Building an EffectiveU i it T h l University Technology
CommercializationOrganization
Jack Brittain, PhDPierre Lassonde Presidential Chair
P f f M tProfessor of ManagementUniversity of Utah
Jack Brittain 1
Commercialization Activity FlowCollege A
College B
Center I
College CCenter II
Disclosures
Licenses to Existing
CompaniesCollege D
College E
Center IIIDisclosures& Patents
College F
College G
Center IV
Licenses to Start‐up
CompaniesCollege G
College H
Center V
Papers Patents ProductsJack Brittain 2
Papers Patents Products
700
Disclosures
600
700
CalTech
400
500
Disclosuressclos
ures
MIT
300 Predicted DisclosuresTop 50 PredictedGoalum
ber o
f Dis
1 disclosure/$1 million
100
200 Nu
0 $0 $200 $400 $600 $800 $1,000 $1,200
Millions of Federal Research Dollars
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Millions of Federal Research Dollars(scatter plot is 80 selected reference institutions, including top 50, 2009 AUTM)
Input –Outputs(averages are red, goals are green; middle horizontal is “good,” top and bottom of red is below average)
Startup Goal 5/$100 million
Startup Goal 10% of Disclosures
Licenses Goal 35/$100 million
Licenses Goal 37.5% of Disclosures
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Commercialization Effectiveness*250.000
High Disclosure/High Disclosure/Low Conversionon
ClevelandClinic
150.000
200.000
Mayo
High Disclosure/High Conversion
Low Conversion
/ $100 Milli
l Research
100.000
150.000
Cal Tech
yClinic
sclosures /
in Fed
era
50.000
CMU
MIT Low Disclosure/Low Disclosure/
Di
0.0000.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00
/High Conversion
Low Disclosure/Low Conversion
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Start‐ups / $100 million in Federal Research* Association of University Technology Managers (AUTM) Annual Surveys, 2007-2011
Typical University ChallengesTypical University Challenges• Disclosure rate is low. Why?
– Operational issues? ProbablyOperational 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 ythan just disclosure problem
– Program coordination matters: align efforts
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Technology Value Curve
Spinoff Value
Where Universities
• Prototyping • IncorporationL / b it
Spinoff ValueGeneration
Where Universities Traditionally Add Value
• Logo/website• Corporate Secretary• CFO Solutions• Umbrella InsuranceM k t h
MARKET EXPANSION
COMMERCIALLAUNCHPROTOTYPEPROOF OF
CONCEPTIDEA
• Market research• Grants programs
EXPANSIONLAUNCHCONCEPT
Commercialization Stage
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Spinoff Development
Phase 4Market
Phase 3Operating
Phase 2Business
Phase 1Formation
Spinoff Value Generation
Phase 5Long Term
Entry• Marketing/Sales
• StrategicP hi
• Customers Testing Product
• Investors• Key Managers
• Business Model
• Product Validation
• Product
• Legal Formation• Technology License
• Product Development GrowthPartnerships
• New Products & New IP in Development
• Key Managers• Board of Directors
• Bank Credit
• Product development grants
• Angel & Seed Investors
Development• Logo, web• Product development grants
PROTOTYPECOMMERCIAL
LAUNCHMARKET
EXPANSION
Commercialization Stage
LAUNCH EXPANSION
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Small Light Fast Small-Light-Fast Money
• Small amounts with immediatemilestones (4 months or less) money chases success as milestones accumulate
Li h l ti d d i i t ti• Light regulation and administration little administrative overhead in making awards University recommends, accountability is portfolio resultsUniversity recommends, accountability is portfolio results
• Fast decisions sustain technology development momentum, facilitate continuity of effort
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y
Spinoff Development
Phase 4Market
Phase 3Operating
Phase 2Business
Phase 1Formation
Spinoff Value Generation
$1,000,000 InvestmentAngels & Seed Funds e g Kick Start
Phase 5Long Term
Entry• Marketing/Sales
• StrategicP hi
• Customers Testing Product
• Investors• Key Managers
• Business Plan• Product Validation
• Product development
• Legal Formation• Technology License
• Product Development
Up to $1.2 MillionFederal SBIR/STTR
Angels & Seed Funds, e.g. Kick StartTotal PotentialStartup Funding$2,455,000
($1 445 000 isGrowthPartnerships• New Products &IP in development
• Key Managers• Board of Directors
• Bank Credit
development grants
• Angel & Seed Investors
Development• Logo, web• Product development grants $25,000 Foundation
T h l C i li i
$50,000 ExternalTechnology DevelopmentGrants (4 times)
($1,445,000 isGrant Funding)
PROTOTYPE
p
COMMERCIALLAUNCH
MARKETEXPANSION
$5,000Micro Grant
Technology CommercializationGrant (2 times)
Commercialization Stage
LAUNCH EXPANSION
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Utah Experience:Grants Facilitated InvestmentGrants Facilitated Investment
$600,000,000
$400,000,000
$500,000,000
$300,000,000
$100,000,000
$200,000,000
$02005 2006 2007 2008 2009 2010 2011 2012
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Cumulative Grants Funding Cumulative Investment Funding
Utah Experience:R t I t tReturn on Investment
$1 400 000 000
$1,600,000,000
$1 000 000 000
$1,200,000,000
$1,400,000,000
$600 000 000
$800,000,000
$1,000,000,000
$200 000 000
$400,000,000
$600,000,000
$0
$200,000,000
2005 2006 2007 2008 2009 2010 2011 2012
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Cumulative Grants Funding Cumulative Investment Funding Value Private Companies
