How to Turn Your Scientific Discovery Into a Business | Dr Ben Miles | Skillshare

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How to Turn Your Scientific Discovery Into a Business

teacher avatar Dr Ben Miles, Scientist and Entrepreneur

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

33 Lessons (1h 33m)
    • 1. Starting A Company From Research

    • 2. Why Should I Commercialise?

    • 3. Routes to Commercialising

    • 4. The Importance of Innovation

    • 5. My Journey from PhD to Entrepreneur

    • 6. How to Spot Opportunities

    • 7. What is Technology Push?

    • 8. The Caffeine Example

    • 9. The Quantum Example

    • 10. Lessons From Ziylo

    • 11. Final Thoughts on Spotting Opportunity

    • 12. How to Build Your Case

    • 13. Engineering Your Success

    • 14. Expand Your Commercial Knowledge

    • 15. 15 Advisors and Team 15

    • 16. Finding Proof of Market Need

    • 17. Introduction to Protecting Your Ideas

    • 18. Types of IP

    • 19. What is a Patent?

    • 20. Who Owns the IP?

    • 21. Should You License or Spinout?

    • 22. How to License

    • 23. How to Spinout

    • 24. Your Research vs Business Roles

    • 25. Licence or Spinout? Deciding Factors

    • 26. The Story of Ziylo's IP

    • 27. Developing a Launch Plan

    • 28. Building a Commercial Strategy

    • 29. Deciding a Cofounder Agreement

    • 30. Agreeing Spinout Terms

    • 31. Securing Finance

    • 32. Finding a Workspace

    • 33. Launching the Spinout

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About This Class

Are you interested in launching a company based on an idea or discovery you came across during your time in industry, research, or academic study?  Are you unsure of the steps needed to start to move this idea out into the real world?

In this introductory course, I hope to give you the foundational knowledge to support you on your journey in turning discovery into innovation.

My goal in producing this course is to start to prepare researchers and innovators with the complementary set of commercial understanding to enhance there technical capabilities and discoveries.

I'll pull from examples from my own experience supporting academic teams to launch spinout and startup companies and try to break down the process from ideation to company launch as clearly as possible.

I'm a PhD Physicist by background that has made the leap into entrepreneurship and am very eager to support others on this journey.

If you do have questions or comments, please do ask! I'll make sure to check back regularly to lend support.

