Shooting for the Moon: How Universities Can Turn Innovation into Companies

Researchers in university labs find vast numbers of breakthroughs which can better the world

In my last post, I explained the motherlode of innovation hidden in the huge stacks of patents and discoveries backlogged at our universities and research labs. While entrepreneurs in Silicon Valley trip over each other to create the next iPhone app, they ignore the early-stage discoveries which could lead to the next Internet, a revolutionary memory device, or a cure for infectious diseases. Researchers in university labs find vast numbers of breakthroughs which can better the world. Most of their work never sees the light of day. Hardly 0.1% of all funded basic science research results in a commercial venture.

To boost our economy, we need to bridge this gap and improve the university research commercialization system. Many are working on solutions. Unfortunately, things change slowly in academia and those solutions are years off, at best. In the meantime, there are opportunities for ambitious entrepreneurs to do what some smart VC’s do — tap into this goldmine.

To create a guide for you, I did some brainstorming with Barry Myers, a colleague at Duke University who plays the Dr. Jekyll and Mr. Hyde roles of university professor and venture capitalist. A disclaimer on his behalf: Barry would never tell you (unless under the influence of alcohol) to go around the university system but here is our roadmap for finding treasure.

First, pick a field which you are really interested in and spend the time to learn what the science really means. This will be like going back to school. Except you know the importance of what you are studying.

Now let’s be clear about what you are looking for. You will find many ideas in academia, but you want the “propriety ideas” – the ones which VC put in the “proprietary deal flow” category. These are inventions which no one else is aware of (and no one else is bidding on). You need to use your judgment to figure out whether you have one of these nuggets. Ask yourself: If the technology works, will its technical abilities be sufficiently better than anything in the market to make a big impact? If the answer is yes, bet on the technology and run with it. But make sure you have the exclusive. That usually means a materials or biological patent or a process patent that relates to an actual process.

Now let’s go mining. Start by knocking on the front door. All research universities have technology transfer offices which are assigned the task of commercializing research. They manage all of the patents and negotiate licensing deals. Some of these offices are really competent and will help you analyze their portfolio of discoveries. They’ll take the time to explain the value and help you shape your thinking. They will connect you with the inventors and may even team you up with other entrepreneurs and potential investors.

But that’s Fantasy Land. Unfortunately, very few tech transfer offices are like this. Most are staffed by lawyers and bureaucrats whose purpose in life is to squeeze every dime out of a potential licensor while protecting their butts just in case they asked too little and the technology makes it big.