Balancing Assertiveness and Patience in Tech Transfer: A NASA Case Study

Balancing Assertiveness and Patience in Tech Transfer: A NASA Case Study

Balancing_iStock_000068897451_lowrez_croppedUPDATE: This tech transfer success has already yielded important public benefits. Vigilant Aerospace’s product was used to support Hurricane Harvey relief efforts. Check out the NASA news story here.

Earlier this spring, NASA’s Armstrong Flight Research Center (AFRC) signed a license allowing Vigilant Aerospace Systems to integrate its patent-pending sense-and-avoid system into the startup company’s FlightHorizon™ avionics platform. This deal is noteworthy not only because it may improve flight safety for all kinds of aircraft, including UAVs/drones, but also because it provides a valuable tech transfer case study.

Having been partnered with the technology transfer office (TTO) at NASA AFRC for many years, Fuentek has supported the commercialization efforts for this aviation control/tracking technology from the beginning. As such, we know how this case illustrates that effective tech transfer often requires balancing assertiveness with patience.

The trick is knowing how assertive to be (i.e., how much time and effort to put into an opportunity) and how patient to be (i.e., don’t give up too early).

Setting the Strategy for Marketing

In evaluating this technology, we found it was clearly fit for commercialization, but our ramp-up to marketing revealed that the technology seemed to be ahead of the market. Industry experts appreciated the innovation, but our efforts to engage them as prospects for licensing didn’t get much traction.

It was clear the market was coming, but at this early stage the landscape and value chain players were too unclear to warrant an aggressive marketing campaign. So instead we recommended a passive campaign, posting an online technology listing on the TTO’s website. Because it was unclear how the market would unfold, we were cautious, advising that it didn’t make sense to spend an overabundance of resources at this early stage.

Leveraging Award/Conference Publicity

While we didn’t recommend an active marketing campaign at this time, we did keep our eyes open for opportunities to get the word out about the technology. So we nominated the invention for the Outstanding Technology Development Award issued by the Far West Region of the Federal Laboratory Consortium for Technology Transfer (FLC). This choice was deliberate—the nomination form was straightforward and easy to complete given the marketing materials we already had. Other awards with complex forms would have required too great an investment of time relative to the expected return.

This strategy, which resulted in a win, paid off in a significant way. You see, that year the Far West and Mid-Continent FLCs combined their yearly meetings with the WBT Open Innovation Forum, which attracted technology-scouting companies and investors. The inventor, who attended to receive his award, collected business cards from folks interested in his award-winning technology. One of those cards was from Cimarron Capital Partners, the venture capital firm that eventually backed Vigilant Aerospace Systems. During our post-meeting follow up, Cimarron invited the inventor to present his technology at another WBT event, which included an audience of entrepreneurs and investors interested in technologies related to unmanned aerial systems.

Harnessing Inventor Enthusiasm

Inventors can be great advocates in tech transfer. And in this case, the inventor’s enthusiasm was crucial. He not only continued advancing the technology but also was proactive in making connections, such as those at the FLC meeting that led to the presentation to Cimarron.

As we collaborated with him on his presentation for the investors, the pitch took on just the right tone. It had the right level of detail for an audience of investors, and it focused on the value proposition and other information that they would consider most important. Plus the practice sessions prepared the inventor for the questions that might come up, helping him avoid crossing the line of revealing too much information or making promises that could not be met. Of course, we’d secured non-disclosure agreements (NDAs) during the meeting preparations, but still it was important to protect AFRC’s position as negotiations began.

Considering the Offer Carefully

Following best practices when it comes to licensing negotiations helped the TTO secure a win-win agreement between NASA AFRC and Cimarron-backed Vigilant based on a multitude of factors. Of course, I can’t reveal the details here, but suffice to say that the process again combined the principles of assertiveness and patience. From analyzing the proposed royalty rate against similar deals to conducting due diligence in examining the pro forma, the TTO was able to be thorough without seeming arduous. Carefully thinking through their responses to Vigilant’s proposals and requests helped the TTO ensure that they secured a fair deal while also making sure that NASA technology could be used to help a small company get off the ground, benefit the economy, and make the technology widely available.

