Should YOU commercialise YOUR research?

One scientist’s storyby Richard Stirzaker

RIRDC Publication No. 08/169

RIRDCInnovation for rural Australia

Should you

commercialise your research?

One scientist’s story

by Richard Stirzaker

September 2008

RIRDC Publication No 08/169 RIRDC Project No CSL-25A

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© 2008 Rural Industries Research and Development Corporation. All rights reserved. ISBN 1 74151 758 3 ISSN 1440-6845 Should you commercialise your research? One scientist’s story Publication No. 08/169 Project NoCSL-25A The information contained in this publication is intended for general use to assist public knowledge and discussion and to help improve the development of sustainable regions. You must not rely on any information contained in this publication without taking specialist advice relevant to your particular circumstances.

While reasonable care has been taken in preparing this publication to ensure that information is true and correct, the Commonwealth of Australia gives no assurance as to the accuracy of any information in this publication.

The Commonwealth of Australia, the Rural Industries Research and Development Corporation (RIRDC), the authors or contributors expressly disclaim, to the maximum extent permitted by law, all responsibility and liability to any person, arising directly or indirectly from any act or omission, or for any consequences of any such act or omission, made in reliance on the contents of this publication, whether or not caused by any negligence on the part of the Commonwealth of Australia, RIRDC, the authors or contributors..

The Commonwealth of Australia does not necessarily endorse the views in this publication.

This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. However, wide dissemination is encouraged. Requests and inquiries concerning reproduction and rights should be addressed to the RIRDC Publications Manager on phone 02 6271 4165.

Researcher Contact Details Richard Stirzaker CSIRO Land and Water PO Box 1666 Canberra ACT 2601 Australia Phone: + (02) 62465570 Fax: + (02) 62465570 Email: Richard.stirzaker@csiro.au

In submitting this report, the researcher has agreed to RIRDC publishing this material in its edited form. RIRDC Contact Details Rural Industries Research and Development Corporation Level 2, 15 National Circuit BARTON ACT 2600 PO Box 4776 KINGSTON ACT 2604 Phone: 02 6271 4100 Fax: 02 6271 4199 Email: rirdc@rirdc.gov.au. Web: http://www.rirdc.gov.au Electronically published in October 2008

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Foreword Commercialisation of science has had increasing prominence over the last two decades. Funding bodies are under pressure to deliver tangible products to their stakeholders, and scientists are under pressure to show their work is relevant. Although there are different routes to make knowledge useful, commercialisation of research and success in the marketplace are the most obvious. There are few examples of successful commercialisation of scientific instruments from research agencies. This report covers the ten years of work that was required to take a scientific idea and turn it into a commercial product. Most commercialisation attempts start very optimistically. But this optimism will be severely tested. The author charts his own personal experience in navigating the commercialisation maze, from IP protection through choosing a business model, signing a partner, moving from prototype to product and the early stages of product release. Although each commercialisation story will be unique, it is important to document and learn from past experience. The story has many lessons for scientists commercialising their research and those who are managing the process. This project was funded from RIRDC Core Funds which are provided by the Australian Government. This report, an addition to RIRDC’s diverse range of over 1800 research publications, forms part of our Rural People and Learning Systems R&D Program, which aims to improve productivity, environmental sustainability and wellbeing in rural and regional Australia through R&D that contributes to building stronger and innovative institutions, communities, group activities and personal capacities. Most of our publications are available for viewing, downloading or purchasing online through our website: • downloads at www.rirdc.gov.au/fullreports/index.html • purchases at www.rirdc.gov.au/eshop Peter O’Brien Managing Director Rural Industries Research and Development Corporation

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Acknowledgments All commercial attempts come with plenty of risk. The person who comes alongside the scientist commercialising their work shares some of that risk. Their role is invaluable. Fred van Dijk was the commercial lawyer who had day-to-day responsibility for the process from 2000 to 2005. He was prepared to listen, make bold decisions and act on them promptly. Fred knew that commercialisation was about building relationships and maintaining momentum. I learnt to respect the role of the lawyer. The detail is important and Fred got the detail right without slowing the process down. Wayne Meyer was the scientist who provided consistent support from the first day. He saw the possibilities and was prepared to back them. There were many others who assisted along the way. Kathy Heinze and Peter Coppin reviewed this report and made many helpful suggestions.

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Contents

Foreword .................................................................................................................................. iii

Acknowledgments ...................................................................................................................iv

Executive Summary................................................................................................................vi

Introduction..............................................................................................................................1

Why commercialise?................................................................................................................2

A short history of a wetting front detector ............................................................................3

From idea to product ...............................................................................................................9 Stage 1: The people, environment and circumstances that birthed the idea .....................9 Stage 2: Protecting the IP and finding the partner and resources to exploit it................11 Stage 3: Moving from prototype to commercial product................................................16 Stage 4: Product release to the financial break-even point .............................................17 Stage 5: Achieving the potential you envisioned at the beginning.................................20

Recommendations ..................................................................................................................22

Four essential postscripts ......................................................................................................23 Copies ..............................................................................................................................23 A note on patenting..........................................................................................................23 New developments...........................................................................................................24 Perseverance ....................................................................................................................24

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Executive Summary What the report is about Those who fund and manage research are keen to see the products commercialised because it demonstrates relevance, delivery and adoption of the research. Scientists also want to see their work used on a wide scale. But very few have hands on experience as to what commercialisation actually involves. Our product is a wetting front detector – a simple device that shows how deep water has penetrated into the soil. This is the ten year long commercialisation story. If a scientist goes down the path of commercialisation all the way from original idea to final product, it will have a major impact on his or her career. I wrote this case history to document my own journey through the commercialisation maze. Herein are the lessons I learnt – things I wish I had known before I started. Who is the report targeted at? This report will be helpful to researchers and scientists, managers and those who are contemplating, undertaking or managing product commercialisation. Background Commercialisation takes place within a much larger context. In the late 1990s, my organisation, like many others in Australia, believed they were not making enough money out of their Intellectual Property. We were encouraged to commercialise our ideas. The organisational zeal for commercialisation started to wane just as our product hit the market and started to sell in volume. The project was ended before we could capitalise on all the knowledge gained or pass it on to others. Commercialisation has been the most exciting, challenging and confronting experience of my scientific career. We were convinced we would have a product on the market within two years. It took seven years. Some of the obstacles were unavoidable, but we made some wrong choices and got indifferent advice along the way. At the start we believed we had to retain tight control over our idea, but this proved counter-productive. It would have been better to build creative partnerships with people who share a common purpose. The enduring lesson for me is the need to recapture the vision of publicly funded research for the public good. This of course includes working with the private sector. This commercialisation effort would be viewed as successful. Almost 12,000 wetting front detectors have been sold into a market that has traditionally been extremely hard to penetrate. However, I would not wish any other scientist to follow the same path we travelled. Key findings Below are some of the major findings.

1. Talk to people who have done it before: The pivotal decision for us was the business model we would follow. The more control you want to retain, the more of the commercial risk you have to carry. We unwittingly chose a risky path and the first two years were dogged by frustration.

