-Welcome, everybody.
Wow, this is a full house.
Thank you all for being here.
So welcome to the Alumni
Leadership Conference.
My name's Hyun-A Park.
I'm in the class of '83.
And also, I got a master of
city planning, class in '85.
And this year, I'm serving
as your Alumni Association
president.
I'm excited to be here, like
you, with fellow MIT alumni
and volunteers.
Like me, you've all returned
to campus this weekend
because we share a passion
for how MIT is making a better
world, not only for us, but
for the generations to come.
Over the next two days,
we'll have the opportunity
to connect with one another,
with current students,
current faculty, and the staff
of the Alumni Association
and Resource Development.
I know you'll be
inspired to continue
to engage in the important work
you do as a volunteer for MIT.
By the end of the
conference, it's
my hope that you'll
feel energized, excited,
and even more motivated
than you are now.
Maybe that's hard,
but we hope to,
as I think someone says,
all of us who went to MIT
were constantly striving
to do better always.
So I also encourage you to
take what you learn here
and share the stories of
MIT when you return home.
And you're going to
hear amazing stories.
I mean, every day,
I'm here a lot,
I get chills when
I hear what MIT
is doing to impact
the world around us,
and the hope we have
for a better future.
Beyond that, I hope you'll
write down a few new things
that you yourself can do to
advance the mission of MIT.
Because I think we also
know, if we don't personally
do something, it's hard to
change others and influence
others.
So whether that's
inviting a friend
to get involved by
coming to an event,
or making an annual fund gift,
or by sharing how MIT makes
a difference in the world
with prospective students
or friends of the Institute.
I hope you've already
downloaded the MIT alumni events
app from Guidebooks.
How many in the
room have done that.
Wow, fantastic.
So if you haven't,
go to the app store
in the Apple products or
Google Play to download it now.
And we have the free
WiFi here at MIT.
It's truly the best
way to make connections
with your fellow attendees,
get alerts and updates,
and manage your own
conference schedule.
If you need help, please
see one of the staff
in the registration area
or any of the events
that you're going to.
You may have noticed that
you received a ALC passport.
It's this.
Did you notice this
in your welcome bag?
That's for you to take with
you to every of your sessions.
So when you go, you want to
get your passport stamped.
And if you have all your stamps
at the end, the final event
at the List Visual
Arts Center tomorrow,
you'll bring your
completed passport,
and anyone who has that gets
this cute little beaver.
So whether the
beaver's for yourself
to cuddle with in the
evening, or for your children
or for your
grandchildren, I think
this is something you can
definitely strive for.
So we're delighted to start ALC
today with a fellow MIT alumnus
and an Institute leader.
Israel Ruiz became the executive
vice president and treasurer
at MIT in October 2011.
As the Institute's
chief financial officer,
Israel is responsible for
financial and debt strategy
development, budget
and capital planning,
and the integrity of our
financial information.
He's born in Barcelona.
Israel holds a masters
degree from the MIT Sloan
School of Management
and a degree
in industrial and
mechanical engineering
from the Polytechnic
University of Catalonia.
Please help me welcome MIT
Executive Vice President
and Treasurer Israel Ruiz.
[APPLAUSE]
Well, before we get started,
what you are not reminded of
is, this is actually a
renewal of your degree.
And the first test, I think,
for those of you who made it
this morning, you've passed.
Which is I have, and I
wake up every morning
making as hard as
possible if you
remember how to go from point A
to B on campus to change that.
So if you made it here,
you'll find a way.
The second thing before we
get started that I want to do,
really, is make sure
we have knowledge
we have friends and families
down in the South, in Texas,
in Florida and others.
And I know I've seen a few
of you who live in that area,
and I really want to make
sure that we acknowledge those
who suffered the two
climate events and weather
events that we here at MIT
worry as much as you do.
But it's really hard to
see, and personally it
affects me quite a bit.
So welcome if you
made it from there,
and best wishes for the
people who are there.
