Building an Effective                University Technology                U i     it T h l                  Commercializat...
Commercialization Activity Flow College A                    Center I College B                    Center II              ...
Disclosures                        700                        600                                                         ...
Input –Outputs             (averages are red, goals are green; middle horizontal is “good,” top and bottom of red is below...
Commercialization Effectiveness*                             250.000                                                      ...
Typical University Challenges          Typical University Challenges• Disclosure rate is low. Why?     – Operational issue...
Technology Value Curve                                          Spinoff Value                                          Spi...
Spinoff Development                     Spinoff Value Generation            Phase 1           Phase 2           Phase 3   ...
Small-Light-Fast      Small Light Fast          Money• Small amounts with immediate  milestones (4 months or less)      m...
Spinoff Development                           Spinoff Value Generation                  Phase 1            Phase 2        ...
Utah Experience:           Grants Facilitated Investment$600,000,000$500,000,000$400,000,000$300,000,000$200,000,000$100,0...
Utah Experience:                        Return on I                        R t       Investment                           ...
Results• Spanning Valley of Death  Spanning Valley of Death    • The Gully of Inconvenience• Le era e in estor dollars  Le...
Universities and the                  Innovation Ecosystem                “Universities do not get enough credit for      ...
Financial Returns College A       Center I College B                                           Licenses to               I...
Enriches Research• Translation process  generates questions  generates questions• Creates new funding  opportunities   – C...
Total Mission Integration• Educational programs > 2600 students    Defining educational experience     Defining education...
Utah Transformed Operation• 2004 “Technology Prevention Organization”• Throwing technologies over the wall   Throwing tech...
Tech Ventures Team/Process             Glenn Prestwich                                       >$1.2 million revenue        ...
Utah Inventors, Startups, & Revenue                                             Faculty Inventors                         ...
Research and Innovation                            Dr. Geoffrey Nicholson                           inventor of the Post‐I...
Supporting Research Impact• Leverage/OPM    – Grants    – Donors    – Effort• Fund Critical Paths  Fund Critical Paths    ...
Changes Utah Made                      g• Total Mission Integration  – Integrated student programs enhance University, eng...
Path to Excellence1. Reinvent: Prepare to succeed (8‐12 months)    a) O     ) Operational revisions              i   l   i...
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University commercialization

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Description of commercialization process, analytic framework for evaluating relative university success -- separating "good" from "big" -- and recommendations for creating an effective organization.

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University commercialization

  1. 1. Building an Effective University Technology U i it T h l Commercialization Organization Jack Brittain, PhD Pierre Lassonde Presidential Chair Professor of Management P f fM t University of UtahJack Brittain 1
  2. 2. Commercialization Activity Flow College A Center I College B Center II Licenses to  College C Existing  Companies College D Disclosures Center III & Patents College E Center  Licenses to  College F IV Start‐up  Companies College G College G Center V College HPapers Patents ProductsJack Brittain 2
  3. 3. Disclosures 700 600 CalTech 500 sclosures MIT 400 Disclosures umber of Dis Predicted Disclosures 300 Top 50 Predicted Goal 1 disclosure/$1 millionNu 200 100 0 $0 $200 $400 $600 $800 $1,000 $1,200 Millions of Federal Research Dollars (scatter plot is 80 selected reference institutions, including top 50, 2009 AUTM)Jack Brittain 3
  4. 4. Input –Outputs (averages are red, goals are green; middle horizontal is “good,” top and bottom of red is below average) Licenses Goal 35/$100 million Startup Goal 5/$100 millionLicenses Goal 37.5% of Disclosures Startup Goal 10% of Disclosures Jack Brittain 4
  5. 5. Commercialization Effectiveness* 250.000 Cleveland Clinic High Disclosure/ / $100 Million Low Conversion Low Conversion High Disclosure/ High Disclosure/ 200.000 in Federal Research High Conversion 150.000 Mayo yDisclosures / Clinic Cal Tech 100.000 CMU 50.000 MITLow Disclosure/Low Disclosure/ Low Disclosure/ /Low Conversion High Conversion 0.000 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 Start‐ups / $100 million in Federal Research Jack Brittain * Association of University Technology Managers (AUTM) Annual Surveys, 2007-2011 5