It was a pleasure to collaborate with the TTO in this final phase of the process. Helping ensure our client got a fair deal and supporting them throughout the negotiations is only part of what we do at Fuentek, but quite frankly it’s one of the most satisfying parts. This is particularly true when we’ve been able to accompany them along the entire road to technology transfer.


For information on how Fuentek can help you manage your organization’s intellectual property (IP), contact us today.

Putting Market Data to Work for Tech Transfer: Stories from the Field

Putting Market Data to Work for Tech Transfer: Stories from the Field

BoyWithBinoculars_iStock_000058151110Gathering and analyzing market data may be at the heart of developing the technology transfer strategy, but its value is not limited to deciding and planning to move forward. There are some less obvious but extremely impactful ways that market data — be it collected through secondary sources or interviews — can be a useful tool for a technology transfer office (TTO).

Here are four projects I’ve worked on recently that illustrate some of the powerful ways your TTO can make use of market data.

1. Cultivate a Potential Licensee

Fuentek was asked to assess the market potential for an innovative materials technology. In researching the market, we found plenty of folks who wanted to be at the “user” end of the value chain, but no one wanted to manufacture the material. However…

There was a contractor already supplying the material to the client’s main organization. Our analysis of the market data showed that this small business would be the perfect licensee.

But that’s not where the story ends.

This small business had never licensed a technology before. Since our client had a vested interest in having a successful licensee, they asked us to cultivate the opportunity and help the prospect navigate the process.

One of the things we did to encourage the company to come to the negotiating table was: We showed the prospect the market data demonstrating the technology’s commercial potential. Once they saw that our client wouldn’t be their only customer, they were ready to work with us as they proceeded step by step toward signing the deal.

Lesson Learned: Market data can be used to help bring prospects to the table who might otherwise not be willing to show up.

2. Give Management a Reality Check

You know those technologies that generate a lot of buzz within the university or lab? This was one of those.

We were supporting a client on developing a license agreement with an interested party. During what turned into a lengthy technical review (I’ll spare you the gory details), management started to get big ideas about how much revenue this deal could generate. They did not realize the potential obstacles that would limit how high the royalty rate could be.

So the market research we conducted helped the TTO do more than just prepare for negotiations. Our objective market data was used to help frame management’s expectations appropriately. Because they could see the similar, relevant deals that fed into the average royalty as well as how those deals were structured, management recognized that their grand plans for the favored technology needed to be adjusted. As a result, when the deal was finally signed, it sailed through the approval process because management wasn’t blind-sided by the final terms.

Lesson Learned: Market data can do double-duty when it’s documented and communicated clearly to management.

3. Find Research Sponsors

A client called me 10 weeks before a provisional patent was set to expire. The inventor felt that the technology was strong, but the TTO manager wasn’t familiar enough with the semiconductor market to know if it was worth investing in a nonprovisional. When she asked if we could help, I felt like that Grey Poupon ad… But of course.

Anyway, as we began our research, we found that the technology applied to only a small segment of a very large market. The market size was sufficient, but there were only a few companies poised to be licensees. Because of the technology’s level of development, chances were slim they’d be ready to license. But chances were good that they’d participate in a sponsored research agreement (SRA).

Armed with this information, the client was able to proceed with IP protection (since that would be needed for any future sponsored research). Then we used the market data to identify and contact potential SRA partners to begin to develop those agreements.

Lesson Learned: Market data can provide you with research partners as well as licensees.

4. CYA When Dealing with Questionable Terms

We were asked to examine a license application our client had received to determine if the proposed terms were fair. The terms seemed low to our client and, quite frankly, at first glance I agreed.

But as I dug into the market data, it was clear that the seemingly low terms were, in fact, quite fair. So in a brief but thorough document, we laid out our analysis along with suggestions for other aspects of the deal that could be negotiated to our client’s advantage.

Then our client, in turn, used our analysis of the market data to assure management that the deal had been carefully analyzed.

Lesson Learned: Market data can be used to document that the TTO is not leaving money on the table when negotiating a deal with less-than-stellar terms.

