Creating a University Ecosystem to Accelerate Commercialization & Energize Startups Collaborative...

Creating a University Ecosystem to Accelerate Commercialization

& Energize Startups

Collaborative Initiatives SymposiumMayaguez, Puerto Rico

19 October 2012

Diane Palmintera, PresidentInnovation Associates

[email protected]

copyright pending: Innovation Associates

www.InnovationAssociates.us 1

mailto:[email protected]

http://www.innovationassociates.us/

GOOGLE GROUPON

SUN MICROSYSTEMS

SILICON GRAPHICS NETSCAPE

CISCO SYSTEMS BIOGEN YAHOO

LYCOS MAPINFO

What do all these companies have in common?

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Associateswww.InnovationAssociates.us


www.InnovationAssociates.us Slide 3

They are all spinoffs from universities

The universities created

an internal and external ecosystem

that promoted technology transfer,

commercialization, entrepreneurship

and economic development.



Commercialization activities at U.S. universities have sky- rocketed

From FY1996-2011, U.S. universities and research

institutes:

More than tripled the number of active licenses.

More than doubled the number of licenses

executed each year; in 2011, there were 4,899

licenses executed, up 14% from the previous year.

And 591 new commercial products were

created.



Startups at U.S. universities are rapidly increasing

From FY1996-2011, universities more than tripled the

number of startups launched each year.

In FY 2011, there were 671 startups formed (of

institutions reporting to the AUTM survey).

Almost three-fourths of the startups had their primary

place of business in the licensing institution’s

home state.

copyright pending: Innovation Associates www.InnovationAssociates.us Slide 6

Startups are of growing importance as an economic development tool

Startups represent a growing share of university

commercialization activities.

Startups stemming from formal technology transfer

activities represent only a small portion of the

total enterprises spinning off from academic

institutions. Facebook and Google are good

examples.


Why are startups an important economic development strategy?

Startups are more likely than licenses to

corporations to remain in the community.

The extent to which startups remain in the

community depends on many factors including

the regional ecoystem, personal ties to the

community, access to capitalization, proximity to

potential customers, and others.



Valley of Death (courtesy: U.S. DoE)



Why is the Valley of Death important?

Lack of early-stage capital – increasingly risk-

adverse, and geographically concentrated VC &

angel investments.

Lack of staged investment capital.

Often insufficient understanding and capacity to

build business management.

Critical time lapses between idea and

commercialization when sufficient resources are

not available.



University commercialization as an economic development strategy

Academic institutions increasingly anchor

economic development in communities and

regions.

Knight/Gallup “Soul of the Communities” survey

shows that universities are important in creating

community ties.

Policy makers and community leaders are

increasingly viewing academic institutions as a

source of entrepreneurs and economic growth.



University commercialization as an economic development strategy (cont’d)

Spinoffs are more likely to remain in the community

where there is an active entrepreneurial

ecosystem.

University commercialization and entrepreneurship

are not just for the “big and famous”

institutions. University of Northern Iowa, Brigham

Young U., Rensselaer Polytechnic, and the University

of Akron are actively developing startups.



Community Colleges are engaged in entrepreneurship

Community colleges are increasingly engaged in

entrepreneurial development and startups creation,

and are actively developing linkages with

research universities.

Ivy Tech in Indiana and Loraine County Community

College (LCCC) in Ohio have created workforce and

entrepreneurship linkages with research universities,

and LCCC has a nationally recognized seed fund for

entrepreneurs.


Many universities successful in spinning off startups have

identified and targeted core research strengths, and

developed strategic plans to build and leverage

those core strengths.

This is particularly important for universities that have

modest research expenditures. Universities such as

Brigham Young U., U. of Akron (polymers), and

Rensselaer Polytechnic Institute (engineering) have been

successful despite modest budgets.

Successful tech transfer and entrepreneurial outcomes are built on substantial, excellent and focused research



Multiple internal factors affect the institution’s success in technology transfer and entrepreneurship

Leadership from the university president is often seen in

universities successful in technology transfer (T2).

Hiring and reward systems, especially tenure credit for

T2, impacts the “entrepreneurial culture” and related

outcomes.

Universities that are responsive to corporate differences

in missions, timeframes and communication styles are

more likely to have successful T2 outcomes.



I

Building solid, on-going relationships between

universities and corporations is more productive than

focusing on short-term licensing gains.

Positive corporate relationships can benefit the

university through contributions that may be

substantially higher than licensing revenue.

Internal factors that affect success (cont’d)



I

Administrative structure – A separate non-profit

organization, such as a research foundation, can provide

an arms length legal distance that benefits the university

and tech transfer.

Tech Transfer is a “Contact Sport” – Software and

other tech transfer tools help support collection and

processing of invention disclosures, legal and

management processes but do not replace personal

contact and the face time needed with researchers.

Internal factors that affect success (cont’d)



Entrepreneurial-engaged universities provide or facilitate access to a full range of services

Successful universities understand that engineers and

scientists often make poor business people and

address this weakness.

