The other day I asked the following question on Fred Wilson’s blog:

[There is a] disconnect between invention and entrepreneurship in universities. Aside from the obvious bureaucracies inherent in major institutions, how is this not a potentially valuable untapped market?

NYC has a tremendous academic force producing valuable research, a majority of which sits on the shelf and collects dust. Couldn’t this be a major source in helping to develop the NYC startup community?

Fred had a very simple answer:

All great companies start with an entrepreneur not a piece of research or technology.

His response couldn’t be any truer, but it doesn’t address an important aspect of my question: When do you invest in the entrepreneur and when do you invest in the product? (Obviously the perfect investment is a combination of the two, but you can’t get perfect all the time.)

Disruptive innovation does not have to come from the hands of an entrepreneur.  Not all products, disruptive or otherwise, are attributed to entrepreneurs.  Most academics and scientists are in their respective fields because it’s what they love.  They live to hypothesize, research, experiment, and invent.  A university researcher may create the next internet but not have the entrepreneurial drive to bring it to market.

So when do you hedge your bets on the product and not the company?  And what happens when you discover the golden product, but it doesn’t belong to an entrepreneur?  I think there’s opportunity within these scenarios (e.g. unique incubators and hands-on/managerial investments).  It may be difficult to navigate, but the returns can be very rewarding.