So let me start with the theme
of today, Enabling Breakthrough
Innovation.
And I wanted to touch
upon several factors that
have to do with that.
The first one is, and being the
treasurer at MIT, is financial.
The second one will be
the physical environment,
and the third one
will be the kinds
of programs and
activities that we make
to really make that a reality.
But let me start with first
principles and my job, which
is the numbers, and tell
you that, on June 30,
we closed the fiscal year.
We report to the October
meeting of the corporation.
The annual meeting, that report
a week ago, we just issued it.
I just remind people, if
you want to compare us
to our peers, you have
to wait until January
because that is how long it
takes for them to issue it.
So I don't know how they
did, but we did pretty good.
We had a great position, we had
great returns on investment,
we had great campaign numbers
and overall performance.
But not only that,
but we actually got
started with lots
of things that are
meaningful to the
topic of today.
Of enabling more innovation
from MIT and the MIT community.
So how do I measure
some of these things?
And of course, I'm not going
to go into the financials.
This is not an investors' day.
One key metric for MIT is the
resources we have, net assets.
Most of those are financial,
through the endowment
and other investment pools.
Some of them are the
buildings and other kinds
of things we have on campus.
But for the most
part, what you can
see in this chart is the
recovery from 2009 and how nice
it has been.
And the main two
drivers of this recovery
have been the campaign and
the investment returns.
So we're shy of $20 billion.
We've never been here.
Just to put numbers in
perspective, in 2000 to 2001,
MIT's net assets were
around $6 billion.
So from 2000 to
2008, they doubled,
and the rest were going forward.
Why is this important?
Well, it is important
because it creates
the basis for how we invest
into the future of MIT, which,
at the end of the day, is what
we will be talking about today.
The second part is
the historical reality
of our performance on
an operating basis.
MIT was always
challenged, and it
was challenged because of
its model after World War II.
And I've talked a lot about,
and I'll show you the numbers,
it was fully funded by research.
And research only pays you
after you've done the work.
And in most of the times, in
fact now, all of the time,
it pays you less than the
dollars that you spent.
So it's not a great
business to be in.
And in fact, from a
financial perspective,
we had to barely sustain
that kind of performance.
And it was not until we had
the resources and investment
and others to really
be able to put
the investment necessary
to do the research we need
to do, independently of how the
funding sources go and measure
that.
So we've sustained this, and the
results for the last 10 years,
it's the first period of MIT
that has had positive results
on an operating basis.
For some of you who
have seen me present
this a few times in 2007,
I became vice president
for finance and it was negative.
So in 10 years, we've been
able to really turn around
how we run MIT, and how we make
sure that the resources are
allocated to the biggest and
most important priorities
that Rafael and the rest
of the faculty will lead.
How does this all translate?
Well, it translates
to say, well,
is it sufficient to have
the billions of dollars
that I showed you in assets?
And the answer is always no.
The ambition of MIT, the
ambition of the faculty of MIT,
the community, the
staff, the students,
is always outpacing
the resources we have.
But one way that we really think
about the ratio of investment
to how we do it is
the metric, which
really is the net assets
divided by the operating budget.
How sizable is that
operating budget at MIT?
And it took, I've been
saying this many times now,
from 1910 to 1960 to go from
1x, essentially the size
of investments were equal
to the size of the operating
budget, 1x in 1910, to
about 2 and 1/2 in 1960.
So 50 years.
All of a sudden,
it was all flat.
This is the era in
which we were growing
the resources on investment.
And then in 1990 to 2000
was the first Institute
comprehensive campaign
and the dot com.
So it fundamentally changed
the level of investment
availability at MIT.
And then moving forward,
we've maintained that ratio.
And we're there.
And why is it important?
Because we can then borrow,
we can do all sorts of things
to really accelerate the
investment in the campus.
So this is the final
chart in financials.
And it just, to me, summarizes
what for many of you
may have been like
when you graduated.
When you didn't graduate, you
probably have a decade here
that you can identify.