2. Count the cost: Commercialisation takes a long time and is all consuming. It will come at the expense of journal publications and many other opportunities.

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3. Understand that organisational change is the enemy of commercialisation: It is extremely difficult to stay on the long road to market when priorities and expectations are constantly shifting.

4. Recognise possible conflict of responsibilities: It is difficult to manage the dual role of ‘chief promoter’ of a new idea and ‘chief sceptic’ – the essential duty of a scientist. A marketer can run with all the successes, but the scientist must remain obsessed with the limitations of their own invention.

5. Embrace failure: We operate in a risk averse culture but it is from failure that we have learnt how to get the best out of our current product and how to make better wetting front detectors to suit new applications.

Recommendations Two sets of recommendations flow from this experience: To managers of science: • Researchers need to be properly informed of the risks associated with the different pathways to

market. Commercialisation is a minefield and researchers need to be informed as to where some of the mines may be buried.

• Commercialisation needs long term commitment from management. It is unrealistic to expect the raw enthusiasm of scientists to stand up to all that will be thrown against them. We operated under four layers of management, and a lot of different people rotated through these positions. Bold decisions made at one level were met with indecisiveness at another. The cautious approach is doomed to fail and there were too many people involved.

To practising scientists: • Seek strong guidance from experienced advisors who have done it all before. Look for these

people inside and outside your organisation. • Commercialisation is about perseverance. The level of perseverance required is hard to sustain

within current organisational structures because, regardless of the rhetoric, the culture is risk averse and the time horizons are short. At the critical times you will have to go it alone.

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Introduction This is not a report that tells you how to commercialise a scientific idea. There are already plenty of resources available for doing that1. I wrote this case history to document my own journey through the commercialisation maze. When two scientists realised they had an idea worth commercialising back in 1997, we scouted around for people who could point us in the right direction. Most of our closer scientific colleagues were supportive. After all, enthusiasm is infectious, and we worked in a smallish group with good morale. A few colleagues, however, sounded a note of caution. They reflected on the meagre success in actually developing a saleable product from our area of science, and could point to a few people that had expended enormous effort for little commercial gain. Just do the work, publish, and get it into the public domain, they advised. We appreciated their point of view, but thought of these scientists as ‘old school’, sceptical of mixing science with commercial success. We are only aware of one other commercial case study from our organisation, written by Ian White and colleagues on the disk permeameter. White et al. (1992)2 describe commercialisation as a ‘narrow goat track with many twists and turns’ and have many penetrating insights on the corporate management philosophy that now dominates publicly funded research institutions. They introduce their case study as ‘a cautionary tale’. We searched around for people who had successfully commercialised in our field. We found very few, and they were cagey in their advice. They did not want to discourage us, but hinted at the minefield that lay ahead. Then there was an ominous word of caution. A senior manager advised us to be very careful. He had witnessed commercialisation attempts break up productive scientific partnerships and even prematurely end careers. What could this mean? The books told us that the vast majority of well-developed ideas fail to be converted into commercial success; and for those that do we are looking at seven years or more of hard work. That is, of course, an average. We had had a flying start and had an irresistible idea. Our first draft business plan envisaged a product on sale within two years, and the venture running at a profit two years later. In fact it did take seven years before the first commercial product rolled out of the factory. At the outset I must stress that this is a personal account. There were several people involved in the commercialisation effort and their stories will be different from mine. I am the only one who was there at the beginning – and was still there ten years later.

1 Australian Institute for Commercialisation and the Technology Commercialisation Group “Commercialisation Boot Camp” 2 White I, Sully MJ, Ford FW and Melville MD (1992). ‘Corporate scientific management and the path to commercialisation of the disk permeameter’. In Advances in measurement of soil physical properties: bringing theory into practice. SSSA special publication No. 30, Soil Science Society of America Inc., Madison, Wisconsin, USA.

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Why commercialise? In some ways the title “Should you commercialise your research?’ is misleading. The choice is not for the scientists, although they will shoulder the responsibility and bear the consequences. Most funding agencies place an obligation on scientists to identify intellectual property (IP) early, to keep records, ensure there is no premature disclosure, and that no non-signatory ‘third party’ operators can make a claim to the project IP. Just reading through the legal obligations can be quite scary. Every senior scientist is well versed in the chore of completing applications for research funding. We are effectively competing against other research groups, and most funding bodies are under pressure to produce quick and tangible results for their investors. We must detail specific outputs of the proposed research (what we will produce) and predict the outcomes (the impact of the research on others). Most scientists would like to quote Einstein here – ‘If I knew what I was doing it would not be called research’ – but instead we sign up to guaranteed levels of performance (milestones) whilst promising breakthroughs. Of course, no one can guarantee a breakthrough. It’s the section on the adoption/commercialisation strategy in these application forms that many of us agonise over. Is every bit of research going to be successful and ‘adoptable’? But if the end point of our research was a product for sale, we would not have to contort our way through cost-benefit analyses. If successful, we could simply say that people bought our product. The research would have been demonstrably relevant and delivered to the target audience. What’s more, there could be an income stream. Imagine not having to squeeze ideas into ever changing five year strategic plans and into this year’s list of funding priorities. Imagine being able to fund your own research program. At the end of the day, commercialisation is just one of a number of pathways to adoption. The IP itself cannot be used until someone turns it into a product. There are obvious risks involved, so those investing need some sort of protection and guarantee that they can reap a reward, if the product is a success. That means you must decide if and how to protect the IP and then find the right partners to exploit it profitably. Before I get to the commercialisation story, the next section explains the idea and the product by way of a short photo essay.

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A short history of a wetting front detector It’s common knowledge that irrigation uses more than two thirds of all the water currently available to humankind. It would seem obvious, therefore, that all irrigation farmers would use some objective means to measure or predict how much water their crops need. In fact, the majority don’t. This is not because of a lack of available tools. It’s more to do with the cost, effort and difficulty of using the tools and interpreting the data. The amount of water in the soil is described in two ways. First there is the proportion of space that water takes up in a given volume of soil, expressed as a percentage. Second there is the suction level that plant roots must exert to ‘pull’ water molecules away from the soil particles. Neither of these terms is intuitively simple. But, the idea of how deep the water infiltrates into the soil is easy to visualise. Apply too little water and we just wet the top crust of soil – water which is soon lost to evaporation. Apply too much water and it drains below the root zone, wasting water and nutrients and potentially adding to salinity problems. During irrigation, water infiltrates into the soil, forming a wetting front, defined as the boundary between the wet soil above and drier soil below. Our idea was to build the simplest device that could tell you how deep the wetting front had gone. The result was a wetting front detector (WFD).

The way to detect the wetting front was to intercept some water as it moved past. Water moves as thin films around soil particles and through tiny soil pores. We needed a funnel to focus the water to one point where the soil became completely saturated.

The wetting front

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In the first prototype, some water from the saturated soil at the centre of the funnel flowed through a ceramic filter and formed an electrical circuit between two brass rings. This activated a buzzer. An even simpler method was to use an electronic float switch. When the water moved through the filter, the float rose. This version worked well with an irrigation controller. We wired the solenoid valve up in series with the WFD. When the float rose, the power was cut to the solenoid valve and the irrigation shut down, regardless of how much time was left on the controller.

