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Thursday, April 15, 2010

Thoughts on Technology Transfer

I have been looking at technology transfer methedology of late, I have transfered technology in the past, for a selection of companies and universities, and I have assembled some thoughts on the technology transfer from academic institutes and a proposed model that I have used many times in young companies.

University technology transfer - why so difficult?

Universities produce lots of research, patents, and base technologies. Few of them ever make it to the commercial market. Yet, lots of recent college grads start companies that bring amazing innovations to market. Why the disconnect? The obvious conclusion is academic versus business thinking. Not so fast. If that were true, corporate research labs would transfer most of it's research into new and existing products. The truth is a very small percentage of corporate research ever makes it to market.

The biggest factor seems to be the fundamental differences between research and product development. Research focuses on advancing technology without being constrained by business requirements. Product development starts with examination of customer needs and business requirements, and matches existing technologies to the problems.

Technology Licensing - Most big universities have Technology Licensing Offices that handle technology transfer on behalf of the university. MIT in Cambridge has one of the best TLO's I have worked with. VCs are constantly looking at technologies from universities more so in North America, but my guess is they represent less than 5% of the companies they fund, probably much less. What are the issues with TLO deals?

  • Disagreement on value of technology
  • No proven customer/market fit for the technology
  • Key technology researchers will not transfer with the technology
  • Complicated Intellectual Property (IP) ownership issues
  • Long term royalties that may not make sense for the product evolution

Its All About The People - VCs invest in people not technologies. Entrepreneurs have a balance of business sense and technology smarts that is very rare. Matching entrepreneurs to technology wizards is where VC firms add a lot of value. They have a list of serial entrepreneurs that they know and trust. Magic happens when they match these entrepreneurs to cool new research.

So how do you handle the technology transfer once you have the IP agreed, well you can use a model such as the Stage-Gate Process


The Stage-Gate Product Innovation process is a carefully designed business process – the result of the world’s most comprehensive research into understanding what discriminates product success and failure. Pioneered and developed by Dr. Robert G. Cooper, it is the world’s most widely implemented and trusted product innovation introduction process.

A Stage-Gate Process is a conceptual and operational roadmap for moving a new-product project from idea to launch. Stage-Gate divides the effort into distinct stages separated by management decision gates. Cross-functional teams must successfully complete a prescribed set of related cross-functional tasks in each stage prior to obtaining management approval to proceed to the next stage of product development.

So I hope this has given you some things to think through when you are ready to do soem technology transfer, or you could give me a call