Johns Hopkins University and Google are partnering to bring ideas from the engineering school to market. While some observers may view this development as evidence that the traditional tech transfer system is failing, we view it as a positive development. We have long argued that universities are creating licensable ideas at an incredible pace, and the onus is on the business community — entrepreneurs, investors, corporations, and funds — to be diligent in watching the university ecosystems and seizing upon licensable ideas early.
Google is actually following a well worn path adopted by many Boston and San Francisco life science venture capitalists — where in the life science world, keeping close tabs on key researchers and their lab output is standard operating procedure for successful VC investment opportunities. Dealmaking in this context is known to transpire early, at times before the broader investor community is even aware there is a licensable opportunity (more on this in another blog post). As we have pointed out in other posts, when it comes to hard science like engineering and biology, the riskiest but most critical injection of capital occurs at the earliest stage or validation work.
Google clearly understands that when it comes to important breakthroughs, the distance that needs to be travelled between a university lab discovery and a commercial product is vast, and the university system is at times not fully equipped — from either the ability to effectively market opportunities, to the availability of sufficient risk capital for validation, to surrounding the nascent technology with with relevant and experienced industry personnel, etc. — to travel this entire distance with every potential invention. One of the reasons for Collective IP is to surface, organize and effectively market the work of researchers in the hard sciences to all members of the investment and business development communities.
A university administrator reading this might reasonably ask: why can’t we be the venture capitalist? Why can’t we expend the resources to do the high risk early-stage validation work, create value, and then move an actual company along the process? Given that many venture capitalists are not particularly skilled at “picking winners” (note that Google itself was turned down by many venture capitalists when it was seeking investment) what is to suggest that universities can’t do better? The University of Minnesota appears to be pursuing precisely such a strategy. But at least one observer believes this is a bad idea.
Between universities who may benefit from close relationships with select venture capitalists, and, on the other hand, becoming VCs themselves, there is a third way to accelerate the commercialization of academic discovery. Universities can use new software and analysis tools to efficiently connect the broadest possible yet intelligently targeted swath of the entrepreneurial, industry and investment communities with academic discoveries. By pursuing their existing fiduciary duties with an available tool like Collective IP, university administrators and technology transfer officers can shift risk and maximize the potential value of licensable inventions.