Floatswitch

Overflow

StoragereservoirFilter

Sampleextraction tube

Our device was now differentiated from others in the market. Irrigation had been about working out how dry the soil was, so we would know when to turn the water on; our method was to stop irrigation when the soil was full – hence the name FullStop Wetting Front Detector. The device was fully automatic. We ran experiments where an irrigation controller turned the water on and the WFD turned it off. If the soil was wet before irrigation, the wetting front moved quickly and the irrigation was soon shut down. If the soil was dry, the wetting front moved slowly because most of the soil pores needed to be filled and a long irrigation was permitted. The experimental data was fantastic, but in the real world there are few irrigators prepared to risk their crop to a funnel and a couple of wires. Also, most farmers do not have solenoid valves to override. Automatic control is risky, and risk is the very thing most irrigators are trying to avoid. We realised that the big gap in the market was for something even simpler. We decided to make the WFD completely mechanical. The idea was to make an interactive learning tool – something that could be used by anyone from a large scale irrigator to a backyard gardener.

The first prototype

The electronic WFD

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This meant doing away with the electronic float switch and having a central tube that rose to the surface. Inside this tube was a styrofoam rod, which floated up out of its housing when water was collected by the funnel

The experiments were going well, but the money was running out. The WFD was too commercial to interest most research funding bodies but not commercial enough to get private investment. This is the danger phase for any commercialisation effort. The WFD, which had started its life in my garden moved back in again. The garage was turned into a laboratory, where all kinds of tests were done to hone and then test various designs.

There were now at least eight different designs under testing in various parts of the garden. Everywhere you looked there was a tube sticking out of the ground, with an empty plastic bottle on top to protect the styrofoam floats. Another great benefit of the mechanical version was we could make them easily ourselves. All we needed was a 20 cm diameter funnel, some electrical conduit, filter mesh, 4 mm tubing and some glue.

The garage was turned into a laboratory

The first mechanical WFD

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To keep the idea alive, we had to make and sell the mechanical version. Over a two year period we built almost 2000 units, almost all of which were sold, and we used the money to keep the commercialisation effort going.

The decision of the Water Research Commission of South Africa to invest in the development of the WFD was pivotal. Finally, we had the resources to test our best designs against standard methods of determining plant water requirements, get the WFD out onto farms and look into the all important adoption issues.

The garden was filled with WFDs

Seven of the WFD designs

Hundreds of WFDs were made in this sweat shop at home

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Momentum was building. People started to hear about the WFD and got to try it out. In 2003 we won the International Commission on Irrigation and Drainage WATSAVE award, for ‘Water Conservation in Agriculture’.

Eventually, after many obstacles, we got the first commercial version onto the market. At first, WFDs sold faster than the factory could produce them. In a short time WFDs were being used in all kinds of situations, and under conditions where we had not done any evaluation or research.

The commercial kit containing 2 WFDs, filter sand and instructions

Two PhD students demonstrating the principles of WFDs at a workshop

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The WFD was being used not only to record how deep water penetrated, but to measure what was in the water. This was a feature we had not focused on at the start, but was assuming greater and greater importance. The design incorporated a small chamber that stores a water sample from the wetting front, which could be extracted later using a syringe. We used inexpensive ‘pocket’ electrical conductivity testers and nitrate colour test strips to monitor salt and fertiliser movement.

One of the greatest problems for the scientist was to how to market such a simple device without under-stating or over-stating its capabilities. We had (we believed) the simplest device for making sense of irrigation, but it was not perfect. However, by now we knew, at least in theory, how to build WFDs to suit various different applications. As we interacted with clients, we realised that the WFD was an interactive learning tool that many could relate to – from the most advanced irrigation farmers to those just starting out. But how do you market an idea like that?

Measuring the conductivity of a water sample

Measuring the nitrate concentration of a water sample

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From idea to product There were five stages in the journey from original idea to a commercial product

1. The people, environment and circumstances that birthed the idea 2. Protecting the IP and finding the partner and resources to exploit it 3. Signing the partner and moving from prototype to commercial product 4. Product release to the financial break-even point 5. Achieving the potential you envisioned at the beginning

We knew a lot about the scientific environment (Stage 1 above), but the other stages propelled us into different worlds. In Stage 2, we mixed with lawyers and patent attorneys. They told us that there are few really good ideas out there, and the most important part of commercialisation is to protect as much of the territory around your idea as possible. In Stage 3 we were told by CEOs and engineers that ideas are a dime a dozen – it’s turning an idea into a product where the real skill resides. In Stage 4, the marketers told us the world is awash with products no one uses – it’s about understanding who your client is, how to reach them, how to package your product, and how to increase the value of your product. There is some truth in all the points of view, but having got this far, I believe Stage 1 is still the least well understood – how to build a research environment that can produce new ideas in the first place. In this case study we are somewhere within Stage 4 – closing in towards break even – at least for the investor, not the research organisation. Each stage has fascinating lessons, but the brief for this case study is to focus on Stages 2 and 3. However, for completeness I will touch on the other stages.

Stage 1: The people, environment and circumstances that birthed the idea Before we can commercialise, we have to have an idea. So where do the ideas come from? If the idea comes out of an existing research project, then time and resources are already allocated to the task. Those who invested in the project will be keen to capitalise – if the idea is deemed to be good enough. Follow-up projects will ensure continuity of resources. I have started two ventures that have resulted in a commercial product. In both cases the original ideas did not come from a formal research project. The ideas came from ‘left field’, from serendipity, from pursuing a dream. Talking about dreams seems a bit out of date in this era of highly managed research portfolios, but it does matter because dreams come with hopes and fears, with ethics and values. It’s not just a job. The idea of a WFD came from left field. Through a previous commercialisation effort I had raised some funds to set up a short scholarship for a post graduate student from a disadvantaged area of South Africa to work with me in Canberra. This led to several more scholarships and a small AusAID grant which paid for a number of trips to South Africa, where we were trying to develop better farming systems for poor small-scale irrigators. Few communities had access to irrigation water in the impoverished area we worked in. Those who had water tended to use more than was needed. They also tended to irrigate on a ‘fixed schedule’, and were frequently observed irrigating crops that were already fully wet. The experience sowed the idea for a simple indicator that would tell the irrigator when enough water had been applied.

