117 Tech Start-Up Questions from a Dumbass Entrepreneur

Hi, I'm Darren and I'm a dumbass.  I work in a world where there are almost no questions that can't be answered without first saying, "Well...It depends!" But doing what I do, starting tech companies, is one of the only things I am really good at.  So, with that said...

I have been an entrepreneur/start-up junkie/ Dot-Communist for half of my adult life.  Many things have changed in the world of tech start-ups since I worked in SV more than a decade ago.  Everyone is so much more sophisticated and there is a much higher level of nuance than when I first started out.  There is also a much larger community of folks who have been-there-and-done-that.

With all that said, I started taking stock of just what I know for sure (or at least think I know, anecdotally) and what I still wish I had a better understanding of.  Then I started to write.  I came up with page- and-pages of questions that I wish I could have asked back in the beginning of my career and a whole bunch that I wish I could get answers to, today.

I am even thinking about getting a group together, which will include a pool of successful entrepreneurs, lawyers (both IP and start-up), early stage accountants and/or start-up CFO’s, Angels and VC’s.  I want to ask them all the questions that I think most newbie tech entrepreneurs would want to know the answers to. 

I figure if I could ever get a few of each, from the aforementioned group, to answer all of these, then add answers from the founders of some prominent tech accelerators like Y-Combinator, Tech Stars and/or Founder’s Institute, I could easily write some kind of “Tech Start-Ups for Dummies” book.

Obviously, there are too many questions to ask in one session, but here are all the questions that I thought to ask.  I could have kept going, but honestly, what good would that do.  I am sure I am missing a bunch of really important topics, especially around valuation, preferred vs. common stock, liquidation preferences, sub-debt, funding sources…

Enjoy, and feel free to send me additions!

Questions For Investors
1.    Have you ever founded a tech start-up and, if so, what was your role and how did it turn out?

2.    What can we, the Twin Cities start-up/entrepreneurial community, do to get more Angel/Seed investors interested in investing in pre-revenue tech start-ups?

3.    Do you ever invest in companies, when you have serious doubts about their ability to raise more money if they should need it or if they come right out and say that the don’t ever want to raise more money?

4.    What does it say about an entrepreneur, when they say they want to raise $1 million on a pre-money valuation of $1.5 million and does it ever seem weird that everyone throws around such large round-numbers, so casually?

5.    Do you ever invest completely independently or do you ever fully fund a round, without other investors; Why/why not?

6.    Have you ever funded an “idea?”

7.    Have you been so impressed with a team or an individual, that you funded what you considered a terrible idea? (how did it turn out?)

8.    If you could describe your favorite quality in an entrepreneur that leads a company that you have funded, and is (or has) provided exceptional ROI, what would it be?

9.    How do you figure out whether an entrepreneur knows the difference between an opportunity and a problem.

10.    When you meet an entrepreneur for the first time, someone who may have been successful in something they have done or started in the past, do you care or even think about whether they were good at what they did or just lucky?  How do you tell the difference?

11.    Is it important for entrepreneurs to know the difference between prepared and over-prepared or do you find that the majority of entrepreneurs are underprepared so it is actually refreshing to meet someone who is over-prepared?

12.    What are the signs of an entrepreneur who is over-prepared what message does that send to you, as an investor?

13.    What are the two-or-three due diligence things that you do, every-single-time, before you invest in a company?

14.    What are ways or examples, that you have consistently seen start-ups waste time on things that don't matter.

15.    If a founder, founders, need to be paid some kind of salary, does that affect whether you will invest?

16.    What is an acceptable salary for a CEO, CFO, or CTO if their company isn’t profitable yet?

17.    Are founders allowed to get raises in salary or do bumps like that always come in the form of stock?

18.    Since we all start somewhere, and none of us has any experience until we just jump in and start doing something, what are a couple of important lessons you have learned since you made your first investment?

19.    From both a business and personal standpoint, what is the best thing about investing in Start-ups?  The worst? 

Questions for Entrepreneurs


20.    Aside from your own company, or companies where you have been an employee, have you ever invested in a tech start-up?  If so, what was your role (board seat, etc.) and how did it turn out?


21.    Now that you have been through it, what is the most important element to choosing the perfect investor.  In other words, if you could choose one thing that an investor would bring to the party, what would it be?

22.    When you know you have a hard deadline or some really important event coming up that could make or break the success of your startup, should you tell potential investors?  If so, how do you communicate it so you don’t look desperate or pushy?

23.    Why is it important to be patient and when is it ok to push an investor to take action?

24.    When you meet an investor for the first time, do you care or even think about whether they have been successful in their past investment activities?  How do you tell the difference between a successful investor and just someone who has a lot of money?

25.    What are the dangers of hiring too quickly?

26.    What are the dangers of firing too slowly?

27.    What are the areas where you “Under-budgeted” for critical elements/expenses in your business plan?

28.    What hurt your start up more, making decisions too fast or too slow?

29.    What helps/hurts a startup more: Looking for answers from other people or Looking for approval from other people

30.    Before beginning to build your product, is it possible to get too much input or listen to too many points of view and, if so, which group is it more important to seek advice from; potential customers or potential investors?

