What exactly is the Funding Innovation Lab?
News from the Funding Innovation Lab: July 31, 2024, Edition 7
Welcome to LabCentral’s Funding Innovation Lab newsletter! Each Wednesday, we’ll be sharing a quick note from Beth McKeon, as well as timely articles to spark ideas and conversations about how the Funding Innovation Lab can identify critical challenges in the biotech funding model, rapidly test potential interventions, and share results with our community.
Each week, I’ve been sharing a little snackable idea around the approach the Funding Innovation Lab is taking to increasing funding equity for diverse founders. I talked about the value of universal design, nudges, tiny experiments, and how we innovate while preserving the best of the current systems.
But what is the Funding Innovation Lab, exactly?
Think of this initiative like a sandbox for developing and testing new best practices in venture.
This might seem a little nebulous and ephemeral. That is on purpose!
The Funding Innovation Lab takes inspiration from DARPA where some of humanity’s most important innovations - like the internet and GPS - have originated. A big reason DARPA has been so successful cracking open innovation on wickedly hard problems is because of the way they are structured.
From DARPA’s strategy, we are incorporating the idea of temporary teams that gather for a fixed duration of time to tackle an ambitious problem. Like DARPA, the Funding Innovation Lab is light on infrastructure and overhead in favor of being extremely nimble and fast-acting.
In order to create this “sandbox for developing and testing new best practices in venture funding”, we are focusing on three activities:
Convening the Community
We’re inviting into our “sandbox” community the practitioners who play a role in funding. This is includes investors and founders, of course. It also includes ecosystem partners like incubators, accelerators, university programs, and service providers. The work of developing new best practices needs the voices and perspectives of all of the players. Our community is also national by default. The strength of the community and the solutions we develop together will come from the diversity of our experiences doing this work in a variety of geographic and funding environments too.
Testing new best practices
Together, we are identifying the low hanging fruit - the behaviors, activities, and structures that could easily be modified or re-designed to be made more inclusive on purpose. For each experiment focus area, we’ll form a small team of 3-4 volunteers, recruited from our community to lead the design of a tiny, fast experiment to test these new approaches and see if they create the kinds of outcomes that create more opportunity or access for diverse founders. We expect each experiment to be completed in eight weeks or less, favoring velocity and momentum in surfacing new best practices.
Publishing the results
As we start to see results - both wins and fails - we’ll open source the learnings. As a sandbox for true funding innovation, we’re certainly going to run some experiments that don’t work the way we thought. Humans are irrational, after all, and often surprise us. However, with the velocity of learning we have planned (2 experiments this year, 15 experiments next year!), we’ll also certainly start to see some promising results, worth testing at a larger scale. By sharing these results openly, we will be encouraging our community to try out some of these new best practices within their organizations and looking for which learnings can really be replicated and scaled.
Similarly to our model, DARPA does not exist to commercialize and scale their innovations in house. They exist to innovate solutions that would be nearly impossible to solve anywhere else and in any other way.
And from Regina Dugan’s perspective (former DARPA director): “DARPA’s model offers an alternative, and its record of success proves that breakthrough innovations can be produced consistently, in remarkably short time frames, with a small, flexible, and agile organization.”
Let’s get started.
What we’re reading
The Funding Innovation Lab relies on a large body of scholarship and research-backed approaches. Each week, we’ll share snippets from the books we’re reading that provide inspiration for the kinds of experiments we may run in the future.
Instead of a book feature this week, I want to share a video and an article, both featuring Regina Dugan, former Director of DARPA. I mentioned in my post above that the Funding Innovation Lab is inspired by the way DARPA structures its innovation teams and tackles wicked hard problems. These two resources have helped inform those choices.
In this TED talk, Regina describes the importance of creating an environment where failure is not just a possibility but expected. True innovation looks like trying things that might not work.
And I particularly love how she lays out the “recipe” for innovation at DARPA in this Harvard Business Review article. The recipe prioritizes temporary teams working on hard but important problems for a fixed duration of time, all elements we are adopting in the Funding Innovation Lab model.
“Our current efforts suggest that organizations in the public and private sectors can dramatically increase their production of breakthroughs by adopting this model. The products and services created by these breakthroughs will improve the competitiveness of companies and countries. They also may restore a belief, that we can, indeed, shape the future.”
Watch the 20 min Community Kickoff presentation
The Funding Innovation Lab is a non-profit program, founded by LabCentral and led by Beth McKeon, with a mission to increase funding equity for women and BIPOC founders in the life sciences.
The Funding Innovation Lab convenes and supports innovators from across VC, universities, and entrepreneurial support organizations, as they run rapid design sprints to solve the persistent systemic barriers and bias in the fundraising and capital deployment process. The Funding Innovation Lab has an open-source policy, sharing the wins and fails from these experiments here on Substack and with its community of practitioners with the goal to see widespread adoption and replication of emerging best practices in this field.