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Engagement with small businesses: Plenty of opportunity but limited bandwidth

Excerpted from the March 2023 issue of University-Industry Engagement Advisor. UIDP members can view the entire issue here.

It’s not that industry engagement executives have anything against working with smaller companies; in fact, the idea of working with these companies, including start-ups, can be the beginning of an exciting process as both the company and the partnership grow. But corporate engagement leaders admit they sometimes simply lack the time required to pursue these companies as much as they’d like.

“The biggest problem for all of us is how to make the best use of our time,” says Nathan K. Utz, vice president of Purdue’s Office of Industry Partnerships. “One of the beautiful things that made me shift from Notre Dame to Purdue is also a problem; there’s so much industry because of size and scale.”

In fact, he says, “we have this conversation every day and every week,” and he stresses that there is no shortage of opportunities, just a shortage of time and resources. “I absolutely I think start-ups and small companies have a lot to offer universities — and the entire ecosystem — and we do engage at those levels — just not at the proactive level we do with the Fortune 500 companies that are obvious targets.”

“There are several layers to this landscape map,” adds Kelsey S. Evans, executive director for corporate relations at the University of Texas-Austin. “I would say on the whole we get philanthropic gifts, research, and student [support] from nearly 400 companies a year, and of that, only about 175 are under active management from development professionals — the Microsofts, the Googles, the Exxon Mobils,” she says. “That means an awful lot of companies’ interactions are probably single faculty members and a single member of the company — or a ‘niche’ connection. That’s great; we want and need that to be happening. There are only so many ways to feed the dragon, and you need all sources in. I love that we have more companies on our tally list than we are actively managing.”

Having said that, Evans continues, “we are also in the very fortunate position of tracking companies moving here after the pandemic, and we have close to 310 that have moved [to Austin] in the last handful of years. My team, and the university as a whole, are very cognizant of [the question] how do we create pathways in for these new companies, to engage our students, faculty, and their employees? In my dreams I’d love to have an advancement professional on my team dedicated to these new companies, big or small, and the small ones in particular deserve special attention.”

Working with such companies, she explains, “is like going to Vegas. All bets do not win, but if you engage and they grow, it has enormous potential for payoff on the back side.”

Leah Aschmann, director of corporate relations in the Office of Corporate and Foundation Relations at Rice University, is on the same page. “The philosophy of how to manage these partnerships is one that should ideally be able to be applied to large companies, start-ups, whatever — but it’s a capacity issue of what you can really handle effectively,” she says. “Philosophically, they should all be the same.”

A different approach?

When corporate engagement offices do become involved with smaller firms, is their approach different than it is with their larger counterparts? “Inherently, yes,” says Evans. “The success I’ve seen with smaller companies is you start at the top — find out from the top level what the most important issues are.”

People at the senior level, she explains, “have great insights about what the company needs, and what its goals are for the next 12-18 months. In larger companies we have often started with a university relations designee or an alum and tend to work from the bottom up. With small companies, [you start at the top] then make a handoff. For me and the university, that has been an effective way to navigate into some of these smaller companies — we’re talking 500 or fewer employees.”

“Absolutely it’s a a different ballgame,” adds Zachary Holman, associate professor and director of faculty entrepreneurship at Arizona State. “When you’re working with large companies, they have funds available, they usually need large workforces, research can be high up on their list; they care about a lot of different things from the university. They definitely spend quite a lot of time with redlines, going back and forth before everything [in an agreement] gets done. And it’s a challenge finding the right person in the company — the decision maker — and who in the organization needs to sing from the same song list.”

Start-ups, on the other hand, “are scrappy, understaffed, definitely underfunded and [present] very unique problems — ‘I’m looking for a piece of equipment that can do this;’ or ‘I need one person who has these skillsets.’ If you can fill that niche, there’s the possibility to move very quickly with few redlines. The negotiations can be so wonderfully simple. You need alignment with very few people.”

