Question

Topic: Strategy

Professors As Partners Or Entrepreneurs?

Posted by Anonymous on 10/31/2004 at 4:30 PM ET 125 Points
As a successful professor at a major research university, I am pressured to be entrepreneurial and form small businesses. It seems difficult ot be good at both jobs. I am proposing that 5 of my colleagues form a partnership, agree to pool our IP and negotiate with the university to license it back to the partnership, and then our corporation can share the workload and any returns, and pool service related tasks, space, etc. By partnering, we are not likely to damage our academic careers as much as starting a "professor driven business" on our own. Further, it seems that our joint knowledge will help us deal with sometimes difficult Univ. IP offices. An additional function would allow the partnership to become a consultation operation in new cross-disciplinary areas.

Basically, we can be good professors or maybe good entrepreneurs. It's hard to do both jobs well. The vast majority of professor started businesses are so-so at best. So, my question to colleagues is, why is this not more common? I have put together a proposal for a partnership and I would like to pursue it, but I can't find similar examples. In our case, each of the professors are involved in a new institute so we already have an intellectual link. We all, already have IP in the system, but this proposal will deal with any IP that is shared by any partner. We are all from different, but cross-disciplinary research areas. For what it is worth, we are biomedical-bioengineering research scientists (with clinical diagnostics opportunities).

What is wrong with the proposed model? Can it work?
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RESPONSES

  • Posted by Deremiah *CPE on 10/31/2004 at 5:15 PM Member
    JPR,

    the model can work but what is likely to breakdown is the responsibility that each person takes to the existing group. Why has it not worked up to now (well the skys the limit on that answer). A great deal of partnerships fail because of the two C"s (committment & communication). When it comes time to do the work make sure that everyone is responsible to the group. If at any point in time other outside demanding responsibilites enter the picture one of your ajoining partners may slack up on their duties. Make sure you have responsible people you an count on who are really committed to carrying their share. Let me think on this a little further. Is there anything else I can do for you?

    Your Servant, Deremiah, *CPE (Customer Passion Evangelist)
  • Posted by Inbox_Interactive on 10/31/2004 at 8:48 PM Member
    Having worked with dozens of early-stage companies that all thought they were the next billion-dollar idea, I have one question for you:

    How many of you are going to be on this new project full-time, and how much money are each of you going to contribute to the effort?

    Okay, that was a two-part question.

    Curious as to your answer.

    Paul
  • Posted by Inbox_Interactive on 10/31/2004 at 11:30 PM Member
    Paul,

    It's late here--10:30PM EST and actually 11:30PM according to my body (moved the clocks back last night)--so I'll post a follow-up message tomorrow.

    In the meantime, if you would like to send me your one-pager, I'd be happy to look at it with a critical eye.

    In a prior life, I consulted to a number of start-ups and early-stage companies. Please understand that I am in no way pitching you on a consulting gig. I am merely offering to review your one-pager and give you the same kind of feedback that many who have been down this road before are likely to give.

    I believe my e-mail address is in my profile, but if not, please send it to paul@inboxinteractive.com.

    Any response to the one-pager will be made directly by e-mail unless you ask/agree that the feedback be made public. Your option.

    Looking forward to learning more.

    Best,

    Paul
  • Posted by Deremiah *CPE on 10/31/2004 at 11:58 PM Accepted
    Paul,

    Thanks for the update. It appears as though you have put forth the necessary effort to take your past time project to a living entrepreneural business dream. Thanks for the detailed background and please consider sending me your 1 pager. Please click on my profile name and you'll see my email address.

    Allen gives some keen insight and since I'm not a professor my experiences only consist of what I've seen in the consulting industry. If you pursue your endeavor I don't believe there is any way of getting around taking the risk of your academic career sliding unless you're as passonate and committed as Allen. You sound determined enough to succeed but just remember Rudyard Kiplings poem "IF"...you must be prepared to build up your failures with worn out tools and if things don't work try, try again like Thomas Edison.

    Truthfully it sounds like you have enough diversity between your staff members and yourself that it could work. Be sure to examine who your potential client base would end up being and how would you meet the needs? I hope this give you something additional things to think about.

    Your Servant, Deremiah, *CPE (Customer Passion Evangelist)
  • Posted by SRyan ;] on 11/1/2004 at 2:09 AM Accepted
    Paul, my quick opinion on your situation:

    I understand your goal for joining ranks with other academics, but my gut tells me that you might be increasing your risk of failure, not reducing it.

