Art Espey asked:


There is no doubt that these are tough economic times. Unemployment is high and credit is tight. Key indicates show that is the worse economy in a generation. Many technology transfer offices have seen potential business partners reduce their innovation portfolios and expenditures. This coupled with a reduction in funding sources, from grants and investors to university sources are blowing the technology transfer research commercialization efforts into the perfect storm.

There are difficulties and challenges, but these times also create opportunities. Here are seven tips to help your technology transfer office succeed in these tough economic times.

1. Maintain a list of problems that are relevant to the research and technologies in the pipeline.

Technology transfer offices typically get involved in research commercialization efforts late in the research and testing process. Get involved earlier in the process and start developing a list of problems of which the research can be applied.

This is really an early brainstorming exercise. Don’t just talk to the researchers. Get business input from those who are not involved with the research or the research teams. Independent ideas can be worth their weight in gold.

2. Develop long-term business relationships.

“Dig the well before you are thirsty.”

-Chinese Proverb

Start developing business relationships with business leaders from a wide range of industries. Do this even before you have any applicable research or solutions for them. These relationships will pay off in two ways.

• You will have a better understanding of the types of challenges that these businesses face.

• When you do have promising research technologies and solutions you already have a relationship with the business or their contacts.

3. Pair researchers with business mentors.

Researchers think like researchers. Business people think like business people. Getting the two to communicate with each other versus talking to each other is a common technology transfer office challenge.

Providing a business mentor to promising research leaders will help alleviate this common problem. This continuous conduit will go a lot further than a long forgotten entrepreneurial seminar.

4. Develop alternative commercialization strategies early.

Good business people know that there is always a chance that their efforts may fail. Technology transfer officers know this too. Unfortunately, many researchers and inventors do not think about this, much less plan for it.

Most inventors think that their invention is world changing and worth millions. They have visions of establishing a company based on their research or technology, selling it for millions, and retiring in the lap of luxury.

The truth of the matter is that nine out of ten spin offs and startups will fail. You, can as the technology transfer officer can improve these odds.

I sit on the advisory board for some start up focused investment funds. One of the strategies that we have developed recently is to go for the big distribution partnering deal with large companies. When that doesn’t work – we find out why and have alternative proposals available.

This alternative could be limited distribution agreements on licensing deals. It really doesn’t matter what the alternative is. What does matter is that you get to stay in the game and get a return on the sunk costs.

5. Reduce risks for all involved.

It wasn’t that long ago that many universities shunned the entire technology transfer process. They wanted their faculty teaching and doing research, not commercializing their intellectual property. My, how times have changed.

Now universities love the revenue that comes from royalties and equity distributions and sales that are associated with intellectual property commercialization. Businesses are always looking for a competitive advantage and right now innovation is the soup de jour, except for one thing …RISK!

In order to get more businesses interested in potential technology look for new ways to reduce their potential risks. Right now cash is king. Instead of negotiating a lower royalty percentage, offer your potential licensor a deferred royalty agreement at a higher percentage. This is the business innovator’s version of “no interest payments for 3 years”.

This approach allows the business to conserve cash today and the university to reap more money in the long run. It’s better than the technology sitting on the shelf waiting to become obsolete.

6. Teach bootstrapping to your startups.

All technology startups need money. That is a known fact. The truth is that many could get by with less money than they think that they need. There in lies the art of bootstrapping. Bootstrapping basically means to start and operate a business without lots of investment funds. It requires the entrepreneur to focus on sales and to hold fixed costs to an absolute minimum.

Bootstrapping requires a unique mindset that few lead researchers turned entrepreneurs can relate to. It takes a special entrepreneur to be able to successfully bootstrap a business.

Help your lead researchers and startup teams. Get some experienced bootstrappers on your advisory and consulting teams and pass the knowledge on to your startups.

7. Partner with other technology transfer offices.

Technology transfer offices provide a valuable service to both the university and their research communities. They play a vital role in the economic development of their respective communities and states. Unlike many organizations involved in the invention commercialization process they do not compete.

