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Leverage wider array of measures to drive improvement, demonstrate value in start-up creation

This article appeared in the April 2017 issue of Technology Transfer Tactics. Click here for a free sample issue or click here to subscribe.

Rebecca Stoughton, a vice president at Fuentek, an Apex, NC-based consulting firm, blogs often about metrics and other areas of interest to TTOs. And she urges licensing professionals to consider both direct and indirect measures when charting their performance and success.

These indirect measures are especially important to look at with respect to start-ups because newly formed companies give universities the ability to deliver impact and value beyond what you can typically accomplish when licensing to an established company, observes Stoughton. “With a company that is already in existence … your relationship with the company revolves only around licensed products, but with a start-up the implications are much broader because basically anything that the start-up does going forward was seeded by your efforts, so trying to track that … reflects work that the TTO has done,” she says.

For example, note when any new products or services from a start-up hit the market, advises Stoughton. “Some start-ups never take a product to market, so paying attention to whether they do or not, and then putting checkmarks in the box and counting [new products and services], is something that is worth doing — even if the products or services do not come from licensed technology,” she says.

The five-year mark is a common reference point for start-ups, so it makes sense to note which start-ups are still in existence and generating revenue at this point, but Stoughton advocates staying in much closer contact with young, technology-based companies. “You should be in contact with your start-ups at least once a year and getting status reports from them,” she says.

It is a best practice to write such reporting requirements into the licenses, but Stoughton notes that it can be mutually beneficial for these companies to share information about their funding situation and their other successes. “It falls on the TTO to ask those questions and to maintain those relationships so that you can pool the data from the companies, but generally speaking companies are willing to provide what they can,” she says.

Queries regarding sales, revenues and employment numbers should be of interest to the TTO as long as the requests for such information are made on a reasonable timeframe, comments Stoughton. For instance, once a year the TTO could send out a request for this data on a standardized form. “As long as [the start-ups] can provide the information in a way that it isn’t proprietary and doesn’t impact things they need to keep confidential, then I think by and large the licensees are willing to provide it,” she says.

Pre-start-up metrics

Another area to consider in terms of indirect metrics could involve measuring impact at the pre-start-up level, notes Stoughton. “One key part of that would be helping to identify technologies or portfolios of technologies from the university that are suitable for a start-up,” she says. “There is a bit of a spectrum of how well and how proactively and routinely TTOs do that.”

Stoughton advises TTOs to consider whether they “proactively and realistically assess the start-up potential of technology” and whether they “proactively consider opportunities to bundle technologies for start-up success.”

The answers to these questions have become increasingly important in recent years as universities have focused more intently on success in the economic development realm. “For a while everybody was trying to do start-ups and the number of new companies went up, but a lot of those companies never should have been started because they weren’t sustainable,” explains Stoughton. “So look objectively at start-up potential and identifying suitable technologies. If an office has a process for doing that, and it is doing it routinely, it is something they could track, and it is more of a direct metric because they have a lot of control over it.”

Similarly, TTOs could tally what types of support they provide for things like business model identification, customer development, defining value propositions and a whole range of tasks that are essential to complete before a start-up is launched, adds Stoughton. “I would look at the number of programs that provide those kinds of supports, the number of clients served through those programs, and something about the results,” she says. “Maybe you are leading a lean start-up kind of program, so note how many participants go through the program and how many companies are launched as a result.”

Once you are in the start-up launching phase, look at how easy it is for start-ups to work with the TTO, suggests Stoughton. “In particular, do you have realistic expectations for the ROI profile for licensing to a start-up?” she says. “The ROI is going to be totally different from what it would be if you were licensing to an existing company.”

Also, consider measuring your support network – for example, the strength of your referral network that can support start-ups with savvy attorneys, management recruitment resources and funding options, says Stoughton. “You could almost think of this like a checklist: Do you have these things or not, and what is your plan for developing them,” she says.

Tally supportive programs, services

In the post-launch phase, look at what you are doing to feed and nurture start-up companies. For example, tally the steps you’re taking to foster rich ecosystem interactions through events, mixers or shared office space. Also, what options for continuing training or ongoing mentoring do you facilitate or provide?

By keeping an eye on such measures, a TTO can propel internal improvements while also boosting performance on traditional metrics and contributing to larger university goals. As Stoughton points out, success with start-ups has a way of feeding on itself when these new companies come back to the university for sponsored research arrangements or to find interns and employees — which are also good metrics to track.

Contact Stoughton at rstoughton@fuentek.com.


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