And the transformation
of the, let me call it,
business model, financial model
of MIT has been significant.
So in 1960, which is
not a bar that is here,
the blue bar which contributed
to research, was north of 85%.
In 1945, it was 95%.
And you can see that in 2017,
the year we just closed,
it's less than 30%.
And if you combine
investment income and gifts,
it's becoming a growing
part of how we fund MIT.
So this is good and bad.
It's good because we can
fund what we need to do.
We have less restrictions.
But the second one
is that it offers
a lot of volatility
and potential
for a financial
environment situations
that MIT has nothing to do with.
The other good thing
of the campaign,
and I'm sure you've
read many news,
is that for the
first time, and I've
been a broken record, I
need to represent this,
is the level of
unrestricted giving to MIT.
And the level of
flexibility of how
MIT is able to fund
other new priorities
is highly dependent on the kinds
of things that are in green.
And for the first time,
unrestricted general
crossed $1 billion dollars.
You've probably heard
the news, but we
had great donors that
really gave significant
and unrestricted giving to MIT.
And investment results also
contributed to that $1 billion.
So let me move to
the challenges,
and start veering toward space.
So we now hopefully
have established that,
on a financial bases, we
are on a solid footing.
We have lots of uncertainty.
Uncertainty that is not
so much driven by MIT,
but the call it geopolitical,
financial markets, you name it.
And all those risks are severe.
But there is one risk that is
MIT, and fairly uniquely MIT.
And that's the risk
that the campus
was in a state
that wasn't really
commensurate to the kind
of research and excellence
that we deserve.
So in 2009, '10 we did the first
study to quantify what would
it take to bring those buildings
that were not in the state
that they should be to
just the basic level.
That doesn't mean that we would
be bringing the new research
that faculty want to do.
To give you an
example, if you were
a mechanical engineer in 1950,
today you may need a wet lab.
In 1950 you didn't
need a wet lab.
So that doesn't take
into account this number,
but the number was
shy of $2 billion.
So we quantified this,
we identified it.
And I always put this test.
I think for those of
you who have seen this,
you may know the answer as well.
Do you remember, if you were
with me a few times ago?
If you don't, do you
know what this is?
An equal?
Who's a civil engineer?
No?
So Building 1, the home
of Civil Engineering.
This is the electrical panel
in the basement of Building 1
It's vintage, 1917.
But the worst part, it's
still the one that's there.
So when somebody flips a
switch in building one,
the lights of Cambridge flicker.
[LAUGHTER]
Of course, I'm
exaggerating a little bit.
But you get the point.
So we needed to get to
act, and to act quick.
And I think that has been one
of the priorities of investment.
And what you see and you've
experienced coming to the room,
it's actually reflective of a
massive investment in campus,
both in terms of priorities.
Like the blue sections
represent key priorities,
like the MIT.nano building,
that I'll show you
a picture, right in the
middle of the campus.
The infrastructure upgrades,
like the central utility plan.
Or the academic
investment in Kendall,
which I'll touch upon next.
But what's important
is that green part
that was pretty much
in existence in 2010.
So the renewal of the campus
and the overall investment
has tripled in just a
very short period of time.
And what I'm really grateful
to the MIT community
is that everybody
understands and is together.
This is not an easy thing to do.
There's noise, there's
dust, there's disruption,
there's displacement,
you name it.
There's lots of calls and
e-mails to my inbox, trust me.
But we're moving
forward, and we think
it's a necessity
for MIT to really
be able to compete
in the next decades.
So I said for us was financial
and the fiscal component,
and how we're addressing the
priorities of investment.
Space people, etc.
So let me turn now to the
environment for enabling
breakthrough innovation.
And I could talk a lot
about the environment.
I could talk about
the MIT environment.
I could talk about the
Innovation Initiative.
I could talk about the great
things in the Deshpande Center,
the sandbox, and many, many
others that are out there.
But that's not my job today.