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We had tried all the usual water saving technologies in our experiments. We had learnt to steer clear of the complicated notions of volumetric water content and soil suction and calculations that convert potential evaporation into irrigation run-times. Our ‘market’ did not speak that language. What these farmers really needed to know was how deep the water had penetrated into the soil after irrigation. Soon after, in November 1996, the idea of burying a funnel to capture some water from the wetting front as it infiltrated into the soil was born. The next few months were some of the most intense and exciting days of my scientific career. I teamed up with a colleague who had a very different set of skills. I had spent all my professional life studying soil structure and plant water requirements, with a heavy emphasis on field experimentation. My colleague came from a more engineering background, and was strong in physics and modelling. He was also unusually talented in the workshop, and loved nothing more than disappearing into the basement to fabricate prototypes of a device to intercept wetting fronts. At this stage management knew nothing about this, because it was not a formal project. It was carried out more as an exciting hobby. Prototypes were tested, mostly in my backyard vegetable garden, and generally under lights in the evenings after work. Sure enough, the idea worked surprisingly well. The first WFD was made from a 20 cm diameter funnel, because that is the size we found in the laboratory cupboard. We found a ceramic tube which we used as a filter, and inside we built a conductivity cell. As water moved downwards into the wide end of the buried funnel, the soil inside the funnel became wetter as the cross sectional area reduced. The soil became saturated at the base of the funnel until some water moved through the ceramic filter, and was detected by the conductor inside. There were many design variations of course, and many small variations are shown in the earlier pictures. As the soil starts to dry, water is ‘wicked’ back out of the conductivity cell so that no current would flow between the conductor and the brass cup. Thus we had a switch that gave us a signal when the wetting front arrived and then reset itself some time later as the soil dried. We buried some of these devices in a bed of lucerne in my garden just before Christmas 1996, and alongside we positioned the most accurate and expensive soil water monitoring equipment, so we could log soil water content at 15 minute intervals. The detector always responded to the passing wetting fronts, even when the change in soil water content was as little as 2%. It took a little fine-tuning, but soon it seemed we had a very simple and very accurate device. We flirted with the idea of setting up a backyard business. The WFD was so simple. All that was needed was a buried funnel, and a means of detecting the liquid water that collected in it as the wetting front went past. Furthermore, a mathematician colleague did some modelling and showed that the idea should work in just about all soil types, without modification. As 1997 dawned, we realised that we could not ‘go it alone’. More and more ‘work time’ was going into the project. We were using the organisation’s equipment and workshop. My garden was becoming full of soil probes, cables and loggers as we started to hone in on the sensitivity of the new device. We also read our employment contracts. Our organisation owns our IP 24 hours a day, so long as it is related to our work. It was true no formal project had birthed the WFD, but we were employed to be innovative about soil and water none the less. The Chief of the Division could not have been more supportive. A mathematician by profession, he knew a lot about how flow-lines are distorted by different shapes in their path. He thought it was a worthy scientific project in its own right as well as a potentially successful product. The only problem was that the Division had no spare cash and was in the midst of amalgamating with two other Divisions.

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Nevertheless, a meeting was held between our Chief, the most eminent irrigation scientist in the organisation and the person managing divisional amalgamation. With a minimum of paperwork and fuss they gave us permission and sufficient funds to keep going.

Stage 2: Protecting the IP and finding the partner and resources to exploit it Now we had a formal project and some resources. The first job was to protect the Intellectual Property and a patent was filed on 28 February 1997. The work required to develop the patent was an unwelcome break in the momentum, but at least the Australian phase was relatively painless. More detail on patenting IP comes later in the story. The next step was to find the optimum route to market. At this time our organisation was strongly encouraging scientists to commercialise research, and floated the idea of spin-off companies in its internal communication. Neither of us scientists knew much about business, but the idea of spinning off a company and being your own boss sounded very nice. Although the spin-off idea was getting into our heads, we did embark on two sensible steps. The first was to commission a market research study to get an independent view on the potential market for our product. The second was to commission a study on different models of commercialising our particular idea. The consultant commissioned to do the desk top market survey produced the numbers we wanted to see. Estimates were couched in cautious language, but the conclusion was that 5000 units could be sold in Australia in the first year. The market in Australia was estimated to be between 100 000 and 200 000 units, and that was enough to launch a business on. We already knew that adoption of soil water monitoring equipment was low in the commercial irrigation sector (around 12% in 1997), but we had assumed that was due to the complexity or expense of existing equipment. Yet it was the domestic market where we saw the greatest opportunity. In 1997 there were 5.4 million stand alone dwellings in Australia, and around 300 000 tap timers and 35 000 automatic irrigation controllers were sold each year. Our technology was about as complex as an irrigation controller, and seemed to offer the very thing the controllers lacked – the knowledge of when to turn the water off. Most inventors want to retain some control over their idea but they generally lack the financial resources and business skills to successfully take a product to market. The more control you want to retain, the more of the commercial risk you have to carry (see Figure 1). For example, there is far less risk in licensing a company to exploit your IP, than there is in spinning off your own company. In the former you cannot control the final product, but carry less risk and are rewarded by a royalty. In the latter, you call all the shots and earn all the profit should that eventuate – and all the risk and downside, should that be the outcome.

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Figure 1. Each commercialisation model involves a trade-off between commercial risk and the inventor’s control over the process (adapted from AIC and TCG).

From the report of the second consultant, the most appropriate pathway to market seemed to depend on the ability to separate the formal IP from the informal knowledge crucial to fully exploit the idea (see Table 1). If inseparable, then staff should be transferred into the licensee company, which might be a spin off (new company) or collaborative or joint venture (with an existing company). If there was no need to transfer the staff, then there may be a case for a new start up company, or traditional technology transfer through sale or license to an existing company. Table 1. Framework for Identification of Technology Transfer Mode (L Thorburn Advance Consulting & Evaluation Pty Ltd 1997).

New company Existing company With people transfer Spin-off Collaborative R&D Without people transfer New startup Traditional Technology

Transfer It all seemed to come down to the concept of ‘tacit knowledge’ which is the knowledge gained from learning and experience that is in the heads of the inventors that cannot easily be captured in formal documents like patents. Another way of describing tacit knowledge is knowledge that is highly context dependent, i.e. you only know what you know when you need to know it. We decided that there was a fair amount of tacit knowledge enmeshed in this project. Furthermore, my colleague was very interested in the business aspect itself, so he favoured the option of maximum control (and maximum risk). We acknowledged our lack of funds and business skill, and the fact that there were existing companies who would be interested in the technology. Thus we settled on the idea that one of us would stay in the research organisation and one would leave to form a joint venture with an existing company to develop the product and take it to market. This decision seemed to satisfy the conflicts between control and risk, but we were totally unaware of how we had sown the seeds that would come within a whisker of destroying the entire project. In retrospect, we now see that this was a pivotal point in the entire process. Scientists need strong guidance at this time from experienced advisors. This is made harder by the fact that this is the period of high excitement, and the scientists will not be very good listeners. Furthermore we did not clarify our visions for the product within the research team – and these visions were different.

Com

mer

cial

isat

ion

Ris

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Inventor’s Control of Idea

Sale

Start up

Joint Venture

Licence

Spin off

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Our organisation made some attempt to guide us, which we interpreted as obstacles in our path. We were headstrong, the organisation dithered, and we had little idea the path we chose

• could create conflict between us and our organisation: we were negotiating to own some of the IP ourselves, so we were effectively on different sides of the bargaining table with our own organisation.

• could create conflict between the researchers themselves: one would take a potentially more risky career choice and therefore would want greater control of the direction of the work and greater reward for success.

• could create conflict between the research and business agenda: we were spending more time on business plans than research, and not getting work published in the peer reviewed literature.

