PitchLyst exclusive: How startups and small businesses can power innovation through research
The Butterball turkey, a Thanksgiving tradition, owes a lot of its popularity to the United States Department of Energy.
Technology that originated with the DOE now is used in the wrappers that keep the turkey fresh, said Conner Prochaska, chief commercialization officer and director of the office of technology transitions in the DOE.
DOE spends $18 billion a year on research and development, said Prochaska, who joined directors of the technology transfer offices from University of South Florida and University of Central Florida on a panel at the Synapse Summit in Tampa to talk about how researchers and innovators in private industry and academia can get their ideas to market.
“We do that through a lot of mechanisms and opportunities and try to make sure that money is spread to the best and brightest across the country, whether it’s people in their garage, whether it’s people in universities, or one of our 17 national labs that we have, which are the jewels of our scientific community,” Prochaska said.
At USF, the focus is on finding ways to connect the people at the university with the community, said David Conrad, director of USF’s technology transfer office.
“The real challenge is how do we connect the people who are working on ground-breaking research with people in business. Typically finding the application for the technology is the hard part. We don’t always know how basic research can be used to solve a particular problem, but people in industry do,” Conrad said. “You might have a startup that could benefit greatly from some USF research, but if you don’t know how to access the people or equipment on campus, it’s difficult. Universities don’t do manufacturing. They don’t make products. They do basic research and look for partners that can take it from the research into product development.”
UCF follows a similar protocol, and posts information about technology available for licensing on its website, said Svetlana Shtrom, director, technology transfer, UCF Office of Research.
“We do our best to put it out there, advertise it, summarize it. We go to conferences and do targeted marketing. But really we invite others to come and look at what we have. I know it sounds passive, but at times it’s the other party that’s in the best position to understand how this technology fits in,” she said.
The Butterball turkey wrapper is an example of that, Prochaska said.
“The research we did 20, 30 years ago on that was how molecules interact with each other. Then it took somebody to come in and say that could be a wrap that could block airborne illness, and what do you know — that’s a product that benefits us all and keeps us healthier and safer,” he said.
A best practice for delivering technology to the private sector starts with the research, Conrad said.
“If I’m an academic or in a national lab, what I really need to know is, what are some potential applications. If I’m working toward the solution to a problem, it makes it a lot easier to move it into the private sector. It doesn’t mean that I’m only going to look at those problems, but it helps to understand the industry. So I think one of the best practices is we have connect people in companies to the people doing the research and doing that before they start down a particular path can really help get things out into the marketplace,” Conrad said.
Both USF and UCF take part in the National Science Foundation I-Corps program. It’s a public-private partnership program that teaches university entrepreneurs with a targeted curriculum to identify valuable product opportunities that can emerge from academic research, and offers entrepreneurship training to participants.
It also helps to vet technologies to see if they meet a need, Shtrom said.
“You define what your minimum viable product is and validate to see if it meets an industry need by seeking customer feedback, and then you know you have a business opportunity or you pivot around what the customers are telling you that they actually need,” she said.
Negotiating a license can take as little as 30 days or as long as several months, panelists said.
“One of the new things we’re working on in our office is to try to streamline the process,” Conrad said. “We want to be a little more entrepreneurial with a sense of urgency than you typically see in a bureaucracy like a university.”
The typical license agreement includes reimbursement of patent expenses, UCF’s Shtrom said. “We want an upfront fee and a reasonable royalty up to 5 percent or less on net sales. Sometimes if a company is a startup and doesn’t have a lot of cash we can balance that out by taking equity.”
At USF, the mission is to get as many technologies into the marketplace as possible, Conrad said.
“We try to back-end the financing, so if you’re successful down the road and you have money that your startup can pay us, that’s fine, or we could convert the equity we have taken into cash,” he said. “Someone who licenses an idea can put $20, $50, $100 million into it before it’s available to be sold. They’re already investing a lot of money. We need them to use that money to develop. What I’m trying to say is, I don’t think we can be in the business of trying to look at deals only to make money. It doesn’t make sense if you’re trying to push as much technology out as you can.”
DOE does not take equity in companies licensing its technology, but provides in-kind services — essentially research it will do for the benefit of the licensing company, Prochaska said.
For more information, click here for USF’s Technology Transfer Office, and here for the same office at UCF. The Department of Energy Office of Technology Transitions is here, and its website to find technology that can be licensed is here.
