Science entrepreneurship – making it big?

Dr Lorraine WarrenSchool of Management, University of

SouthamptonFebruary 3, 2011, English College in Prague

Science?

Or…

Geeks are cool, no?

Worse..

Are there any wealthy scientists?

Alchemy?

Maybe!

• Scientists, engineers and technologists are generally well paid…. compare quite well with medical, legal and other professions

• But as universities get more entrepreneurial, some scientists have become super-rich…

Examples• Dennis Gillings, worth £120m, made fortune in pharmaceuticals • Fishmonger's son from East End of London. Became professor of biostatistics,

University of North Carolina. Founded Quintiles - research, sales, marketing advice for drug companies

• Henry Beker, £59m, internet technology • Chairman of Baltimore Technologies and visiting professor of IT, Royal Holloway,

University of London • Chris Evans, £120m, biotechnology • Started his career as a microbiologist after studying at Imperial College, London,

and Hull University, before taking up a research fellowship in the US • David Potter and family, £575m, computers • Former physics professor. Founder of the mobile computer company Psion • David Rhodes and family, £85m, telecommunications • Former professor of electronic engineering at Leeds University, founded a group of

electronics companies

[source = Guardian 2001]

THES Survey in 2006• dozens of multi-millionaire professors who have made fortunes through spin-off

companies, entrepreneurial ventures and inventions. • Twelve academics identified as the biggest earners in the list have founded

companies worth hundreds of millions of pounds. • The list is dominated by academics at Oxbridge and Russell Group institutions but

also includes lecturers at Bradford, Dundee and Ulster universities. • It includes John King, an ex-lecturer at Queen's University Belfast, who has been

valued at £160 million, and Brian Bellhouse, an Oxford engineering professor, whose personal wealth has been estimated at £40 million.

• Multimillionaire Cambridge scientist Sir Greg Winter and Oxford chemists Steve Davies and Graham Richards also feature among the top 12 earners.

• Professor Richards, an unabashed multimillionaire, said: "Academics are making money on an unprecedented scale. I can think of 20 millionaires in Oxford alone. It is catching. My young colleagues can see that I have made a lot and yet I do normal work and haven't sold my soul. This is also now accepted by academic peers."

• Several on the list have made their millions in the past year, such as Stephen Jackson, a Cambridge biologist who founded KuDOS Pharmaceuticals.

Taking science to the market

• Patents, or licences• Setting up a ‘spin-out’ company• Attract funding (Angels/VC)• Shares, float on AIM• Incubators, science parks• Innovation hot-spots: Silicon valley (Stanford

University), Boston Route 128 (MIT), Cambridge

Benefits for society too!

Goldsmiths technology could save NHS £500 million -- The NHS could save £500 million a year on everyday supplies, thanks to SpendInsight software developed by a partnership featuring academics from Goldsmiths, University of London, the University of Reading and @UK plc.

My Background

• School of Management, http://www.management.soton.ac.uk/people/details.php?Name=LorraineWarren& or www.doclorraine.com

• Research, teaching, consultancy• Research interests in digital media; creative

industries; development of new products, services, behaviours

• Context: incubation, early stage concept development, policy support, regional development

Projects• www.creatorproject.org , new Business models and research

processes for the creative industries [Nottingham, Newcastle, Cambridge, Queen Mary, Birkbeck]

• Sensory Threads [Proboscis] biosensors, wearables, community issues

• Gesture and Embodied Action [motion capture-industry links]• MIPP Sussex University [motion capture-archaeology-visitor

experiences]• LiberateMedia mobile connectivity, new business stratgeies• Webscience group at Southampton (Tim-Berners Lee)ALSO• International consultancy, sharing best practice USA (MIT,

NCSU, San Diego), Russia

University of Southampton

• Research-led ‘Russell Group’ University• Ranked 12 in UK [out of around 120], 90 in the world• South Coast of UK, easy reach of London, Brighton,

Bournemouth• Seeking to develop campus as a Cultural Centre for

region• Southampton Science park

Southampton Science Park

Collaboration Merck <-> UoS

Merck building

Has physics and chemistry laboratories on the upper floor and offices on the ground floor for research into liquid crystals.

