Inventing Entrepreneurs Prof. Gerry George Imperial College London Simple facts Scientists becoming entrepreneurs is not the smartest choice TTs, at their very best, aren t equipped to champion technologies by themselves There is a lack of entrepreneurial capacity that can understand and push technologies
Creating tensions! Universities (and their stakeholders) becoming increasingly demanding TTs ill-equipped to handle startups and licensing because they require two different types of talent, structure and incentives The application of university science requires new managerial talent to push forward 3 Imperial Innovations Working with inventors you need to apply an institutionalized process.. Stage 01 Sourcing ideas Market application Stage 02 IP Protection Stage 03 Proof of Concept Product Development Stage 04 Licensing Stage 05 Formation and incubation of technology businesses Stage 06 Investment Stage 07 Exits Page 4
The Challenges of Technology Transfer Technology getting out there Being used! Creating value The difficult choices are in Finding the market what is best use? Appropriating value how much? Rights who gets it? Page 5 Now which market? Cell Membrane Biocidal Polymer P P NH NH P Page 6
Where to look? Biocidal polymer Low concentration requirement High efficacy (kills everything; incl human cells) Can be modified for stability Can be modified for substrate specificity Page 7 Complicated enough? Market (application) Industry (competition) Value (capturing and sharing) License? Start-up? Page 8
Wisconsin Alumni Research Foundation Founded in 1924 Invention of Vitamin D Prof. Harry Steenbock (Biochemistry) Using $900 from 9 alumni of UW University should not participate in private benefit of public good Page 9 Steenbock s guidance Support excellence in research Willingly and without encumbrances Discourage complacency and encourage action Attract and retain high caliber scientific talent Incentives to invent Invest in the infrastructure In people In assistance In facilities Page 10
Pushing the Core Patenting and licensing Performance is stellar with licensing of 2 inventions How did these two inventions become stellar? What did WARF do to make these two runaway successes? Non-core capabilities Page 11 Exogenous Regulatory Events Average time decreases Variability decreases Page 12
Claims increase Portfolio increases Page 13 Graphic inferences Reduction of variance in time to patent Becoming better at a single core capability Inferring learning within core capability Mean Variability Difference (t-test) 1244 days 587 days 771 days 347 days p<.001 750 days 314 days p<.06 Page 14
So what about income? 18000000 16000000 14000000 12000000 10000000 8000000 Real Income Indexed Actual Net Income 6000000 4000000 2000000 0 year 1929 1934 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 Page 15 What else did WARF patent? Vitamin D Vitamin K Copper/Iron Complex for anaemia Warfarin (Coumadin) MRI Silicon heat dissipation Human embryonic stem cells Page 16
At what cost? Average cost to patent $23,445 Average cost to license $30,570 Average cost of licensed patent $54,015 Average cost of unlicensed patent $33,415 Average years to license 7.49 years Page 17 What gets licensed? 20 19 18 17 16 15 14 13 12 Patent number 11 10 9 8 7 6 5 4 3 2 1 0 2 4 6 8 10 Years to first license Page 18
Probability of license? Hazard rate function of licensing Hazard rate.01.02.03.04.05.06 0 2 4 6 8 Year Page 19 Being Entrepreneurial in Technology Transfer Entrepreneurial expositions and leadership Vitamin D testing labs Warfarin rodenticide testing Wurster process roll-out Institutional changes Tax and foundation laws Patent laws Page 20
The first invention Vitamin D Create Demand Create Brand Protect Demand Page 21 Some TT Solutions Focus on.. Try New Things! Finding markets Creating value Incentives for entrepreneurship Co-creation and co-development networks Engage larger corporates in co-venturing Fund prototyping and getting to proof of concept Consider a portfolio approach don t wait for licensees before patents Get your scientist stars fired up and help (Its not equitable, correct!) Use your student body more productively identify the smart and sparky ones Try/fund a startup internship program to cultivate entrepreneurial students Subsidize entrepreneurial capacity development B-school and Engineering Don t bother too much on Trying to get the most money on each deal There is no best deal! Page 22
Where does that leave us so far? It takes TIME! But patience will kill you first Licensing is a tough job but TTs get paid to do well Being entrepreneurial in licensing pays off Still doesn t solve the start-up problem Inventing Entrepreneurs who should read this book You are an inventor or blissfully deluding yourself that you can be Eureka! You discovered something interesting! You want to make sure that your innovation is used You are wondering if it is all worth it at the end You are likely contemplating an entrepreneurial option
It s a bunch of stories yes Profiles Profiles and and Experiences Experiences Spectrum Spectrum of of scientists scientists with with varied varied experiences experiences across across many many disciplines disciplines Analysis Analysis and and Tools Tools Participating Participating in in commercialisation commercialisation Success Success and and failure failure in in venturing venturing Understanding Understanding roles roles and and identities identities Real Real examples, examples, including including many many that that are are ongoing ongoing Evaluating Evaluating opportunities opportunities and commercial and commercial modes modes Personal Personal narratives narratives of of accomplishments, accomplishments, pitfalls, pitfalls, and and lessons lessons learned learned Preparing Preparing for for the the journey journey Building Building skills skills sets sets What are the stages in the entrepreneurial process? Personal challenges Market-driven challenges