You can ask anyone
during these three days,
and they'll tell you we're
doing amazing things internally.
My job today is to tell
you what we do around MIT,
and perhaps even
within MIT, to enable
exponential breakthroughs
in innovation.
So there are four things I
wanted to touch upon today.
The first one is MIT.nano.
Then I'll show you some on the
Kendall Initiative and Volpe.
And then the fourth
one will be The Engine
that I'm sure you've all
talked about and heard about.
And I want to tell you a little
bit more how it came about
and what we're doing.
So this chart, I use it
for several purposes.
I show it because the density
factor, and I'll show you,
the next chart unparalleled
the kind of proximity factor
that MIT has here, and
we've had the luxury
to really do is unique.
And we want to exploit
this uniqueness.
It comes at a price.
If you want to build
something here,
it affects you and
it's very costly.
But it's really very important
because, since its origin
and the main group of MIT,
the connectivity factor
and interdisciplinary
work that goes on here
is transformational.
So right in that MIT.nano,
which-- let me see right here--
it's at the place of
former Building 12
right behind the dome.
It's a magnificent
state-of-the-art facility
for the most advanced
nanotechnology clean rooms
in the world.
It's an investment,
combined investment.
$350 for the
building, plus maybe
$200 for the
infrastructure necessary
to feed the utilities
of this building.
So think about a north of half
a billion dollars of investment.
There's no one doing
that kind of investment.
It's slated to be opened
in the summer of '18.
So we're actively
finishing it up.
It's pretty much all built,
and it will take about a year
to just clean the air
inside the building
to make sure it's at the level
that our researchers need.
The second, and perhaps
most important in terms
of transformation
of the environment,
is the Kendall
Square initiative,
which, for those
of you who have not
been so inclined to hear about
it, it's south of Main Street.
It's occupying the
site of where it used
to be six surface parking lots.
And then north in blue
is the Volpe site,
which we just got the exchange
agreement with the government
late last year.
So let me touch on what
that means for MIT.
So in terms of development
size, Kendall Square
is around 1.3
million square feet.
The Volpe, we're now in the
zoning process with the city.
We hope it's going to be in the
2.5 to 3 million square feet.
To give you a sense
of the campus today,
it is 14 million square feet.
So the whole Kendall development
is about 10% of the campus.
The other one
would be about 20%.
So talk about 30% of campus
development potential
in just two sites.
So this is an image that we
are now in community meetings.
It's perhaps hardly
much to kind of look at.
It's an aerial view of what
the Volpe site would be.
So here, right there.
And the nature of this
exchange agreement
is that we negotiated
with the government
to really have access to
this 14-acre site, which
has an odd shape here,
of which four acres
will be devoted to rebuilding
the new headquarters
for the Department
of Transportation
that is existing in the site.
And the remaining 10 acres, once
we're done with that building,
say four years from now or
so, will get exchanged to MIT
with its development rights.
So the remainder of that, it's
a set of about eight buildings,
a park, and lots of amenities
that really will create,
and start creating again,
the kind of neighborhood
and Kendall system
we want to foster
more innovative companies,
more residences, etc., etc.
So most important when you
combine the Kendall, which
is right there with
Volpe, we're able to think
about the district and its
uses on the ground floor.
So for the first time, and
through the MITIMCo real estate
office in combination with
the MIT administration
and the Facilities
department, we'll
look at creating essentially a
mini-city around MIT, and what
is needed to be around
MIT to create the right
richness and the desire for
people to be around MIT.
Not only the companies,
not only the companies that
were already successful,
and I'll show you a picture
of, but really, the
critical mass of individuals
that will be here in this kind
of knowledge innovation economy
that we're creating
and benefiting from.
Kendall, this has been in
the news now for a few years.
Kendall is a
six-site development.
As I said, there
is site number 4.
That's the academic site.
We're moving forward.
That's this building over here,
where the grad tower will be.
That is supposed to
replace Eastgate and add
a number of beds, 250
beds, to the Eastgate side.
