#375 Why the Best Startups Don’t Start in Garages—Insights from André Laplume

The CTO Show with Mehmet Gonullu

In this episode of The CTO Show with Mehmet, we are joined by André Laplume, a professor at the Toronto Metropolitan University, to discuss the fascinating world of spinout ventures. André shares his insights on why the narrative of startups beginning in garages is often misleading, and how many successful companies actually originate as spinouts from established organizations.

We explore the concept of spinout ventures, where employees leave an incumbent firm to start their own companies, often carrying with them the knowledge and experience gained from their previous roles. André highlights the difference between corporate spinoffs and spinouts, emphasizing how the latter is typically driven by the entrepreneurial ambitions of individuals or small teams rather than managerial decisions.

Throughout the conversation, we delve into the advantages of spinouts, such as better survival rates and faster scaling compared to traditional startups. André also busts the myth that most startups begin in garages, using examples like Apple, where much of the foundational work occurred within an established company. We discuss the triggers that lead to spinouts, including strategic disagreements, ethical conflicts, and the desire to innovate beyond the constraints of a parent organization.

André provides valuable advice for aspiring entrepreneurs currently working in established firms, encouraging them to view their employment as a learning environment rather than just a job. He also addresses the legal and strategic considerations for those looking to pursue a spinout, including the importance of navigating non-compete agreements and maintaining good relationships with former employers.

As the episode concludes, André offers final advice for fellow entrepreneurs, stressing the importance of leveraging the experience gained in established companies to create successful ventures. Whether you’re considering a spinout or simply interested in the dynamics of startup creation, this episode is packed with insights that challenge conventional wisdom about entrepreneurship.

More about Andre:DR. ANDRÉ LAPLUME, co-author of SPINOUT VENTURES, is a Full Professor in Entrepreneurship and Strategy at the Ted Rogers School of Management, which is part of Toronto Metropolitan University. Laplume researches the intersections where new entrants and incumbent firms meet with the aim of breaking down the barriers facing entrepreneurs, while helping managers deal with entrepreneurial ambitions in their organizations. His research has appeared in top journals like Human Relations, Journal of International Business Studies, and Journal of Business Research, among others. He received his PhD in Management from the University of Manitoba in Winnipeg, and spent seven years at Michigan Tech, teaching in its MBA program. Earlier, Laplume was a business and information technology consultant, helping clients integrate businesses and automate units. He is a frequent judge at entrepreneurship pitch competitions and an experienced entrepreneur, having launched a startup while in Michigan.

https://spinoutventures.net/

00:00 Introduction and Guest Welcome

01:04 André Laplume's Background and Research

02:12 Discussion on Spin Out Ventures

05:11 Examples of Successful Spin Outs

07:36 Triggers and Motivations for Spin Outs

16:32 Challenges and Risks for Spin Outs

21:01 Legal and Financial Considerations

28:16 Future of Spin Outs and Final Advice

33:36 Conclusion and Farewell