ResultsResults• 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 Boardand Company Collaborationsand Company Collaborations
• University participates in equity upside
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Universities and theInnovation 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
b bl t th b k ”never be able to pay them back.”- Melba Kurman, Triple Helix Blog, 25 Feb 2011
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Financial ReturnsCollege A
College B
Center I
Licenses to Existing
IndustryResearch
College C
gCompanies
Disclosures
Research
College D
College E
Center IIDisclosures& Patents License
IncomeRoyaltyIncome
College F
College G
Licenses to Start‐up
CompaniesEquity
R tCollege G
College H Center III
Companies Returns
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Enriches ResearchEnriches Research• Translation processgenerates questionsgenerates questions
• Creates new fundingopportunities– Commercial sponsors tend
to be repeat customers– Less than Federal, but can be
stable and grow steadilystable and grow steadily
• Work with faculty whowant to be involved
– Does not matter if faculty opt out– Faculty success generates interest
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Total Mission Integration
• Educational programs > 2600 students Defining educational experience Defining educational experience Huge positive for faculty
• Donor gifts over $80 milliong $ Lassonde Center/Institute Sorenson Discovery Center A l hi $1 illi Annual sponsorships over $1 million
• University Venture Fund manages $18.5 million in Fund I manages $18.5 million in Fund I Fund II target is $50 million
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Utah Transformed OperationUtah Transformed Operation• 2004 “Technology Prevention Organization”• Throwing technologies over the wallThrowing technologies over the wall“hoping the coyotes will raise them”
• Bottom half of TTOs, ranked 96th
• 2008 Tied MIT #1 AUTM survey for
2008 Sugar Bowl Trophy
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• 142 start‐up companies• over $200 million licensing and royalty revenues
Fortress Ruins
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$ g y y• over $300 million commercial‐sponsored research
Tech Ventures Team/ProcessGlenn Prestwich
Presidential ProfessorPresidential Special Assistant
Entrepreneurial Faculty ScholarsSeed Funds• KickStartRon Weiss, MD
retired ARUP CEO
>$100 million
Software Dev CenterMedical AcceleratorEnergy Comm Center
>$1.2 million revenue
l d/ d lTroy D’Ambrosio
• UpStart• Lineagen• Vendice• Navigen
d d
retired ARUP CEOFaculty Outreach≈420 faculty
15% total faculty 5‐8 faculty case load
Energy Comm. CenterVenture Bench
Doug Lloyd/David DolanSerial Entrepreneurs
Entrepreneur in Residence
ySeasoned Entrepreneur
Raised Capital > $600 millionDirector of Education Programs
• Founder Fund• UVF
> 2600 students > 100 business people
Bryan Ritchie, Director and Associate VP25 fulltime professionals + 30 student interns
Technology Commercialization/Commercial ResearchResearch
Commercialization
$300 millionfederal research
300 “Inventions” 120 Potential Licenses30 Potential Companies
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Company
Utah Inventors, Startups, & Revenue
Revenues
$70,000,000
$80,000,000
$90,000,000
140
160
180
Faculty Inventors
$20 000 000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
60
80
100
120
140
$0
$10,000,000
$20,000,000
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
0
20
40
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Repeat Inventors New Inventors
20
25Start-ups
Commercial Research Commercial Clinical Research LicensingRepeat Inventors New Inventors
0
5
10
15
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2
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197019711972197319741975197619771978197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011
Research and Innovation
Innovation is the“Research is the
Dr. Geoffrey Nicholsoninventor of the Post‐It™:
Innovation is the transformation of knowledge
into money.”
Research is the transformation of money
into knowledge.
As innovators, universities are unique in their dedication to reinvesting innovation returns in
knowledge creation and dissemination
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knowledge creation and dissemination.
Supporting Research ImpactSupporting 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 goalp g– control strangles speed and momentum– place small bets with immediate milestones
C it l f ti i b t tJack Brittain 22
• Capital formation is about outcomes
Changes Utah Madeg• Total Mission Integration
– Integrated student programs enhance University, engage facultyg 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 positiveg p
• Programs mitigate early stage risk– Provide leverage for investorsg– Platform for community engagement– Encouraged capital formation
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Path to ExcellencePath to Excellence
1. Reinvent: Prepare to succeed (8‐12 months)) O i l i ia) Operational revisionsb) Faculty and departmental outreach
2 Motivate: Faculty engagement (month 12+)2. Motivate: Faculty engagement (month 12+)a) Launch entrepreneurial faculty scholarsb) Leadership engagement President to Deansb) Leadership engagement, President to Deans
3. Lead: implement coordination for all innovation and entrepreneurship activities (ongoing)p p ( g g)a) Depends on trust of motiveb) Ongoing investments in program innovation
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