So a total of 450, or
north of that, for that.
The Innovation and
Entrepreneurship Hub
will be here.
The admissions office
will be moved right there.
Campus tours will be
starting from lobby 7
and also from the Eastern
Gateway at Kendall.
For those of you like maybe
staying at the Marriott,
right across the Marriott,
that's the location.
Site number 5 which
is this one, will
be a site that
will be commercial
on top, but at the bottom, will
have the MIT Press Bookstore
and the MIT Museum.
So we will be bringing
the MIT Museum
from its current location
in Central Square to here.
And you can imagine, and start
thinking and envisioning,
a gateway right here.
Now, when somebody
comes out today,
comes out of the
Kendall T station,
it's really hard to find MIT.
And a very basic goal
we have of this project
is that at least an MIT
level will be right there.
[LAUGHTER]
So to give you a sense of
the transformational nature,
but also the length
of projects like this,
the beginnings of all of
this started in 2010, 2009.
And we got the first
approval of the zoning
in 2013, in April of '13.
And the first
building, which will
be the academic building,
of course, this one,
we're were expecting
to fundraise.
But we're moving
forward because we
need to make sure
that we have the beds
and we want to
create the gateway.
This building will be opening
around summer to fall of 2020.
So we're talking 11
years, if you will,
of planning and discussions with
the city and others to do this.
We hope Volpe will be that,
but that's the time scale
of these developments.
10 to 15, up to 20 years.
But once they are done, when you
think about Kendall and Volpe,
they create an incredible
environment in close proximity
to MIT campus to not only
locate very innovative companies
small, medium, and
large, but also
the individuals that will
want to live close by.
To give you a sense--
sorry.
Number 1 is another
housing development.
This is a commercial
housing development.
So we will be creating
a district right here.
There will be a grocery and a
pharmacy in this neighborhood.
So what this entails,
of course, these
are nice pictures and
renders from architects.
But what this entails is what
you probably have observed.
And this is a massive
construction site.
For those of you who
raised their hand when
civil engineering
and architects,
it's an amazing sight to watch.
It's a dangerous site.
That's why it's fenced.
It's disrupting
flows, of course,
because people used to use
from Kendal to the campus.
Now you have to go around it.
But it's really enabling us
to start with all the utility
work and infrastructure work.
And then we'll start
digging to go and build
the underground parking
that this complex will have.
Also importantly, the three
buildings facing Main Street,
which would be this one.
So it's familiarly
called the Clock Tower.
The Rebecca's building
that was called lately.
And then where the
MIT Press Bookstore,
they are going to maintained,
the facades will be maintained.
They're historical landmarks
by the Cambridge Historical
Commission.
But they'll being gutted.
And inside, they will
be leveled to make sure
that we have the right complex
for offices and laboratories.
So with this,
hopefully, what I want
to summarize today is something
I haven't talked about,
but I think you know enough,
is that MIT academically
is doing as good
as it's ever been.
And anywhere you
look, anywhere you go,
in department you're from,
any department that you like,
they're doing amazing stuff.
Our faculty, researchers,
students are at their best.
I think it's uncontested.
We have any metric to
prove it, but we're
doing really, really well.
What's less known, but hopefully
from my conversation you know,
is that we're also doing
pretty well around MIT.
And this is something that
it was many years ago,
but it's now intensified
and exponentially moving up.
And if you look around
the cluster of innovation
around MIT, through
its land control
and through very good policies
around how we think about it,
we have now an amazing
roster of companies.
And this is just a
little bit of the ones
that you may know
the logos from.
But there are lots of starting
companies, medium companies,
and big companies around
MIT because of MIT.
And what we're able
to do here is not only
extract value from the
real estate holdings
that MIT has for future
academic expansion,
but also extract even
greater value intellectually
by developing the right
adjacencies with our community.
So here, we have
a unique position.
As I say, typically, if you want
to find clusters of innovation,
this would not happen around
a kind of a 1 and 1/2 mile
radius of where you are.
