What it Takes to Go from Idea to Success
For Kristian Hammond and Larry Birnbaum, professor and associate professor of electrical engineering and computer science, starting new businesses wasn’t their goal when they received their PhDs in computer science from Yale 25 years ago.
But within the last decade, the pair realized that to test the technology they invented in their labs it had to “go out into the wild,” Hammond said. That experience of commercialization has led to both successes and failures – ups and downs that they were eager to share with faculty and students at a Dean’s Seminar Series on Wednesday.
Hammond and Birnbaum have had their share of great successes, but to get there, they had to learn lessons along the way. One of Hammond’s first forays into commercialization was a recommendation system he developed that required no interaction from the user (unlike recommendation systems used on websites like Amazon.com that base recommendations on previous purchases). He raised $7 million to fund a startup, but he had trouble explaining to companies why they should switch to new software when they were satisfied with their current choice.
“It ended up – what’s the word for it – tanking,” Hammond said. The company was eventually sold for the money that went into it.
But both Hammond and Birnbaum encouraged faculty to take risks, because the reward was ultimately worth it. They’ve had their share of successes, such as Allvoices, a citizen news website, uses their algorithms to scours more than 3,500 mainstream feeds and online, real-time sources of news to provide relevancy and context for user-submitted news reports, and Incisent, a data analytics service that they helped create, has turned out successful, as well.
Their most recent startup, Narrative Science, an application that generates news stories, industry reports, and headlines without human authoring or editing, has recently raised $6 million in venture capital.
But to get to that success requires not just a good idea but the right idea.
“The idea matters,” Hammond said. “That’s the coin of the academic realm.” Making that idea successful, however, requires delving into an entirely different realm: the world of business. It might seem easy, but going from idea to success requires licensing, investment, market analysis, good management, intellectual property, and a host of other potentially issues.
“(A good idea alone) is not a reason for someone else to invest in it,” Birnbaum said. It has to solve a problem, and it has to make money. Making money is a priority in businesses and not in academia, which can lead to a culture clash between the two groups.
Hammond and Birnbaum have also had experience wading through the numerous other issues that come with developing technology at a University: who owns what, how royalties are divided, how to deal with conflict of interest, and how not to leave your students out of the action.
For example: When faculty members first create a new technology, they must create a paper trail to track the ownership of the intellectual property by filing a disclosure agreement. Everyone must be on this agreement, including students who had a role in the research.
Inventors have one year from the first public disclosure of the invention to file a patent application. Once the patent comes up for review, inventors must be ready to pay thousands of dollars in attorneys’ fees during the examination.
Even once those issues are sorted out, they said, a startup still faces the major hurdles of finding investors – oftentimes friends and family, at first – and getting a good management team in place.
Ultimately, there are tools at the University to help faculty commercialize their technology: the Innovation and New Ventures Office, which acts as a resource and conduit for intellectual property, licensing, and marketing questions. The office can help faculty make their ideas a reality, Hammond said – but only if those ideas are right for commercialization.
“It’s not how smart you are, or how good your ideas are,” he said. “It’s the marketplace and what will come out of those ideas.” Ultimately, though, commercialization of technology will bring researchers more than money – it can allow them to move their work forward and let it “have impact on the world.”