InventingEntrepreneurs

Prof. Gerry GeorgeImperial College London

Simple facts

Scientists becoming entrepreneurs is not the smartest choice

TTOs, at their very best, aren’t equipped to championtechnologies by themselves

There is a lack of entrepreneurial capacity that canunderstand and push technologies

3

Creating tensions!

Universities (and their stakeholders) becomingincreasingly demanding

TTOs ill-equipped to handle startups and licensingbecause they require two different types of talent,structure…and incentives

The application of university science requires new managerialtalent to push forward

Page 4

Working with inventors you need to apply an institutionalized process…..

Stage 01Sourcing

ideasMarket

application

Stage 02IP Protection

Stage 03Proof ofConceptProduct

Development

Stage 04Licensing

Stage 05Formation

andincubation oftechnologybusinesses

Stage 06Investment

Stage 07Exits

Imperial Innovations

Page 5

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 6

Now which market?

NH

O

O

O

O

O

P

O

O

O

NH

O

O

O

O

O

P

O

O

O

O

O

O

O

O

P

O

O

O

CellMembrane

BiocidalPolymer

Page 7

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 8

Complicated enough?

• Market (application)• Industry (competition)• Value (capturing and sharing)

• License?• Start-up?

Page 9

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 10

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 11

Pushing the Core

• Patenting and licensing

• Performance is stellar with licensing of 2inventions• How did these two inventions become stellar?• What did WARF do to make these two runaway successes?

• Non-core capabilities

Page 12

Exogenous RegulatoryEvents

Average time decreases

Variability decreases

Page 13

Claims increase

Portfolio increases

Page 14

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 days771 days 347 days p<.001750 days 314 days p<.06

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So what about income?

0

2000000

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16000000

18000000

year

1929

1934

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Real Income IndexedActual Net Income

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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 17

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 18

What gets licensed?

0 2 4 6 8 10

123456789

1011121314151617181920

Patent number

Years to first license

Page 19

Probability of license?

.01

.02

.03

.04

.05

.06

Haz

ard

rate

0 2 4 6 8Year

Hazard rate function of licensing

Page 20

Being Entrepreneurial in TechnologyTransfer

• Entrepreneurial expositions and leadership• Vitamin D testing labs• Warfarin rodenticide testing• Wurster process roll-out

• Institutional changes• Tax and foundation laws• Patent laws

Page 21

The first invention – Vitamin D

Create Demand

Create Brand

Protect Demand

Page 22

Some TTO Solutions

• Focus on..• Finding markets• Creating value• Incentives for entrepreneurship

• Try New Things!• 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!

Where does that leave us so far?

• It takes TIME!• But patience will kill you first

• Licensing is a tough job but TTOs get paid to do well

• Being entrepreneurial in licensing pays off

• Still… doesn’t solve the start-up problem

Inventing Entrepreneurs…who shouldread 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 and Experiences• Spectrum of scientists with

varied experiences acrossmany disciplines

• Success and failure inventuring

• Real examples, includingmany that are ongoing

• Personal narratives ofaccomplishments, pitfalls,and lessons learned

Profiles and Experiences• Spectrum of scientists with

varied experiences acrossmany disciplines

• Success and failure inventuring

• Real examples, includingmany that are ongoing

• Personal narratives ofaccomplishments, pitfalls,and lessons learned

Analysis and Tools• Participating in

commercialisation

• Understanding roles andidentities

• Evaluating opportunitiesand commercial modes

• Preparing for the journey

• Building skills sets

Analysis and Tools• Participating in

commercialisation

• Understanding roles andidentities

• Evaluating opportunitiesand commercial modes

• Preparing for the journey

• Building skills sets

What are the stages in theentrepreneurial process?