We can work pretty much
anywhere of these companies.
One recent example
that you may or may not
have not heard
about, but it's to me
the really clear expression of
the benefit of this proximity.
When I talk to the city, I talk
about the power of proximity.
And this power of
proximity enables
great face-to-face
human interactions
that create connectivity,
that create relationships,
that ultimately create
significant benefits.
So the latest one that we just
announced is the IBM and MIT.
IBM, just let me
go back for those
of you who didn't see the logo.
IBM Watson right here.
So just about two years
ago, IBM Watson Health
moved its headquarters from
New York City to Kendall Square
to be in [? proximity ?]
distance to the Broad
Institute, to the
MIT departments,
to the researchers that
needed the work to be done.
Google intensified its
presence in Kendall Square
to think about bio and health.
Two years, fast forward,
what we have is the agreement
signed for $240
million investment
in a new lab, collaboration
between IBM and MIT.
This is one example,
the most recent example,
just a few days ago.
So as I said, this
environment enables
breakthrough innovation.
Not today, but into the future.
This is a 10-year agreement,
so we're moving forward.
So with everything I
said, you could add, well,
what's not going as well?
And that was when we
paused and we thought
about what became The Engine.
And what it was, in
2015, you may recall,
Rafael wrote an op ed
in the Washington Post
about innovation orchards.
And an innovation
orchard was a term
that we coined around
creating this environment
for breakthrough innovation.
But it really didn't
have the specifics.
It was like, well, we know that,
for the kind of innovation that
comes out of places
like MIT, the system out
there is not serving
it as well as it could.
What I mean by that
is that there are not
resources, patient
capital, and infrastructure
necessary to do that.
And since that time, in
2015, we started to work on,
well, let's validate that.
Let's go around
and talk to people
and create the stories, both
within MIT and in this region.
And we clearly validated it.
We validated lots of
things that, within MIT,
there are lots of ideas, big
and small and medium and large,
that cannot effectively
transition from the lab
into what we at MIT
would call "impact."
And the second one, and
perhaps even most important
for what's next, is that
capital-intensive technology
isn't really served by the
current financial frameworks.
And this is because people don't
look at a 20-year investment.
So you think about
the Volpe investment,
for which we publicized, we paid
$750 million for this exchange.
Clearly this is not a
developer timeframe of a five-
to 10-year investment.
This is perhaps a
50-year play for MIT.
So capital-intensive technology
and breakthrough technology
may take 20 years,
may take 30 years.
And that's outside the
investment profile of an Uber
or a Lyft or
something like that.
So after validating
this, we thought
about how do we explain this.
And how we explained
this is that there's
no app to cure cancer.
And we came up with this turn to
really visualize what we meant.
And what we meant
is that, of course,
we value the innovation
that goes on around services
and the digital economy.
And the digitalization
that we're all experiencing
is making our lives much
more productive and easier.
But at the same time,
that's not really
going to change fundamentally
lot of the things
that we are concerned
about at MIT.
And there is a gap, a
very significant gap,
between what we do
in the labs at MIT
and what needs to happen
to really commercialize
these companies.
So this engineering
risk is something
that even the vast VCS
will recognize they are not
well-positioned to address.
So when we talked
about what could
MIT do to enable that
this gap be either closed,
or at least put the investment
that's really necessary to make
sure that that doesn't work.
So the first thing is
like, why should it be MIT?
I mean, we why would MIT start
something around this area?
And we listed a bunch
of things that we think
are unique to MIT, or
to the Kendall ecosystem
that I just presented to you,
that would make this effort
and investment in this
effort much more successful,
or at least the potential for
success would be much higher.
So you can read them.
You can think about this.
But it goes from our ability
to be patient with capital,
the unique density
of infrastructure
and [INAUDIBLE]
infrastructure within MIT
and outside in the
companies that I showed you.
And really, the talent
component of who is around MIT.