Meet Your Teacher

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Dr Ben Miles

Scientist and Entrepreneur


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1. Starting A Company From Research: Hi, my name's Dr. Miles and I'm the CEO of a company called spin up science. We have the goal of helping more people that come from a research background, spot opportunities for how their discoveries might find some application in the real world. And then take those ideas and move them into a startup company, into a spin out company from either a university or from a large industry group. Broadly, over the course of this course, I want to talk about the five or six or so topics that I think are really important in understanding. Does my idea actually have application in the real world? And if so, how do I go about moving it there? How do I go about protecting it? Should I be licensing this idea to a third party, or should I be turning it into a startup company in its own right? What strategies should I employ to get the company up and running? And how do I actually launch the company into the marketplace at the end of the day. 2. Why Should I Commercialise?: I completed my PhD at the University of Bristol about four years ago, or so. I'm a physicist by training and I studied nano physics and nano optics. I really believe that as someone that sat in that, in that sphere and that sphere of research, pushing forward scientific understanding, pushing forward for scientific discovery. It's really important that if we do come across things that will have impact and benefit at the end of the day on the public, on the taxpayers that have funded this research in the first place. That we've got a real responsibility as researchers to make sure we can pick up those ideas, package them as best as possible, and get them into the hands of those people that they can benefit. In the next couple of sections I want to explain why this idea is important in the first place and also a bit of my background and why I in particular, I'm interested in helping people start these companies. And those can be ideas from, from health care to improving security, to improving the health of our planet. At the end of the day, all of this just creates benefit in kind of a virtuous circle. If we get these ideas up and out the door, great. It creates jobs for scientists. It stimulates the economy. It creates some return, hopefully for the inventors, for the university, for society as a whole. And most importantly, it creates that loop, it creates that mechanism. So that science can actually have impact on the world This sort of driving force, this economic reward mechanism funds more science at the end of the day because we have a healthier, wealthier population, more capable and more interested in seeing the value of funding science. This process though, is reasonably difficult. What I present here is the hit rate of arguably the guys in the room that should really, really be nailing these numbers. This is Stanford's Technology Transfer rate. Over the past 50 years or so. The technology transfer team, that technology transfer office in Stanford University, the group that are responsible for helping academics to realize the value of the ideas that they are developing. Have looked at broadly about 10 thousand ideas. They’ve chosen to patent about 5000 of them. But only three have been those sorts of incredible golden nuggets that go on to create real economic return, real impact for both society, the university in those inventors. And I highlight this point and I highlight this image to kind of clarify two ideas. Number one, that metric isn't the goal. The metric that is the goal is to translate exciting ideas into the, into the hands of the public where they can be of benefit. Number one. But number two, this success rate, this hit rate shouldn't discourage you. All I bring it up to say is that if we are interested in creating a process to move ideas out the door and into the hands of the public. Whatever process we build, it needs to be really scalable, needs to be really effective. And it can't have any bottlenecks. Because if there are any bottlenecks, we won't get through these 10 thousand ideas so that we can find these three or, three or so diamonds in the rough. I think the best approach, the best mechanism that we have to make sure that any idea that we do discover we can work out its full potential. And if there is potential, there seize that potential and realize it is to arm the researchers themselves that can discover these things with the commercial capability, the commercial insight and commercial skill sets to actually pick up these ideas, turn them into businesses and move them into the marketplace. 3. Routes to Commercialising: Every time an academic does make a discovery and thinks about moving it into the real world, which for first off, isn't that common of occurrence. But at the moment that kind of academic mentality is to publish first, think about patenting and maybe turning into a company second, by which point is often too late. But in those rare instances where their academic does think about turning the idea into something in the real world. There are two routes. The first route is kind of what you might expect, approaching some large industry partners and saying, I've discovered something. Is it of interest? Do you guys want to buy it off me and maybe develop it and take it to market yourselves. And that sounds like a fantastic idea, that sounds like a fantastic process. Being able to throw it over the fence for industry to pick it up and be able to run with it. Arguably, that's how the process should work. It's absolutely nine times out of 10 not how the process does work. Very often in an industry will turn around to an academic and say, this is fantastic. This is a really interesting idea. Can you work on it for five to ten more years to refine it a little bit as it is just a tiny bit too early for