31.    Following up on the previous question, is it more important to seek advice from those who already serve your industry or those who have built a company with a similar business model?

32.    If, as a founder, you have responsibilities and financial commitments that make it absolutely impossible to work for free; should you go into deep debt, threaten the financial security of your family, or be expected to, to “Prove” your commitment to your company?

33.    From both a business and personal standpoint, what is the best thing about founding a Start-up?  The worst?

34.    Have you ever fired an investor or had to figure out a way to remove them from the mix?  Why/how? 

Questions for all

35.    Besides getting customers and revenue, what is the one thing you would tell someone to do to really get your attention?

36.    What is the dumbest mistake you have ever seen an entrepreneur, who eventually got funded, make?

37.    What is something that you hear from entrepreneurs/investors that makes you say to yourself “Well, I can cross them off the list of people I would ever consider investing in/taking money from?”

38.    What is the difference between important and urgent and how do you decide which is which?

39.    Is it more important for an entrepreneur to be seen as smart-as-hell or obsessively driven?

40.    Thinking back on start-ups you have funded, how do you gauge whether the team understands the difference between focus and activity and, as an investor, how do you help steer them toward more productive activities.

41.    Is it more important, for someone who is looking for funding, to be better at generating publicity or confronting reality and can one overcome the other?

42.    What are the areas where you consistently see entrepreneurs “Under-budget” for critical elements/expenses in their business plans?

43.    What are the tell-tale signs of an entrepreneur who has let getting funded go to their head?

44.    What are the most common things, as an entrepreneur that you found yourself Overspending on and how did you figure out that you were doing so?

45.    What is worse; Under-communicating or over-communicating?

46.    What are the kinds of critical events that happen during a start-up’s early stages that breed overconfidence?

47.    What is worse for the long-term success of a company: Not shipping fast enough or shipping a crappy product?

48.    If a start-up hasn’t filed legal documents, which designate them as a C-Corp or an LLC, does that send a message to investors and, if so, what is that message?

49.    How do you decide what the percentages are that each founder gets?

50.    For multi-member founder teams, who or what kind of founder usually gets screwed or at the very least, under-valued for their contribution.  Who’s contribution is overvalued?

51.    If you had to choose just one, is it more important to have a great accountant or a great lawyer?

52.    When is it time to bring in an experienced CEO

53.    What are the characteristics of a good start-up CEO and how do they differ from the characteristics of a good CEO of a company that has 25 employees and/or 5 million in revenue?

54.    When should you no longer be considered a Start-up?

55.    In general, would you say it is more important for a start-up, in its infancy,  to have a long-term strategy for self sustainability, so that they can minimize the amount of outside investment they need to take, or a well-defined path to becoming a good acquisition target?

56.    Do you think IPO is a reasonable goal for a start-up to even consider from the beginning?

57.    What is the difference between a start-up friendly lawyer and an investor friendly lawyer and how does an entrepreneur know the difference?

58.    (This question for all except entrepreneurs) Are there lawyers, accountants, developers, other common types of vendors that you will not, or maybe prefer not to, work with, all thing being equal?  Does this ever become part of the equation when you are considering investing in or working with a start-up?

59.    Should a start-up have an advisory board? why?

60.    How many people is about the right size for an advisory board and when is it just too big?

61.    How should an advisory board differ from a board of directors/governors?

62.    What is the most appropriate level of compensation for a Board of Directors/Governors? Does this include cash as well as stock?

63.    Is it appropriate to have a completely independent voice on the Board of Directors?

64.    What is “smart money” and is it so important to have smart money, that you should turn down “dumb money” no matter what?

65.    What is the worst way for a start-up to spend money?

66.    What is the most cost effective way for a start-up to spend money?

67.    Do investors ever get pissed or think you are losing focus if you spend time mentoring someone else or participating in activities that don’t bring tangible value to your company?

68.    Other than stealing or some other criminal activity that directly affects the company, what is the one thing, above anything else that should trigger immediate removal from the team/company/ board, etc…? 

69.    In what percentage of start-ups are one or all of the founders removed from their initial role’s by the board?  Do they usually stay with the company, long-term, or is that a signal that they should probably leave?  Is that usually the message that the board is trying to send?

70.    Out of every ten start-ups that get funded, how many start-up CEO’s are equipped to handle that job, long-term, through multiple rounds of financing or through a successful exit?

71.    How often do founder teams split up, and why?

72.    How do you go about firing a founder?  When should that happen? What are the signs or triggers for this to occur?

73.    What are the worst case-scenarios you have seen for a company that had to get rid of a founder? (not naming names, just situations)

74.    From a company culture and morale perspective, what is the best way to deal with a founder leaving the company?

Networking - I am often intimidated by networking events filled with people who could probably help me or teach me something, but might also be WAY ahead of me in the experience life-cycle.