And not just at MIT, but MIT,
the Broad, the hospitals,
Harvard, you name it.
So we talked about in,
first, ifs you really
want to address something as big
as what we've just presented,
it's not just for MIT to solve.
MIT can enable that.
But we want others to help
us and work together with us.
So we wanted to look at
the areas in which MIT
has the greatest
strengths and the kinds
of technological areas.
And this is a pictorial
representation of areas
that I think you can name them.
But anywhere from
robotics to biology,
bioengineering, the
convergence of life sciences
and engineering, digital,
Internet of Things.
Although this picture is
not, but clean energy,
believe it or not.
Clean energy research.
So all these areas, and
you could add many more,
are areas that are
characterized by, really,
these leaps of faith in
technology disruptions
into commercialization
and the need
for tons of investment,
tons of necessary resources.
And to make it very, very
clear, one other pain point
that we looked at
was, well, what
happens when a student
who's working on this today
graduates, and imagine that
they need to replicate MIT.nano.
Well, it's impossible for a
startup to replicate MIT.nano.
I mean, they couldn't.
The capital efficiency
and the capital investment
demanded from investors is
not sufficient to really
be able to do that.
And therefore, people
end up quitting.
So that came about to say, well,
let's do something about it.
And it became The Engine.
It had a different code name,
of course, as you can imagine.
But we launched
it as The Engine.
And The Engine was this
vision and aspiration
to help tough tech founders
around this region,
in particular at MIT.
But it really opened to
this region's entrepreneurs
to be invested in this
area, because we believe
in the power of proximity
and we wanted to have access
to this network of resources.
So we launched publicly
the vision and the ambition
in October of last year.
It had great reviews,
but a lot of skepticism.
Of course, if it hasn't
been done, there's a reason.
But if I said that and we didn't
do it, it wouldn't be MIT.
So we wanted to do
something about it.
We wanted to test it.
And because it was MIT, and
because it was built by MIT,
I think it got the attention,
in many ways like when
MIT launched MITx
and Digital Learning.
And then we launched EdX
in connection with Harvard.
It provided the credibility
and the long-term vision.
So what is this?
And I'm not going to go
through the full slide
because it's too busy.
But what it's meant to indicate
is that, not just within MIT--
I mean if you look at the
top of this MIT Innovation
Initiative, sandbox, lots of
programs that span the VMS,
you name which
ones that we have.
But all the others that are
part of the original network
of innovation within
Boston, the greater Boston
area in Massachusetts.
So can we take something
that gives them
the funding necessary
for this tough tech
innovation, the kind
of input and reviews
and infrastructure
necessary to succeed,
and build a bridge or the
extension cord for them
from the laboratory all the
way to these commercial impact?
It's a simple idea.
But of course, the idea needed
to be validated and funded.
So it has many components.
It has a space component.
It has an infrastructure
component.
It had a fund.
It had, of course, a
selection criteria.
And this was the first thing
that we needed to cross at MIT.
We're used to having
lots of initiatives that
are educational in nature
that help out entrepreneurship
and innovation.
But they're accessible to all.
In this one, we needed to
have a filter and a criteria
for passing that.
And we wanted this
great idea not
to be done by MIT because
there was lots of conflicts
of interest with that.
So we hired an
independent person
to run The Engine, who makes
and is charged with doing that.
The person is Katie Rae,
well-known in the Boston
regional ecosystem.
And she and her team are
making the investment decisions
for the companies
that enter The Engine.
The Engine fund started with an
ambition to raise $150 million,
and MIT committed $25 to it.
I can anticipate to you,
I cannot disclose the full
amount.
But we will be either
shy or over $200 million.
So there was lots of skepticism
about will we have investors
believing in this mission.
And we wanted investors
that were aligned
with what we were
trying to do, not just
financial return investors.
And to make sure that
that was the case,
the fund was created
in a way that, instead
of being an eight-year fund,
it was an 18-year fund.