The Value Proposition

Note:

• A ‘cool technology’ is not a good value proposition

• Value proposition must match to market need

• Value proposition must be consistent with strategy

• You must be able to communicate the value proposition succinctly

Res

ou

rces

Level of Development

ExistingResearch and DevelopmentResources

ExistingCommercialization

Resources

Discovery TFP Product Development Commercialization

The Valley of Death

Res

ou

rces

Level of Development

ExistingResearchResources(Technical and Market)

ExistingCommercialization

Resources

Discovery FFE Development Commercialization

Technology Feasibility Point

Decision space between opportunity

discovery and product development

Area of Study

Gap between Research and Commercial Application:Targeting resources where they have the greatest impact on new business creation

Res

ou

rces

ResearchFaculty

Service Providers / Complementary Assets

Level of Development

“Valley of Death”

ExistingResearchResources

ExistingCommercialization

ResourcesDecision space between discoveryand product development

What do we mean by the ‘value proposition’?

From a business perspective:• What is the primary factor that makes you know

that your business will make money?

From a product perspective:• What makes you sure that your customer needs

your product?• What makes you certain that the customer will

buy your product?

The Value Proposition

From an investment perspective:

• What is the primary factor that makes you sure that the investor will give you money?

The Value Proposition

Possible factors:

• Performance/cost (i.e. based on your core assets)

• Only product offering that is capable of meeting a recognized customer need

• An unbeatable team

The Value Proposition

Why a team?

• Entrepreneurs are individuals, no?

• Promising technologies often need significant business development before line managers or investors are interested

• Often, technical people lack the skills, resources or time to develop product ideas, conduct market research or write business plans

T

PPPPP

MMMMMMMMM

The most basic building block of a Business Concept

Why is it difficult?: Technology - Product - Market Linkages

The TEC Algorithm(Professor Angus Kingon, NCSU)

Description Description / Ideation/ Ideation

CommercializationStrategy

CommercializationImplementation

Database or Further Development

Phase I

Phase II

Description / Ideation

CommercializationStrategy

CommercializationImplementation

Database or Further Development

Phase IPhase I

Phase IIPhase II

The TEC Algorithm

Information Gathering

Launch

Funding

SrMgmt

StrategyDevelopment

PrimaryInformationGathering

PreliminaryAssessment

ProductConcept

Product Formulation

Preliminary Assessment

Primary Information Gathering

Strategy Development

Implementation

Millionaire in the making?• Mark Ferguson, Co Founder & CEO

Renovo• 2002 European Science Prize, 350

scientific articles and papers• Professor at the University of

Manchester from 1986-2007 where he served as Head of Department, Dean of Biological Sciences and lead a large research group.

• was CEO of Manchester Biotec Ltd, a university company formed to foster promising new biotechnology ventures. During this time he was responsible for funding, building and staffing its £15 million Incubator Building and raising a £10 million investment seed fund.

• CBE

Renovo• Founded in 1998 Renovo

commenced operations in October 2000 and floated on the main market of the London Stock Exchange in April 2006

• Renovo is a biopharmaceutical product company and a leader in the discovery and development of drugs to reduce scarring, improve wound healing and enhance tissue regeneration

• http://www.renovo.com/• 110 employees• Dr Sharon O'Kane, CSO, was

named as Manchester Business Woman of the Year(Manufacturing/Technology)

The future?

• Clean technologies???• Clean technology venture investment totaled

$5.6 billion in 2009 despite non-binding climate change accord in Copenhagen, finds the Cleantech Group and Deloitte (http://cleantech.com)

• Check out by region and sector!

Finally

• Any questions!