The Provo (Utah) University now ranks first in the country in the number of startups, licenses, and patent applications per research dollar spent, according to the Association of University Technology Managers. BYU-licensed technology led to the creation of nine new companies last year on a research budget of roughly $30 million. Stanford, with a budget of $1.1 billion, spawned the same number of startups.
The private Mormon university set out to beef up its technology transfer department three years ago. It hired Mike Alder, an Alabama venture capitalist, to head the department, as well as Dee Anderson, a lifelong entrepreneur and BYU grad, to be his No. 2. They have tapped BYU’s vast alumni network to generate interest in licensing everything from bacteria that consume carcinogens to cutting-edge hearing aid technologies.
When Alder came on board, BYU was issuing around seven licenses a year. The 10-person team (seven of whom are student interns) expects to issue up to 40 licenses this year. “We’ve stepped up our game, and that’s had positive impact,” says Anderson.
Alder and Anderson have put much of their energy into building better relationships. They hold weekly meetings with different departments to discuss research in core areas such as chemistry, computer science, and engineering. In September, Anderson set up a LinkedIn group of BYU grads who want to hear about new technologies. That has resulted in several phone calls a week from people interested in using BYU research. The school also started an Entrepreneur in Residence program earlier this year that recruits alumni and business leaders to help evaluate technologies and identify opportunities for startups. It has so far recruited 28 entrepreneurs. While all are unpaid, they can invest in the business ventures they help put together. One entrepreneur is Eliot Jacobsen, a partner at a venture fund called RocketFuel in Salt Lake City. He plans to license an e-mail encryption technology that he discovered through the program. “Mike and Dee are doing [tech transfer] more disruptively,” says Jacobsen.
Other universities have set up alumni networks to help commercialize research. The University of Akron in Ohio, which ranked eighth in patents per research dollar, recruits retirees as unpaid senior fellows to help structure licensing deals. At MIT, tapping alumni has long been the norm. As Lita Nelsen, director of MIT’s Technology Licensing Office, says: “A lot of the people we work with have [MIT] degrees.” What distinguishes BYU, says Diane L. Palmintera, president of Innovation Associates, a consultancy in Reston, Va., is that it’s adopting an approach used by institutions with a much greater focus on research.
BYU has less of a financial cushion than big schools. Alder faces a hiring freeze. And some at the university don’t think turning research into business ventures should be a top priority. To a large extent, Alder admits, they’re right. “It’s not our main mission to be in tech transfer; it’s an extra for the faculty.” In this environment, though, keeping faculty happy is important. “They can go other places,” says Alder. “This is an incentive to stay.
Reprinted from the December 7 issue of BusinessWeek by special permission, copyright © 2009 by Bloomberg L.P.
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