The challenge, notes Holman, is to be flexible when it comes to funding. “Maybe you have a conceptual alignment, but you apply for funding together; the office has to be flexible before the money comes in,” he offers. “They may want a one-year project paid in advance. Or, $150,000 may be a huge deal for a five-person start-up, but if the university is willing to accept quarterly payments, it may be possible to do. You have to understand the pain points and perspectives.” Despite these challenges, he says, “I love working with them.”

Many similarities

In terms of the approach to partnering, however, Utz sees many similarities to dealing with the big boys. “There’s a lot to contemplate, but it’s no different than a larger company,” he asserts, and it always starts with the question, “’Why would this company, no matter what the size, be interested in partnering with Purdue University?’ Depending on the size and resources, that engagement differs. But small start-ups and companies small to mid-level have talent needs. Obviously, that’s an easy way to engage and help them, and they can add value to Purdue by providing learning opportunities for our students,” Utz points out. “That’s a great way to engage — at least as a start. They probably also have some research and technology gaps they need to fill, but with smaller companies do they have the resources to actually outsource R&D? Even in that case there are great opportunities to engage when it comes to going after certain federal funds.”

Getting back to the theme of similarity, Utz points out that just about all technology spaces — take hypersonics or microelectronics, for example — are not the exclusive domain of large companies. “If you think about those ecosystems and industry sectors, they all comprise companies big and small,” he notes. “In order to get from the beginning to the end result in the supply chain, it takes companies of all sizes.”

He notes there’s also little difference in how the university decides whether to partner with a given company. “I don’t think it’s any different; we have a corporate engagement process we go through with any and all companies we have a conversation with,” he says. “We have a specific list of 10-15 questions; through those you start to see answers. They may say they have no R&D budget, or they’re not hiring students, so you start to discern from the conversation what the opportunities are.”

For example, when it comes to talent, says Utz, they address whether the company is interested in hiring Purdue students, and if so, what they’re looking for — bachelors, Masters, PhD? A similar inquiry takes place around research needs, whether the company is large or small, he adds. “‘Do you have technology gaps you need help with? Products or technology to improve? Do you outsource R&D? What does your budget look like?’” he shares. “Then, [the same process] for professional development and upskilling — ‘Is your workforce up to date? Are there gaps where Purdue can be a partner?’”

Most common collaborations

What types of engagement are typical with these smaller companies? “If it’s a company that’s new to Houston, they want to get their logo out there, to get their name in front of the students,” says Aschmann. “They want to sponsor events. Sometimes there’s student recruitment, and then it’s easy to connect them to the center for career development. Some of them give data problems to students, and if they work for them there’s a good mentorship interaction opportunity.”

“People; talent is huge,” says Evans. “Sometimes they need a little more hand holding. We never suggest they drop into the career center [during Career Days] at the basketball arena with 300 other companies and get swallowed up and lost. The Texas Career Engagement Center (TCE) does a beautiful job helping them understand what skills they’re looking for and they host virtual or mini sessions just for that company. We’re very grateful to have them; they’re great partners helping us find great engagement moments.”

Specific opportunities often present themselves in areas like biotech and life sciences, she adds. “It’s still a pretty small sector from workforce data, so we set up a dedicated life science fair — engineering, biology, molecular biosciences, pharmacy, and data science — so we can have a cross-college mini career fair in that specific field,” Evans reports.

“For sustainable small businesses there are things like the need for a capability — product development, or research — where they do not normally have the capital demanded to install those capabilities themselves,” notes Holman. “So, they hunt around universities; they usually start at a local university, or an alma mater, trying to find out if that capability exists, and if so, how to access it. At many universities [specific experts] are squirreled away in faculty labs, with no charging mechanism without sponsored research. If you need a PhD student for one year, great. But if you have one sample, or need a unique technique, that’s problematic,” he observes. “That’s the Ione reason that ASU over the last seven years has really consolidated in these core facilities, available to everyone on a fee-for-service basis,” he shares.

