Creative Destruction Lab’s incubator program at New York University’s Stern School of Business has ended after only a year, The Logic has learned.
CDL focuses on providing mentorship to early-stage science and technology startups. Its approach has been successful; companies that have graduated from its incubators have generated over $4.34 billion in equity value. The expansion to New York was its first foray beyond Canada’s borders, announced with much fanfare in fall 2017. Though 13 of the 27 companies in CDL-NYC’s first cohort graduated, the institutions said they mutually agreed not to continue the program. Since announcing the New York location, CDL has expanded to the U.K. and France, and said it will soon announce a new U.S.-based incubator.
“After a successful first year, the two institutions mutually agreed to end their partnership,” Jessica Neville, spokesperson for NYU Stern, told The Logic in an emailed statement last week.
Sonia Sennik, executive director of Creative Destruction Lab (CDL), also said the incubator’s closure was a “mutual” decision.
“We had different visions for the future,” Sennik told The Logic in an interview.
“The most important word in ‘Creative Destruction Lab’ is ‘lab,’ meaning we are always experimenting,” they said. “We experimented by trying a partnership with NYU. It worked well on several dimensions, but not others.”
Founded in 2012 at University of Toronto’s Rotman School of Management, CDL is a non-profit organization that focuses on providing mentorship to seed-stage science and technology companies. It doesn’t charge fees to the ventures it incubates, nor does it take equity in them. It has five locations across Canada, and now has sites at Oxford University and HEC Paris. Its graduate companies have generated over $4.34 billion in equity value.
The expansion to New York, announced with much fanfare in fall 2017, was CDL’s first foray beyond Canada’s borders. Dubbed “CDL-NYC,” its inaugural nine-month program received “a landslide of applications,” according to an official NYU press release from October 2018. Of the 289 applicants, the program accepted 27 ventures using technologies including artificial intelligence, therapeutics and medical devices. Its admission rate of roughly nine per cent made it “the most selective program in the CDL network.”
“We are creating the premier ecosystem of entrepreneurship education and programs here on the east coast,” said NYU Stern’s dean, Raghu Sundaram, in the release. “I am excited by the strides CDL-NYC has made in taking us closer to this vision.”
Despite those promising beginnings, however, the program ended in May of this year.
Sennik said the partnership delivered on “quality of startups and investors and mentors in the region,” and that CDL was “grateful” for the opportunity to have worked with the school.
“NYU is a great institution; they were not a right fit for our program,” they said. “What the future looked like for the program, we differed on that.”
Sennik declined to directly address the nature of the differences in the two organizations’ perceptions of the program. “It was a one-year experiment.”
Sennik added that in December, CDL will be announcing a new U.S.-based partnership with a university that is in the “top 10 in the world for engineering.”
There was no formal public announcement of the partnership’s dissolution. Most references to the CDL-NYC program have been removed from both NYU’s and CDL’s websites.
However, an archived version of a page from NYU Stern’s website trumpets “the CDL-NYC advantage,” which included being “founder friendly,” “collaborative mentorship” and “business support” from “students at Stern’s top-ranked MBA program.”
“CDL-NYC will foster an ecosystem to maximize the probability of success for science and technology-based, massively scalable, startups in the New York region and beyond,” an archived version of CDL’s website reads. “CDL-NYC will leverage the greater NYC region’s strengths as the world’s business capital, as host to the world’s foremost research institutions, and as the fastest growing hub in the U.S. for high-tech startups.”
The same month the CDL-NYC program ended, NYU Stern launched Endless Frontier Labs (EFL), which “reinforces NYU’s commitment to the thriving entrepreneurship ecosystem in the greater NYC region and U.S. markets,” Neville said in her statement to The Logic.
“EFL has no current engagement or affiliation with the Creative Destruction Lab.”
In a July 2019 press release, NYU cited the help of “EFL mentors” in the success of 13 companies that graduated from the CDL-NYC program. None of the companies responded to The Logic’s requests for comment prior to the publication of this story. Inquiries to NYU Stern staff and mentors that had been affiliated with CDL-NYC elicited a response from Neville instead.
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In February, The Logic broke the news that CDL was opening its first European location at the University of Oxford’s Saïd Business School. Sennik said the first Oxford session took place last week, and the program is hoping to select companies in the artificial intelligence stream from a pool of 270 applicants.
In October, CDL announced it was expanding to HEC Paris, an internationally recognized business school, next year to help 25 early-stage startups commercialize. The partnership came despite the French government’s concerns about Facebook’s Libra Association, of which CDL is a founding partner.
Future partnerships are not off the table, Sennik said.
“We’re always open to having discussions.”