These three areas of conflict were to dog us over the coming years. Meanwhile the first trials were going extremely well. We used our detectors to manage sprinkler irrigation of turf grass and they were working beautifully. It was pure ‘set and forget’ irrigation, and we envisaged a system in every irrigator’s field and every backyard garden. Before we could speak to a potential joint venture partner, we had to sort out the deal between our organisation and ourselves, so we knew what we were offering. There had been murmurings within the leadership of the organisation to reward commercialisation as a means of encouraging it – as happens at some universities and many research institutions overseas. It was all extremely vague and in some ways our project was used as a test case within the organisation. We had convinced ourselves that we wanted some ‘stake’ in the business, but until we had a partner with whom we could do a business plan, it was unclear what that stake should be. The first nine months of the formal project filled three official files – 351 pages of memos, draft plans and other correspondence on ‘the business’. Reading back over it a decade later reveals some of the agonising and soul searching we did whilst trying to come up with a workable plan. We could never raise enough capital for both of us to leave our current jobs – one could go into the new venture and one would stay. Would the one who left get leave without pay? Could the one who stayed behind and did the research be a director in the company? Could he receive a royalty? Who would own the IP? What was a fair risk and reward for each party? In October 1997 we approached three companies. Two were very well known multinational irrigation companies and the third a local company. Our presentations were well received. All three companies wrote back to express their formal interest in commercialising the WFD. This was our first real exposure of the idea to outside experts. Up till now it had been a kind of cloak and dagger exercise, as we tried to tie down all the loose ends to the patenting process. So as not to jeopardise our patent position we were unable until then to discuss the idea outside the organisation. All discussions were now held under confidentiality agreements, which somewhat slowed progress. Not only was it a wonderful release to talk to members of the industry, we had clearly impressed them. Our euphoria was short-lived. Soon it became apparent that these partners were not quite sure what they were being offered. There was a patented idea which they liked, but the deal came replete with scientist and his business plan. When these prospective partners pressed us for further detail, we had to go back to our organisation for clarity. This meant a meeting with the Business Manager. Once he approved the next step, we and the Business Manager went off to see the Program Leader, with all the memos, plans and supporting documentation. If he agreed, we all trooped off to see the Chief, with even more paperwork. Fitting this into everyone’s diaries could take several weeks. Meanwhile the prospective partner was waiting.

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At Divisional level, our organisation did its best. We were asking questions that none of the managers had faced before, and they had a duty to proceed with some caution. So the sticky questions were sent up to the next level. Our Divisional managers knew us, watched the unfolding story, and were to some extent caught up in the possibilities of it all. Not so at the highest level of management – they were unaware of our anxiety and rising levels of frustration. The answers came back. ‘Why not just give the technology away in a spirit of public good? Why not license it to an existing company and do a R&D agreement with them? Why do you need to transfer personnel or set up a new company for what seems like a straightforward idea?’ These were fair enough questions, but the idea that scientists could and should run with their product had already taken root. We put forward numerous plans which were tweaked and critiqued at various levels – but in the end we were drifting in a sea of uncertainty. No one would sign off until they could see the whole deal and it was impossible to get the whole deal together until we knew what was permissible. We started to go round in circles. This, essentially, is why I agreed to write this report. We had chosen a high risk strategy to retain control. We had no idea of the implications of this decision. Since our organisation had indicated its in-principle support for spin-offs and joint ventures, we expected them to bend over backwards to help us. We did not understand that we were not always on the same side of the table – expectations were different. Neither our organisation nor the courses on commercialisation I have looked at since adequately prepare the scientist for what they will face on the commercial road. The reality is that the view through the investor’s lens is very different from the view through the scientist’s lens. Expectations differ; languages differ – understanding this is essential to move forward. The first year of the formal project ended on a mixed note. The experiments were going well and industry liked the product. Yet it seemed three quarters of the time was spent on internal wrangling and there was little to show for it – except for the bulging files. In early 1998 we sent the three prospective partners some experimental data, the market survey, and a draft business plan with a provisional blessing from the organisation for the spin-off joint venture option. Some negotiation followed on the details of ‘joint venture’. The people we were negotiating with also belonged to large companies, and could not make decisions about joint ventures on their own. They needed more detail. Three months later there was not much progress. We sought out prospective partner number 4. This time it was an entrepreneur who had started his own irrigation company. As sole owner, he could be flexible, and could be the mentor we needed to guide us through. The WFD was essentially an electrical switch that would cut the power to a solenoid valve and therefore over-rode the irrigation controller. Prospective partner number 4 wanted to build a dedicated irrigation controller to go with the detector so we could sell the whole package. This would need more money, so proposals were written to AusIndustry and others. The months slipped by, the funding proposals were rejected and the idea was abandoned. Our financial resources had now run dry. The first three prospective partners had gone cold, and now the fourth. We had entered the international phase of the patent process with substantial upfront costs. Year 2 was at a close and we still had no product. We looked around for other funds, particularly the research and development corporations, but with no success. They saw the product as near commercial – and did not want to be seen to be propping up

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the private sector. This is a well known danger period for any commercialisation attempt. The public sector sees the product as too commercial and the private sector sees the product as too risky. We successfully lobbied our organisation to give us the funds to get 300 ‘production version’ prototypes built, so that we could at least get the idea used by the industry. We abandoned the strategy of secrecy. More than ever we needed to let the idea out so we could drum up some interest and support. In late 1999 potential partner number 5 appeared on the scene. This time it was not one of the manufacturers of plastic irrigation products, but a company that had pioneered, developed, manufactured and successfully marketed a new sophisticated irrigation scheduling tool. This company knew what we were going through – and they had done it before us. They tested our product and liked it. They also understood science. They considered our detector an ‘entry level’ product that had a good fit with their flagship product. In some ways we were back at the beginning again – starting negotiations with a new company. But this time we had 300 expertly built prototypes for sale, so we were not quite so empty-handed. Nevertheless, Year 3 was over and there was still no commercial product. By this time the two inventors were drifting apart as our real interests came to the fore. My partner had been the driving force behind the business side. He now wanted to change direction and follow a related research agenda. I had been doing much of the field research on the detector, and had cooled on the idea of automatic control of irrigation. We had got some excellent results; but with automation you could be precisely right if you set things up correctly and precisely wrong if you don’t. You needed considerable ‘prior art’ to use a detector automatically. If the detector was placed too deep, or the irrigation interval was too short, the crop could be over-irrigated. The reverse occurred when the detector was placed too shallow. I wanted to return to where I had begun – to build a simple tool that could help people understand what happens when we irrigate the soil. I needed a mechanical version that could work as a learning tool, not a so-called turn-key solution. The problem now was that my time was fully occupied by other funded projects. The old questions came to the fore. Is it worth continuing? What, if any, will be the reward for success? What will be the penalty of failure? I moved the whole project back home where it had begun several years before, setting up a laboratory in the garage and using the vegetable garden as testing ground. There I developed the mechanical version of the WFD and shortly after won a large project from a South African research funding agency to further develop it in conjunction with the University of Pretoria. I also received a grant from RIRDC to do some on-farm testing in Australia. The project had little to do with commercialisation – but it was still a lifeline. Negotiations with partner number 5 proceeded through the year and finally a draft licensee agreement was exchanged. Through sheer exhaustion, we had pretty much dropped any claims to personal involvement with the company or share in the benefits. It was a straightforward agreement to license the IP for a royalty on each product sold. There was a small upfront fee and a provision for the inventors to consult to the company from CSIRO as necessary. All that was needed now was a signature. Shortly after there was a change in management at the top of partner number 5, followed by the news they would no longer proceed with the agreement.

