There’s no doubt that some of our most valuable innovations started in university settings. However, in my experience, many game-changing innovations never make it to market, even if the science supporting them is strong. Here’s what I’ve been seeing.
University IP rights are not the problem.
Many universities have a “tech transfer office” whose job it is to market innovations to anyone willing to commercialize them. Those offices are generally easy to work with. Recognizing how hard it is to commercialize IP, some tech transfer offices will sell 5-year exclusive rights for just $1. And in the long run, they just want to work with stable partners who can honor their contracts, which usually call for an annual license fee equal to 2% of revenues.
The problem is in execution.
Solving for these factors remains a challenge for many university-born innovations.cialis pilule
- Time & money. The path out of the lab and into the market is long and risky. There’s a big difference between making something in a lab verses making it at scale. Few investors have the appetite to fund the machinery and staff (and all the mistakes along the way) required to manufacture at scale.
- People. Academics are usually more interested in furthering their research than in the relatively boring process of building and running a business. Herein lies the problem; the academic inventor doesn’t want to give equity to someone who doesn’t know the science, and great executors won’t work without a huge chunk of equity.
- Switching costs. I once worked with a team considering mass production of graphene. We learned that while graphene is better than silicon as a semiconductor, silicon would be very hard to replace. The cost of changing supply chains, production methods, and the final products to use graphene rather than silicon are really high.
- Customers aren’t ready. Brand-new technology might be so new that there are no customers for it. I recently evaluated a company that invented a semi-flexible battery. The tech sounds amazing, but even the inventors struggled to find immediate applications for it.
- One-trick pony. Few companies are built around one technology. Instead, they combine many patents with ongoing innovation. One new innovative technology isn’t usually enough to make a company.
The inventors who do it right have a few things in common. They:
- Validate. The inventors prove that there’s a real and ready market for their products, usually on their own time and dime.
- Analyze. They understand the economics of the business well before committing to investing in larger prototypes.
- Diversify. Test whether the innovation has multiple potential customers and uses, and then focus on the ones with the most urgent need.
- Commit. They then quit their academic roles and work full time to bring the innovation to market.
- Source. They figure out who will produce, distribute, and buy the thing before they try to raise money.
- Recruit. They know their strengths and stick to them. They can build a team to round out their strengths.
Scrappy leaders are able to cobble together grants, accelerator money, and investments to get a product out of a lab and into the world.