Some technology transfer offices such as Stanford and MIT are the envy of their peers, however most technology transfer offices do not reside in a geographic area that harbors entrepreneurship in its DNA.

Partnering with other technology transfer offices offers many unique benefits that cannot be found though other means. It opens up dialogue and support for represented research and technologies to new areas and new commercialization ideas. It develops relationships with other potential business partners and fosters potential research synergies.

Targeted TTO partnerships can lead to specific research pairing with higher degrees of commercialization potential. This focused effort will, in the long run, yield a high degree of return on investment.

These 7 technology transfer officer tips can help you reduce your operating costs and increase your revenue generation success rate. It’s a win for society, the researcher, the business community, the university, and YOU!



technology

Timothy Nuckles asked:


Commercial buyers of information technology products and services are locked into a self-defeating pattern of behavior when it comes to negotiating contract terms and conditions with technology vendors, and it is time to move on to a better approach. Better technology vendor negotiations produce better contracts for a technology project, and better contracts produce better project outcomes. So, break the mold and move on to a better way of negotiating contract terms and conditions for your next technology project.

Vendor Contracts – Timing Is Everything

Let us assume that by now you have done a lot of planning and information gathering for your proposed technology project, you have completed a vendor selection process, and now it is time to document your deal with your chosen vendor.

At this stage in the technology procurement process, the most common practice—indeed the almost-universal practice—is to distribute the vendor’s proposed contracts to your project team for review and comment. Then, as if by instinct, everyone starts looking for vendor bias in the contracts. No one has been given this specific directive. You simply assume and expect that everyone knows the drill. Folks on your project team begin striking certain biased provisions and scribbling notes about amending others. For sure, removing or limiting vendor bias in the contracts is a worthwhile exercise, but now is not the time to perform this exercise.

Light bulb on

I had to get several technology deals under my belt before I realized this, but at this early stage of the contracting process, you really need to focus first on terms and conditions that are important to you, not the terms and conditions that are important to your vendor. We know your vendor has included in its specimen contracts (as modified prior to presentation to you) all the terms and conditions of your deal that are important to your vendor. In fact, they are very easy to identify. They are all the contract terms with vendor bias. These provisions are so important to your vendor that it has purposely added bias to them, often with obvious exaggeration and redundancy. Even if your vendor has to bargain down somewhat from these provisions, your vendor is still in a safe position because the starting point was so extreme.

What you should do instead

At this initial stage of contracting, you should ignore your vendor’s proposed contracts. Simply set them aside for the time being, and do this for two reasons.

First, in order to express in writing the terms and conditions that are most important to you, you must actually think of what those terms and conditions might be. Likeable as your vendor may be, your vendor will not have already added to its proposed contracts the terms and conditions most important to you for your particular project. You will have to come up with this stuff on your own.

Second, until you know what terms and conditions are most important to you

for your particular project, you are in no position to challenge your vendor’s biased provisions except in attempt to remove or limit the bias. “I don’t know exactly what impact this provision has on our project, but I know it’s not a provision that helps our cause.” Challenging these provisions in a vacuum does not really help you.

The big picture

Now is the time to start with a fresh, big-picture perspective, and then fill in lots of detail. Circle back to earlier stages of your procurement process and revisit your decisions, your assumptions, and the various things you have learned. As a result of your many meetings and discussions, there may be things that you are now taking for granted: special vendor qualifications, how a particular piece of your project will be orchestrated, acutely risky aspects of your project, and so on. Bring to mind other similar projects within your organization and apply what you learned from those experiences.

Re-acquainting yourself with prior thought processes, discoveries, assumptions, and experiences will help you remember aspects of your project that you previously deemed important—whether because they are critical to project success, they pose a substantial risk within your project, or perhaps both—and it will force you to consider the importance of other elements for the first time. This process will help you build out the terms and conditions for your deal that benefit and protect you, terms and conditions that maximize the probability of project success and minimize project risk.