Personalchallenges

Market-drivenchallenges

How the book is organised

• Discovering Entrepreneurial Options• Chapter 2 -- Entrepreneurial Purpose• Chapter 3 – Inventing Entrepreneurial Options• Chapter 4 – Technology Licensing• Chapter 5 – Lifestyle Businesses

• Cultivating an Entrepreneurial Identity• Chapter 6 – The Entrepreneurial Academic• Chapter 7 – Entrepreneurial Journey Model• Chapter 8 -- Sample Journeys

• Assembling the Entrepreneurial Toolkit• Chapter 9 – Understanding Industry Context• Chapter 10 – Accumulating Business Skills• Chapter 11 -- Primer on Financing

• Visualizing the Road Ahead• 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 topropagate invention

• Commercialventuring

• Foundations ofentrepreneurialpurpose

Stages in the entrepreneurial process

Inventing Entrepreneur ProfileJo Handelsman

• Unique among our profiles: Handelsman never wanted tostart or run a company commercialising her technology.

• Purpose of technology transfer• “tech transfer is important not because we want to be

entrepreneurs …and not because we want industry runningthe university…. Technology transfer benefits society and theuniversity.”

• 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 forwhich I have no apparent aptitude.”

• Personal element to research• “… my mother developed an immunological disease, …. that

ultimately caused her death after 17 years of miserableillness. … there was just nothing I could do to help her fightthe bacteria that were killing her.”

• Long term institution building• “At university research serves education… Waiting is a luxury

that industrial science simply can’t afford”.

Prof. Jo Handelsman

ProfessorPlant Pathology andIndustrial & Systems

Engineering

University ofWisconsin - Madison

Assembling the entrepreneurial toolkit

• Industries and markets

• Industry attractiveness &value chain

• Disruptive technologies

• Start-up location choices &implications

• Cost and differentiationstrategies

• New business road test

Stages in the entrepreneurial process

Inventing entrepreneur profile -Michael Stonebraker

• Five start-ups• Served as CTO twice & CEO three times while

faculty• One 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. Youhave to prove it’s a good idea to get their attention.”

• “It’s all about executing at lightning speed. That’s thesecret to start-ups, spend no money and execute inzero time.”

• Clearly, these are not skills natural toacademics!

Michael Stonebraker

ProfessorComputer Science and Artificial

Intelligence LaboratoryMassachusetts Institute of

Technology

Preserving Identity

• Scientific identity

• Characteristics ofinventing entrepreneurs

• Common experiencesStages in the entrepreneurial process

Inventing entrepreneur profileJohn Hennessy

• Pioneered the RISC (Reduced Instruction Set Computer)technology at Stanford, commercialised via start-upcompany MIPS Computer Systems.

• Transformative experience:“It probably was the single most formative year of my life. …You learn about leading people and managing teams; youlearn a lot about focus. And you learn that there is a greatreward when you build a product and people use it.”

• Not always glamorous:“... I did everything I wiped counters; I picked up donuts for theguys … I hired people …, I was the technical evangelist, Iwent on the road and did cold calls all the time.”

• Academia over Corporate:“… It has to do with breadth and mental stimulation. There isno CEO job in the entire world that has the breadth of this job[President of Stanford University], because no company hasthis breadth.”

Prof. John Hennessy

PresidentStanford University

Co-founder of MIPSTechnologies

Entrepreneurial journey model

• Roles

• Identities

ResearchOccupying positions expected to pursue knowledge discovering:scholar, professor, student, inventor.

CommercialOccupying positions expected to engage in managing business:executive, manager, technologist, consultant.

Technology-basedFocuses on technology, invention, or application of science.

Market-basedFocuses on end-users who with unmet needs or broadlyunsolved problems.

Entrepreneurial journey space

• Combining responses to role and identityevaluations places an individual in one ofthe quadrants of the journey modelmatrix.

• A – strong focus on long term research.

• B – research focus on specific technologywith some consideration of applications.

• C – focused heavily on commercialapplications to meet specific market needs.

• D – commercial role based on specifictechnology embodiment.

• E - role designed to solve customer problemwithout 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.

• Idiosyncratic initial conditions.• Changes in roles and identity.

• 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

• Of 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 inentrepreneurship

InventingEntrepreneurs

Prof. Gerry GeorgeImperial College London