of different ways that we're working with companies and the government. And, and, you know, beyond that, we're working with the zoo and the port and the airport and all these people in similar programs. So it's a very close-knit community in San Diego.

Yeah, it's very— it's all twined together, right? But it all kind of weaves through the university. That puts you in a unique place.

Yeah, exactly, exactly.

Well, on that note, let's stop right here. But coming up in the second part of my conversation with Paul Robben, the Associate Vice Chancellor for Innovation and Commercialization at UC San Diego, Paul talks about the importance of community outreach.

I think something that a lot of people don't do is they don't go out to the community enough. and kind of say, you know, what would you like to see the university doing that would deliver people to you that are going to be more successful? So we did a lot of that, you know, we went out and we talked to the innovation community and the venture guys and everybody else kind of stuff, and it's kind of based off that that we delivered a lot of programming.

Learn more about the BOSS Business Operating Support System at bossstartupscience.com. Or you can reach Gregory Shepard at GregoryShepard.com. This has been a production of Forbes Books.