Another area of engagement ripe for small companies, he continues, involves internships and hiring. “In the last couple of months, we’ve had past students reach out to us on internships,” Holman says. “So many of those connections and best hires are not made at career fairs but through one-on-one relationships.” Holman notes that he’s shared this experience from the other side after launching his own start-up. “One company I started signed up for a career fair,” he recalls. “It turned out the career fair had a waiting list and a large charge, so we started our own career fair — a start-up career fair — partnering with regional and state organizations.”

Utz notes that the difference in engagement with these firms has to do with scale, not type. “It’s a smaller scale; in the talent space, they can still provide some real-world problems and experiential learning for our students. They can engage with student clubs and speak about what it’s like to be a small or medium-sized company.”

In addition, he says, “there are great opportunities to partner and go after some of the bigger companies” by adding the small company to a collaboration. The pitch might be, “‘Hey, between Purdue and this smaller company we can really fit in this gap problem you’re looking to solve.’”

Creating avenues for engagement

Some universities have found creative ways to encourage partnerships with smaller firms. For example, at UT Austin, “we work closely with the Chamber, so we’re at least part of the dialogue as [companies] consider Austin,” says Evans. In addition, she explains, “we’ve created a ‘New to Austin’ engagement effort, curating executive levels from those businesses — big or small. We’ve started engaging them in thought leadership opportunities to meet with key leaders based on what they know about their business. We’ve had a couple of great events in the fall, and we have a spring series laid out.”

These events are all very small, she continues, and have involved leaders from the medical center, the performing arts center, and the gaming industry, and include panel discussions. “It’s really all about engaging,” says Evans. “There’s no fundraising request, but we’re creating connections so we understand how to best get them connected across campus — whether in talent or research.” The December meeting, she reports, drew 20 new businesses. “There’s so much energy in town; they all ask for e-mails and do things together,” she notes. “We’re planting seeds, but we do not know what the trees will look like.”

“I work a lot with start-ups,” says Holman, both those coming out of the university and non-affiliated firms. “I engage with companies that have a particular problem and say, ‘Hey, someone at ASU does something [related].’ I’ll make an introduction. I’ll help review contracts. There are also opportunities for them to engage at ASU with large companies.”

These companies can also participate in the university’s “New Economy” initiative, which feature five centers focused on particular areas of innovation. “[The centers] fund research projects; there’s only co-investment from the companies, with the amount depending on the size of the company,” he explains, adding that 70% of direct costs are paid for by the program when start-ups are involved. “That solves a pain point — access to capital,” says Holman.

A number of smaller companies he works with are being created at and emerge from the university, he continues, which presents both a challenge and an opportunity for the engagement team. “A key barrier is the disentanglement of the company from ‘Mother University,’” he states. “We have things at ASU to facilitate that process. There’s a facilities-use agreement; they can pay for a postage-size piece of real estate in the faculty lab, so the research activity is done within the university but the IP is owned by the company because they pay for what they use. Also, we have a fair amount of real estate to lease, so companies are very inclined to maintain relationships with the university.”

In addition, he shares, he applied for and won an Economic Development Administration grant, in partnership with the Arizona Commerce Authority, which enables start-ups (not necessarily associated with ASU) to access the university’s core facilities at 50% off the normal fee-for-service rates. Resources available include a super-computer, electron microscopy facilities, and semiconductor fabrication lab.

No proactive targeting

For many universities, as is the case at Rice, smaller companies only enter the picture by approaching the engagement office first or having some other existing connection. “Our short answer is there is not a specific program targeting small companies,” says Aschmann. “I’d say that 85%-90% of our work with companies is with ‘presidential partner’ companies who are truly engaged holistically and continually strengthen those partnerships.”

