Thursday, December 19, 2013

Big Labs Have Advantages for Startups

Startups looking for research partners have plenty of options.  I've blogged before about the government's SBIR/STTR programs but that's just the tip of the iceberg.  Large labs offer other options.  I checked out a select few.

The Lawrence Livermore National Lab's Industrial Partnerships Office is in my neck of the woods here in the Bay Area.  I haven't used their services but they seem very willing to collaborate with business plan competitions.  I wish I had support like that when I wrote a business plan or a competition as an undergraduate.  The LLNL IPO monthly webinar showcases the tech they think is ready for a market and the audience is pre-screened for serious investors.  I know people from each of those investor groups and they are serious about finding good ideas.  Those of us who aren't members of prominent angel groups can always use the lab's i-GATE program to find tech and partners.

The Fraunhofer Center for Sustainable Energy is not one of the US government's national labs but their TechBridge promotes research with entrepreneurs.  Some startups in the Cleantech Open could really benefit by using Fraunhofer's testing facilities.  Too many startups try to create something technically infeasible from scratch.

PARC is another well-known private R&D shop.  I find their Big Data analytics test bed intriguing; maybe I should pay them a visit to see it in action.  I've blogged a lot about how Big Data open gaps in enterprise computing that startups can disrupt and exploit.

I did not know that SRI had a venture arm for spin-offs and licensing until I heard it from one of their representatives in person.  I think a startup would need some serious venture money backing it up to license tech from Stanford.  VCs won't just hand money to anybody to commercialize a Stanford idea.  Quite a few VCs have stated in public forums that they prefer to back startups with academic pedigrees from Stanford and UC Berkeley.  Graduates of the best Bay Area schools get first crack at funding for commercializing their own schools' research.  I would leverage my Notre Dame connections but they don't want anything to do with me.

Sandia National Laboratories has tons of partnering opportunities.  I like the flexibility of the Funds in Agreement options and it looks like they offer limited IP protection.  Once again, there's no free lunch and startups will likely have to come to the table with some funding of their own before they can think about seeking reimbursement.

The catch with the national labs is that inventors and entrepreneurs typically have to develop the lab's tech and not their own.  It's not like entrepreneurs get free workshop space for nothing.  The good news is that competing for these labs' award programs is one of those little paths to victory that can keep a startup team motivated through the long haul to commercialization.  Ideas ready for licensing can get visibility from the LES Foundation's competition.  Some labs will work with collaborative IP agreements but somewhere along the line a lab will expect upside participation in the resulting business.  SRI doesn't tout its billions of dollars in value creation for nothing.

I also wonder about untapped opportunities for tech transfer from USDA's ARS and the VA's TTP.  IMHO those are among the overlooked corners of the federal government's research network.  Startups working with newly discovered tech can expect a long haul to commercialization . . . about 15 years, according to one lab rep who addressed a Cleantech Open event I attended.  I'd prefer to work with tech that already has something on the shelf for a shorter timeline to commercialization.  Startups who want my attention need to show me something more than just an IP agreement from a big lab.  I want to see a team of serial entrepreneurs, a product/market fit with pain points to solve, and a path from traction to sales to scaling that's been validated by a venture-backed accelerator, the NSF Innovation Corps, or the Lean Startup process.  It sure sounds easy until you try it for real.