us, unfortunately at the moment, which the academic, we'll say, Well, no, that's not how the academic funding system works. I need to keep on discovering novel science and publishing papers on it. That's how I stay gainfully employed, that's how I win grants. This creates a really strange system where it's too early for industry to pick up, but it's too late in the process for academics to really see much value in continuing their study around it. They're not supposed to be polishing a product, making it ready for market. They're supposed to be discovering novel and interesting things about the universe. So oftentimes this pathway, although we think it should be the way it doesn't actually work. The other end of the spectrum, the other approach that an academic can take is to say, okay, maybe industry wasn't interested, but I still see some real potential here. Why don't I turn this company into a startup? Why don't I build a business around it, leave academia and get this thing started? At which point, the academic oftentimes realizes that they'd been in the field of research for 5, 10, 15, 20, 35 years at that point in time. And actually they're very, very, very good at research. And the university wants them to stay in that role because at that point in time they often manage a group of postdocs. They manage a group of PhD students. They bring in research money to the university. University doesn't want them to leave. And actually very often The academic doesn't really want to leave either. They've, they've built a career for themselves which is very successful. And those are the ones oftentimes that have come up with the deepest, most interesting discoveries. And what that means is the consequences that the startup route, the spin out root doesn't really happen either. What we've got at the end of the day is just a big roadblock between academics creating ideas and then actually seeing realised value into the real world. 4. The Importance of Innovation: We are pumping out PhD students at an absolute rate of knots at the moment. From a study by the Royal Society back in 2010, we see that about 53% of PhD students studying science within a few years of leaving the PhD will be outside of the field of science altogether. Citing mostly a lack of job opportunities within academia and a lack of job opportunities within industry. We're not quite at a one in, one out policy at the moment within academia, but we're, we're reasonably close is increasingly hard to find lectureships, to find full-time academic professorships at the end of the day. And it's moving a lot of talent out to the wider world to search for different opportunities. Oftentimes to become a banker, which no shame on bankers, but I wonder is that the best use of our human capital? Is that the best use of our talented quantum researchers or synthetic biologists or chemists? Probably not, I would argue. And the downside here is that the PhD ultimately at the end of the day, trains you perfectly well. But it trains you perfectly well for that academic pathway ahead, that postdoc lecture ship Professorship position, of which increasingly we see very few people can actually permeate through those roles. What I think is very important is creating people that can not only succeed in academia, but equally, if the pathway for them does not go that way, they have the skill sets to be able to pick up their technical knowledge and apply it really effectively into the real-world and inverted commas the rest of industry and application areas that they might otherwise come to. Those are the sorts of people that I'm really interested in building. And that's the sort of mentality and the mindset and the skill sets that we're going to learn over this program. 5. My Journey from PhD to Entrepreneur: I wanted to shed a little bit of light as to my background. I finished my PhD about four years ago or so now back in 2016, 4.5 years ago, I guess, back in 2016 from the University of Bristol. As I mentioned before, I'm an optical physicist by training. And when I emerged from the PhD I was studying, I was in the field of nano physics. Nano physics was really taking a slump. That wasn't a lot of funding going around. It was very hard to find a postdoc position. There was one that I found that was maybe going to be in Texas and I thought, Do I want to move move my entire life over to Texas to chase a six month post-doc? Only maybe to have to move back six months later? No, maybe that's not right, the right kind of pathway for me. I got very lucky in that, at the end of my PhD, I didn't own a house. Most PhD students don't. I didn't have a spouse. Most PhD students don't. And I wanted it to be paid slightly more than £14,000 each year because that was my PhD stipend. And even if it was only £14,001 a year, then I was going to be happy I've made a little bit of progress in the world to PhD had been worth it. As I started to look out and kind of survey that the job's in the real world. I was increasingly on optimistic about my excitement levels for any of them. I looked at kind of what I would classify as the no names that the Dyson, the KPMG's, the (if you're an an optical physicists) the Thorlabs. And increasingly I felt that if I moved into one of these roles, I would just be a cog in a very large machine, ultimately really not making that much impact in the world and not having much direction over what it was that I was applying my brain to you. And that's the bit I really liked about the PhD. I decided as a result of not having, not having much to lose, having a really good kind of risk profile at the end of the PhD, which I think all PhD students do have, or most of them do have. I thought I'd try startup. And even if that thing didn't work, what's the worst that could happen if after a year or so the company went bust. So I looked around the city of Bristol, which is where I was based. And I couldn't really find many science startups because starting a company based on