75.    What is the importance of networking for an entrepreneur? 

76.    Do investors ever consider how networked an entrepreneur is when they are thinking about investing?

77.    What are some of the most important groups that an entrepreneur can get involved with, that signal that they understand the importance of networking?

78.    For each group, what is the one networking event that you would never consider missing? Why?

79.    For each group, what is the one networking activity that you think some entrepreneurs waste their time participating in or that they participate in, to the detriment of their goals.

80.    What are some great networking behaviors that impress you? For entrepreneurs, talk about investors; for investors, talk about entrepreneurs; for legal, talk about all; for accountants talk about all.

81.    Is it more important to network with others in your same industry and/or your relative level of influence or social stature, or should you risk looking like an idiot or worse, feeling like an outsider in a room full of people who already know each other?

82.    Is networking more or less important after you have been funded?

83.    What are the characteristics of a good mentor?

84.    Should mentoring be a formal relationship.  In other words, should I say to someone, “would you be my mentor?” or “would you mentor me in this X area?”

85.    Is mentoring a business relationship?

86.    What should an entrepreneur be trying to get from a mentor?

87.    What should an entrepreneur never ask of or try to get from a mentor?

88.    What’s in it for the mentor?

89.    How many mentors is too many?

90.    How much time is too much when it comes to networking?

91.    Is it a mistake to become so focused on your business that you don’t have time to network or mentor, even if your business is wildly successful?

Would you rather have:


92.    An awesome, charismatic, leader who can communicate the vision OR an awesome, super-organized and empathetic (people) manager, running a start-up?

93.    A principal founder/start-up CEO with Undying Passion for the idea OR Real World Experience

94.    Founder/CEO who is Confident OR Pragmatic

95.    Founder/CEO : Street smart OR book smart

96.    Founder with a technical background OR Founder with sales background in target industry

97.    Founder with a technical background OR founder with operations, finance and HR background

98.    Founder with sales background in target industry OR operations, finance and HR background

99.    Founder/CEO: MBA with 2 years at McKinsey OR BA in English and 8 years in sales to target market

100.    Investor with personal net worth of $200 million but no experience in your industry OR Investor with net worth of $5 million, but can introduce you to lots of customers.

101.    Investor who is super-supportive of your company and helps any way they can, but likely can’t/won’t invest in follow-on rounds OR a micromanaging investor who doesn’t really offer much besides money, BUT can help you raise a ton of money, as you grow.

Accounting

102.    What can a good accountant do for you and is it important that they have experience working with start-ups?  Why?

103.    In general, for entrepreneurs looking to raise money, should they file as a C-Corp, an LLC or should they wait to see what their investors want them to do?

104.    What is the best thing about working with entrepreneurs?

105.    What is the most difficult thing about working with entrepreneurs?

106.    Why do you think it is so hard for entrepreneurs to understand the concept of pre-money and post money.

107.    If an entrepreneur has a good accountant and a good attorney, is it still important for them to understand the minutiae of pre-money and post money valuations.  Why?

108.    How do you value a company that hasn’t produced revenue?  Are there any indicators or benchmarks that one should look for?
109.    For a pre-revenue tech start-up with no patents or tangible IP, what is the top end of the valuation-scale and what makes some companies, in similar situations, more valuable than others?

Legal

110.    What is the difference between legal representation that is used to working with startups and those who aren’t?

111.    Does a good start-up lawyer need to have a lot of knowledge and experience in issues surrounding IP?

112.    Is reputation a factor that entrepreneurs should consider when they hire a lawyer?

113.    What is the best thing about working with entrepreneurs

114.    What is the most difficult thing about working with entrepreneurs

115.    What are the most important things to get right from a legal standpoint, when forming a company?

116.    What should an entrepreneur do if they don’t have the money or good fortune to have access to a good attorney?

Other

117.    Finally, For an entrepreneur who needs:

1. A co-founder or two - Who bring skills, experience and a solid background/reputation of providing specific key elements to other successful businesses
2. Investors - who inevitably will want them to keep the company as lean as possible in the early stages, to reduce the burn rate
   
3. Market validation – to show both investors and potential co-founders that the opportunity is worth the risk
   

Would you be better off spending your time networking with potential partners, potential investors or potential customers?

Open Letter to AUTM: The REAL National Convention Debate Topic Should Be: "Why Haven’t We Embraced the Web for Marketing and (Express) Licensing of our Available Technologies?"

Alan Bentley, the president of AUTM recently announced that there would be a big "debate" about the pros and cons of "express Licensing." 

First let me say that in my opinion having a “debate” on pros and cons of express licensing doesn’t go far enough.  The discussion should also include marketing technologies outside of our personal networks and why we haven’t fully embraced the technologies available to us for doing so.  Also, a definition of what folks think “express licensing” means, would probably narrow the scope to a manageable level.   Plus, asking the folks from tech transfer offices to weigh in on this doesn't make sense.  So few of them have a clue about how to effectively and efficiently tackle express licensing that you couldn't fill a closet much less a ballroom with those who could speak intelligently on the subject.

