Let’s face it, the Technology Transfer Office (TTO) has an exceedingly difficult and complex job to do. And if not executed to perfection, while faced with so many variables beyond control of the Office, heads may easily and frequently roll.
How can we possibly improve TTO performance?
And, why should we even care to?
At its essence, the TTO mission is to jailbreak innovation in order to improve the human condition.
Clearly the Office has set a lofty aspiration bar, and why shouldn’t it? Shoot for the stars and land on the moon my madre would always say. Many of us have learned the oft-painful lesson that a worthwhile endeavor is rarely ever easy to achieve. Those of us blessed of sound mind and body and business acumen (yes all three elements are requisite) have a responsibility to serve as adjuvants (how’s that for integrating some immunology into the discourse) via this extraordinary opportunity – to make the world a better place – for those who cannot…
Historically TTO success metrics have been tethered to benchmarks such as Y/O/Y growth in numbers of invention disclosures, patents applied and issued, and licenses/options granted. Technology transfer, just as any other business, is fundamentally determined a success or failure, not so surprisingly, by focusing upon the top-line revenue performance. This is a no brainer, right? You don’t need to be a Harvard MBA to know a business can only endure for so long if operating at a loss. Well, according to a recent Brookings study, it is estimated that most universities do not generate enough licensing and royalty income to cover the wages of their TTO staff and the legal costs for the patents they file – and that over the last twenty years approximately 87% of TTOs fail to achieve break-even, staggeringly disappointing numbers indeed. Thankfully most of these offices are able to rely upon support from the broader university, as only a very small minority of TTOs are capable of self-support.
Success of the TTO has much broader and profound implications than simply a monetary return – though there are many examples of such blockbuster earnings, here are just a few in an effort to grab your attention:
It may sound pedestrian, but at its core the key to improving the human condition is via the creation of a translational culture within the hallowed halls of the research University, one that nurtures and grows innovation and where entrepreneurial thinking is fundamental – and the key performance indicator is simply … the spinout startup new company. Companies that spinout of university are disproportionately high performing, where ~8% IPO, which is ~>2X the rate of US enterprises (Litan, et. al. 2007).
We must encourage and cultivate a logarithmic acceleration in growth of the number of spinouts from the research University. As it is the spinout company that enables a nascent technology to have the best chance for achieving a commercialized product that may function to treat or cure disease, pinpoint new energy sources and stabilize existing resources, address climate change challenges, revolutionize travel, transform communication, tackle poverty, improve agricultural yields, end hunger and provide access to sufficient clean and safe drinking water to all, to name a few.
It is easy to wax poetic about what needs to be done, often less easy to illuminate how to do it. Here is my effort to suggest and willingness to work towards seeing a hastening of such an increase in spinout creation:
In an environment where the TTO is commonly under-resourced and over-burdened it is a near impossible ask for just a handful of office associates to suss data outputs from hundreds if not thousands of faculty, post-docs and graduate students and then quickly make an assessment of its downstream commercial potential. An intermediary catalyst is required to supplement the office work to identify *more* opportunity.
We should embed Entrepreneurs in Residence (EIRs) at the department level, whereby intimate relationships may be formed, beyond only faculty but to also include research associates, post-docs and graduate students.
Sidebar interesting point to note: in Norse mythology, Eir, which translates as “help” or “mercy” is a goddess associated with a medical skill.
In our example the EIR, not Eir, should be unleashed within a defined neighborhood amongst the broader University, enabling deployment of focused expertise, and one where deep understanding of potential embryonic technologies may be leveraged. Ideally the EIR should bring to bear demonstrated acumen in the departmental discipline, a history of success in the early-stage environment, an ability to manage and team build, as well as a rolodex full of public and private capital sources. These arrows in the EIR’s quiver paired with the shared passion to improve the human condition should combine to require no more than a favorable equity position in said potential spinout or spinouts as incentive-based compensation. Surely this is the characterization of a rare individual, but I know they are out there because I have met them, time and time again. The TTO does not require a line item in the budget, the EIR is focused on her mission to create a company, and the inventor receives the attention and industry-based partnership that often does not arrive in the lab until much later when precious resources may have been exhausted on purely academic experiments rather than on those that are translational in design.