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Year 4 finished, and there was still no product. As the sun set over the project in Australia, things started to stir in South Africa. We quickly got the mechanical prototypes out to leading farmers. We had the resources there to build a close knit team. We installed the electronic versions on farms, logged their response and played them back to the farmers. The idea started to spread around; people were interested. We were talking to potential users and they were talking to us. Suddenly the idea had momentum and people got involved. We connected with a South African irrigation manufacturer and started to brainstorm how we would design the commercial version and how we could market it. In April 2001 the South African company sent in their formal expression of interest to commercialise the product. By the end of July they presented their comprehensive business plan, which included a full description of the company, preliminary designs of the moulds for making the detector, all the costs, and a five year budget. By September the terms of the license agreement were agreed to, including the license fee, duration, territory and royalty structure. We also agreed on a way for me to be fully involved in the design process, and a clause saying they would not proceed to manufacture without my sign-off on the final design. 2001, five years after we tested the first prototype, looked to be the year. But we had been in this exact place 12 months before. There was a big difference between exchanging a license agreement and actually signing it.

Stage 3: Moving from prototype to commercial product There were some anxious weeks over the Christmas break and then again whilst lawyers picked through the detail, but the license was finally signed on 25 March 2002. Three months later there was a major shake-up in the South African company and the managing director departed, and later the chief engineer, followed by the factory manager. It took a while for the new management to get things together again, and new (and expensive) initiatives were not at the top of their list. The project had to go before a new board before funds could be released. There is a big difference between a prototype and a mass production model. There are limitations to the shape of cavities that can be produced by plastic injection moulding. It was somewhat frightening to be designing a commercial version that was not quite the same as the prototypes upon which all the experimental data was based. Between scientist, engineer and tool maker, we worked through several design options and finally settled on a version we could all live with. By November 2002 the company was ready to do detailed costings on the moulds. Then the project got the official green light. The drawings for the moulds were commissioned. Tooling-up started early in 2003. We had lost several months through management upheavals, but from here there was no turning back. It takes at least three months to make the moulds. Then they must be tested and refined to make sure all the pieces fit properly. In July 2003 we had the first commercial WFD in our hands. Exciting as it was, the commercial version was completely untested. We now had to put the commercial version through its paces to ensure its sensitivity matched that of the prototypes. This

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took a further three months, for which I took some long service leave and retired to the garage3. Testing was completed in November 2003 and inevitable modifications to the moulds were required. Fine tuning was painfully slow. We also had to produce a comprehensive set of instructions and even the packaging took time. Finally, in August 2004, seven years and seven months since the original patent was filed, the first WFDs went on sale. It had taken eight months from the presentation of the business plan to signing of the agreement; eight months from signing to the design of the commercial version; nine months to build, test and refine the moulds; twelve months from first product moulded to product release – just over three years in all. It seems a bit unfair that just one page of this case study is devoted to the most successful stage of the commercialisation. However we had learnt some things over the previous five years. Below are some of the factors that contributed to the success of this stage of the project:

• Don’t negotiate with your organisation and your prospective partner at the same time. After exhausting ourselves with five unsuccessful partners we finally committed ourselves to a strategy with a realistic ‘minimum position’. From there negotiation was relatively easy and both sides were happy with the final deal.

• Business is about relationships. We made the effort to build trust with our partner and learnt to ‘let go’ sufficiently to let others put their skill and enthusiasm into the product and have some ownership of it.

• The organisation’s business lawyer took a personal interest in the project. Although it was his job to manage the potential downside if something went wrong, he was committed to making the project a success. In short, the lawyer was a colleague intimately involved in the project, not just another layer of management.

Stage 4: Product release to the financial break-even point It slowly dawned on us that the WFD would not be a great money spinner. We were hard-pressed to think of any soil water monitoring equipment that had made the inventor wealthy. The value of the WFD was overwhelming in helping to introduce soil water monitoring to the majority of irrigators who had proved resistant to all other methods. Based on the experience of other products and their champions, we knew this would be an uphill battle. The WFD was also a tool that combined water and solute monitoring, and for once could help to bring these two arms of good irrigation practice together. Nevertheless, we needed to be commercially minded – the product had to pay its way. Hence we had to balance the combination of ‘public good’ and ‘commercial’ in our model. So we developed a strategy to take the FullStop Wetting Front Detector to the market in Australia via a Public Good Commercialisation model. Around this time my organisation had a ‘Virtual Incubator Company’ to help ease new products across the gulf between science and practice. I submitted a Business Plan for the ‘FullStop Public Good Commercialisation Venture’ to the Incubator Company, and after much negotiation it was accepted. The rationale for the Public Good Venture is spelt out in the Business Plan, but essentially rests on two realities:

3 In fairness to my employer, the leave was later reinstated, but at the time it was the only way I could dedicate myself fully to the task

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1. The WFD is a new idea with no precedent or prior art. In some ways it was deceptively simple. Training would be essential to get the product properly launched into the market and there needed to be local fine tuning to get the appropriate placement depths in new situations. Without this, some early failures could set the project back years.

2. The WFD had been designed to make intuitive sense to irrigators, both in its mode of operation (convergence in a funnel), and in its output (mechanical signal when water passed a set depth). It was a learning tool which had the potential to penetrate the majority sector of the irrigation market that had proved resistant to other tools, as well as the urban market and potentially the third world market. There was an opportunity to use the tool to make many of the complexities of soil physics and soil chemistry understandable to a lay audience. This was all public good territory.

The concept of the Public Good Commercial Venture was built into the original agreement with the South African company. The South African company wanted to keep the scientists involved in the project because they understood the issues surrounding a completely new product. They agreed to provide the Public Good Venture with 1000 free WFDs, plus a further 50 000 units at factory price. This generous arrangement demonstrated the goodwill between researcher and manufacturer, and that both parties understood they had to cooperate to be successful. The first year on the market was unbelievable. Within the first four months after formal product release (Aug to Dec 04) the factory had distributed 5000 units (Figure 2). At one stage the factory could not make them fast enough. These numbers were beyond our comprehension. For comparison, I have always thought the tensiometer as the best tool invented by soil scientists. It is simple, extremely accurate and relatively inexpensive. It has been consistently promoted by every agency concerned with water for five decades. Yet there are only around 3000 irrigators in Australia who have adopted them. Figure 2. Total product distributed (red line). The South African company territory included sub-Saharan Africa plus 3 South American countries (blue line). The rest of the world was for the Public Good Venture. The black vertical dotted line denotes the time when the Public Good venture was scrapped. * Figures represent product purchased by a retailer, not final sales (although we do not know of any distributors carrying large amounts of stock).