As a primer or maybe a “fight-starter,”  I would suggest that we are really debating the difference between inefficient methods and efficient marketing and licensing practices.  

I find myself writing this, having spent the last two-and-a-half years having thought, ate, breathed and slept "express licensing" and, in broader terms, Marketing University I.P. on the Web. 

My company, M.IP.P. Strategy has developed the First and most successful tool for SEO, Online Marketing, Express Licensing creation Administration and Management Application that is out there today; CaSTT - (Commerce and Search for Technology Transfer).  
And it was designed  in conjunction with a University Technology Transfer Office.

SO, with that having been said...

The problem is, express licensing isn't really the issue.  The real issue is the effective use of tools to market available technologies.  The reason that express licensing doesn't work and hasn't really caught on for most universities has little to do with the licensing part of the equation.  Instead the issues reside in the reality that folks can't find the technologies that we have available for licensing.

The Bayh-Dole Act recognized the incredible potential of university inventions, yet a staggering number of promising technologies remain untapped; The economic and humanitarian benefits unrealized, because of the gap in getting inventions noticed and into the hands of companies with the development funding necessary to nurture these vital innovations and discoveries.  Connecting companies with viable licensing opportunities remains the most significant challenge along the research-to-deployment continuum.

The typical marketing and licensing model, for US Technology Transfer offices, relies heavily on inefficient marketing techniques and constantly cultivating professional relationships with industry contacts. I am by no means asserting that we should not cultivate strong industry relationships, but employing this methodology means that when a researcher produces a new invention or makes a breakthrough discovery, the ability to successfully commercialize that intellectual property is often directly tied to the resources available to the technology transfer office and the personal contacts of the technology transfer professional assigned to marketing that technology.  Common sense dictates that if you are an overworked portfolio manager in a tech transfer office, juggling dozens, if not hundreds, of intellectual property disclosures, you are more likely to dedicate your time to ideas that will have huge, obvious, monetary pay-offs, rather than trying to shepherd inventions with less obvious commercial potential through the morass of red-tape and paperwork that accompanies most transformative ideas, coming out of pure research or academe. 

The tech transfer industry, as a whole, hasn’t kept up with the staggering advances in electronic marketing techniques and search engine optimization strategies, over the last decade.  Because of thsi fundamental truth, the only viable option for transferring the latest technology to someone who can turn it into jobs, growth and money for your university, lab or hospital, is sending more emails and making more phone calls, all-the-while eagerly waiting for serendipity to smile upon your efforts and leaving you hoping that the new technology is at the perfect intersection of innovation, need, ability, resources and the right person actually knowing the other right person, so they can engineer a meeting. In short; in the tech transfer world, it has always been about how much money you have and whom you know, rather than how good your idea is; but money is tight and “hope” is neither a sound strategy nor a successful tactic.

Because of this omnipresent paradigm, Technology Transfer Offices have fallen far behind the rest of the business world when it comes to utilizing the most helpful and transformative communication tools at their disposal; Web Marketing.  One of the effects that this deficiency in professional and organizational development has, is that technology transfer professionals, and specifically those who are tasked with marketing intellectual property, occasionally operate on differently communication levels than those with whom they are supposed to interact. 

The typical TTO - marketing person spends her time making phone calls, sending emails, and trying to figure out how to get the contact information for completely unqualified leads at monolithic companies.  Meanwhile, most of the jobs created in the United States, and most of the folks making revolutionary economic and societal changes, based on untapped ideas and elbow grease, are never going to hear about the wealth of amazing technological treasures available to them, because they aren’t part of a giant machine that churns out a new product once every ten years. 

Entrepreneurs; those far more likely to turn innovative research developments into practical business products, don’t spend their days waiting for someone in a tech transfer office to call them. Additionally, it is arrogant and naïve to think that corporate researchers and product development engineers have time to visit every university website; trolling the ivy covered depths of neglected discoveries.  The folks that will lead the nation and, specifically, the area’s most affected by the current economic distress, won’t do so by trudging through acronym-laden technology descriptions, jargon filled abstracts and indecipherable static files, meant more for their peers than for someone who might turn their work into a commercial venture. 

The reason the future of technology transfer for public institutions is so cloudy is that most new technologies, even the most exciting, promising and commercially viable ones, can only be found by an extremely persistent individual, who knows precisely which technology he or she is looking for; has somehow discovered the website where the information is stored; understands how to navigate through academic databases, journal publications and patent searches, to ultimately find enough information to lead them to someone in the Technology Transfer Office.  Even if one successfully runs that gauntlet, what follows is a significant investment in person-hours required, by both the potential licensee and the Intellectual Property owner, to facilitate the sharing of information, process paperwork and complete several manual steps in the data gathering and licensing process. 