How the book is organised Discovering Entrepreneurial ptions Chapter 9 Understanding Industry Context Chapter 10 Accumulating Business Skills Chapter 11 -- Primer on Financing Visualizing the Road Ahead Chapter 6 The Entrepreneurial Academic Chapter 7 Entrepreneurial Journey Model Chapter 8 -- Sample Journeys Assembling the Entrepreneurial Toolkit -- Entrepreneurial Purpose Inventing Entrepreneurial ptions Technology Licensing Lifestyle Businesses Cultivating an Entrepreneurial Identity Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 12 The Managerial Challenge Chapter 13 Preparing for Growth Chapter 14 Exit Preserving Identity Chapter 15 Identity, Growth and Learning on the Journey Discovering entrepreneurial options Decision to propagate invention Commercial venturing Foundations of entrepreneurial purpose Stages in the entrepreneurial process
Inventing Entrepreneur Profile Jo Handelsman Unique among our profiles: Handelsman never wanted to start or run a company commercialising her technology. Purpose of technology transfer Academic identity and entrepreneurial purpose I am pretty good at teaching and leading an academic research group, so why would I go off and do something for which I have no apparent aptitude. Personal element to research tech transfer is important not because we want to be entrepreneurs and not because we want industry running the university. Technology transfer benefits society and the university. my mother developed an immunological disease,. that ultimately caused her death after 17 years of miserable illness. there was just nothing I could do to help her fight the bacteria that were killing her. Prof. Jo Handelsman Professor Plant Pathology and Industrial & Systems Engineering University of Wisconsin - Madison Long term institution building At university research serves education Waiting is a luxury that industrial science simply can t afford. Assembling the entrepreneurial toolkit Industries and markets Industry attractiveness & value chain Disruptive technologies Start-up location choices & implications Cost and differentiation strategies New business road test Stages in the entrepreneurial process
Inventing entrepreneur profile Michael Stonebraker Five start-ups Served as CT twice & CE three times while faculty ne of the pioneers of relational database technology Focused on execution: its rare that you have to compete early on against the elephants, because they are slow moving. You have to prove it s a good idea to get their attention. It s all about executing at lightning speed. That s the secret to start-ups, spend no money and execute in zero time. Michael Stonebraker Professor Computer Science and Artificial Intelligence Laboratory Massachusetts Institute of Technology Clearly, these are not skills natural to academics! Preserving Identity Scientific identity Characteristics of inventing entrepreneurs Common experiences Stages in the entrepreneurial process
Inventing entrepreneur profile John Hennessy Pioneered the RISC (Reduced Instruction Set Computer) technology at Stanford, commercialised via start-up company MIPS Computer Systems. Transformative experience: It probably was the single most formative year of my life. You learn about leading people and managing teams; you learn a lot about focus. And you learn that there is a great reward when you build a product and people use it. Not always glamorous:... I did everything I wiped counters; I picked up donuts for the guys I hired people, I was the technical evangelist, I went on the road and did cold calls all the time. Prof. John Hennessy President Stanford University Co-founder of MIPS Technologies Academia over Corporate: It has to do with breadth and mental stimulation. There is no CE job in the entire world that has the breadth of this job [President of Stanford University], because no company has this breadth. Entrepreneurial journey model Roles Research ccupying positions expected to pursue knowledge discovering: scholar, professor, student, inventor. Commercial ccupying positions expected to engage in managing business: executive, manager, technologist, consultant. Technology-based Focuses on technology, invention, or application of science. Identities Market-based Focuses on end-users who with unmet needs or broadly unsolved problems.
Entrepreneurial journey space Combining responses to role and identity evaluations places an individual in one of the quadrants of the journey model matrix. A strong focus on long term research. B research focus on specific technology with some consideration of applications. C focused heavily on commercial applications to meet specific market needs. D commercial role based on specific technology embodiment. E - role designed to solve customer problem without as much focus on specific technology. Journey model matrix Types of Journeys The Research Transfer Entrepreneur The Sabbatical Entrepreneur The Research-driven Inventing Entrepreneur The Dual Role Entrepreneur The Corporate Entrepreneur The Business-focused Inventing Entrepreneur
Lessons from the journey model Venture path is not same as entrepreneur s journey. Every journey is unique and personal. Is there an optimal path? For a given effort, an optimal path can be discussed Journey transforms the inventor. A rich mix of thought and practice for Mindful Action Idiosyncratic initial conditions. Changes in roles and identity. f experiences of those who have taken them Skill sets for the journey Frameworks to understand the issues Highlighting the major challenges and opportunities Make informed choices on inventors involvement in entrepreneurship Inventing Entrepreneurs Prof. Gerry George Imperial College London