    The most critical thing for success in a new venture is having a strong management team. Yes, your fellow professors can have a stake in the business... but you need to recruit the kind of experienced leaders who can devote themselves to commercializing your IP.

    Welcome to the forum!

    - Shelley
  • Posted by SRyan ;] on 11/1/2004 at 2:23 AM Member
    Another thought:

    Maybe you should get in touch with the top dogs at BioHouston (see www.biohouston.org) and see if they have seen partnerships like yours work. If you talk to Jackie Northcut (CEO) or Tim Graves (Ops mgr), tell them Shelley from BirdNest sent you.

    What made me think of them? Both of our organizations operate in the Houston Technology Center.

    Good luck!
  • Posted by Deremiah *CPE on 11/1/2004 at 8:15 AM Member
    Paul,

    Shelley gives great advice as usual. I would most certainly follow-up on her connections and furthermore she has partnered with people in her own business for over 10 years. Besides that she's from wonderful and smart ( & She's from Texas where everything is :::)))
  • Posted by Inbox_Interactive on 11/1/2004 at 11:33 AM Member
    Let me see if I understand. (Sometimes it takes me a while to "get it," but when I do, look out!)

    1. As part of your work in academics, you and your colleagues develop intellectual property that could possibly be commercialized for profit.

    2. If only one person in your group were to try to monetize his/her IP (after licensing it from the school), the risk is that the academic career will suffer as all of that person's attention is focused on the business. Moreover, that one person's IP may never become commercially successful, leaving that individual with neither an academic nor business career.

    3. Rather than take such a risk, a group of such people could pool their IP and resources. In this case, no one has to give up his academic career, and the likelihood of success increases as their are more assets (primarily IP) and resources (people).

    If this is the plan, this all sounds fine to me, but that still leaves the question of who's going to run the business. If I were you, I'd contact a local venture capitalist who specializes in the industries where most of your IP is applicable. Your group would contribute the brains behind the IP, and the VC could contrubute the capital and the brains behind the day-to-day operation. Given your standing, you'll get a meeting for sure. Offer to take a managing partner to lunch.

    Just know that, for so long as you're unwilling to give up your day job or invest any real capital into the business, you're probably not going to get as large a chunk of the equity as you may envision.

    Just an idea.

    Paul
  • Posted on 11/1/2004 at 1:55 PM Accepted
    Lots of good input from colleagues here.

    From where I sit, the shared-risk, pooled-IP approach will only work if there's a full-time, committed marketing/business leader for the group. I've seen many consultants/academics try a similar approach, and it invariably falls apart/fails -- mostly because there's nobody who has enough "skin in the game" to ensure that it gets all the energy and attention it needs. They're all smart people, but, as you point out, there's only so much a person can do and a limited number of skill-sets that any one person can have.

    You need a committed partner who will spend 110% of his/her time and talent marketing what you have and running the business. (Ideally it would be two different people -- one marketer and one general manager -- but for now, I think you'd do well to have one person, until you're sure this is a real business.)

    The problem with shared-risk/shared-work is that everyone is looking to everyone else to make something happen. There's no catalyst to make sure the company "story" hangs together and gets presented to the right target audience, the right way, at the right time, in the right venue -- consistently and professionally. Nobody gets fired when the business doesn't meet its goals.

    The underlying idea is sound, but don't make the mistake of thinking your IP will somehow sell itself to the world. You still need a professional (full-time) marketer if this is going to work. Someone has to be on the line for making stuff happen, proactively identifying potential customers, and martialing the talents and abilities of the principals in just the right mix to bring legitimate and significant value to the people who are ultimately paying the bills (i.e., your clients).
  • Posted by SteveByrneMarketing on 11/1/2004 at 4:20 PM Member
    Hi Paul,

    Points to mgoodman, someone needs to own it. You need a full time executive with real world business successes. I have known key partners in biomed venture capital firms that will take on an “interim” CEO role that either becomes their full time position or, when the timing is right, the CEO will be replaced with a new guy. I seem to remember a story involving UCI professors that ended with a successful business. You might try searching Ed Chang, co-founder of Opus Medical, he has an interesting “problem statement” process and several success stories.

    Lastly, it’s important that the group gives the CEO his head to make the business happen, meaning do not micro-manage or manage by committee.

    Best of luck, it sounds like fun

    - Steve
  • Posted by SteveByrneMarketing on 11/1/2004 at 8:19 PM Member
    “we need an entrepreneur who is not smart enought to come up with own IP”

    nice statement, kinda makes the case for professional management doesn’t it.

    -Steve
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