Many Technology Transfer Offices, particularly those located in economically distressed regions, think they cannot afford the resource expenditure necessary to fix this problem or, even if they can, don’t know where to start, so they continue to use outdated and inefficient means to reach potential licensees.  These Technology Transfer Offices have been taught to believe this business model will lead to licensing, commercialization, and job creation.  The unfortunate reality is that inadequate marketing strategies, antiquated systems and inappropriately used software applications simply do not provide most tech transfer offices with a reliable mechanism to reach beyond their own personal networks, or outside their own geographic reach, to garner unsolicited leads.  The absence of adequate education and training targeted to the unique issues and circumstances that technology transfer offices face, and a lack of specialized technology development for this small niche industry, make it incredibly difficult to create an environment for potential licensees to even find viable licensing opportunities.

Efficient Licensing

The problem that I have with most folks that think they are doing express licensing is that they STILL NEGOTIATE!  It is as if we think it is our job to negotiate. 

Imagine if your TV broke.  You would have a problem that needed a solution.  Because we have trained licensee’s to think a certain way about buying (licensing) stuff from us, If you were buying the TV from a Target store, as if it were University IP, it might go something like this.

You/licensee: walk into Target and say to the manager “I would like to buy that TV.”

Store/Technology Manager; “Great; That TV is $539.  How would you like to pay for that?”

You/licensee: “Whoa, hold up big fella! We are going to have to negotiate.  I said I like the TV, and it does all of the things I need a TV to do, but I am not thrilled by the packaging; Especially the tape on the box.  No, before I buy that TV, I am going to need you to make some changes.  The thing is, I don’t really like the way it is packaged.  I need you to send it back to China, and repackage it.  Also, I need you to remove the tape with the red Target® logo on it and just use clear tape.

Store/Technology Manager; “Ummm. What?!”

You/licensee: “Yeah, if you do all that stuff, I will buy that TV for the exact same price that you have it listed at right now.”

Now, at Target, if the Store/Technology Manager calls security and has you (justifiably) thrown out, you can just got to another store.  But it is highly unlikely that you will turn around, go back to your house and decide that it might be easier to get exactly what you want by just building your own TV.  Even if you could, it would take too long and cost too much.  But this is the crazy, contra-intuitive, sandbox that we in tech transfer find ourselves playing in every day.

If we just said: “Nope, we have a set of standards that we cannot stray from so, if you want it, here it is!” Folks would have no option but to accept it – or not.  Either way we can justify our actions.

Does This Sound Familiar

Currently, when an individual or organization wishes to enter into a non-exclusive license agreement for the use of commercialized intellectual property with a University, a manual process must be undertaken whereby both the potential licensee and employees of the Technology Transfer office can expect to engage in an inefficient, and occasionally arduous, licensing process.

First, the customer must identify the product he wishes to license and either, contact the inventor for information on how to license the IP, or figure out for himself how to engage the TTO.

Then he must either call or email the appropriate TTO employee and wait for a response, after which they receive further instructions regarding the exact license parameters and the processes and procedures they must undertake in order to complete what should be a relatively simple transaction.

Licensing Non-Exclusives (Because Gerry mentioned it)
In the best-case scenario, using some forward-thinking TTO’s web site, a customer might be able to:

• Obtain a couple of paragraphs of background information, a simple set of license instructions and a downloadable copy of the license, from the website, which is usually in PDF form.
• The customer must then mail, fax or email several hand-signed copies of the license back to the TTO. 
• They must, also remit payment for the license, either by mailing a check or via wire transfer (which has its own set of instructions and manual internal processes.)

In either case, several, steps must be taken to reconcile this transaction in the accounting process.  In cases that I am familiar with, the check comes in then sits on a desk or in a basket for a while.  When it is opened, someone stamps a date on it and begins to enter the transaction and customer data into some central accounting system software (if they are lucky). Sometimes, however, the info gets added to  the TTO’s tech management database but there is a separate process by which the university and the TTO have to account for the money. In those cases, another step is added to the process which means that the check has to clear the bank, then a TTO staffer has to find and enter the details of THAT process into a different system before materials can licenses are approved and sent to the licensee.

Finally, upon receipt of the Executed License, the “cutting edge” University forwards an electronic copy of the reproducible materials and content to the licensee.  If the licensed materials are something that must be boxed up and shipped, there is yet another set of procedures for fulfillment and shipping communication.  and, of course, all notifications and shipping/tracking documents must then be manually entered then be tracked in your CRM or technology management system.

And what about export controls?

Our express licensing system has multiple levels of export control mechanisms.  We can restrict information, access and ability-to-license for all technologies or even individual license types for a specific technology, based on IP address, country, state, physical address of the licensee and a bunch of other variables.  So, for instance, someone in Afghanistan, could license the academic version of some piece of software, to use for research purposes, but not be allowed to even get technical information about the commercial or more developed versions of the same technology.

However, in most cases, using the “Old school ways of doing things, getting your hands on the technology once you have jumped through these hoops will take at best, a few weeks, and most often several months.

Let's Negotiate

Sadly, this is currently a “Best-Case” scenario for most TTO’s.  Most often though, the customer, since she has already gone through the trouble of actually endeavoring to speak directly to someone at the Tech Transfer Office, says:

“Can we change the language in section XXX  …I just don’t know if we can do it that way here at our company/ university/ hospital/ lab…,” etc?