Actually, these stories illustrate more than just the various ways TTOs can put market data to valuable use. They also show the many ways that Fuentek supports R&D organizations in their technology transfer and strategic decision making. Whether it’s making patenting decisions or negotiating deals, Fuentek is your trusted advisor for insightful analysis and objective recommendations. Contact us today to learn more about how Fuentek can help you achieve your goals.

License Negotiation Forget-Me-Nots for Technology Transfer Offices

License Negotiation Forget-Me-Nots for Technology Transfer Offices

StringOnFinger_iStock_000021963522_lowrezThe past few months have seen several of us at Fuentek supporting multiple clients with negotiating licenses for their technologies. One project that I’ve been helping a client with embodies several best practices of license negotiations. Ironically, these concepts are so essential that they’re sometimes forgotten.

So here is a list we’ve put together to ensure that the most important aspects of license negotiations stay front and center.


1. Value Is More Important than Price

Often we are asked for help in coming up with a price for the technology to be licensed. But such attempts at “price tagging” usually yield a number that’s too high or too low, over- or underestimating how much the technology is worth to the licensee. So rather than putting a price on the technology, one must put a value on the deal.


Our client was contacted by a company asking what the cost would be to license a particular software technology. I helped her turn the question around and think about it from the prospect’s perspective. This changed it from What’s the price of our technology? to What value does our technology bring to the market? How will this licensee use it? What are the specific circumstances of the market? (BTW, ideally you’ve done the market-focused research to begin to answer these questions.)


For more insights on tech transfer negotiations, download our free webcast. Read more here.

2. Let the Licensing Prospect Make the First Offer

Actually, we recommend that TTOs require the prospect to make the first offer. Remember: You hold the technology that they want, so you get to set the rules of the negotiation. And one of the best rules is the two-step application process, which we’ve helped several TTOs successfully implement.


When the client asked me how she should respond to the company’s inquiry, I advised her in putting together the basic elements of a term sheet for the prospect to fill out and submit as an application for a license. This first step puts the TTO in a position of power, because the application sets the floor for the negotiations. (The offer won’t get lower than this, and there’s nowhere to go but up.)


3. Grant Exclusivity Judiciously

Companies often want an exclusive license to protect their interest, which is understandable. Yet there is no need to go whole-hog in granting exclusivity and hamstring the TTO if/when other companies express interest in the technology. (Yes, this vegetarian just used “hog” and “ham” in the same sentence!) A field-of-use exclusive license provides the protection companies want while maintaining the flexibility to secure additional licenses.


The term sheet submitted by the company requested across-the-board exclusivity. However, we knew other companies in other fields were interested in the technology. Plus, we knew that this small company would not be able to cover all markets for this technology, and other players were better suited for the other markets. Therefore, we advised our client narrow the blanket-exclusivity request to specific fields of use.


4. Use Caution in Setting the Royalty Rate

In looking at the royalty rate, be sure to consider (1) the percentage of the total product and (2) the portion of the product portfolio that the technology will impact. We at Fuentek call this measurement the “Attributable Portion of Revenue” — that is, the amount of revenue generated that can be attributed to the licensed technology.


The royalty rate that the company proposed looked reasonable at first. But a closer look showed me that the rate being offered was too low given how the technology would fit in the company’s product line. You see, the company wanted to sell hardware that implemented our client’s software. Their calculations assumed that the software was just a small portion of their product, which in a sense it was. Yet without our client’s software, the company had no product. Therefore, the low royalty rate was inappropriate.

For more on this topic, check out this post on negotiating a reasonable royalty rate as well as these additional examples.


5. Rethink the Concept of the “Counter-Offer”

Earlier I mentioned that the first offer from the prospect sets the floor for negotiations. A counter-offer sets the ceiling. (The offer won’t get higher than this, and there’s nowhere to go but down.) So rather than structure a detailed counter-offer, provide feedback to the prospect about the proposed terms that need adjusting. When done effectively, this feedback keeps the dialogue open and leads to a second offer from the prospect.


Since this type of conversation can be daunting, I talked through the possible dialogue in advance with the client. (If they say X, you respond with Y.) We even did a couple of dry runs so that the TTO representative could practice conveying her position without shutting down negotiations. The result: A revised offer has been received, and negotiations are ongoing.