As part of this process, make a detailed list of list of terms and conditions that are important for your particular project, and:

1) Categorize them by subject matter.

For example, requirements development and prioritization, data mapping, business process issues, software development, application integration, database integration, system integration, testing, implementation, buyer protections, vendor management tools, warranties, etc. When you get around to negotiating the items on your list with your vendor, your project team will have important reference points. “Does this contract item touch implementation? If so, let’s look at our implementation items.”

2) Add qualifiers for each item.

Among other things, qualifiers can include a ranking of particular item’s relative importance within your project (critical to project success, represents substantial risk, wish list, etc.). When you get around to negotiating the items on your list with your vendor, your project team will be less inclined to treat all items on your list as equally important. Almost certainly, not all will be equally important. Your team will have a sense of how hard to push on a particular item, and in terms of the give and take that occurs in any negotiation process, they will have sense of what items to compromise (and by how much) or concede outright if met by strong resistance from your vendor.

3) Add relevant notes and comments for each item.

Among other things, relevant notes to attach to your list items include comments about accountability. Who within your project will be accountable for accomplishing the particular item: your vendor, your internal staff, or some combination? And what should happen if the party with accountability drops the ball?

With this kind of list in hand, you are in a much better position to review your vendor’s proposed contracts. Perhaps most important, you are no longer reviewing the contracts in a vacuum. You are equipped to conduct a truly meaningful review of your vendor’s proposed contracts.

Is there a gap in the vendor’s proposed contracts; that is, an item from your list has not been addressed at all? Is there an inaccuracy in the vendor’s proposed contracts; that is, an item is addressed, but its present treatment does not match your understanding, preference or requirement? Are topics within the contracts miscategorized? Are interrelated items not treated as such? Are accountabilities not clearly established?

An even better approach

Although breaking the mold and adopting the above approach to technology vendor contracting will certainly help you produce better contracts for your next technology project, which contracts should facilitate a better project outcome, there is a way to help yourself even further.

Instead of starting with and working from your vendors’ proposed contracts for your next project, think about developing your own standard agreements to include within your technology procurement process (usually at the RFP stage).

First, develop a neutral or somewhat buyer-favorable Software License Agreement. Find a standard Software License Agreement and neutralize or remove the elements of vendor bias. Then add the buyer-side content that you would normally find yourself negotiating with a typical vendor (were you working from the vendor’s standard Software License Agreement). Next, find a standard Consulting Services Agreement and do the same thing.

You can add your newly-developed standard agreements to your next technology RFP and request that responding vendors either approve your standard agreements as-is, or cite alternative language for provisions they do not find acceptable.

By incorporating your standard agreements into your technology procurement process, you will achieve two important things. First, you will be able—probably for the first time—to evaluate vendor candidates based on one of the most important factors for project success, terms and conditions. You can guage a prospective vendors appetite for terms and conditions that are important to your for your particular project BEFORE you have selected a vendor. It is much harder to win favorable terms and conditions AFTER you have selected the vendor for your project. And second, you will greatly reduce negotiation cycle times.

More and more commercial information technology buyers—of all sizes—are using this approach. It may surprise you to learn that many reputable technology vendors will not only entertain the possibility of working from your standard agreements instead of theirs, they may even welcome the prospect because it saves them time and expense as well.

A word of caution

When you develop your own standard agreements, exercise some discipline. Do not convert a terribly vendor-biased agreement into a terribly buyer-biased agreement. This will not help your cause. Instead, shoot for balance. Software developers, for example, have to protect their rights in their intellectual property, and there a certain limits beyond which they will not venture; for example, an excessively broad license grant. Understand vendor limitations and be fair. Add buyer bias judiciously and only if it is truly important to your organization.

Meet Nuckles at http://www.NucklesLaw.com or visit the firm’s sister site at http://www.TechnologyBuyersAdvocate.com.

© 2008 All rights reserved. Olive Consulting Group LLC / Nuckles Law Firm



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