To which the Technology Manager inevitably says “of course; just let me send that to our lawyers and make sure it is OK with them.”

This action triggers the customer to suddenly believe that if there are lawyers involved, maybe theirs should be too.  2 months later the technology, which could have been licensed immediately had there been a mechanism in place for doing so, is still stuck in legal terms-and-conditions purgatory and might never make it out.

This is, simply, a poor way to treat a customer who wants nothing more than to find a useful technology, learn more about it, pay for and execute a license and fulfill the order.  The worst part about it, for the TTO, isn’t even the delay; the worst part is that you have trained another customer to automatically assume that the terms and conditions, that are included in the licenses that you promote, are arbitrary and that one would be a sucker if they simply accepted them.  This is the same feeling one would get if one were to go to a used car lot and tried to buy a car.  We all know how much folks love to negotiate…

Great Bootstrapper's Breakfast today

Today's Bootstrapper's Breakfast was fascinating and well worth the time.  In attendance were the entire team from the winners of the start-up weekend, who have been working on no sleep and lots of caffeine.  Kevin Spreng kept the discussion on track and we all got to talk about what we are working on and, in most cases, what we do when we aren't bootstrapping a start-up.

One of the interesting themes was how much different it is to be an entrepreneur once you are married, have kids, a mortgage and the real responsibilities that naturally come along as one get's older.  Coming out of that discussion, I am seriously thinking about getting a group together that consists of a bunch of guys that have been involved in start-ups in the past, who might be able to lend some historical perspective, give some free advice and help younger entrepreneurs build their respective network's.

Playing off that discussion, I think there was some consensus that we can all serve the start-up community by working together and sharing our connections.

Jeff Pesek had some really interesting comments about the things that he has learned about being an entrepreneur in the Midwest which started a discussion about the differences between the Silicon Valley venture capital/startup environment and the Twin Cities'.  One of the things that I absolutely agreed with him on was when he said it is really important to consider the sources of the advice that you get as it relates to doing a start-up or finding funding.  He said, "there are a lot of poser's out there"...  Truer words were never spoken.  Jeff also talked about the current state of venture funding here in town and what he feels are ways that we can improve the climate.

The best part of the breakfast, for me, was at the end when we went around the table and shared what we are looking for, in terms of help for the various projects we are all working on, and also what we might be able to offer the other members of the group.

Afterward, Kevin held a little impromptu session on the merits and pitfalls of the various types of legal entities that an unfunded start-up might consider, when trying to attract seed, angel or venture funding.

I left thinking that I am amazed at how much more mature the Twin Cities start-up community has become since I first went out looking for venture funding back in 2000.  I mentioned that, back then, the only decent networking group in town was Netsuds, and all 6,000 members were trying to get a meeting with Michael Gorman.  Now, getting in the room with someone who can fund your idea is a little easier, and we are all getting better at realizing that just Because another company gets funded, that doesn't preclude ours from being successful too.

In the end, I think the most important nugget that I took from the event was that there are lots of people out there who are talented and well connected and if we all work together, share ideas, share contacts and use our past experience and lessons learned from our failures as well as our successes, we can help each-other avoid mistakes and turn the Twin Cities in to a more inviting environment for innovation.

Association of University Technology Managers, Statistics, Over Time

AUTM Stats, Over Time

If you go to http://autm-stats-over-time.mippstrategy.com/, you will find a Motion Chart, which gives a graphical illustration of all of the stats that AUTM collects, each year, from its member institutions.  The difference between what you get when you do a query on the AUTM site, and what I have done, is that I have created a moving, graphical, representation of all of the statistics collected since 2002, so you can choose your own parameters and see how they interact and react against each other, by school or institution, over time.

This data can be used to benchmark against other institutions, or just see how your own school/institution has done over time.

If you have ever wondered how your school compares, over time, to all of the other AUTM members, or maybe just a couple of others, in any or all collected categories, this is a fairly easy way to find out.

I am interested to hear back from folks as to what they think about the way this data is displayed.

Please note: All of the data from this chart came from a blanket query of all of the statistics that are available to AUTM members on the AUTM website.  There are a couple of obvious errors in one or two of the individual school’s data, but I used the data exactly as it was reported.

Lies, Damn Lies and Statistics

Truth, Opinions & Statistics?

A national survey conducted by the Pew Internet & American Life Project in collaboration with the Exploratorium benchmarks how the internet fits into people's habits for gathering news and information about science.  Findings include:  

• Nearly 9 in 10 (87%) online users have used the internet to look up the meaning of a scientific concept, answer a specific science question, learn more about a scientific breakthrough, complete a school assignment, check the accuracy of a scientific fact, download scientific data, or compare different or opposing scientific theories.  
• Most Americans say they would turn to the internet if they needed more information on specific scientific topics. Two-thirds of respondents asked about stem cell research said they would first turn to the internet 
• 59% asked about climate change said they would first go to the internet. Most of those searches would begin with search engines.  
• Nearly three quarters (71%) of internet users say they turn to the internet for science news and information because it is convenient.  
• Two-thirds (65%) say they have encountered news and information about science when they have gone online with a different reason in mind.

