[LINK] Universities Australia

[Tom Koltai]

> -----Original Message-----
> From: Tom Worthington [mailto:tom.worthington at tomw.net.au] 
> Sent: Sunday, 11 September 2011 10:51 AM
> To: Tom Koltai
> Cc: link at mailman.anu.edu.au
> Subject: RE: [LINK] Universities Australia
> 
<SNIP> 
 
> > PhD's let go the reins. Hand them over to those MBA types...
> 
> I suggest we need PhDs trained to be able to talk to the MBA 
> types. We 
> need scientific and engineering people who can talk business language.

Err actually, no.

For several reasons.
If the University owns the IP and has a commercial interest in the
outcome, at what point does the commercial needs of the University
outweigh the individual rights of the inventor?

In other words, how can the University remain impartial unless it is at
arms length. (e.g.: Stanford at arms length from Google.) 

Academic persons speaking bizspeak has always been a barrier to
commercialisation.

Most financiers are petrified of inventors; and that mortally 'deal
damaging' phobia is usually compounded when the first meeting
introduces:

"...Bob. He's our commercial licensing guy. He makes sure that you wont
screw the university. Haa haa... Just joking."

What you need is an entrepreneur that understands how little or how much
of the technology should be made public to maximise the products
potential without pushing the eyes glazing over "you've been geeked"
button.

E.g.: an anaerobic based auto-recharging graphite nano-tube hydrogen
storage device is of little interest to Mrs. Unit Holder.
The publicus investment portfolio formational list of interests is
short; 

1.   how much will I make how quickly ?
2.   will my car be cheaper to run with one of these doohickie in it.
3.   is it cheap enough so that everyone will buy one so that my shares
will go up a lot ?
4.   when can I sell my shares ?

The Universities/incubators only interest should be, depending on the
positioning of the sales campaign and product evolutionary timetable,
is, how low a price can we charge to cover costs, ensure ubiquitous
take-up (teme development) and subsequent dependency whilst managing to
keep the investor shareholders happy ?

Please note, nary a formula or algorithm anywhere in the very simple
marketing equation. It is my opinion and anecdotal observation over
thirty years that the less Academics (inventors) have to do with the
final sales, marketing and corporate building, the more successful the
rollout generally is.

When we examine some of the more successful commercial tales over the
last millennia, it strikes me that it is never the inventor that strikes
it rich, but the promoter who... If the inventor lets him, takes the
inventor along for the ride for a paltry 8-10%.
(That almost always requires a muumuu of 60% to the promoter so that he
can cornerstone and develop a commercial following.)

People don’t buy brands because X over Y = Z to 32. They buy because
they like the "story". 

Some examples:

Marconi - packaging promoter
Henry Ford - packaging promoter
Bill Gates - packaging promoter
Eric Schmidt - packaging promoter

So the skill set needs to be... Not academics briefing financiers but
journalists (ok, communication graduates) interviewing the visionary and
writing a paragraph.

One paragraph that details the need fulfilment potential and
profitability of the invention.
The secret to successful commercialization.

Example Para:

Dear Dragon:

You should fund my anaerobically auto recharge nanotube hydrogen storage
device because:

As fuel prices go sky high, the public will flock to a fuel device with
the promise to sever their relationships with the fuel companies.
Added to that, the first exit will likely be Exxon, Shell, Chevron or BP
meaning that your cornerstone investors can cash out and free-ride after
the public demonstration on the seven o'clock news. We can build the
device for $300 and believe we can charge a monthly rental fee per
customer of around $30 per month, meaning that with the average vehicle
life of 5 years, our profit margins on every customer is 5,000 percent.
-----
Sleazy ? Of course. However, the only requirement I see for academic
involvement in this exercise is for the independent experts report from
an established testing centre (e.g.: RACQ/NRMA) (and interview sound
bites for future marketing).

Tom, I reiterate. Australian universities (and their alumni) have
developed thousands of great inventions. (e.g. FeRAM in S.A. in the
nineties).
They don't get up in Australia because the academic institutions are
unfortunately financially unrealistic. As a consequence, those that do
make it usually do so outside of the Academic environment and end up in
Silicon Valley, China or the UK (Usually though IP misappropriation).

The help but hands off procedure would appear to work in several areas.
I offer Caltech as an example, with over 100 commercial spin-offs per
annum (of which only a dozen or so are over one million dollars in
value.) 

An analysis of successful commercialization versus: Shelving/Failure was
executed by the Stanford Economic Policy Branch "Appropriability and
Commercialization: Evidence from MIT Inventions" wherein they studied
all commercialisations licensing that occurred from MIT Graduate work
from 1980 to 1996.

The conclusions were varied but in summary (from a short period dataset
<11years)

Quite often licensing is effected to enable copying elements of the
invention to allow the licensor to invent his own patentable version of
the technology and in the meanwhile, keeping it off the market.
Of course, if the licensing is too expensive, then the marketing
vultures merely wait in the wings for patent expiry and become the
imitators.

Age of         FAIL        YES       Right
License       Loser       Winner    Censored 
 1             37%         24%       39%
 2             30%         25%       45%
 3             28%         21%       51%
 4             47%         19%       34%
 5             43%         14%       43%
 6             40%         10%       50%

Most Commercialisation failed by year five, but that 25% of year one
licensed technology was successfully commercialised. 
That to me seems an eminently achievable target for Innovations ATP/ATC
or any other university intellectual Property commercialisation group.

If we could licence 90% of the innovative start-up papers collecting
dust at AU's 36 hallowed halls of learning and be successful with 25% of
those, we would have something that could :

A: Drag us out of the coming depression
B: Show the world that Australia is an academic and commercial
powerhouse and not just an accidental repository for iron ore.
C: Make every Australian doubly proud to be an aussie, home of BBB,
Beer, footy and; all those inventions.

Err, BBB is a left over seventies euphemism that is no longer pc. 

In closing, a 100% share of "no deal" equals very poor commercialisation
stats.
Possibly the Government should consider legislation similar to the US
Bayh-Dole Patent and Trademark Law Amendments Act (as in 35 U.S.C. §
200-212) to ensure that not too much dust collects on too many files in
university filing cabinets.

The current regime would tend to suggest that intellectual property (the
real;y good ideas) remains secret and is not disclosed (for several
reasons that possibly shouldn’t be discussed in a politically correct
forum).

References:

http://www-siepr.stanford.edu/repec/sip/05-017.pdf