What can an industrial ecologist involved in commercialising long-lead time scientific R&D learn from an innovator, a venture capitalist and a patent attorney when they are all sitting on the same side of the table?
A great deal more than I thought before I attended the pre-conference workshop on commercialising a spin-off company and conference on 'Commercialising Technology 2000' conference organised by IIR Pty Ltd in Sydney, Australia on 16 and 17 May 2000.
The workshop facilitators included David Evans, Managing Director of Uniquest Pty Ltd, the technology commercialisation and consulting company owned by the University of Queensland; Frank Foster, a venture capital investor with Allen and Buckeridge in Sydney, and Rob McInnes, a partner specialising in intellectual property law at Baldwin Shelton Waters Law in Sydney.
The trio set themselves the ambitious scope of:
Establishing a sound business plan that meets the expectations of all stakeholders and responds to the target market Creating a workplace culture that fosters innovation and satisfies the institution Structuring the ownership in a spin-off company Managing the legal risks in running a start-up, and Raising capital and financing a spin-off company. By and large, all these topics were touched on and developed through the skilful facilitation of David Evans who brought out both the knowledge and experience of the expert panel and the accumulated ideas, concerns and interests of the 15-20 participants.
I was left with a much better understanding of the difficulties of commercialising R&D out of a large scientific organisation, the pitfalls in establishing a successful spin-off when the initial Intellectual Property is closely held by the founder who wants to control the control the company, and the importance of achieving technology milestones to the ongoing valuation of the spin-off company.
The two day conference was attended by 40-50 participants in a more formal but nonetheless informative setting. Once again, the emphasis was on the case studies and practical experience across a wide body of c-commerce and biotechnology companies, from 10 person start-ups in Internet media services to global players in biotechnology and pharmaceutics.
The ecologist in me searched for underlying patterns and processes that linked these diverse ideas from people working in organisations across many scales of organisational and commercial complexity.
I found many parallels with invasive species colonising new or disturbed ground, with populations struggling to fill an unoccupied niche, with individuals exploiting an under-utilised resource or successfully outmanoeuvring the slow-growing, stable but nonetheless vulnerable founders.
To an ecologist, research commercialisation offers many parallels with invasive species colonising new or disturbed ground, populations struggling to fill an unoccupied niche, and individuals exploiting an under-utilised resource.
As in natural ecosystems, those individual agents that are most successful can withstand or adapt rapidly to change, and most importantly, pass on and increase their form of capital, genetic or financial, over time.
Apart from these lateral lessons in the human ecology of new businesses and emerging commerce, I also benefited from the fresh insights of young men and women running bold start-ups in e-commerce (eg Ben Hosken and Kerri Lee Sinclair, AgentsArts; Peter Moore, eBusiness Interactive).
There were also valuable insights from a more established electronic products and services company (Rob Douglas, Keycorp Ltd), from innovators taking Intellectual Property out of educational institutions (Stan Jeffery, Australia Technology Park; David Evans, Uniquest), and insights into the minds, pockets and hearts of the investors (Frank Foster, Allen and Buckeridge; Bob Moses, CSL Pty Ltd; Paul Martin, The Profit Foundation).
The final day contrasted two sobering presentations on Protecting your Intellectual Property by a tag team from Allen Allen & Hemsley (Niranjan Arasaratnam and Tanya Ross Gadsden) and adequate disclosure of information affecting the capital markets (Louise Elsing, Australian Stock Exchange).
Two fascinating case studies were also presented on the development of micro-electronics in Australia (Trevor Cole, The Warren Centre) and fostering innovation through supporting scientific research with commercial applications, using gene therapeutics as an example (Geoff Symonds, Johnson & Johnson Research Ltd).
The first case study pointed out the great potential for benefits to Australia from the development of a micro-electronics industry based on local know-how. Critically though, access to design software was described as tightly controlled by a few key players in the USA and the price of entry to this game was seen to be too high for many smaller national players to fully develop their competitive design potential. This seemed to be more of a problem with how the local players were currently resourcing and structuring their research and commercial activity.
By contrast, the global reach of Johnson & Johnson (188 companies in 52 countries) shows the market potential for the commercialisation of powerful new biotechnologies in the area of human health.
Geoff Symonds described the networked relationship of Johnson & Johnson Research in what I would describe as a knowledge broker role poised between academia and the marketplace. Interestingly for me, he described the adoption and development of "gene shears" technology for use in HIV treatment. This gene technology was originally developed by CSIRO Plant Industry in the 1980s for use in the emerging field of plant genetics underlying current agricultural biotechnology. However, Johnson & Johnson licensed the gene shears technology for use in the pharmaceutical area and hired one of the CSIRO inventors. Limograin, the French life sciences company, licensed the technology for use in the agricultural area.
As in natural ecosystems, those individual agents that are most successful can withstand or adapt rapidly to change, and most importantly, pass on and increase their form of capital, genetic or financial, over time.
Although not well known, the rest is history, and suffice to say that due to the 'Greenpeace Effect', it is now easier to do a human clinical trial using this biotechnology than an agricultural trial. Such uncertainties, and unintended consequences of various commercialisation pathways, were richly sprinkled through the three days of this fascinating conference.
As one who resides fairly close to the 'techie' end of the commercialisation spectrum I was left with a healthy regard for the social, economic, legal and commercial complexities that govern whether or not a great idea or technology successfully makes the long journey to the market.