Agitators, innovators, evangelists and maybe even some angels (as in investors) gathered Feb. 23 for a
-hosted conversation on technology transfer.
At issue: how to bridge the gap between inventors and entrepreneurs and smooth the runway for the commercialization of innovations and intellectual property produced by Minnesota researchers.
The event took place on the U of M's West Bank campus. The panel of six, which was moderated by MOJO "agitator" Rick Brimacomb, represented the university (and Mayo Clinic) research side, the entrepreneur side, and someone in between: recent U of M graduate-turned entrepreneur Alex Johansson, co-founder and CTO of the startup NewWater, LLC,
Jay Schrankler, executive director of the U of M's Office of Technology Commercialization, offered some statistics about the university's improving track record of "spinning off" companies--and ones that stay in Minnesota.
From 2001–2006, said Schrankler, 14 companies spun out of the university, of which four still exist. Of the147 jobs those companies created, 111 are in California now--an example of the tech-and-talent drain that was a key topic of the MOJO conversation.
By contrast, 23 companies have come out of the U of M since 2006, he said, 21 of which are still around. They account for 50 jobs, all of which are in Minnesota, according to Schrankler.
Early conversation addressed the success or failure of tech-transfer attempts.
"Success is a deal that doesn't fall through," said Jeff Carpenter, senior portfolio manager for Development Capital Networks. He outlined mistakes he sees companies making in the process of bringing research to market.
"The companies tend to … overestimate the stage of development, and they underestimate the cost and the time to get something to market."
Lee Jones, CEO in residence at the university's Venture Center, stressed the importance of similar expectations on the parts of the researchers and entrepreneurs.
"When I hear people say 'it's hard to get technology out of [the university],' what I really hear is that they, a) don't know how to access it, or b) they have expectations that they are getting more than [the concept of the technology].
"There's expectation that the development process has already taken place, or that the inventor is going to willingly hand over all of his information," she said.
Schrankler laid out the four elements necessary for a successful start-up company: the right technology, a good market for that technology, a good management team, and, of course, capital.
Johansson hit on a key point with his advice for entrepreneurs looking to license technology from the university.
"[The university's] one concern is the revenue that's going to get generated by this technology," he said, "and by licensing it to you, they are preventing anyone else from generating revenue with [that] technology."
Schrankler followed with a breakdown of revenue return: one-third rightly goes to the inventor, he said, and the rest goes back into research.
Later, conversation turned to the potential for technology to flee the state. While the university is strong in biotech research, "If you have a biotech invention, and you want to spin off a company, where is it going to end up?" asked Carpenter. "San Francisco or Boston."
Johansson noted that, of 40 recent, top-of-their-class graduates he knows, all have jobs, and only four are in this state.
Schrankler assured potential entrepreneurs that the university is trying to not send technology out of state--despite opportunities to do so--and he asked them to be patient.
"We have more potential companies in our pipeline right now than the system can handle," said Schrankler. "Have patience with us. The longer we can keep that company inside the university and work the problem so that it can stay here…"
An audience member asked why so much emphasis was put on biotech research at the university when the Twin Cities has stronger markets for other technology.
"We are the Silicon Valley of medical devices," said the audience member.
The argument was also made that the region's concentration of med-tech chokes off the potential for growth in other areas.
To this point, Carpenter advised entrepreneurs to diversify their interests in technologies.
"There's more here than just med-tech," he said. "Maintain what you've got with med-tech, but support all the other innovations out there."
"God bless you!" responded Darren Cox, founder and "chief evangelist" of Commerce and Search for Tech Transfer (CaSTT).
Earlier on, he had given prospective entrepreneurs some simple advice:
"Be curious … and figure out what it is that you're interested in that is going on at the U. It's a huge place, and they are some of the most amazing things that I've ever seen coming out of research.
"There are gold mines here, trust me," said Cox. "There are cash machines, and entrepreneurs who ignore the university's innovations are doing themselves a great disservice."
Source: MOJO Minnesota tech transfer conversation, Feb. 23
Writer: Jeremy Stratton