research just apparently was a thing that doesn't really happen. I looked and I looked and I looked and I looked, and finally, I got very lucky. And probably the only job ad posted in the past 10 years, 20 years maybe even came from a startup based in the city of Bristol That was actually commercializing some science that we're looking for, an optical physicist. And I said, I'm in, I'm probably the only person that you will find. So as a result, I'm the perfect candidate. Hire me, let's get, let's get this science started. I joined Ziylo Ltd. They were trying to commercialize a piece of glucose binding chemistry, which means essentially a piece, a synthetic lectin, a protein that was very good at binding to glucose and only glucose. And while they were hoping to do is maybe create a diagnostic for something like diabetes or maybe as kind of a shimmer of an idea a long, long way away. Maybe they could create a therapeutic, an actual treatment for diabetes, something analogous to a SMART pancreas, a SMART insulin. That was always kind of the, the dream, but by no means do we ever think, we would get there. Very long story short a couple of years later. Ziylo hit the news because we got acquired. We've got acquired by a company called Novo Nordisk, which makes a large amount of the world's supply of insulin for a figure that May 1 day reach $800 billion, which is a large pharmaceutical companies way of saying, we're not telling you, but it was a reasonable amount of money, um, which was interesting because it really put Bristol on the map and it raised the profile of turning science ideas that occur in university into companies. Because suddenly that can be really interesting to university because maybe it's a way to fund further research. Maybe it's a way to suddenly appear in the news more often. Suddenly, the community was really, really interested in starting these companies. Even though up until that point, very few of this, very rarely was this activity actually happening. Within the city of Bristol. Particularly, we noticed that really everyone that had come before us as a small Science start-up, had looked around the city of Bristol and realized that there wasn't much going on here in terms of science companies. And they picked up sticks and they'd gone to places like the golden triangle, like Oxford, Cambridge, London, like Silicon Valley. We famously a Bristol sent maybe the guy that will build a quantum computer over to Silicon Valley because you don't start science companies in Bristol. We thought when we were sitting in Ziylo, I as one of the team there, that you know what, "This is crazy!" We should be trying to retain this, these exciting companies and retain this capable, these capable individuals and make sure they stay down in the city because these create awesome jobs for lowly PhD graduates like myself that we're looking for these sorts of opportunities. It was at this point in time, this was a couple years earlier than when the company actually sold. We decided that rather than leave the city with this company, we should try and stay here and solve the problem not only for ourselves, but for other companies that would come after us. What we needed was some wet lab space. What we needed was some incubation space to be a science company, to be in a community of other science companies. So we built one. The team went out, led by the CEO of Ziylo, who became the CEO of this company that we would build, Unit DX, that became the first incubator in Bristol for science companies, raised about 2.5 million pounds, learned how to build science buildings. 18 months later, we opened the doors to an incubator space in Bristol. And from that point, we were really excited to start to nucleate a hub of researchers turning into entrepreneurs. Because suddenly we had the facilities to do it. Surely the easiest bit was to open the doors and to welcome these hordes of researchers in that wanted to start their companies. What we very quickly found was that actually that wasn't really the academic mentality at this point in time. As I said, Ziylo hadn't had its big newsworthy moment. So commercializing science, turning into companies was actually something really most people didn't think about really, really at all. That's really where I entered the story. I became really interested in this problem. How do we keep the lights on of wonderful places like this building we built? How do we engineer serendipity as quickly as possible? That's where I started to have the idea of this company spin up science. How do we engage researchers in the capabilities needed to spot ideas within their research and actually turn them into something. What we're looking to do as a company and what we're hoping to do, partly through this program is create what I kind of consider in a new class and you breed a new generation of researcher, someone that not only has that core knowledge, PhD level knowledge, which oftentimes is world-leading, but also all of the complimentary expertise that wraps around it that allows you to get the, the utmost, the fullest amount out of that technical expertise that really compliments it. And that's things like being able to spot opportunities within the marketplace for your ideas. Being able to lead a team, being able to raise finance, being able to plan what a business should let light being able to forecast the financials that will be needed to convince an investor to come on board. And being able to provide the momentum that makes the whole thing happen. Becoming one of those sorts of people, regardless of whether you then want to dive back into academia or whether you want to continue starting companies. It doesn't matter. Those skill sets are really, really, really powerful. And those are the skill sets that I'm interested in helping other people to develop. 