Certainly as many interdisciplinary efforts are stood up, where the departmental lines are blurred – akin to for example what the University of Colorado is doing with their BioFrontiers Institute, lead by former HHMI President and Nobel Prize winner Thomas Cech, Ph.D., bringing together researchers from the life sciences, computer science and engineering to uncover new knowledge – there can easily be an EIR inserted to collaborate within the boundary lines established by such innovative units.
What we need to achieve is a Henry Ford-like mass production approach to the amplification of University spinouts. Here experts in narrowly scoped tasks staffed the continuous flow assembly line. I suggest there are similar efficiencies to be harvested via embedding Entrepreneurs In Residence at the department level, rather than by unleashing one to the entire university.
> So, if you are a potential EIR please contact me as I would be overjoyed to connect you with an interested TTO.
> And, If you are a potentially interested TTO please contact me as I would be overjoyed to connect you with a talented and eager EIR in waiting.
And finally, I would be remiss if I were to overlook highlighting Covalent Data, an Innovation Intelligence platform, specifically designed to accelerate the opportunity identification process for TTO, researcher, industry, foundation and grant agency. Yes, there is no doubt about this not-so-subtle plug, but hey, this is my blog and Covalent Data is a transformative resource that you should know about.
According to the National Business Incubation Association, there were over 1,250 incubators in the United States as of October 2012 (!), and that number surely grew in 2013. By way of comparison there were just 12 incubators in the United States in 1980.
Incubators are often one component of a larger entrepreneurial ecosystem consisting of physical co-working spaces, new and experienced entrepreneurs, mentors, assorted venture capital and angel investors. Unfortunately the law of probability suggests that only a small percentage of the accelerated startups emerging from these communities will become self-sustaining. But all this accumulated experience – from successes and even more so from failures – should not go to waste.
The many entrepreneurs who have recently worked on software or web applications may wish to consider, either now or in the future, turning their attention to the challenge of bringing hard science innovation from universities to the general public. In other words, they should consider the technology transfer process. The incubators and accelerators can help. These entities have not yet begun to effectively connect with, and explore the technology available at universities and research labs.
We think there are several reasons why incubators/accelerators have not, yet, taken advantage of the tech transfer process. First, while university technology transfer offices often make data about licensable discoveries available on their website, this information, without much more context, is not as immediately actionable as it could be for entrepreneurs, their mentors and the incubator communities. Second, investors coming from tech – especially software – do not have much experience with the technology transfer process, and expertise from successful university licensees tend to remain siloed within life sciences or niche engineering and materials science. Collective IP solves these two problems.
In the coming months we will delve into the incredible opportunities presented by university research discoveries, and how local entrepreneurial ecosystems – including experienced entrepreneurs moving on from software and web applications – can benefit from the tech transfer process.
Posted in Innovation Intelligence
In a recent opinion piece published in the Proceedings of the National Academy of Sciences titled “Changing the academic culture: Valuing patents and commercialization toward tenure and career advancement” the authors suggest that the reason universities have been slow to take on their proper role in the innovation economy is because of “a lack of change in incentives for the central stakeholder, the faculty member.” The authors argue that “universities should expand their criteria to treat patents, licensing, and commercialization activity by faculty as an important consideration for merit, tenure, and career advancement, along with publishing, teaching, and service.”
We certainly agree. And if such incentives lead to more tech transfer success it will create a positive feedback loop which will further incentivize faculty.
But the production of patents is only one small part of the process of going from pure research to successful enterprise. There is a long distance to be travelled between obtaining a patent and the licensing of that patent to a startup for purposes of creating a company. And then an even greater distance to be travelled in making that startup a success, so that it generates meaningful licensing revenue back to the university.
We think “commercialization activity” should include participation in the local startup ecosystems (i.e. the broader community of entrepreneurs, investors, mentors, etc.) The university can help, by providing for example, meeting and work space, research assistance and a variety of other value-add resources.
Aligning incentives more closely to the innovation economy, as the authors suggest, is a great idea, but in a vacuum it may have little impact. Effectively and efficiently connecting those faculty, who are amenable to a commercial lens on their work, with the broader community of entrepreneurs, investors, mentors and local startup ecosystems would likely yield a greater impact. Collective IP works diligently to lubricate this university/faculty connectivity with industry. We invite you to participate, start by identifying your university here: https://www.collectiveip.com/technology-transfer.