Tech Transfer eNews Blog

Sweat Equity Challenge attracts software start-ups for NC State


By Jesse Schwartz
Published: March 31st, 2021

A detailed article on the NC State Sweat Equity Challenge appears in the March issue of Technology Transfer Tactics. To subscribe and access the full article, click here.  

Along with the ongoing challenge to generate invention disclosures from faculty comes the old maxim “be careful what you wish for.” In many cases when disclosures are received, the ideas are not fully conceived or validated enough to warrant allocation of the TTO’s limited resources. And even when the IP is well described, it often arrives with little knowledge of the target market or validation of the market need.

With these challenges in mind, Jason Lamb, JD, LLM, senior licensing associate in North Carolina State University’s Office of Research Commercialization (ORC), created the NC State Sweat Equity Challenge with the help and enthusiastic support of ORC Director of Licensing Kultaran Chohan and Assistant Vice Chancellor Wade Fulghum. The program encourages a way for innovators to take their less than fully formed ideas through vetting and a rigorous customer discovery process.

Lamb manages a portfolio of technologies centered around software, industrial design, and data technologies from the Department of Electrical and Computer Engineering and the College of Design. While the disclosures in his area are plentiful, says Lamb, “by and large, most of the people I was engaging with . . . just had great software ideas and they didn’t know how to connect the rest of the dots. They often do not have a true sense of market demand nor do they have the coding resources to create a basic prototype.”

Lamb also suspected that many potentially good ideas floating around campus never came to the ORC’s attention. “You look around, and you see successful companies that are software-based,” says Lamb. “But we’re not launching many of those companies. The same types of ideas are bubbling around NC State. They’re just not getting out.” Lamb saw this disparity as a potential opportunity to discover, nurture and commercialize these software ideas at ORC, so he launched the Sweat Equity Challenge as the mechanism to accomplish this.

One might think that if a person comes up with a good idea for software, they also would know how to create code for that software. However, as Lamb points out, this is very often not the case. Furthermore, they do not necessarily have the wherewithal to connect with the professional services needed to get the coding done for them. Tapping into computer science students on campus is often not a good solution because the deliverable schedule might not fit into their coursework or the students may not have the level of professionalism required to work on a start-up project. Freelance work is another option, but the cost might be prohibitive.

Enter the Software Challenge, which not only overcomes these obstacles but generates a clear sense of market demand and market fit for the idea.

The Sweat Equity Challenge is open to anyone; it doesn’t necessarily have to be a university faculty member, employee, or university student. The only requirement is that if the applicant decides to form a start-up, the venture must use and license university-owned IP. The IP is created after market validation and during the Phase 3 prototype development phase. If an undergraduate applies with an idea based on IP they’ve already created (such as an existing prototype or design), they retain ownership of the existing IP under university policy. The same is true for non-NC State applicants or any existing IP not owned by the university. However, if the idea holds up to market validation, the applicants have the choice to go and create their own start-up or to work with the university and sign over existing IP. The university would then issue a license to the start-up to use the existing and any newly created IP developed during Phase 3 the program.

Each year, NC State sees about 40 to 50 Sweat Equity Challenge applicants. Each applicant submits a two-page document identifying a problem in the market and their proposed solution. They also disclose whether they have any existing code or a version of the solution already made.

The program hasn’t yet become well known on campus, but Lamb has plans to remedy that by “painting the entire campus” with the message that the program is meant for everyone in the NC State community and encouraging anyone with an idea to fill out an application.

The number of students vs. faculty who apply to the program is about an even 50/50 split. However, of the applications selected for the customer discovery step, about 80% are faculty, many with graduate students and postdocs as part of their team. “We get many applications that aren’t as fully formed from the student groups, and typically faculty will be submitting something that they’ve done research on over a number of years,” explains Lamb. He hopes to create a course in the future that would help students to write higher-quality applications.

ORC and their selection committee review the applications and choose about 10 individuals or teams to go through the market validation step. Those selected go through a four-week market assessment short course, a version of the National Science Foundation’s I-Corps program. During this course, the participants interview potential customers and strategic partners to see if they can validate their business hypotheses in the market. “We’re teaching teams to divorce themselves from their particular technology and think more about market needs and desires,” explains Lamb.

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