Entrepreneur@NU: Successful Entrepreneurs Tell Their Stories
"Big companies are nice, but they're not where the action is," says William Moffitt. Moffitt, CEO of Nanosphere, who has worked with nine startup businesses, joined other successful startup CEOs Andrew Cittadine, chief executive officer of American BioOptics LLC; Philippe Inagaki, CEO of Polyera; and Stuart Frankel, CEO of Narrative Science, in the panel, “Successful University Tech Spin-offs” at the third annual Entrepreneur NU Conference, May 24.
Panelists discussed their experiences in taking technology from a university and turning it into a viable company. All the companies represented on the panel have licensed technologies from Northwestern University. Jeff Coney, Director of Economic Development in Northwestern University’s Innovation and New Ventures Office, moderated the panel.
Andrew Cittadine summed up the path of entrepreneurship in his opening remarks, “I didn’t have a plan to end up here in medical technologies,” he said, referring to how he got involved in startup companies. He says it happened by accident when some friends started a company at Stanford University. From there, he says, he followed things he enjoys. Cittadine likes the novelty of university technologies, which are essentially a blank canvas and provide the opportunity to turn an idea into an actual product.
Panelists discussed the unique aspects of transferring technology from a university, the role of academic founders, finding the right people for key positions, and fundraising.
Each of the four topics addressed important issues:
Unique Aspects of Transferring Technology from a University:
- When a technology is licensed from a university, there is a change in the mentality behind research. In the academic realm, researchers operate on a “publish or perish” agenda. Once the technology enters the commercial space, the definition of achievement changes. The mantra becomes “only the paranoid survive.” Time frames go from an academic and grant-funding calendar to firm deadlines and set deliverables.
- University spinoffs create very collaborative environments, but also require incredibly self-directed and independent people.
Role of Academic Founders:
- It is important to ensure that everyone understands their role and contributions to the company and that they respect what each person brings to the table.
- In academia, in order to publish, a researcher needs the experiment to work just once. A viable company, however, requires stable and consistent products, which require both academic and industrial research.
- Inside know-how is important and can come from a junior professor, if the lead faculty member is unwilling or unable to join the company.
- Universities offer access to talent. Stuart Frankel, who works with Narrative Science co-founders Kris Hammond and Larry Birnbaum, both McCormick School of Engineering and Applied Science faculty, has hired 15 engineers who graduated from Northwestern.
The Right People in Key Positions:
- A startup success, in large part, depends on finding the right people. This requires communicating about expectations and the company’s core values from the very beginning.
- A startup should hire people who want to be involved simply because they believe in the research, the product, or the process.
- By continuing the conversation about Polyera’s core values, Phil Inagaki has built a culture around working harder, smarter, and as efficiently as possible.
- When it comes to raising money, telling a really good - and big - story is key, but it needs to be balanced by communicating in a step-by-step fashion what actually can be achieved.
Communicate clearly with investors:
- Set reasonable expectations. Choose a venture capital company that understands your business.
- Don’t forget about grant funding, which can be helpful for early-stage companies.
- Physical sciences research can take a long time to get to market, which can require exploring alternative funding sources such as corporate funding and partnerships.
Advice from the “Successful University Tech Spin-offs” panelists:
- Phil Inagaki: “You are a lot more dependent on luck than you’d like to be. The environment can change fast, so have a plan B and even a plan C.”
- William Moffitt: “ Don’t celebrate the highs because then the lows don’t taste so bad.”
- Stuart Frankel: “Stuff goes wrong every day. Expenses are always higher and will come faster than you think. And sales cycles are always slower than anticipated.”
- Andrew Cittadine: “Timing is everything.”