A Strategy to Spin More Startups and Inventions Out of PNNL

Rosemarie Truman has a plan to help form more companies that could commercialize the promising inventions languishing inside of Pacific Northwest National Laboratory.

The model she’s implementing in her role as the federal lab’s new director of innovation impact turns the typical business plan challenge on its head: Instead of startup teams pitching judges or investors on their ideas, the lab would essentially pitch pre-qualified teams from outside the lab on promising inventions from its portfolio.

She helped develop the model at the Center for Advancing Innovation, a nonprofit she founded and ran before coming to PNNL. The CAI’s first startup challenge was conducted in 2013 with the National Institutes for Health and the Avon Foundation. Combing through the NIH portfolio, Truman and her team found 10 inventions related to breast cancer that had been unable to attract interest from large pharmaceutical companies. For example, some were for orphan indications—rare forms of the disease such as triple negative breast cancer that don’t impact large populations.

“For various reasons, these inventions were more appropriate for startups,” Truman says. “But so then the question becomes, how do you find startups?”

The solution was to build them. Teams of people from around the world were invited to pick one of the inventions and compete to create a startup that would take it forward. “We spun out 11 companies the first year,” Truman says. An accelerator component was added to help these nascent businesses get off the ground.

The CAI ran expanded challenges with NIH, including one focused on neurology, which Xconomy covered, and one this year with NASA. Truman is now laying the groundwork to do something similar with PNNL inventions. The Department of Energy lab, operated by Battelle in Richland, WA, has researchers breaking ground in energy storage, cybersecurity, the electricity grid, supercomputing, and many other areas. It has about 4,400 employees and an annual budget of nearly $1 billion.

(Truman will discuss modern approaches to technology transfer with other experts in the field at Xconomy Intersect in Seattle on Dec. 8. Click here for more details and registration information.)

There’s a tremendous amount of value sitting untapped within federally funded research institutions. While running the CAI, Truman and her team estimated that a 6 percent increase in the rate at which promising inventions are disseminated from the 5,000-plus U.S. research labs, universities, hospitals, and research-focused foundations could yield a major boost in GDP—in the range of $500 billion to $1.5 trillion a year.

Truman

Truman

“Even if we’re half wrong, it’s still big,” Truman says. “What I’d love to be able to do is institutionalize models that could truly maximize our ability to make the most impact of our commercially viable inventions that we have in the United States.”

The startup challenges are just one approach. Truman says research labs need to do more to make their technologies accessible to smaller companies. “For example, NIH created a startup-exclusive licensing agreement, which allows them to tap into a much larger piece of the market,” she says.

Labs also need to do more to make their best inventions discoverable by outsiders. Good inventions with commercial applications are often obscured to would-be entrepreneurs by the technical jargon researchers use to describe them, she says. In some cases, particularly related to inventions with national security implications, the obscurity may be intentional.

Despite its enormous research output, PNNL’s physical distance from the entrepreneurial ecosystem of the Seattle region can be a barrier. The lab does have a significant Seattle office, however. And researchers from PNNL, as well as University of Washington and Washington State University, connected with Seattle entrepreneurs and investors at the SciTech Northwest event last month.

Truman says the startup challenges can help, too. “You’re bundling inventions but also increasing collaboration opportunities that are byproducts of the challenge model,” she says.

The first PNNL challenge is in the planning stages and on track to begin in late summer 2017.

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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