The Key to Success: Why University Startups Don’t Perform as Well as Corporate Startups

The review article explores the differences between university startup entrepreneurs and corporate entrepreneurs, and why the latter are more successful

University Startup Entrepreneurs (USEs) possess the scientific knowledge and institutional support necessary to build and sustain high-tech ventures. But why are they not as successful as Corporate Startup Entrepreneurs (CSEs)? Empirical evidence suggests that differences in motivations, culture, knowledge, and identity could be the answer. USEs seek intellectual stimulation over financial success, struggle with accepting their entrepreneurial identity, and lack knowledge of the market and customers, putting them at a disadvantage compared to CSEs.

^{Image title: Researcher investigates the characteristic differences between entrepreneurs from universities versus corporates
Image caption: University Startup Entrepreneurs (USEs) have immense scientific knowledge and receive substantial university support and resources to launch their high-tech startups. However, they are often not as successful as Corporate Startup Entrepreneurs (CSEs). Prof. Alex Coad studied the differences between USEs and CSEs and found that fundamental differences in entrepreneurial motivations, culture, knowledge, and identity could be the reason why CSEs have an edge over USEs.
Image credit: Professor Alex Coad from Waseda Business School, Waseda University
License type: Original content
Usage restrictions: Cannot be reused without permission}

University research is where innovative technological breakthroughs originate. As a result, a number of proactive universities provide substantial resources and support to their academic researchers to help increase the number of all ventures. However, despite receiving this extensive support and having access to the best scientific knowledge, many academic entrepreneurs are not as successful as their corporate counterparts. While this sounds like a contradiction, there is enough empirical evidence explaining just why this could be happening.

With this in mind, Professor Alex Coad from the Waseda Business School, Waseda University, Japan, critically analyzes the differences between Corporate Startup Entrepreneurs (CSEs) and University Startup Entrepreneurs (USEs) to answer the question as to why CSEs outperform USEs. “My analysis is part literature review, and part ‘appreciative theorizing,’ which comes from applying rigorous theoretical frameworks from previous literature,” explains Coad. Accordingly, his comparison of the two entrepreneurship types relies on different theories and perspectives about motivations, knowledge base and search routines, culture, and personal identity, among others. The results of this extensive study were published online in The Journal of Technology Transfer on June 17, 2025.

According to the study, USEs refer to faculty, staff, or students from universities and public research institutes who innovate in an academic research context and subsequently found a firm based on that research. Similarly, CSEs refer to those who launch their businesses after leaving their previous employment in a private firm and utilize the knowledge gained from it.

One of the main characteristic differences between USEs and CSEs is their entrepreneurial motivation that influences their paths and outcomes. While USEs are driven by monetary rewards, their main motivation often comes from undertaking intellectually stimulating research that might lead to more academic achievements. University jobs often have plenty of autonomy, hence USEs often steer towards being opportunity entrepreneurs because they will not leave academia to start a firm for want of autonomy. On the other hand, CSEs may be driven by the desire to escape employment frustrations in the pursuit of workplace autonomy. This can lead to a focus on lifestyle motivations (autonomy, flexible working style, etc.) for entrepreneurship.

Cultural orientation is another factor that shapes entrepreneurial behavior. USEs tend to be more communitarian or missionary, wherein they focus more on creating societal impact and being valued in the community, rather than their financial performance. Whereas, CSEs often adopt a Darwinian approach, with an emphasis on commercial success and gaining a competitive edge.

Furthermore, while USEs possess valuable scientific knowledge, they often lack commercial acumen. They mostly rely on codified knowledge found in published resources, and their specialized knowledge is not applicable across different industries. In contrast, CSEs possess tacit business knowledge learned through their experiences, with specialized understanding of market opportunities and industry networks that are transferable across sectors.

Another driving factor is USEs’ notion of identity. The transition from an academic identity to a profit-seeking, entrepreneurial identity is complicated and challenging for USEs, often becoming psychologically inhibiting and resulting in lower success rates. Finally, USEs tend to prefer technical roles, while shirking from managerial and regulatory tasks, and connecting with customers, which can create an organizational power imbalance. Even their problem-solving approach is more analytical as opposed to the practical approach taken by CSEs.

Although these inherent traits place USEs at a disadvantage against CSEs, for example, regarding knowledge of customer needs, Coad believes that they can be overcome with the right guidance and policy mechanisms. “Mentoring and peer networks can help USEs smoothly transition and adapt to their entrepreneurial role. Support institutions, like incubators and accelerators, can encourage them to adopt lean startup principles to test the market. After all, understanding user needs is not ‘rocket science,’ but early-stage activities that are within the grasp of USEs, if only they are willing,” Coad concludes.

Reference

Authors:Alex Coad
Title of original paper: “The company I keep is not corporate enough”: Exploring the specificities of University startups
Journal: The Journal of Technology Transfer
DOI:10.1007/s10961-025-10228-4
Affiliations:Waseda Business School, Waseda University

About Professor Alex Coad from Waseda Business School

Dr. Alex Coad is a Professor at Waseda Business School, Waseda University, Japan. He is interested in the areas of firm growth, firm performance, entrepreneurship, and innovation policy. He has published about 100 articles in international peer-reviewed journals, over 14 thousand citations and an H-index of over 50. He is an Editor at Research Policy and Small Business Economics and an Associate Editor at Industrial and Corporate Change. Prof. Coad has previously held academic positions at the Max Planck Institute, Aalborg University, University of Sussex, and CENTRUM Graduate Business School, and was an Economic Analyst at the European Commission. He received the 2016 Nelson Prize at the University of California, Berkeley.