Successful universities provide, or facilitate access to

capital, build management capacity, accelerate

innovations, incubate entrepreneurs and support

networking.



Successful entrepreneurial universities have close

linkages to private seed/venture capital. They

facilitate linkages between researchers and startups,

early in the process.

An increasing number of universities have internal seed

capital funds and angel networks that invest in

faculty/student entrepreneurs. Effective funds not only

provide capital but also build management capacity.

Accessing capital



Entrepreneurial universities sponsor or encourage

linkages to enterprise forums or springboards that

screen, mentor and showcase promising academic

entrepreneurs to potential investors. (MIT Enterprise

Forum one of the first.)

Alumni networks often provide a good source of

angels, mentors and “Fellows” – a surprising number

want to “give back.”

Accessing capital (cont’d)



Often the major weakness of university startups is

inexperienced management. Hiring experienced

CEO’s and other top managers and providing

experienced management advice can be key.

Entrepreneurs-in-residence and mentors,

especially experienced serial entrepreneurs, provide

invaluable input and guidance to startups.

Building management capacity



Business plan competitions mentor and showcase

university entrepreneurs to potential investors. Their

value comes more from mentoring than financial

rewards.

Business School/Entrepreneurial Center/Law School

student interns and teams can address marketing,

intellectual property and business issues, benefitting

both startups and students.

Building management capacity (cont’d)



Acceleration funds/programs are increasing. These

programs such as VentureLab, MIT Deshpande and

USC Stevens Institute provide funding and help move

research from an idea to a commercialization stage.

Challenge grants that require or encourage

university-industry partnerships and commercialization

plans facilitate research translation to the market.

Accelerating innovations



Critically important are industry involvement

and university-industry partnerships of all types,

including:

Industry participation on academic boards,

Faculty/researcher exchanges and student internships,

Corporate research laboratory and/or incubation facilities on university premise,

Corporate data centers, and

Shared research & production facilities.

Accelerating innovations (cont’d)



Increasingly inter-disciplinary research and

acceleration programs contribute to innovative

startups.

Creating solid connections with external sources

for beta testing and clinical trials are important

linkages to establish.

Developing student teams to move the innovation to

prototype stage and beyond provide invaluable

learning experiences as well as acceleration.

Accelerating innovations (cont’d)



Effective incubators and research parks provide a

platform for entrepreneurial services beyond

the physical infrastructure. Venue counts; services

and external connections count more.

Research parks that effectively support

entrepreneurs develop linkages to the

university and to external sources of funding

and business assistance. A good example is

UWisc-Madison.

Incubating startups



Networking opportunities may be the most

important element. They should facilitate interaction

between entrepreneurs, and between entrepreneurs

and

Service providers,

Potential investors,

Potential partners, and

Customers – private, govt. procurement, and global.

Networking



Internally – R&D, entrepreneurship programs,

capitalization, acceleration, incubation and

networking should be connected within the

institution.

Externally – Between the institutional innovation and

entrepreneurship operations and local, state and

private ones.

Connecting the dots



Regionally – Across borders; dictated by natural

growth of clusters and entrepreneurial activities, not

by artificial geographic or political boundaries.

Globally – Connections dictated by potential

benefit from R&D collaboration, production, and

outreach to customer base.

Connecting the dots (cont’d)


University commercialization is part of a larger regional ecosystem

Courtesy of the University of Akron Research Foundation



From Core Capacity to Regional Impact

Initiatives• Tech Transfer &

Commercialization• SBIR/STTR & Other

Grant/Contract Assist.

•Mentoring• Investment Capital• Student Internships• Entrepreneurial &

Mgt. Capacity Building

• University-Industry Partnerships

• Univ.-Govt/ Philan. Partnerships

Impact• Startups Launched• High Wage Jobs

Created & Retained• Increased Revenue• Increased Mfg. &

Production• Increased Exports• Diversification • Expanded Supply

Chain • Mushrooming

Cluster Development

• Greater Community Ties & Satisfaction

Core Capacity• R&D Funding &

Expenditures• Science,

Engineering & Medicine Faculty & Students

• Inter-Disciplinary Research

• Research Centers• Laboratory

Facilities• Corporate

Linkages• Physical Infra-

tructure



Coulter Translational Research in Biomedical Engineering now has transitioned to TP2 involving 6 universities (in addition to first 9).

Increasing collaborations between biomedical engineers and clinicians, moving promising technologies to clinical application, and developing sustainable processes.

$580,000 each year for a period of five years.

Oversight Committee includes the BME Dept. Chair, Medical School reps, OTT, entrepreneurs, local Venture Capital, and the Business school.

National Translational & Entrepreneurship Models



Deshpande Center:

Since 2002, MIT’s Deshpande Center funded 90+ projects with over $11 M in grants, spinning out 26 projects that collectively raised over $350 M in outside financing.

The Deshpande Center employs several approaches:

• Grant Program – up to $250,000 for projects that have established proof of concept and identified an R&D path and IP strategy.

