|Award Category:||Innovation and Entrepreneurship|
|Project Site:||Research Commercialization Program|
|Submitted By:||Innovation Works|
Innovation Works’ (IW) Research Commercialization Program is a collection of initiatives that utilizes university partnerships to facilitate the commercialization of innovative technologies and promote the creation of high growth-potential companies in southwestern Pennsylvania. The program provides funding and strategic business support to help determine the commercial potential of university innovations; helps rapidly transform very early-stage startups into revenue-positive companies through the application of innovative business growth strategies; and provides assistance to entrepreneurs working outside of the university setting to help them overcome commercialization challenges. Since program inception, IW has awarded 89 translational research grants totaling over $1.3 million and has provided mentorship and business support services to 49 entrepreneurial teams working to commercialize technologies. The teams have in turn formed 17 companies, created more than 60 jobs, launched 36 products; and attracted over $110 million in follow-on funding. This program is highly scalable, having already been adapted within Innovation Works for use in other research institutions and industry sectors.
Southwestern Pennsylvania is home to several prominent universities and research institutions that, combined, attract over $1 billion annually from federal sources to support research that leads to cutting-edge innovations. In the last 10 years alone, two of these institutions, Carnegie Mellon University and the University of Pittsburgh, have been awarded over 17,500 research grants and have registered nearly 1,000 patents. Despite this high volume of intellectual property creation, university technology transfer offices lack the resources required to fully support the commercialization efforts necessary to draw the greatest economic value from these innovations. Systematic factors are the primary impediment to success; federal research dollars fund research, but are prohibited from being used to support market validation and commercialization efforts.
As southwestern Pennsylvania’s most active investor in early-stage, high growth-potential technology companies and an integral member of the region’s economic development community, Innovation Works recognized that a need for assistance existed among universities and developed a suite of programs to provide business growth and commercialization strategies to university technology transfer offices and entrepreneurs with the goal of improving the economic impact of the region’s research institutions.
The Research Commercialization Program is multi-faceted, bringing together highly successful programs that IW has implemented to better actuate economic growth and promote university partnerships that increase technology commercialization and company creation. It is made up of three major components:
- providing funding and strategic business support to help determine the commercial potential of university innovations;
- applying innovative business growth strategies to rapidly transform very early-stage startups into revenue-positive companies; and
- providing assistance to entrepreneurs working outside of the university setting to help them overcome commercialization challenges.
Innovation Works provides both funding and strategic support to promising university technologies that cannot otherwise access the university commercialization assistance necessary to validate a technology’s market potential. Funding is provided through the Research Commercialization Program as direct grants that can total up to $25,000 per project and are disbursed directly to the university to fund the commercialization efforts it conducts on behalf of the company. In addition to supporting these activities at the university level, IW also offers recipients mentorship and guidance from one of the organization’s Executives-in-Residence (EIRs). These seasoned business professionals and successful entrepreneurs work closely with both the entrepreneurs and technology transfer offices to ensure that companies are provided with the most complete and thorough suite of services, individually tailored to meet the specific challenges of a particular company. This assistance protects against the most common risks faced by very early stage high growth-potential companies, helping bridge the “Valley of Death”— the funding gap between concept-stage and growth-stage that provides the greatest challenges for early-stage companies. The work of the EIRs is intended to complement the services typically provided by technology transfer offices. While these offices excel at specific facets of the commercialization and licensing process, EIRs have extensive experience determining and ensuring a technology’s successful transition from promising idea to viable business.
For inventions and business ideas with high-growth potential that have already demonstrated commercialization potential (sometimes through the abovementioned funding mechanism), Innovation Works developed the i6 Agile Innovation System, in partnership with Carnegie Mellon University, to rapidly transform startups into revenue-positive companies through the application of innovative business growth strategies. Agile innovation is based upon the belief that a company must intimately understand customer need by interfacing with customers as early as possible – even before a product has been developed. A prototype product is quickly developed and presented to customers for feedback; that feedback is then used to refine and improve the product. This iterative process is repeated so that a marketable product addressing customer needs can very quickly come to market. This agile innovation process is taught through the i6 program, ensuring that companies understand its value and how to implement the growth strategy to maximize the success of their product offerings. Each team or company is paired with three distinct mentors from the program’s extensive mentor network. The first mentor is a “quarterback” – usually an IW Entrepreneur-in-Residence – who helps guide a company through the agile innovation process. The second mentor is a Business Mentor who has domain or functional experience that can quickly influence the direction of the company and their product. Lastly, a Product Mentor – such as a current Product Manager or CTO – helps the company navigate the realities of commercializing their products. These three mentors, focusing on process, function and implementation, are helping participating companies get better products to market in a shorter period of time, improving their competitiveness and laying the groundwork for success.