  6. 6. Typical University Challenges Typical University Challenges• Disclosure rate is low. Why? – Operational issues? Probably Operational issues? Probably. – Culture issues? Probably.• Conversion rate is low, licenses and startups.  Why? – External engagement? Internal focus in office? – 90% of why the revenue numbers are average 90% of why the revenue numbers are average.• Start‐ups rate is partly disclosure rate issue – Faculty engagement matters, problem is likely more  y g g ,p y than just disclosure problem – Program coordination matters: align efforts Jack Brittain 6
  7. 7. Technology Value Curve Spinoff Value Spinoff Value Generation • Prototyping  • Incorporation Where Universities •LLogo/website / b it Traditionally Add Value • Corporate Secretary • CFO Solutions • Umbrella Insurance •M k t Market research h • Grants programs PROOF OF  COMMERCIAL MARKET  IDEA PROTOTYPE CONCEPT LAUNCH EXPANSION Commercialization StageJack Brittain 7
  8. 8. Spinoff Development Spinoff Value Generation Phase 1 Phase 2 Phase 3 Phase 4 Formation Business Operating Market • Legal Formation • Business  • Customers  Entry • Technology  Model Testing  • Marketing/ License • Product  Product Sales Phase 5 • Product  Validation • Investors • Strategic Long Term Development • Product Product  • Key Managers Key Managers Partnerships P hi • Logo, web development  • Board of  Growth • New Products   • Product  grants Directors & New IP in  development  • Angel & Seed  • Bank Credit Development grants Investors COMMERCIAL MARKET PROTOTYPE LAUNCH EXPANSION Commercialization StageJack Brittain 8
  9. 9. Small-Light-Fast Small Light Fast Money• Small amounts with immediate milestones (4 months or less)  money chases success as milestones accumulate• Li h regulation and administration Light l ti d d i i t ti  little administrative overhead in making awards  University recommends, accountability is portfolio results University recommends, accountability is portfolio results• Fast decisions sustain technology development  momentum, facilitate continuity of effort y Jack Brittain 9
  10. 10. Spinoff Development Spinoff Value Generation Phase 1 Phase 2 Phase 3 Phase 4 $1,000,000 Investment Formation Business Seed Funds e g Kick Start Operating Angels & Seed Funds, e.g. Kick Start Angels & Market • Legal Formation • Business Plan • Customers  Entry Total Potential • Technology  • Product  Testing  Startup Funding • Marketing/ License Up to $1.2 Million Product Validation Sales Phase 5 • Product  Federal SBIR/STTR• Investors • Product  $2,455,000 • Strategic Long Term Development development  • Key Managers development Key Managers ($1,445,000 is ($1 445 000 is Partnerships P hi • Logo, web grants $50,000 External • Board of  Growth Grant Funding) • New Products  • Product  Technology Development • Angel & Seed  Directors & development  Grants (4 times) Investors • Bank Credit IP in  grants $25,000 Foundation development p $5,000 Technology Commercialization T h l C i li i Micro Grant Grant (2 times) COMMERCIAL MARKETPROTOTYPE LAUNCH EXPANSION Commercialization Stage Jack Brittain 10
  11. 11. Utah Experience: Grants Facilitated Investment$600,000,000$500,000,000$400,000,000$300,000,000$200,000,000$100,000,000 $0 2005 2006 2007 2008 2009 2010 2011 2012 Cumulative Grants Funding Cumulative Investment Funding Jack Brittain 11
  12. 12. Utah Experience: Return on I R t Investment t t$1,600,000,000$1,400,000,000$1 400 000 000$1,200,000,000$1,000,000,000$1 000 000 000 $800,000,000 $600,000,000 $600 000 000 $400,000,000 $200,000,000 $200 000 000 $0 2005 2006 2007 2008 2009 2010 2011 2012 Cumulative Grants Funding Cumulative Investment Funding Value Private Companies Jack Brittain 12
  13. 13. Results• Spanning Valley of Death Spanning Valley of Death • The Gully of Inconvenience• Le era e in estor dollars Leverage investor dollars• Community engagement • Entrepreneurs In Residence • Commercialization Advisory Board and Company Collaborations and Company Collaborations• University participates in equity upside Jack Brittain 13
  14. 14. Universities and the Innovation Ecosystem “Universities do not get enough credit for the fact that as players in our innovation ecosystem, they’re willing to gamble on cash-strapped startups. At the end of the day, who else is offering to pick up the tab? … Warts and all, universities remain willing to pay patent costs to support expensive and increasingly sophisticated IP strategies for startups who will likely never b able to pay them back.” be bl t th b k ” - Melba Kurman, Triple Helix Blog, 25 Feb 2011Jack Brittain 14
  15. 15. Financial Returns College A Center I College B Licenses to  Industry Existing  g Research Companies College C College D Center II Disclosures & Patents License Royalty Income Income College E College F Licenses to  Start‐up  Equity College G College G Companies Returns R t College H Center IIIJack Brittain 15