0

2000

4000

6000

8000

10000

12000

Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08

WFD

s di

strib

uted

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In territoryOut of territoryTotal

By the end of the second irrigation selling season (Dec 05) total product distributed had topped 8000 units. The sales figures were still magnificent, but lower than the previous year. We thought this may have something to do with pent-up demand – we had told enquirers that the product would be available two years before it actually hit the market.

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Most of the sales occurred in South Africa itself. The profile surrounding the WFD was very different in South Africa and Australia. In South Africa we had secured the research funding to build a team and do on-farm trials. Many people were aware of the WFD, had tried out a prototype, knew someone who had, or a member of the research team. It had been much harder to get funding in Australia, and the project team was more or less a one man band. The Public Good Venture focused on building relationships with potential distributors and getting feedback, rather than sales. The deal was that the Virtual Incubator Company would underwrite the Public Good Venture. As long as we broke even we could keep going – if not the Incubator Company had the right to shut us down. My main cost for the Public Good Venture was a single employee, and our ‘out of territory’ sales of over 2000 units were able to cover for that. The Venture also built a comprehensive website, including irrigation simulation ‘games’ and training materials with the aid of a grant from RIRDC. Our WFD had earlier been awarded the International Prize for “Water Conservation in Agriculture” by the International Commission on Irrigation and Drainage. Through international conferences, the word about a new simple device was spreading. Enquiries started to come in from all over the world. We had expected interest from places like USA, South America and Europe. But requests for WFDs came in from Cuba to Iran and many places in between. There was worldwide interest. The Business Plan put to the ‘Incubator Company’ had the purpose of demonstrating ‘the viability of the FullStop Wetting Front Detector in the context of a public good commercialisation model within five years.’ Within that five year period we had to generate sufficient interest, champions, training material and demonstrate a sensible route to market. We still did not know what kind of a product we had. By 2005, about 25% of the commercial irrigation sector in Australia used some kind of irrigation scheduling tool. Would we push this up by a few percentage points? One group of irrigators was using our detector as part of a mandatory irrigator code of practice. Would this spread all over the country – or all over the world? Maybe we could penetrate the vast home garden market as well? The aim of the Public Good Commercial Venture was to answer these questions. By selling to various distributors in different market segments, and supporting them with advice, we would find out. For the time being we were making good progress, except in one important area. Potential overseas distributors wanted to know what rights they would be granted. These were all the usual questions of territory, exclusivity, minimum performance, license fees etc. The Public Good Commercial Venture did not own the IP – so these questions had to be put back to the organisation. Now there was a slim chance of squeezing some money out of the WFD project. Negotiations bounced back and forwards and dragged out over months, even years. One by one the interested parties drifted away. Despite running at a small profit, the Public Good Commercialisation Venture was scrapped 18 months into its five year term, because the organisation’s priorities had changed again. Full responsibility for the future of the WFD was handed over to a private company. Having parted with tens of thousands of dollars in protecting the IP around the world, no one had been given permission to sell in IP protected territories. Unsure of the future market, the South African manufacturer delayed new investments in the product. Sales slowed just when we thought they should be starting to take off. The future again looks uncertain.

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Stage 5: Achieving the potential you envisioned at the beginning When we started ten years ago, we believed that we had a device that was different from any that had gone before. It worked in the same way people tended to think about irrigation, and therefore could become a ‘learning tool’, with the potential to change the way millions of people think about water. I still believe that. We were fortunate to be able to keep the flame alight over the five years before we signed a commercial partner, and owe a debt of gratitude to my managers who let us keep going during this time. Grants from RIRDC, starting in 2000, kept the dream alive. Several projects from the South African Water Research Commission, and the incredibly supportive team from the University of Pretoria, got the fire burning. Despite the hiccups, our South African manufacturer has been a fantastic partner. At this point I want to pay a special tribute to the South African Water Research Commission (WRC) for the pivotal role they played. Having made the decision to back a prototype detector, the WRC had the commitment to stick with it right through the commercialisation phase. The WRC did not burden us in IP red tape – their focus was always on the public good. The research managers effectively became part of the research team – on the one hand keeping us accountable to the contract, but continually supporting and encouraging us on the risky journey we had embarked on. In short they wanted to succeed or fail with us, not manage us at arms length. Yet there have been disappointments. Right at the top is the fact there was continual change in my organisation, which meant everyone became preoccupied with setting new directions. The obsession with doing something ‘new’ was smothering attempts to persevere with what you already had. Projects are ‘line-managed’, so it is necessary to get signoff on important matters at each level. During the life of this project, my line management has gone through five different Program Leaders, three different Business Managers and four different Chiefs. And that is only at Divisional level – above that there’s more. The upshot was that more time and effort was spent internally, getting permission to proceed on each of the hundred and one tasks needed to commercialise a product, than on actually doing the work. Almost all these line managers were helpful and supportive – two or three were indispensable. Yet only one was engaged for long enough to fully grasp the history of the project, where it was going or could go. I could brief line management on my experience, but in the end decisions were made according to the management style of the day, with little regard of what had gone before. There was not enough space for a long term view and never enough time to learn. The question that is often asked of me now is ‘If you had your time again, what would you have done differently?’ I am loathe to speculate, but below are some reflections:

• The benefit of protecting the IP is not clear cut for this type of product. Certainly it was important in signing the manufacturer, but probably not crucial. I do not know what would have happened if we had just published the idea in the literature. In some ways IP protection worked against us. For example, in trying to recoup the expenses on patents, we wrapped potential partners in financial obligations and red tape and finally drove them away.

• We must recapture the vision of publicly funded research for the public good. Like all scientists, we were under constant and heavy pressure to bring in research funds, so spinning off a company sounded attractive. We tried to get certainty and control but just got frustrated. It would have been better to hold to our own public good agenda from the first day and then forge strategic partnerships with the private sector to reach this goal.

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To the above I add several important lessons for the scientists involved:

• It is incredibly difficult to manage the dual role of ‘chief promoter’ and ‘chief sceptic’. The entire commercialisation has been done on a shoestring budget, so I’ve had to use every opportunity to champion the idea wherever I could. At times I’ve felt like a salesman. A marketer can run with all the successes, but the scientist must remain obsessed with the limitations. This is how it should be. From failure we have learnt how to change the design to make better WFDs to suit specific applications in the future

• The scientist wanting to commercialise must weigh up the costs against their publication record. For the first two years the work was commercial in confidence, so we could not publish. When the product was released, I had to quickly respond to many unforeseen problems and do endless ‘pilot experiments’ to get around today’s problem so we can keep the show on the road. This is not the stuff of journal papers. Commercialisation is more time consuming that I could ever have believed. The already scarce times that can be put to writing journal papers simply evaporated.

There is one last, even more, difficult decision for the researcher. When – and how – to disengage? By the time you have spent many hundreds of hours (voluntarily) outside work time, sunk your heart and soul into the project, resisted all other intrusions and passed up lots of other opportunities, it’s not easy to just walk away. It’s hard to say when the scientist’s job is done, and the scientist involved is not likely to be the most objective assessor. In the January 2007, the President of the International Commission of Irrigation and Drainage posed the question ‘Which technology has the capability to revolutionise food production so that we can meet the challenge of producing 67% more food with only a modest increase in water use over the next 25-30 years?’ He continued that there is ‘not much to be gained by talking about this in the abstract, so sticking my neck out, here are ten technologies that I think could be contenders’. At number 3 was the Wetting Front Detector, ‘recognised for its outstanding potential……but not yet widely appreciated.’