Users of the internet for science information also report better attitudes about the role science plays in society and higher assessments of how well they understand science.  Specifically:  

• 78% of those who have gotten science information online describe themselves as "very" or "somewhat" informed about new scientific discoveries; 58% of remaining internet users says this.
• 48% strongly agree that to be a strong society, the United States needs to be competitive in science; 33% of remaining online users strongly agree with this.  
• 43% strongly agree that scientific research is essential to improving the quality of human lives; 27% of other online users also say this.
   

Further, in a report entitled “The Impact of the Internet on Institutions in the Future,” Most surveyed believe that innovative forms of online cooperation could result in more efficient and responsive for-profit firms, non-profit organizations, and government agencies by the year 2020.
 
By an overwhelming margin, technology experts and stakeholders participating in a survey fielded by the Pew Research Center’s Internet & American Life Project and Elon University’s - Imagining the Internet Center, believe that innovative forms of online cooperation could result in more efficient and responsive for-profit firms, non-profit organizations, and government agencies by the year 2020.

A highly engaged set of respondents that included 895 technology stakeholders and critics participated in the online, opt-in survey. In this canvassing of a diverse number of experts, 72% agreed with the statement:  

• “By 2020, innovative forms of online cooperation will result in significantly more efficient and responsive governments, business, non-profits, and other mainstream institutions.”

Only 26% agreed with the opposite statement, which posited: 

• ”By 2020, governments, businesses, non-profits and other mainstream institutions will primarily retain familiar 20th century models for conduct of relationships with citizens and consumers online and offline.”

While their overall assessment anticipates that humans’ use of the internet will prompt institutional change, many elaborated with written explanations that expressed significant concerns over organization’s resistance to change.  

They cited fears that bureaucracies of all stripes – especially government agencies – can resist outside encouragement to evolve. Some wrote that the level of change will affect different kinds of institutions at different times. The consensus among them was that businesses will transform themselves much more quickly than public and non-profit agencies.

The Online Experience TTO’s Should Offer Their Potential Licensees

These are some of the things that we set out to accomplish when we were building CaSTT (Commerce and Search for Technology Transfer) 
 

Simple and Familiar User Experience

TTO's must make it easy for potential licensees to:

• Search for and find a specific technology
• Get detailed product information
• Choose an appropriate license type
• Enter Customer and payment information
• Complete the transaction and fulfill the order
• Buy with confidence - Use a secure E-Commerce transaction interface specifically tailored to the needs of University Technology Transfer offices

Administrative Control and Ease of Use

Application and Management Tools Should Help Technology Transfer Offices:
 

• Track sales
• Perform site-use analysis using Google Analytics (or your favorite web data package)
• Find out where users are coming from, what they are searching for and what keywords they use to find a specific technology.
• Review numbers and types of agreements.
• Create non-negotiable licenses, with standard terms and conditions
• Automate much of the purchase, fulfillment and product-information function currently performed by Tech Transfer Office staff or University inventors

You can read more about our experience building CaSTT for the University of Minnesota Office for Technology Commercialization on the M.IP.P. Strategy Website

How Does Your Tech Transfer Office Treat Potential Licensee’s?

Does This Sound Familiar

Currently, when an individual or organization wishes to enter into a non-exclusive license agreement for the use of commercialized intellectual property with a University, a manual process must be undertaken whereby both the potential licensee and employees of the Technology Transfer office can expect to engage in an inefficient, and occasionally arduous, licensing process. 

First, the customer must identify the product he wishes to license and either, contact the inventor for information on how to license the IP, or figure out for himself how to engage the TTO. 

Then he must either call or email the appropriate TTO employee and wait for a response in which they receive further instructions regarding the exact license parameters and the processes and procedures they must undertake in order to complete what should be a relatively simple transaction. 
Licensing Non-Exclusives

In the best-case scenario, using some forward-thinking TTO’s web site, a customer might be able to:

• Obtain a couple of paragraphs of background information, a simple set of license instructions and a downloadable copy of the license, from the website.
• The customer must then mail, fax or email a signed copy of the license back to the TTO. 
• They must, also remit payment for the license, either by mailing a check or via wire transfer (which has its own set of instructions and manual internal processes.)

In either case, several, steps must be taken to reconcile this transaction in the accounting process. 

Finally, upon receipt of the Executed License, the “cutting edge” University forwards an electronic copy of the reproducible materials and content to the licensee. 

However, in most cases, getting your hands on the technology once you have jumped through these hoops will take at best, a few weeks, and most often several months.

Let's Negotiate

Sadly, this is currently a “Best-Case” scenario for most TTO’s.  Most often though, the customer, since she has already gone through the trouble of actually endeavoring to speak directly to someone at the Tech Transfer Office, says:

“Can we change the language in section XXX  …I just don’t know if we can do it that way here at our company/ university/ hospital/ lab…,” etc?  