National Translational & Entrepreneurship Models (cont’d)



Deshpande Center (cont.’ed):

• Catalyst Program – Catalysts, a vetted group of individuals with experience in innovation, commercialization, and entrepreneurship work with faculty.

• Innovation Teams (i-Teams) – student interns work in teams to develop “go-to-market” technical & business strategies.

• Events – The IdeaStream Symposium and other events showcase MIT technology, and engage the VC and business community.

National Translational & Entrepreneurship Models (cont’d)



Blackstone “Launchpad”:

Opened in 2008 as part of the University of Miami Career Center, Launchpad treats entrepreneurship as a “career path,” offering guidance and resources through individual and group consultative sessions, workshops, and networking events.

Local Venture Coaches play a key advisory role.

Blackstone expanded the model to Wayne State U. and later a Northeast Ohio consortium; a new initiative of $50 million over 5 years (to start Dec. 2012) will further expand innovative entrepreneurial models.

National Acceleration & Entrepreneurship Models (cont’d)



National Science Foundation’s “I-Corps”:

NSF selected universities to develop and serve as hubs to conduct entrepreneurial training for science & engineering faculty, involving intense five-day sessions.

Now hosted by Georgia Tech, Stanford, and University of Michigan; a recent solicitation will result in several additional university hubs.

Additional current solicitation will result in smaller entrepreneurial nodes.

National Acceleration & Entrepreneurial Models (cont’d)



I-6 program:

Created by multiple agencies, lead by EDA, i-6 is intended to bring together multiple, public-private partners to identify a current or persistent problem or unaddressed opportunity, and implement innovative strategies.

Started in 2010 with six awards, two subsequent rounds in 2011-2012 have focused on energy & manufacturing.




Jobs & Innovation Accelerator Challenge:

A joint program by EDA, DoL/ETA, and SBA, is designed to generate startups and jobs through collaborative, cluster-based regional development. Most involve accelerating ideas to near-production or pilot-production prototypes in cluster driven industries.

To date, two rounds have awarded about 40 regions grants averaging $1.8 million that have targeted industries, including health care, energy, advanced manufacturing, and information technology.




National Network of Manufacturing Innovation Institutes (NNMII):

Proposed $1 billion public-private partnerships involving regional initiatives that bring together universities, corporations, manufacturers, entrepreneurs, workforce development, & investment vehicles for collaborative R&D, acceleration, and startups.

National Additive Manufacturing Innovation Institute (NAMII), a $70 million public-private pilot was awarded by DoD & DoC in August 2012 to a consortium involving PA, Northeast Ohio, & WVA.




Checklist for Academic Institutions[Excerpted/Paraphrased from Technology Transfer & Commercialization Partnerships ©]

Has the institution identified core research strengths and does the institution have a strategy for building its research base?

Is the institution’s president supportive of technology transfer, entrepreneurship and economic development; and is that support demonstrated in academic policies?

Is there “buy-in” from academic deans and faculty researchers; are there sufficient incentives to encourage “buy-in”?



Checklist for Academic Institutions (cont’d)[Excerpted/Paraphrased from Technology Transfer & Commercialization Partnerships ©]

Does the institution have sufficient funding and staff devoted to transfer, entrepreneurship and economic development?

Do the institution’s hiring, promotion (tenure) and intellectual property policies encourage faculty participation and promote excellence in technology transfer and entrepreneurship?

Does the institution have the infrastructure and services, and/or linkages with external resources to launch startups?




Does the institution have an “entrepreneurial culture;” does it celebrate and reward entrepreneurial success?

Are there effective research and commercialization relationships with industry; and is there sufficient flexibility and responsiveness to benefit both parties?




Do the institution’s policies and practices promote long-term benefits rather than short-term technology transfer gains?

Are academic administrators aware of the benefits derived from engaging in technology transfer and entrepreneurial activities?

Are state policy makers aware of the benefits?




Does the institution work with policy makers and organizations to develop and advocate for comprehensive strategies that support

Research & development funding,

Industry-university partnerships, and

Technology transfer and commercialization, and

Entrepreneurship?



Two IA reports are particularly relevant from

www.InnovationAssociates.us:

Technology Transfer & Commercialization Partnerships : Sponsored by the U.S. National Science Foundation (NSF), focuses on top emerging, smaller institutions.

Accelerating Economic Development through University Technology Transfer: Sponsored by the CT Governor’s Competitiveness Council, focuses on U.S. top performing institutions in technology transfer.




Emerging Issues & Recommendations for Technology Transfer and Commercialization in a Global Manufacturing Environment : With the Council on Competitiveness and University of Akron

Developing High-Tech Communities: San Diego: Sponsored by the U.S. Small Business Administration

Other Helpful Publications from IA’s Website:

copyright pending: Innovation Associates www.InnovationAssociates.us

Slide 46

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Web: www.InnovationAssociates.us

+1.703.925.9402

mailto:[email protected]


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