ACES advice: The secrets to making modern spin-out creation work

High tech start-ups require many and varied inputs, but for Daniela Couto, CEO of the cell therapy spin-out Cell2B,  the vital support needed to overcome initial business stumbling blocks was surprisingly straightforward.  “The university [of Lisbon] gave us an office, did not charge us anything and provided a landline.” she said. “That was really important while we closed the seed round. One week after closing, we were out and looking for our own space. It was a very simple thing, but I think is the best thing they could have done.”

Universities can undoubtedly help spin-outs to overcome the initial hurdles, but what can they do at the point that companies are being formed? How can they pinpoint potential entrepreneurs amongst their students? How should a university choose its industry partners? These are some of the issues discussed by panellists at, “Spinning out – Incubators, tech transfer strategies and academic accelerator programmes”, in a session at last month’s Science|Business Academic Enterprise Awards.

Entrepreneurial spirit for all, spin-outs for few

“Modern opportunity assessment is all about the screening and selection process,” said Will Cardwell, Senior Advisor for Global Alliances, at Aalto University, where the “funnelling” principle has been applied to its entrepreneurship strategy.

Everyone has the opportunity to partake in the Aalto Ventures minor programme, where professors integrate elements of entrepreneurship into courses such as photography and materials. “We try to market this opportunity to every single student,” said Cardwell, “So they have a shot of seeing what it is like to be an entrepreneur.”

The intake is then reduced for acceleration programmes, Summer of Start-ups, Start-up Life and Start-up Sauna. Here, “maybe only one out of every fifty or one hundred ideas gets selected,” Cardwell said. The final stage of the “funnelling” process is a grant programme of up to €1 million for “the best science-driven innovation cases,” he said.

“I really believe in this idea of infecting as many as possible with the entrepreneurial gene,” said Cardwell, “but the worst thing would be for all of those people to form companies.” The aim is to “quickly filter down in Darwinistic fashion to the few with real potential, and then make sure that all the people “infected” contribute to the ecosystem in one way or another,” he said.

Collaboration with industry

For those few, there are opportunities aplenty at Aalto. In May 2012, the university launched AppCampus, an €18 million mobile application development programme financed by Microsoft and Nokia.  “We can give grants of €20,000, €50,000 or €70,000 to teams from all over the world that are trying to innovate on Microsoft and Nokia platforms,” said Cardwell.  AppCampus grants have been given to seventy different countries.

Ray Pinto, Senior Government Affairs Manager, Microsoft Europe, Middle East and Africa says the programme has been very beneficial for Microsoft. “As a software company, we’re only as good as the innovation that we invest into the software platform, especially algorithms” he said.

Finding the right partner

But successful university commercialisation is about collaboration as much as spin-outs, as David Docherty, Chief Executive of the National Centre for Universities and Business (NCUB), a UK body set up to foster collaborative relationships between universities, noted. However, there is a fundamental problem of scale, with up to 150,000 companies in the UK that want to set up collaborations with universities. “Tech transfer offices of necessity cannot deal with that number," Docherty said.

Docherty was previously the chairman of a dating agency, where he became expert in the use of algorithms to find potentially happy matches. There must be something in these algorithms that could also, “be applied to match personalities in companies with personalities in universities,” he said.

To explore this, NCUB is developing five online brokerage pilots. While this is a technical and marketing challenge, Docherty says, “It might also be the biggest potential breakthrough - that supplements all other networks universities have built.”

Looking beyond IP

Docherty is reluctant to focus the discussion about innovation around intellectual property (IP), saying, “Most creative and digital companies do not actually have what you would call IP, but they do have relationships with innovation assets.”

A lack of profitability in technology transfer means that while, “Only five per cent of academics in the UK are engaged in patents, around seventy per cent have community engagement. There’s about £3 billion raised a year out of community engagement in the UK university system, relative to the £50-odd million return on patents, which cost approximately £50 million to protect,” Docherty noted.

This raises the delicate question of whether technology transfer is the best benchmark for evaluating universities. “We need to think more broadly about how universities engage with companies and get world-class collaboration,” Docherty told delegates.

Grass-roots innovation

Community engagement is a key element of Microsoft’s strategy. The company works with local governments and partners in communities across the world to operate Microsoft Innovation Centres (MICs) for students, IT professionals, entrepreneurs, and academic researchers.

Companies are given the space to incubate and attract capital, while benefitting from free software, access to the Microsoft source code, expertise and mentoring. “In Europe alone we now have 27 MICs,” said Pinto, “and 15,000 companies that have born out of them.”

It is part of Microsoft’s responsibility as a big company, “to drive forward grassroots innovation,” Pinto believes.