“I like to say that there was a time when we were the best technical university in the world. That’s because we were the only technical university,” says Jakub Nešetřil, who has been working at the university as vice-rector for entrepreneurship and technology transfer since February. The Czech Technical University was founded in 1707, and roughly 300 years of competition have long deprived it of that position. Although the school has a good reputation in the Czech Republic, it is losing ground on a global scale. For example, according to one of the prestigious rankings, it is ranked 189th among technical universities.
Nešetřil shows other numbers that worry him: during the existence of CTU, nine spin-offs have been created at this institution. “The good news is that six of them were created in the last 12 months,” he says. “So we have a growth trend, we are improving. The 20 years before that, it was the three mentioned,” he adds with a touch of irony. Comparing the numbers with the world-famous Stanford, which creates at least 350 startups every year (but some numbers even say a multiple), or MIT, where there are about a thousand of them every year, may seem too far away, so Nešetril chooses the European University in Munich for comparison. It functions as a renowned technical university on the continent and a partial model for his plans. The number of startups that are created there every 12 months ranges from 100 to 150, Nešetril describes.
CTU wants to rely heavily on all of these indicators and move them to a level unprecedented in the Czech Republic. Michal Pěchouček, who took over as rector in February, would like CTU to reach the top hundred in the aforementioned ranking of technical universities within the next ten years. Among other things, transforming the institution into a business cradle of Czech technologies that will be applied in everyday life will help in this.
A few days ago, CTU presented a new interdisciplinary program in which it connects Czech universities and helps develop projects with the support of Pale Fire Capital, Credo Ventures, Wood & Company, or IOCB Tech Group. A little earlier, it opened a new challenge for young scientists. And now it announces that it is transforming into an institution that not only will not mind if its students leave school to develop their own projects - but would like to directly support this approach.
The school is building an infrastructure that will allow students and doctoral students to develop their own projects. If they are too demanding and they have to choose between school and business development, CTU intends to encourage them to disconnect from the university and choose to operate independently.
Our product is not a spin-off, but a founder
In other words: the CTU management believes that if necessary, a successful founder must leave school completely. “It’s not a model where I do 30% spin-offs, 30% teaching, and 30% writing articles,” says Nešetřil. “Those people have to leave and dedicate themselves to it 100 percent. Cut off, burn bridges, jump into it,” he elaborates. He explains that the product is not the university spin-off, but the founder. “No company is created by someone ordering it. It is created because someone decides that they want to work on it and build it. Until they decide, we have nothing to play with,” he says.
“Successful startups were created because the founders had to bet everything on one card at some stage. And part-time work at the university goes against that,” agrees Pěchouček.
160 employees that we don’t have
To support the development of startups, Nešetřil is building Venture Builder, which is trying to commercialize research. “We are talking about teams that have research but no product,” he explains. “The University of Munich has UnternehmerTUM for this purpose, with 500 employees. If we apply this to the number of students at CTU, it would correspond to 160 employees. I think that is more than all the transfer offices at all Czech universities combined,” he comments.
A conservative estimate would be to build a technology transfer team of around 50 people. It is estimated that it could take around seven years before any results are visible – that is how long it takes for projects to develop into truly independently operating and profitable companies on the market.
“The university has three major roles. The first is education, i.e. teaching; the second is science, research, progress and knowledge. And the third role is to help society directly. And this is through cooperation with industry and by creating startups and finalizing projects so that they have a real social or business impact,” comments Pěchouček. “I’m not saying that everyone understands me, but I repeat it so often that they start to get used to it,” he smiles.
In addition, the management wants the key performance indicators (KPIs) of deans and heads of departments to also address the success of founded startups. Together with Nešetřil, they explain that the Czech university environment in its normal setting works against the establishment of spin-offs. “If someone from the faculty wanted to create a startup in the past, it was usually disadvantageous for the dean or head of department. They lost cheap labor, which sometimes taught, sometimes wrote articles. It was not fully supported,” says Pěchouček.
"The contradiction is inherent, we all feel it. A scientific team publishes articles and receives some impact rating for them. And from that, the school
ability to attract grants. If I lose researchers by starting a company, they run away somewhere and my team has no articles, it also has no funding. So there is a direct financial incentive not to support such innovations,” explains Nešetřil.
Founders at the head of the school
The function of Vice-Rector for Entrepreneurship and Technology Transfer, which Nešetřil now performs, is new at CTU and is intended to show how seriously the school is about supporting entrepreneurship. “I have been in my role for about a hundred days and in that time I have met maybe 15 rectors from various universities, in Europe, Latin America and Asia. And I have to say that I have not seen much of the vice-rectors for entrepreneurship and vice-rectors for transfer,” says Pěchouček.
The fact that a high-ranking vice-rector is in charge of entrepreneurship issues, as well as the fact that it is Jakub Nešetřil, in themselves show the importance that CTU is now giving to business activities. Nešetřil is considered one of the most successful Czech technology entrepreneurs. In 2017, he sold his startup Apiary to Oracle for billions of crowns. He subsequently launched the organization Česko.Digital, which helps with IT not only in state administration. And before joining CTU, he developed the Matika Česku project.
CTU has reinforced Pěchouček with other interesting experts, and in addition to them, they can also take advantage of the situation that currently prevails in the startup ecosystem. Nešetřil points out that the very logic of what makes a startup valuable is changing. "The era of 'cheap' startups, where you just need to develop software and be the fastest on the market, is no longer valid," he says. "If you have a SaaS startup, you sell software as a service, there is no longer any defensive moat between you and anyone else," he says in response to the development of AI. "And we need to start looking for deeper intellectual property so that these projects really have a chance to defend something," he thinks. This is where he sees the importance of universities. “The role of DeepTech, universities and the ability to actually extract intellectual property from science and transform it into something that exists as a product is growing,” he says.
CTU is making changes to the university sector quite quickly. The brisk pace is demonstrated by the six startups mentioned in 12 months (although not all of them were created after Pěchouček took office). And also the speed of founding. “Our fastest spin-off took 23 days now,” says Nešetřil. “And we are rightly proud of that, because even in Western Europe the gold standard is to manage to establish a company, including property and licensing arrangements, within 30 days,” he describes.
A more fundamental change is to be how much of a stake the university wants to keep in the companies it has founded. CTU currently takes a 10% stake (non-dilutive) and an additional 10% share of sales. “We definitely want to make changes there,” says Nešetřil. He wants to reduce the numbers to ensure greater viability of the projects. However, he does not want to give a specific figure yet.
All of the above also requires significant financial costs. The aforementioned seven years before some of the startups fully develop, even Venture Builder cannot be fully independent. A project that is supposed to help founders develop an entity separate from the university could cost hundreds of millions of crowns during that time. CTU presented its Venture Builder to funds that normally invest in startups, and the school tried to attract them to cooperate, from which the dream projects could emerge.
“Never in the history of the Czech Republic have we had a founder as rector. We have three successful startup founders in the university management who made them exit. We have clear support from top to bottom,” he says. “It is a window of opportunity that may not be repeated for decades to come. And we have the opportunity, especially the Prague innovation ecosystem, which is quite underinvested, to turn it upside down. But it will not be possible without external help,” he admits.
Pěchouček sees the school’s bet on young scientists as its biggest asset. “This is the future generation that is on the move, understands the world around them, and is more sophisticated in its ability to respond to change,” he says. “We want to liberate them and show them that you can be a great teacher, you can be a good scientist, and you can also start a startup – and that all three roles are equally useful,” he adds.