Crossing the Chasm
Northwestern electrical engineering faculty, Kristian Hammond and Larry Birnbaum, discuss the challenges, timeline and Northwestern success stories of commercializing university technology at the April McCormick Dean’s Seminar Series event.
On April 6th, the McCormick Dean’s Seminar Series and the Innovation and New Ventures Office (INVO) presented “Crossing the Chasm: The Process and Problems of Moving Technology Into the Marketplace.” Electrical engineering and computer science faculty members Kristian Hammond and Larry Birnbaum discussed the process of moving technology out of the University and into the world and shared their experiences over the last ten years of commercializing their work. Drawing from both the opportunities and challenges of their own experiences, they have concluded that taking a technology from University to marketplace is no easy feat, but it is essential in order for academic research to have an impact on the outside world.
When he was at the University of Chicago, Hammond realized that in order to test technology it needed to go out into the world, which meant commercialization. He began commercializing some of his technology, which included a recommendation engine that eventually was sold. In The Dev Lab at Northwestern, Birnbaum and Hammond helped with several university companies: Intellext, which specialized in frictionless information systems and was sold to Perfect Market in 2007; Allvoices, a citizens news site, which raised $8 million and is currently in operation; and Narrative Science, based on technology of automated narrative story generation from data developed in a graduate class with the Medill School of Journalism. Narrative Science was founded in 2010 and raised $6M in venture capital earlier this year. “The idea matters, it’s the coin of the academic realm,” Hammond says. “But in the ‘other’ world, success is moving the technology out of the university and getting someone to buy it,” he adds.
Starting a company may sound simple, but there are a long list of things that need to be done and questions answered: Licensing, hiring people, finding a management team, securing the intellectual property, building the product - which takes money - raising money, finding customers, and ongoing sales. In addition, faculty members need to think about their students’ role in developing the technology, their future role, and their stake in the company.
“The idea is not enough,” says Hammond, quoting venture capitalist Tom Churchill, who used to work at the University of Chicago. An idea needs to be evaluated, which requires knowing what the marketplace looks like. And in order to understand the marketplace, the following questions must be answered: Do people want this? How many people want this? Are there barriers to entry? Is anyone else doing this? From a market perspective, what makes us better? And can we sustain it? There must be demand for a product, or it must solve a problem. Simply being the best at what you do, is not enough, Hammond says.
There are a wealth of resources and organizations to help along the way. Call the Innovation and New Ventures Office (INVO), and start a conversation. The Integrated Marketing Communications Program at the Medill School of Journalism specializes in marketing, and the Kellogg School of Management’s Levy Institute for Entrepreneurial Practice fosters entrepreneurship. The Illinois Technology Association is dedicated to helping early-stage companies move forward. And Tech Cocktail provides an opportunity to network and have conversations with the tech community.
One of the most crucial steps in the commercialization process is the first one - disclosure. “For faculty, what is created is owned by the university, and when you invent something, you want to protect it. Fill out the form on INVO’s website, which starts the process of building a paper trail of company ownership, and is essential for raising investment,” Hammond says.
