University of Michigan Tech Transfer Makes Great Progress in Ten Years. But Is It Enough?
Like at most universities at the time, tech transfer at U-M was an afterthought, a low priority enterprise usually staffed by people with little or no industry experience.
But after witnessing the success of Stanford University and the Massachusetts Institute of Technology, the U-M began mining its intellectual property vaults for potential gold.
“We’ve always been a great research university,” says Nisbet, executive director of OTT. “We had all of this great stuff. But they don’t always translate into commercial opportunities. Being in the Midwest, we have to try a little harder.”
That extra effort has paid off. Under Nisbet’s leadership, the university has spun off 93 companies and generated about $168 million from royalty/equity income, including the sales of startups like HandyLabs and HealthMedia. The U-M enjoys a strong reputation from venture capitalists inside and outside of Michigan.
In the past “universities were difficult to work with,” says Koleman Karleski, the managing director of Chrysalis Ventures in Kentucky, an investor in HealthMedia. “But over the years, schools have become sophisticated in undestanding their technology and figuring how to structure intellectual property so it leaves the university. I think it’s clear that the University of Michigan has picked up on that.”
At the same time, the U-M faces long term questions over whether it can, or even wants to, be a commercialization powerhouse on par with elite institutions on the coasts. The school’s $1.2 billion in research expenditures is among the highest in the country yet its tech transfer output is relatively modest compared to other schools who spend far less on research.
“The U-M has done a fabulous job,” says Marc Weiser, managing director of RPM Ventures in Ann Arbor, who works closely with the university. “But I think it can do much better.”
Having lived in Boston, Seattle, Minneapolis, and Michigan, and having reported on technology across the country, I’ve observed an ambivalance towards tech transfer in the Midwest that’s not as prevelant on the coasts.
With the exception of the University of Wisconsin, Midwest research institutions like the University of Minnesota and Mayo Clinic don’t seem to have really embraced the aggressive entrepreneurship that could fully maximize the economic potential of their IP.
Nisbet also takes a measured approach to converting university IP into cash.
“We’re not trying to maximize revenue,” Nisbet says. “We’re trying to maxmize deployment of technologies and sometimes it’s leaving that last nickel on the table.”
Still, “we love to have huge exits,” he says.
U-M has certainly invested quite a bit of time and money positioning itself to be an economic powerhouse. Last year, the school debuted its Venture Accelerator, a 16,000 square foot maze of offices and wet lab space at the former Pfizer reseach and development facility on the north campus. The accelerator already houses three university spinoffs with two more on the way.
Nisbet has hired professional staff to vet technologies and recruited local entrepreneurs to advise startups. He also wants to tap the university’s 400,000 strong alumni network around the country to help out.
“We do all of this because we’re not Boston,” Nisbet says.
But could it be? In 2009, the U-M spent $1.02 billion on research, topping schools like … Next Page »