I'm a bit behind on my reading and just came across The New York Time's article The Idea Incubator Goes to Campus. It covers the growing trend of universities assisting professors in commercializing their research.
We recently experienced this process first hand. We had the opportunity to work with Zensi, a company founded to commercialize some very cool research - a method to sense and monitor home electricity use at the appliance level.
Zensi was acquired by Belkin earlier this year. The terms were not disclosed, but I can report the founders are very happy with the deal and thrilled to be part of Belkin- a company with manufacturing scale, global retail reach and proven expertise in developing slick consumer electronics.
There are several academic research commercialization lessons from our Zensi experience:
1. Involve people with relevant business experience as early as possible: Most academic researchers have a limited understanding of what it takes to create commercial products.
A key reason Zensi was successful was one of the founding professors had prior business experience and they attracted a tech veteran as CEO very early in the process. This allowed them to identify the opportunity and create a strong product prototype.
While it's unrealistic to expect the average academic research group to have as much business experience as the Zensi did, it is possible for researchers to find highly experienced advisors and/or business help from university technology commercialization groups.
2. Be realistic when it comes to fund raising: Raising money these day is not easy. It takes time, valuations are low and terms tend to be tough. Most new entrepreneurs way underestimate how much time and effort it takes to raise money.
3. University commercialization departments can be friends and/or foes: Zensi was lucky. The universities involved - Georgia Tech and the University of Washington - were very supportive and consistently added value.
Other university-based startups are less fortunate. University commercialization departments exist to create value for their schools. This can put them at odds with academic founders and potential investors.
To avoid potential problems, it is generally best to come to business terms with the commercialization department early in the process and before attempting to raise funds.
4. Consider all your commercialization options: Zensi wasn't considering being acquired by a large corporation, they were planning on rasing money and building a business.
But several things changed this view. First, while Zensi was able to raise venture funding it became clear the terms and valuation were not going to be as attractive as the team hoped. Second, interest from large corporations (Zensi had several suitors) was much stronger than anticipated and they made strong offers.
The large corporations also could develop Zensi's products more quickly and market them more broadly than Zensi could on its own. This was very attractive to the founders, who are highly motivated by the opportunity to create products that cut energy use and greenhouse gas emissions.
Don't get me wrong - building a successful company is a hugely rewarding experience and a lot of fun. But it's not the only path to creating value.
5. Be realistic about the commercial possibilities of academic research: The goal of most academic research is to create new knowledge or expand the boundaries of existing knowledge. Because of this, a very small percentage of academic research projects can be turned into successful products - at least in the time frames a startup company generally has.