6. Both Sides Want the Best Deal Possible

Quite frankly, that’s the essence of negotiations, isn’t it? We have found that looking at the various aspects of a deal from different perspectives gives you the whole picture, which empowers you to negotiate more effectively and get the best deal for your organization.

And remember: The person on the other side of the negotiating table is doing the same thing. So don’t assume their first offer is their best offer.

Feel free to contact me to find out more about how Fuentek can help your organization proceed successfully through deal negotiations.

Lean Startup Principles Apply to Tech Transfer: A Dispatch from Poland

Lean Startup Principles Apply to Tech Transfer: A Dispatch from Poland

Fuentek's Becky Stoughton (far left) and Laura Schoppe (far right) with the Krakow class of their Entrepreneurship for University Researchers series.

Fuentek’s Becky Stoughton (far left) and Laura Schoppe (far right) with the Krakow class of their Entrepreneurship for University Researchers series.

As I find myself back in Poland to deliver another round of training courses on entrepreneurship to university researchers, I’m reminded of Steve Blank’s fireside chat at the AUTM® national meeting in New Orleans. Specifically, I’m thinking about how the feedback loop that plays a major role in the Lean Startup methodology also has a role to play long before a startup is even a gleam in an entrepreneurial researcher’s eye.

What’s the Lean Startup feedback loop? Well, according to Eric Ries:

The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop. [emphasis mine]

In Lean Startup terminology, this is the build-measure-learn feedback loop. The feedback is relative to a minimum viable product (MVP), which contains just the features that are hypothesized to be essential to customer interest. Getting feedback on the MVP before investing heavily in the full product’s development ensures that, if your product is going to fail, it fails early, allowing you to conserve your resources to pursue other opportunities.

All of this is directly in line with proactive management of the innovation/intellectual property (IP) portfolio. In fact, there are many striking parallels between the Lean Startup principles and best practices for technology transfer.


Fail Early = Screen First

  • In the Lean Startup method, part of the goal is to learn as soon as possible if an offering is likely to fail.
  • In technology transfer, rapid triage is followed by in-depth assessment of a technology’s market potential. (You can see this mapped out in our Road to Technology Transfer infographic.)

As an example in tech transfer, Fuentek uses a multi-stage process to evaluate client technologies. First, we perform a screening to see if the technology is fit for commercialization. Those that pass the screening ramp up for marketing, which includes a strategic analysis of the market. This cost-efficient approach ensures that those technologies with the highest market potential proceed down the tech transfer road.


Product Value Proposition = Technology Overview

  • In the Lean Startup model, the value proposition focuses on what the product does for the target customer.
  • In tech transfer, technology evaluation focuses on what the invention does for the user.

At Fuentek, we call articulating the value proposition of a technology the Technology Overview, and you can watch a webcast about it here.

BTW, Alex Osterwalder’s Value Proposition Canvas could serve as a helpful tool for principal investigators (PIs) to use in thinking through and articulating their technology’s benefits for the user. (At the AUTM meeting, Steve Blank suggested using the Business Model Canvas in this way, but I think using the Value Proposition Canvas is much more realistic.)


Feedback on the MVP = Expert Interviews on the Technology

  • In the Lean Startup model, the target customer provides feedback on the MVP, enabling adjustments to be made that increase the product’s potential for success.
  • In tech transfer, interviews with industry experts provide feedback on a technology’s commercial potential and what is needed to increase that potential.

More from Becky on the topic of gathering valuable customer feedback has been published in the New Hampshire Union Leader.

Time and again, when we have conducted market research and gathered competitive intelligence on a technology, we’ve gained insights about what the market really needs in order to be interested in that technology. It could be minimum performance specifications or test data or price points. This feedback — which can be used by the inventor to improve the technology to better meet the market’s needs — maps nicely to the build-measure-learn feedback loop.


Applying the Principles to… Research

Becky Stoughton working with an entrepreneurial researcher in Warsaw (May 2014).

Becky Stoughton working with an entrepreneurial researcher in Warsaw.