To which the Technology Manager inevitably says “of course; just let me send that to our lawyers and make sure it is OK with them.” 

This action triggers the customer to suddenly believe that if there are lawyers involved, maybe theirs should be too.  2 months later the technology, which could have been licensed immediately had there been a mechanism in place for doing so, is still stuck in legal terms-and-conditions purgatory and might never make it out.

This is, simply, a poor way to treat a customer who wants nothing more than to find a useful technology, learn more about it, pay for and execute a license and fulfill her order.  The worst part about it for the TTO, isn’t even the delay; the worst part is that you have trained another customer to automatically assume that the terms and conditions that are included in the licenses that you promote are arbitrary and that one would be a sucker if they simply accepted them.  This is the same feeling one would get if she were to go to a used car lot and tried to buy a car.  We all know how much folks love to negotiate…

Where Do Your Technology Descriptions Come From

It’s Not The Arrow; It’s the Archer

No matter whether you have a home-grown IP Management Database or a commercial application, the problem isn’t the IP Management System.  Most technology tracking and management software was never meant to be a central repository for Search Engine Optimized technology marketing content.  No prior system was specifically designed to integrate with the vast array of new, user and search engine-friendly, web-based technologies, without significant and costly customization.

When new or updated information is published, a manual process must still be undertaken to get the same information, which now resides on the website, out to its intended audience.  That is also assuming that there are adequate resources available to build fully developed marketing campaigns for the tens of thousands of new inventions and discoveries coming out of research facilities each year.  Further, the same process must be repeated each time there is an update or upgrade.

In fact, there are plenty of tools that are simple to use and produce dramatically better results than the way most TTO's do things now, but between bureaucracy, budget and fear of the unknown, most tech transfer offices refuse to accept that they are doing a terrible job of getting information about their innovations out to the world in a way that those searching for it can actually find it and begin to engage in the licensing process.

The Promise of the Future for Tech Transfer

How to Get There

It is possible to leverage the power of the Web to bring potential licensees, folks that you don’t have contact info for, to the universe of amazing technologies that often lie dormant waiting for someone to discover them.  By using ubiquitous web tools, and following proven content-optimization methods, industry can find out about licensable technologies and, in many cases, actually license it, with no human intervention, no phone calls, no negotiation and no paperwork.

Whatever applications and tools the TTO chooses, though, should really be a secondary consideration.  The application itself is simply a means to an end.  In my mind, which application one uses is only as important as a tech transfer office's ability to change the way they market their technologies.  It is so important for people to understand that they should not be using jargon, technical descriptions and the indecipherable gobbledygook that professors and researcher write. (mostly, it seems, to impress other professors and researchers)  one can find reams of quantitative data that PROVES that people simply do not use the web to search for solutions to problems the way most of us in the tech transfer world seem to think they do. 
 

If folks aren't beating down your door to find out more about all of the cool, ground- breaking inventions and discoveries that you have to offer, you no longer have to ask yourself why; It is because you are writing for the wrong audience.  I have had this argument a hundred times with folks in our own office and all I can say is that the results speak much louder than anything I can say or do to convince them.  

I can give you a hundred examples of how easy it is to get people to actually notice your licensable technologies, but most often, it doesn't matter, because folks don't want to do the work it would take to fix their content.  They just want to post whatever they have in KSS, InfoEd or Inteum, directly to the web, with no regard for whether or not anyone in the world will ever be able to find it, use it or understand it, if they do.  We in the Tech Transfer world seem to think that the simple act of getting a technology description online means that anyone searching for a solution to a problem, one that has anything at all to do with the general nature of one of our inventions, will easily be able to find it.

The fact is, there are tens-of-thousands of technologies being listed on IP aggregator sites, but the real people out there searching for them can't find them because we do such a horrible job of writing technology descriptions, optimizing our content and setting ourselves up for success.  We don't understand the tools that we are using or how search engines work.  Optimizing content can help us do our jobs by bringing unsolicited leads to our doorstep.

Tech Transfer Offices need to completely scrap the way they think about how they describe their technologies.  We need to begin to learn how to use the tools that we already have available to us.  And, finally, we need stop trying to turn technology management systems, like KSS, Inteum and InfoED, that are in no way meant (or equipped) to help one market the technologies whose descriptions are housed there, let alone do so online.  We need to start thinking more clearly about our the behavior of our audience.

Why are Tech Transfer Organizations Using video / Web 2.0 / social media tools

It Gets Worse

The trend that sees tech transfer offices skipping the most important steps in the online-marketing-tool "learning curve," and instead jumping directly to a strategy of using video/Web 2.0/social media tools, without ever learning how the web, search, content optimization and basic internet marketing processes work, means that they are focusing time and resources on steps that won’t help them until they go back and learn the basics.

If you can’t effectively market a technology online, so that you get unsolicited leads, why would you shift your focus to trying to market a video about that technology.  If you are doing this you are throwing good money after bad.