So we wanted to make sure that
people entered into this fund
because they believed
in the mission.
We also believe that we
will get financial returns.
Otherwise, we would
not be creating a fund.
But at the same time, we
want to create the stability
to do this.
Another big part
of what we think
MIT could do to help out
these innovators is, about 70%
of the people we interviewed
and we surveyed, they had spent,
if they did get to
serious aid investments,
say, about $10 million serious
aid investment, they spend
about half to 70% of that, $5 to
$7 million dollars replicating
infrastructure they
already had when they
were at MIT or a laboratory.
We were aiming at that.
Because if you think about
software, all the money
they raise, they go to really
programmers to do at that.
So we wanted to equate
a little bit what's
happened with Amazon Web
Services and Cloud services.
The cost of
innovation in software
has dropped dramatically.
And you and a friend can do that
over the weekend with a laptop.
And that's pretty
much what you do.
Well, can we get to a
little bit of that paradigm?
So we came up with
this Engine Room idea.
And the Engine Room
idea was the idea
to open up the infrastructure
services that had already
been pioneered here
at MIT, within MIT,
by Professor Marty
Culpepper and the Mobius
application for maker spaces.
So again, we have all the maker
spaces available and visible
to every student at MIT.
That was his idea.
So we took that idea and said,
well, can we make it bolder?
Can we make every
piece of infrastructure
and specialized equipment in
the region open to the engine
start-ups and, ultimately, open
to any tough tech entrepreneur?
Of course, you can start with
the "why nots" very easily.
But we jumped on it.
We got 10 partners
very quickly, and we
started with MIT and
dreaming what that could do.
And what that
could do, and these
are real partners, but
not a real example,
is that if somebody is
creating some technology that
necessitates MRI imaging,
rapid prototyping
and fabrication, and certain
technologies that only GE has,
well, that's why.
We have Mass General connected
to MIT through the Martinez
imaging center.
We can access their
facility in Charlestown.
We can go to the seaport
at the GE headquarters,
and Flex has opened
a facility that
will enable to scale and
fabricate that device in a very
quick basis.
All of them have signed
agreements with The Engine
to do this, and to do it
either for free or at a price
that will be a lot cheaper
than a startup could access.
So again, by using the MIT
platform and The Engine
platform, what we're trying
to do is enable that access.
A different example
would be through MIT.
We will give them access
to MIT.nano facilities.
At a price, at a
commercial price,
but at a fraction of
the cost that a capital
investment would be required.
That's the whole idea.
To give you a sense--
this is now completely outdated
because the inbound requests
to be a part of the engine
are now shy of 1,000.
This snapshot was 200.
It was just when we
started looking at this.
The pie chart hasn't
changed that much.
The other idea we
had is, like, well,
will we really be
tapping the right market,
or will we have 90% of
people applying still
for software applications?
And it's not that we're
not going to fund software.
It may be.
But most likely, we will not.
And these were the
kinds of applications
that we were having.
Biotech, software, medtech,
energy, IoT manufacturing,
other.
Highly diversified,
great funding teams,
and great, great technologies.
And also, the other thing is,
well, will here be application
and free for all companies
that are already working.
And then the reality came
that most of these companies
were at the right stage
that we wanted them.
Most of them had not
raised more than $100,000,
and they needed a lot more to
even get to proof of concept.
So that was the perfect stage
for what we wanted to do
and what we wanted to bridge.
So take this engine
as the idea of MIT
doing amazing work
through throughout.
And we graduate postdocs and
grad students and undergrads,
and they want to do great
things for the world
and they want to have their
aspirations fulfilled.
This is one more
element that we hope
they will be accessing
through the MIT network.
So there's no more I can say.
But on September 19, stay tuned.
We will be disclosing the
first cohort of companies
funded by The Engine.
They are amazing companies,
and I will just tell you,
they have a lot of
alumni connections.
So here it is, financial
physical environment.
And now one of the
programs that I
happen to be very familiar
with with the engine that
were doing.
