Science-y Advice for (potential) Entrepreneurs: Add this to your library
In addition to C&EN, Cleantech Chemistry’s household also receives Physics Today, the monthly magazine of the American Institute of Physics. The December issue contains an article – available free online – that is a must-read for any potential or current entrepreneur in the sciences.
The authors* interviewed 129 out of 192 founders and 16 other company officers at 91 startups in entrepreneurial clusters in 13 states. They examine where the firms’ technology came from and where their funding came from (and in what order). The interviews unearthed fascinating observations about working with venture capital and angel investors and how they differ regionally. The article also covers the different types of technology transfer programs at Universities and what it is like to work with them. It also discusses regional start-up cultures across the U.S.
As in this year’s C&EN special issue on chemistry entrepreneurs, the focus is on lessons learned. The Physics Today story includes a box titled “How to create an unsuccessful startup.”
In case you think that the situation of physics R&D and start-up culture is different than in chemistry – read this excerpt and see if it sounds familiar:
Because the large high-tech companies that once supported significant research have switched to development, the role of small startups as creators of innovative physics-based technology has become more important. Lita Nelsen, director of MIT’s Technology Licensing Office, describing the general decline of the once-great industrial labs, noted that “we’re dependent on the universities to be pushing the frontier of knowledge because the research labs in industry are largely shut down.” She added that more than half of the MIT patents for really innovative, early-stage technology are being licensed to startups. According to Nelsen, once a startup has proven an innovative technology, “the large companies will then buy either the product line or the company, and that is a conscious strategy for acquiring new technology now because it reduces their risk.” For a proven technology, large companies sometimes pay 100 or even 1000 times what they would have paid had they licensed the same technology from a university at an early stage.
The article goes on to discuss the difference between what it calls “technology push” versus “market pull” companies and why the former is the more risky. Go check it out!
*Orv Butler is a historian at the American Institute of Physics Center for History of Physics in College Park, Maryland. Joe Anderson is the associate director of the AIP history center and director of the AIP Niels Bohr Library and Archives in College Park.
The DOI for the Physics Today article
Risky business: A study of physics entrepreneurship