In most cases, she continues, “the smaller companies seek out the university. Maybe it’s an alumni connection; we might hear from development officers that we have an alum who started this company and would like to get more engaged. It could be through technologies being commercialized through Rice in all kinds of ways. These smaller companies and start-ups usually have a specific interest on campus, and do not have the capacity to truly engage holistically. We work with them to connect to an area that most benefits them and us, and we let that part of campus manage that relationship until their needs and wants become broader.”

Purdue’s approach is similar, Utz says. “The process itself is unfolding in a way that we do manage [the relationships] differently,” he says. “Our folks are proactively engaged with specific portfolios in sectors. They have a list of 20-30 companies they are each tasked with engaging with. These big companies are here today — or they should be. The smaller companies and start-ups come on our radar when they work with certain faculty who say, ‘You should check them out.’ We only get engaged when it comes to us; we’re not out there hunting for these companies.”

Optimizing bandwidth

With all the good intentions, the bandwidth challenge remains a barrier to more engagement with small businesses. How can industry engagement executives manage these relationships in a way that gets them what they want without spending huge amounts of staff or money?

“There’s no good, easy answer,” Evans concedes. “You have to find partners on campus. As a corporate relations team [leader] I still have metrics that are very focused on top-level philanthropy, so I have to be a great front door, but I’m also cognizant of what I’m tasked with doing. We have these trusted relationships across the ecosystem; we have places to plug in so people can get e-mails to relevant programming, pathways to get them engaged without me and my team having to engage in person every time. That’s really, really critical.”

“With a lot of these things, [it requires] candor, communication, and being realistic with ourselves as a university as to what we offer; hopefully, [small business leaders] are realistic about what they offer as well,” says Aschmann. “Usually after one or one-and-one-half hours with a company, you can put a plan in place and go from there. Identify quickly where the points of interest are and execute quickly on those.”

After identifying those points, she continues, “connect them with a group on campus and encourage that group on campus to respond. Show our responsiveness and willingness to work through any questions they might have; connect them with the right faculty member.”

As with many aspects of engagement, success with smaller businesses has to do with relationships — “a friendly face, a voice, trying to make good things happen for them, the students and the university,” Aschmann observes.

“It starts with understanding what their needs are and how they differ from large companies, and designing programs that specifically try to target them. In many cases it may not require a lot of time once they’ve made a connection with the right faculty,” adds Holman. “When a smaller company [partners] with one faculty, a lot of work is identifying the opportunity up front, and there’s less work at corporate engagement.”

Is all this extra effort worth it? “Absolutely,” says Holman. “We all think at universities that it’s such a win and so exciting to have a partnership with Google or Moderna — but they were both start-up companies coming out of universities. Isn’t it exciting to be part of them when they’re young, and a key enabler for them to become larger?”

“Yes, it can be,” says Utz. “Again, every day I have to say, ‘am I going to go down a rabbit hole, and in six months have nothing to show my boss?’ We make educated guesses, understand what the opportunity is, and bail if need be. These are important companies; they live and die payroll to payroll. We can help them.”

“It’s a long-term play,” Aschmann adds. “It’s all about building the relationship, because you don’t know where it’s going to be. I’ve said for a long time that gifts and grants of $5,000 are often more time-consuming than a million — and more personal. From a giving perspective, smaller opportunities often take more work, and a new relationship takes more time. For those existing partners, even companies giving multi-millions each year, the trust is already there. So, that’s where the work comes in.”

“Yes, it’s worth the effort if you have the vested interest of stakeholders in units and they’re willing to pick it up,” says Evans. “You have to have folks across campus also see the benefit. Obviously, along with the hand-holding you have to begin to see students respond in a positive way. If year over year you get only 50 kids to show up at a career fair, maybe it’s not worth it.

“As a university,” she concludes, “it’s on us to break down the complexities and begin to engage.”

Contact Aschmann at 713-348-4361 or; Evans at 512-431-8158 or; Holman at 480-965-9959 or; and Utz at 773-844-9392 or