Universities are like Seattle's Pike Place Market: Many Small Businesses Under One Roof

By Joseph Huang

My wife, who is an academic, tells me she is an entrepreneur in an academic environment. I agree. Our recent discussions have led me to think that universities are a lot closer to a confederation like Seattle's Pike Place Market and San Francisco's Ferry Building Marketplace than a monolith like a traditional corporation.

Imagine yourself walking towards Pike Place or the Ferry Building. What you see is the branding of the marketplace. Once you are on the premises, however, you are inundated with numerous small businesses selling you flowers, fish, meats, and cooked meals. There are many nearly identical businesses that sell the same things and are competing against each other just a short stroll away.

Each of the small businesses exists in the tension of promoting themselves and promoting the greater marketplace. No single business is bigger than Pike Place or the Ferry Building. Advertising to people who are not physically on site, for the most part, is done on behalf of the marketplace as a whole and not toward any individual business. Once the customer is on site, however, then it is a mixture of shouts, free samples, and colorful displays to lure you to a specific store.

Each of the small businesses exists in the tension of promoting themselves and promoting the greater marketplace. No single business is bigger than Pike Place or the Ferry Building.

Universities are very similar.

While there is branding for the university as a whole, each tenure track faculty operates like a small business. (I emphasize tenure track faculty for a reason; they are the ones with the most prestige and the most budget on campus.) Each faculty operates in a tension of promoting their own work while also promoting the university they currently belong to. Other faculty around them – other "businesses," if you will – can conduct similar research on their own. And yet, the faculty must live peacefully with each other.

Follow the Money to Reveal True Behavior
There is further evidence that professors act more like small business owners than an executive of a multinational corporation. When a professor leaves one university for another, she typically takes all of the research grant dollars with her. She will also typically take the post-doctoral research fellows and any PhD students who are NOT near graduation with her. (PhD students near graduation will typically finish up and obtain their degree.)

The reason this is possible is that, for the most part, research grant dollars are tied to the individual, not the university. So, when star researchers leave, they take the money with them.

For the most part, research grant dollars are tied to the individual, not the university.

This does not happen in corporate America. Sure, directors can leave the company and move to a new one. They may even hire some of their former subordinates. However, the revenue source does not automatically follow the director without a fight. Employment contracts typically forbid executives taking business with them when they leave.

Both-And
When working with universities and researchers, keep in mind that you are working with both the larger university and the professor. There are needs that have to be satisfied at the central administration level, and there are also needs that have to be satisfied at the professor's level.

Joseph Huang is NACRO Co-President and Associate Director of Development at Stanford University.