  16. 16. Enriches Research• Translation process generates questions generates questions• Creates new funding opportunities – Commercial sponsors tend to be repeat customers – Less than Federal, but can be stable and grow steadily stable and grow steadily• Work with faculty who want to be involved – Does not matter if faculty opt out – Faculty success generates interest Jack Brittain 16
  17. 17. Total Mission Integration• Educational programs > 2600 students  Defining educational experience Defining educational experience  Huge positive for faculty• Donor gifts over $80 million g $  Lassonde Center/Institute  Sorenson Discovery Center AAnnual sponsorships over $1 million l hi $1 illi• University Venture Fund  manages $18.5 million in Fund I manages $18.5 million in Fund I  Fund II target is $50 million Jack Brittain 17
  18. 18. Utah Transformed Operation• 2004 “Technology Prevention Organization”• Throwing technologies over the wall Throwing technologies over the wall “hoping the coyotes will raise them”• Bottom half of TTOs, ranked 96th 2008 Sugar Bowl Trophy • 2008 Tied MIT #1 AUTM survey for  number of technology spinoffs • 2009 and 2010 #1  • 2011 #2, MIT #1 • FY 2006 to present: FY 2006 to present: • 1,117 disclosures, 456 executed agreements • 388 new inventors • 256 issued patents Fortress Ruins • 142 start‐up companies • $ g y y over $200 million licensing and royalty revenues • over $300 million commercial‐sponsored research Jack Brittain 18
  19. 19. Tech Ventures Team/Process Glenn Prestwich >$1.2 million revenue >$100 million Presidential Professor Presidential Special Assistant Software Dev Center Seed Funds Entrepreneurial Faculty Scholars Ron Weiss, MD Medical Accelerator • KickStart retired ARUP CEO retired ARUP CEO Energy Comm. Center Energy Comm Center • UpStart ≈420 faculty Faculty Outreach Venture Bench • Lineagen 15% total faculty 5‐8 faculty case load • Vendice Troy D’Ambrosio y • Navigen Seasoned Entrepreneur Doug Lloyd/David Dolan l d/ d l • Founder Fund d d Serial Entrepreneurs Raised Capital > $600 million Entrepreneur in Residence • UVF Director of Education Programs > 100 business people > 2600 students Bryan Ritchie, Director and Associate VP 25 fulltime professionals + 30 student interns Research Technology Commercialization/Commercial Research$300 million 300 “Inventions” 120 Potential Licensesfederal research Commercialization 30 Potential Companies Company Jack Brittain 19
  20. 20. Utah Inventors, Startups, & Revenue Faculty Inventors Revenues $90,000,000180 $80,000,000160 $70,000,000140 $60,000,000120 $50,000,000100 $40,000,000 80 $30,000,000 60 $20,000,000 $20 000 000 40 $10,000,000 20 $0 0 FY FY FY FY FY FY FY FY FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 2004 2005 2006 2007 2008 2009 2010 2011 Repeat Inventors New Inventors Commercial Research Commercial Clinical Research Licensing Start-ups2520151050 1970 1 1971 1 1972 1 1973 1 1974 1 1975 1 1976 1 1977 1 1978 1 1979 1 1980 1 1981 1 1982 1 1983 1 1984 1 1985 1 1986 1 1987 1 1988 1 1989 1 1990 1 1991 1 1992 1 1993 1 1994 1 1995 1 1996 1 1997 1 1998 1 1999 1 2000 2 2001 2 2002 2 2003 2 2004 2 2005 2 2006 2 2007 2 2008 2 2009 2 2010 2 2011 2 Jack Brittain 20
  21. 21. Research and Innovation Dr. Geoffrey Nicholson inventor of the Post‐It™: “Research is the Research is the  Innovation is the  Innovation is thetransformation of money  transformation of knowledge  into knowledge. into money.” As innovators, universities are unique in their dedication to reinvesting innovation returns in knowledge creation and dissemination dissemination. Jack Brittain 21
  22. 22. Supporting Research Impact• Leverage/OPM – Grants – Donors – Effort• Fund Critical Paths Fund Critical Paths – Monitor milestones – Do not fund “no results” – Post performance funding: money chases success• Outcomes depend on shots on goal p g – control strangles speed and momentum – place small bets with immediate milestones• C it l f Capital formation is about outcomes ti i b t t Jack Brittain 22
  23. 23. Changes Utah Made g• Total Mission Integration – Integrated student programs enhance University, engage faculty g p g y, g g y – Industry sponsored research largest contribution to resources• Cost recovery to investment model – Cost recovery is inevitably a failure – Investment logic produced tangible economic returns over long term – Changed the nature of our work to the positive g p• Programs mitigate early stage risk – Provide leverage for investors g – Platform for community engagement – Encouraged capital formation Jack Brittain 23
  24. 24. Path to Excellence1. Reinvent: Prepare to succeed (8‐12 months) a) O ) Operational revisions i l ii b) Faculty and departmental outreach2. Motivate: Faculty engagement (month 12+)2 Motivate: Faculty engagement (month 12+) a) Launch entrepreneurial faculty scholars b) Leadership engagement President to Deans Leadership engagement, President to Deans3. Lead: implement coordination for all innovation  and entrepreneurship activities (ongoing) p p ( g g) a) Depends on trust of motive b) Ongoing investments in program innovation Jack Brittain 24

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