Ironically, these parallels have been made manifest in the entrepreneurship training we’ve been doing in Poland. During the training, we have been teaching researchers the essentials of how to define a business model, develop a business plan, and secure funding. We introduce them to the key concepts of entrepreneurship — evaluating a business opportunity, determining if market characteristics are favorable for a startup, and so on.

But before all of that, we help them get grounded in these concepts by teaching them how to analyze their own innovations and ideas. We teach them how to identify market dynamics, where their innovation fits in the value chain, who the key players are currently, and the critical factors that will determine whether commercialization is likely to succeed or fail so that they can focus their efforts each step of the way.

An interesting outcome of this approach to entrepreneurship training is that it also has implications for research, as revealed in these comments by several training participants:

“I intend to discuss with my lab how we should refocus our work a bit to be more relevant to the intended users.”

“I think that all the information will help [me] to faster get my goal and be more open to commercialization of my ideas.”

“I especially appreciate the part on Technology Overview, which in my humble opinion is extremely important to scientists.”

To me, the take-home message is that teaching researchers to approach their work more entrepreneurially has benefits even if they do not get involved in a startup company. And that’s particularly important because not all technologies are best commercialized through startups, and not all researchers are interested in starting companies.

Entrepreneurial thinking has benefits regardless.

Note: Fuentek is providing these courses under contract with the Foundation for Polish Science, with co-financing by the European Union within European Social Fund.

Ready, Set, Intern! One Tech Transfer Office’s Experience

Ready, Set, Intern! One Tech Transfer Office’s Experience

SpringForwardClock_iStock_000026185332_Small-croppedNow that we’ve sprung forward into Daylight Savings Time, it is also time for university technology transfer offices (TTOs) to spring ahead with their summer internship programs.

March is usually the month when TTOs issue their “Apply Now” announcements for summer interns. But all is not lost for TTOs who are just getting started.

Although there are significant advantages to planning a new summer internship program the previous fall, March is not too late to start.

For example, it was last spring when a university TTO asked Fuentek for help with establishing their internship program. They wanted to start that coming summer, so we jumped in to help them. And we used the tricks that we’ve learned over our long history of establishing effective internship programs.

With Fuentek’s help, the TTO was able to get the key components in place quickly. Those components include the following.

Job Descriptions

Clear summaries of what interns would be doing helped students know what a summer with the TTO would be like. It also let them know that there was real substance to the internship. And that it would be an excellent opportunity for growth and experience.

Selection Criteria

Having a what-to-look-for list helped the TTO have productive interviews and select excellent candidates… for the most part. More on that in a moment.

Initial Training

Although webinar-based training was an option, this TTO had us do an in-person 2-day course on how to screen for a technology’s commercialization potential. These sessions included lots of exercises and examples of real-world screening reports to give interns the fundamentals they needed.

The Tale of the Distracted Intern

Most of the interns were very hardworking. But our trainers noticed that one of the interns was less so. After the first day’s training session, he didn’t do the homework. Instead, he tried to do it on the fly during Day 2. Quite frankly, this set off warning bells for us. So, we alerted the TTO that the intern didn’t seem to be taking the job seriously. Sure enough, it turned out that this intern was a Ph.D. candidate who was in the midst of finishing up his dissertation. He abandoned the position just a few weeks after being hired.

Lesson Learned: It’s best to deal with these situations early, before you invest too much time in training an intern whose mind is clearly (albeit understandably) focused elsewhere.

Ongoing Mentoring

We gave interns ongoing support during their first few screenings. This provided the additional guidance they needed as they executed on the principles and process they learned in the training.

Because the TTO staff were too busy with their day-to-day work to provide this support, we handled the one-on-one mentoring for the TTO via phone conferences.

A Successful Summer

Sure enough, these key components allowed the TTO to have a successful summer with the interns. The interns were able to be productive within a couple of weeks. They provided the TTO staff with actionable results rather than issues and requests for guidance.

Fuentek was pleased to support the TTO every step of the way as they started down the internship path. And because we work collaboratively with our clients, the TTO was empowered to leverage last year’s support as they head into the program’s second year.

We have lots more insights about tech transfer internship programs. But if you would like Fuentek’s help, feel free to contact me.

It’s not too late!


Internship Programs