As part of the Research Commercialization Program, Innovation Works also provides assistance to entrepreneurs working outside of the university setting to help them overcome commercialization challenges. This assistance, provided through IW’s Commercialization Alliance and Technology Commercialization Initiative programs, utilizes two full time program managers with over 50 years’ technology commercialization experience and advanced degrees in engineering to provide mentorship and guidance. Through the Commercialization Alliance, IW works with other regional economic development nonprofits to accomplish two main goals: 1) to increase the number of commercialized technologies that are developed at the National Energy Technology Laboratory – a major regional research institution; and 2) to create an atmosphere of innovation at the laboratory in which engineers and management are encouraged to consider the commercial potential of new technologies and inventions during intellectual property creation. This program has the potential to greatly improve the overall economic impact of the federal laboratory, strengthening southwestern Pennsylvania’s innovation ecosystem. The Technology Commercialization Initiative is a funding mechanism designed to support the commercialization of innovations in robotics and advanced technologies. Companies are chosen by the members of the Technology Commercialization Advisory Board, a membership-based organization comprised of university representatives and business leaders of prominent technology-based companies, and receive up to $100,000 in funding and mentorship.
Collectively, the initiatives of the Research Commercialization Program help technology innovators overcome the early challenges of the commercialization process, contributing to the foundation of economic growth in southwestern Pennsylvania.
The Research Commercialization Program boasts impressive results and has provided valuable capital, mentorship, business assistance and networking opportunities to a significant number of technologies, teams and companies. To date, the Research Commercialization Program has:
- Awarded 89 translational research grants totaling over $1.3 million;
- Provided mentorship and business support services to 49 entrepreneurial teams working to commercialize technologies; and
- Hosted 16 agile innovation workshops.
Thanks to these efforts, participating teams working to commercialize technologies have:
- Formed 17 companies;
- Created more than 60 jobs;
- Launched 36 products; and
- Attracted over $110 million in follow-on funding.
As these companies and technologies continue to mature, IW anticipates all of the abovementioned metrics will increase substantially.
From the outset, IW’s Research Commercialization Program was designed to be scalable and easily replicable across various industry sectors. Five years after launching the University Innovation Grant program – a key component of the Research Commercialization Program – IW partnered with Carnegie Mellon University to launch the i6 Agile Innovation System. Funded through a federal grant award, this program utilized the lessons learned from investing over $750,000 in 36 technologies through the University Innovation Grant program to develop a model for nurturing the high growth-potential of software- and internet –based startups through the efficient utilization of capital and human resources. Throughout this three-year initiative, the i6 Agile Innovation System proved that IW’s Research Commercialization Program was scalable across additional industry verticals and entrepreneur types, as these grants were awarded to student entrepreneurs rather than the faculty researchers more commonly supported through the University Innovation Grant program. The Research Commercialization Program has also scaled to support the commercialization of technologies produced by non-university partners. In early 2012, IW began providing assistance to technologies developed in other federal and private labs through partnerships with the National Energy Technology Laboratory and the administration of the Technology Commercialization Initiative, both of which offer grants and strategic services to support promising research.
The sustainability of the Research Commercialization Program is derived from the increased deal flow the program generates for IW’s primary investment vehicle. Technologies supported through the initiative have raised over $110 million in follow-on funding and have provided IW with significant returns on its investments. These returns not only fund the administration of future grants through the Research Commercialization Program; they also reduce the organization’s dependence on outside funding sources, improving IW’s overall operational efficiency and sustainability.
UEDA Awards of Excellence Finalists presented at the Annual Summit in Pittsburgh on October 28, 2013. Summit attendees then voted for the best initiative in each category.