By my estimation – and I have also heard the number elsewhere – 80 percent of startups in Silicon Valley have a close working relationship with a university, while in Canada, the number is much closer to 20 percent.
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YOU i Labs president Jason Flick.
By Jason Flick
To be honest, I think that Canadian figure is optimistic. I would love to hear examples of productive relationships between universities, colleges and startups.
How do we fix this and why is it happening? I have invested a fair bit of time working with, and trying to work with, our academic institutions. Let's start with why we so rarely lever their strengths to support startups here in Canada.
Not on the same page
It may seem obvious, but it wasn't to me when I first began dealing with universities. Professors in this context have two goals - funding and publishing papers. An entrepreneur has two goals as well - acquire or boost his IP and accelerate his product to market.
These goals are in direct conflict with each other, and putting this on the table early on is key. Unfortunately, this is where many relationships stop. The funding language and deadlines from organizations such as NSERC (a major funder of academic R&D work), which universities must follow, quickly confuses and disillusions a startup that just wants to get going.
Current tech transfer offices are ill-equipped to deal with a large number of small companies
I have gone through the official channels for working with our local universities and they just don't work. Tech transfer staff can handle an IBM or Siemens because they can have five projects in parallel with a full-time staff member exclusively committed to managing the relationship with the university. When a startup shows up and they don't see solid progress in every meeting, they will disengage very early on.
Few startups can afford to have their CEO or CTO busy filling out paperwork and having four or five meetings trying to narrow down the right professor and project.
This is not intended as a slight toward our local tech transfer offices, but when a professor was put forward for a project we were trying to get off of the ground, it was apparent they had been coerced. We appreciate that tech transfer staff are pushing professors into these types of relationships, but the professors have to want to work with the private sector.
My concern is that professors positively predisposed to working with the private sector are already doing so with $1 million in funding from a multinational such as IBM, with a five-year plan where the multinational also provides a year of government lobbying to boost next year's budget. The odds of securing funding as a result of this kind of partnership with a large company are very good. Of course, these projects rarely make it to market and they do not add to the financial future of Canada if the multinational isn't based here.
Funding, funding, funding - the little guys just don't have it
When a startup engages with university staff and the first or second thing they hear is "matching funds" before the startup even knows what the project is and how it could add value, it is again another serious road block.
Luckily, there are "in-kind" arrangements, such as having your staff work on the project for free or loaning equipment. Cash is king for a startup and a joint project is a high-risk proposition; there needs to be an assumption with any initial project that there will be an in-kind arrangement in lieu of cash.
For future projects, a startup can be a great funding stream for an academic institution, but they need to get past that first project and both parties need to experience an early win to fund the next one.
How can we fix this?
There is no silver bullet. I think what must be addressed are the general attitudes among faculty towards partnering with startups and the lack of success stories. Startups must also understand that academic institutions are driven by different outcomes and they need to carefully select projects that fit them. However, both of these issues can be resolved if we can drive some successful outcomes. I am focused on how we can do that at the ground level.
Lack of startup entrepreneurs and professor 'dating services'
One of the biggest challenges I face in trying to succeed is the relationship with the professor. We have had three successful joint projects with universities. Ironically, none were local. In every instance, the success of the project came down to the individual professor. Is their R&D in line with yours? Are they a professor who wants to work with the private sector, and, preferably, have done so before?
Academic institutions and professors will post "active" areas of interest on their websites, which is somewhat useful but often far out of date. The onus still rests on the startup's shoulders to research opportunities and qualify potential partners.
What I think we need is more university open houses, ones just for startups, where the professors can showcase what they are doing and what they will be working on next. Or - and this is an idea for an entrepreneur listening out there - a social media website not unlike a dating site where you can match founders to professors.
I don't believe the government needs to add more funding, but it must do a more effective job of educating startups on the funding that is available. First, raise awareness of the funding sources that are available then increase funding levels as the results speak for themselves.
At both of my businesses, we often have co-op students working on site. They learn so much about what it takes to build a company and the cool projects we are working on, but this information doesn't seem to be filtering up to their professors. I would love to someday receive a call from a professor to discuss his student's work and how we could create some kind of strategic partnership. It's never happened to me. Has it happened to you? I think there is a resource pool here which universities are not accessing.
I would love to hear your success stories, and your ideas. I think Canadian startups are at a significant disadvantage against their U.S. counterparts if we don't build more linkages with colleges and universities. Our academic institutions hold a wealth of knowledge and intelligence and are equipped with multimillion-dollar labs. It just doesn't seem right that only big companies, which typically have a poor track record in efficiently commercializing R&D, have access to these resources.
Jason Flick is co-founder and president of YOU i Labs and Flick Software. He has founded half a dozen companies in the past 18 years and is an adviser and executive to nearly a dozen software companies.
This article is part of a continuing series examining the state of the ecosystem necessary to successfully bring technology to market and looking at what is working and what can be improved in the go-to-market ecosystem. It first appeared on Francis-Moran.com.