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Recommendations Despite the rollercoaster journey described above, I am grateful for the opportunity to commercialise an idea that I passionately believe in. Two sets of recommendations flow from this experience: To managers of science: • Researchers need to be properly informed of the risks associated with the different pathways to

market. Commercialisation is a minefield and researchers need to be informed as to where some of the mines may be buried.

• Commercialisation needs long term commitment from management. It is unrealistic to expect the raw enthusiasm of scientists to stand up to all that will be thrown against them. We operated under four layers of management, and a lot of different people rotated through these positions. Bold decisions made at one level were met with indecisiveness at another. The cautious approach is doomed to fail and there were too many people involved.

To practising scientists: • Seek strong guidance from experienced advisors who have done it all before. Look for these

people inside and outside your organisation. • Commercialisation is about perseverance. The level of perseverance required is hard to sustain

within current organisational structures because, regardless of the rhetoric, the culture is risk averse and the time horizons are short. At the critical times you will have to go it alone.

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Four essential postscripts Copies For years we protected the idea, fearful that people would steal it. We spent tens of thousands of dollars on patent protection. The great paradox now, is that people want to get hold of the WFD, but can’t get it because of red tape. We have sold far more WFDs into unpatented territories than those where we have IP rights secured. We were unable to commit ourselves to the idea of the common good in the broadest sense. There are very few businesses anywhere in the world that have made any money out of selling products for monitoring soil water. It became plain that no one would get rich from WFDs, but the desire to recoup on the investment of public funds led us to put hard bargains before like-minded people who could have shared our vision around the world. We drove them away. I now get satisfaction from the news of copies (from unpatented territories). The WFD idea has only just begun. We know how to build different versions with different sensitivities for different applications. We want more people to join the struggle to produce low cost instruments that can help irrigators learn about water.

The WFD on the left was put together by a researcher in Mexico. He has used over 70 locally built WFDs to schedule irrigation to strawberries and given us excellent feedback and research data. The yellow WFD on the right was built in Iran (shown along side the commercial version). In both these cases the researchers have been keen to collaborate and share ideas.

A note on patenting The Australian patent process was relatively painless, but the US system was different. When the US patent was rejected, I could barely bring myself to read the examiner’s report. I had grown to dislike the patent process because you have to translate your invention into language so convoluted and arcane it’s almost impossible to work out what it actually means. Apparently part of the ‘skill’ of filing a patent is to capture as much of the scientific territory around your idea as possible. Ideally, you claim the whole field, and make a net that will catch subsequent inventions that you did not actually think of, but fall into the territory you have claimed as your own. The trouble is everyone else is playing the same game. They are also trying to make nets to capture inventions they did not think of, and whilst constructing our own net we got well and truly caught up in someone else’s.

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When I finally did read the examiner’s report I realised that almost all the objections raised were inventions with the word ‘funnel’ in the abstract, and most bore no resemblance in mode of action to our WFD. I guessed someone had just done a five minute word search and then dumped all the material on us to sort through. We were able to sort through it, but it took a lot of time and a very expensive US patent attorney. We showed how all the objections thrown up against us were spurious. After a long break, we were again informed that the patent application had been rejected. This time the evaluation was incisive; an expert job had been done to prove that a number of our claims were invalid, and they even sent us the scientific papers demonstrating prior art. This rejection was extremely helpful and allowed us to draft a tight application around the distinctive inventive step of the WFD – which was subsequently accepted. The experience made me feel as though ‘first timers’ are just fobbed off – you have to really know what you are doing to get a good patent through, otherwise you will be fleeced by the system.

New developments There were, and continue to be, technical challenges – but these are to be anticipated. A wetting front gets weaker and weaker as it moves down into the soil. It’s a bit like a wave getting smaller and smaller as it rolls up a long beach until it dissipates into the sand. WFDs must be placed at depths where they are not too shallow (where they respond to every irrigation) and not too deep (where the wetting front is too weak to detect). There is a huge range of soils, different methods of irrigation and different management styles, and there needs to be local fine tuning to get the depths right. There is no irrigation scheduling tool that has been immediately accepted into the market. All have required at least 10 years of effort post market release to reach some of their potential. We need to build up the critical mass of effort to push through and demonstrate the potential in a whole variety of situations. We have not been able to do this yet. It’s too easy for someone to set the detector up at some arbitrary depth and then say ‘it didn’t work for me’. Failure is the best teacher. If you can embrace it, it tells you what you most need to know. Although we have only one commercial version, we now have the ability to build WFDs to suit several different applications.

Perseverance Each year there are ten reasons to give up on the commercialisation attempt and only one to keep going – that is, you believe you will be successful in the long run. Still, I’m glad I never saw the timeline below (Figure 3) at the start. Figure 3. Time line for commercialisation of WFD.

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4STAGE 1STAGE 2STAGE 3STAGE 4STAGE 5

2004 2005 2006 20072000 2001 2002 20031996 1997 1998 1999

Stage 1: The people, environment and circumstances that birthed the idea, Stage 2: Protecting the IP and finding the partner and resources to

exploit it, Stage 3: Signing the partner and moving from prototype to commercial product, Stage 4: Product release to the financial break-even point, Stage 5: Achieving the potential you envisioned at the beginning.

RIRDC Publication No. INSERT PUB NO. HERE

Should YOU commercialise YOUR research? One scientist’s story

by Richard Stirzaker

RIRDC Publication No. 08/169

Those who fund and manage research are keen to see the products commercialised because it demonstrates relevance, delivery and adoption of the research. Scientists also want to see their work used on a wide scale. But very few have hands on experience as to what commercialisation actually involves.

This publication presents a scientist’s ten year long commercialisation experience. His product is a wetting front detector – a simple device that shows how deep water has penetrated into the soil.

If a scientist goes down the path of commercialisation all the way from original idea to final product, it will have a major impact on his or her career. This case history documents the journey through the commercialisation maze. Herein are the lessons learnt and the

things that should be known before getting started.

This report will be helpful to researchers and scientists, managers and those who are contemplating, undertaking or managing product commercialisation.

The Rural Industries Research and Development Corporation (RIRDC) manages and funds priority research and translates results into practical outcomes for industry.

Our business is about development a more profitable, dynamic and sustanable rural sector. Most of the information we produce can be downloaded for free from our webstie: www.rirdc.gov.au

Books can be purchased online or by phoning 02 6271 4100.

Contact RIRDC:Level 2

15 National CircuitBarton ACT 2600

PO Box 4776Kingston ACT 2604

Ph: 02 6271 4100Fax: 02 6271 4199

Email: rirdc@rirdc.gov.auweb: www.rirdc.gov.au

This publication can be viewed at our website— www.rirdc.gov.au. All RIRDC books can be purchased from:

www.rirdc.gov.au/eshop

RIRDCInnovation for rural Australia