Timothy Folta is Professor and Thomas John and Bette Wolff Family Chair of Strategic Entrepreneurship at the University of Connecticut School of Business. He is also Faculty Director at the Connecticut Center for Entrepreneurship & Innovation. Innovation Destination: Hartford asked Folta about his fascination with entrepreneurship and corporate strategy and how his role as a professor is helping to shape future entrepreneurs.
IDH: What piqued your interest in entrepreneurship?
FOLTA: As a PhD student at Purdue University, I had the great fortune of having a mentor who happened to be one of the top scholars of entrepreneurship in the world. Arnold Cooper was trained at Harvard and was one of the first scholars to study the ecosystem in Silicon Valley. He later created one of the largest databases of entrepreneurs and their businesses and got me involved in some of his research. That exposure introduced me to the many, many intriguing elements to entrepreneurship and gave me a great platform to develop my interests.
IDH: How long have you been at the University of Connecticut? What courses do you currently teach and what do you enjoy most about instructing?
FOLTA: I joined in the Fall of 2013, after spending 15 years on faculty at Purdue University.
In Fall 2015 I will be teaching a course to undergraduates titled “Risks and Rewards of Entrepreneurship.” This course is a core course in the new Entrepreneurship minor we have just recently launched at UConn.
I love teaching undergraduates because they tend to be very enthusiastic about learning. They are also humble enough to seek out mentors, a role I really enjoy.
This Fall I am also teaching a Biomedical Entrepreneurship class, targeting graduate students in medicine, engineering and business. It is especially exciting because it represents a partnership between the three schools. Cato Laurencin from the School of Medicine and Ki Chon and Mostafa Analoui from Biomedical Engineering will be co-teaching the class with me.
I taught a class like this at Purdue and the students loved it. The students will tackle real clinical needs and we anticipate that businesses may emerge from the class.
In Spring 2016 I will teach an Executive MBA class on Corporate Strategy. I taught this course last year and it was great because the rich corporate environment here in Connecticut offers lots of opportunities to bring in wonderful guest speakers from outstanding companies.
IDH: As a professor, you have some insight into what interests future entrepreneurs. Are there any “hot topics” in particular that appeal to your students?
FOLTA: A number of hot topics exist. One topic is an approach of customer discovery called the Lean Launchpad. The idea is basically that the entrepreneur de-risks the venture by implementing a series of customer and stakeholder interviews.
A second topic of great interest is entrepreneurial financing. In particular, issues around securing venture and/or angel capital are always of interest. Crowdfunding is a new type of financing that is trending.
A third topic is related to business models—the way the venture secures revenues and economizes on costs. Each venture opportunity has a plethora of different business models an entrepreneur might exploit and students are intrigued about how to develop and appraise different business models.
For example, Airbnb (property sharing) and Uber (car sharing) represent business models that “share” existing resources for growth and expansion, rather than incur capital investment. The last I checked, Airbnb was worth over $30 billion, an amazing amount considering they own computers, and that is about it.
IDH: Your research interests include entrepreneurship and corporate strategy. How have your interests evolved?
FOLTA: My interests evolve and develop with each doctoral student I advise. Two recent students are examples. One student, who ultimately became a faculty member at the University of Pennsylvania’s Wharton School, became interested in how multi-business corporations create value relative to single-business firms.
Our research focuses on resource flexibility and the ability to reallocate resources across businesses. Consequently, I am hosting a conference in November 2015 and editing (with colleagues from Dartmouth University and Northeastern University) a special issue of a journal on Corporate Strategy and Resource Redeployability.
Another student became a faculty member at the University of Buffalo and his research emphasizes entrepreneurial finance. We just had a paper accepted in a journal that examines whether venture innovation is affected more by investment by venture capitalists or angel groups.
IDH: What types of research are you currently working on?
FOLTA: A project I started (with a colleague from York University) is looking at the benefits and costs of “portfolio” entrepreneurship—when individuals have more than one business simultaneously. I also started a project to assess whether the federal Small Business Innovation Research grant program makes a difference on ventures that receive these grants.
Another project (with colleagues from Copenhagen Business School) is looking at the optimal size of new ventures and whether starting below or above this size creates long-term disadvantages or advantages.
Finally, I will soon finish a white paper on the “State of Entrepreneurship in the State of Connecticut.”
IDH: You have contributed to several publications, books and industry journals and even appeared on a Ted Talk at Purdue University. A central theme is entrepreneurial risks and strategies. Tell us what fascinates you about this topic.
FOLTA: It really bothers me when people describe entrepreneurs as “risk-takers.” Entrepreneurs are most effective if they manage risk rather than embrace it. In fact, when venture capitalists appraise business opportunities, they consider to what extent the entrepreneur has managed:
- Product risk—Do they have intellectual property and “freedom to operate?” Can they make the product?
- Management risk—Does the venture have the right people on its leadership team or a plan for developing the right team? Does it recognize its weaknesses?
- Market risk—Is there are large enough market to support the business?
- Business model risk—Is the venture’s offering compelling enough to attract customers, partners and employees?
- Financial risk—Does the venture know how much capital it needs?
Entrepreneurs operate in an uncertain environment. In fact, the opportunities with the highest payoffs generally have the highest uncertainty. However, the clever entrepreneur will manage risk effectively.
IDH: How did you become involved at the Connecticut Center for Entrepreneurship & Innovation and what does your role as Faculty Director entail?
FOLTA: I was asked by the Dean to lead the center. I took on this role because there are so many opportunities to expand the entrepreneurial infrastructure at UConn and I want to play an active role in making this happen. As Faculty Director, I lead a team of employees by helping establish a vision for how we will allocate our resources and effort.
IDH: What do you enjoy most about working with entrepreneurial students?
FOLTA: Entrepreneurship is exciting for many students because it represents a chance to create something out of nothing. Many students find this experience completely novel and it expands their education enormously.
What really drives me is the chance to help students and faculty have these experiences so that they have the option to exploit them at some point in their lives. This is what universities are meant to do; however, entrepreneurial experiences are particularly potent in their ability to nurture students and their future opportunities.
IDH: What is the best thing about living/working in the Greater Hartford region?
FOLTA: We have a wealth of outstanding companies in this region, which provides a wealth of opportunities for our students. We also proximate to New York City and Boston, two of the top places for entrepreneurship in the world. With this proximity comes access to talent that might benefit faculty and students.