6. How to Spot Opportunities: When we're thinking about taking an idea and turning into a company, I mentioned there are kind of five or six key steps along that pathway. The first one and where we start is having the idea in the first place, making the discovery, finding some new ground, some otherwise unexplored area and saying, You know what this could be, this could be something. What happens beyond that point is what I usually referred to as the spotting, the opportunity phase, which is where we try and find where specifically there is application within the real-world for this new idea. This is kind of the, the spark. The idea really is the spark. And what we're looking for at the end of the day is the Tinder that we can wrap around it to actually start to build some momentum, to start to make things happen. And I think when we're looking for these opportunities what's really important. And this is a very big topic so we'll, we'll touch on it quite quickly. What's really important, is that we are looking for opportunities in a marketplace. The address as firmly as possible, a need of a customer rather than a want. A want can kind of be ignored. Colloquially, the expression goes, you often hear people wanting to have a Ferrari, but at the end of the day, the car that they ultimately buy, the car they ultimately need is much more likely to be a Toyota. People ultimately at the end of the day by things they need. So we need to produce something ideally that fits that kind of gap. When we're thinking about these opportunities, there's really three kind of questions that we start to ask ourselves. First, who does our idea actually help? And the tighter of a definition we can get around that person the better. How specifically does it help them? What does, what does it do? Does it remove a pain from their life? What does it give them some unfair advantage? Some unfair because some unfair gain over other people. Why is it better than the other things already in use? Because ultimately the end of the day, if they are already recruiting some sort of solution, what will make them put that one down and pick up ours? That's a really important set of questions to start to ask whenever we look at an opportunity, because it helps us really build an evidence-based to decide, is there something real here? 7. What is Technology Push?: For a lot of researchers, when they are coming across a discovery, oftentimes they invent something without necessarily a perfect idea of where it will fit in the marketplace. They aren't necessarily spotting some, some holes, some problem, and trying to engineer a solution for it. Much more likely, most researchers developed technologies because they are pushing forward the bounds of science and they are at the absolute forefront of human knowledge, human capability in those areas. As a consequence, the discoveries that they come across don't always perfectly have a match to some problem in the real world. This whole concept, this whole idea is called technology push. The idea that the technology comes first, the discovery comes first. And the act of turning into a company kind of involves a bit of pushing it towards different opportunities until you find some place that it fits. This is a reasonably complicated idea. It's much, much, much harder than the alternative, which is called market pull, where the market is expressing that it has some particular problem. We want digital cameras to be smaller, or we want them to have more storage capability and we want them to take better pictures without us knowing anything about photography. Those are all things that the market can request of us. But if we develop some core abilities, some amazing technology, and no one in the marketplace seems to be shouting about that problem. They have. Finding where this idea fits can be really difficult. The way I like to think about it is in a couple of stages. I always start with a core technology. And what I look for are what I call fields of use. Different application areas that this technology might be applied into. Maybe different kinds of sectors may be different ways that the product can be devised with these different application areas in these different sectors. Say, there will always be a certain market opportunity associated with each of them. That market opportunity is comprised of three big concepts. Number 1 is the market state. The state of the market. Is that market worth a 100 pounds or if that is that market worth a billion pounds? Is that market growing or is it starting to shrink for whatever reason, those factors will influence how attractive that opportunity is to pursue. And at the end of the day, it's very hard to pursue multiple opportunities all at once. Typically most people kind of commit to one, maybe two, if they're particularly ambitious. Another factor could be the level of competition in that marketplace. If you're moving into a marketplace that you are the first person to arrive there, you've have that first-mover advantage. Maybe that becomes a really interesting opportunity because you aren't competing against anyone. You might be able to establish a real foothold for yourself before anyone works out that this is an opportunity in the first place, equally, on the other end of the spectrum, you might find that you will arrive into the marketplace with your shiny new technology. And it's already absolutely saturated with other people. And you're going to have to work really hard to differentiate and win any market share from those other, other existing kind of incumbent groups that might negatively influence your view of that market opportunity. And you might choose to move your technology into greener pastures. And the third, and I would argue, the most important facet of those market opportunities is the customer need. How badly does that customer at the end of the day actually require a solution to their problem. And I always kind of codify this. It got across three different levels. Is this problem an itch? which ultimately end of the day I would argue a lot people can ignore and it should if they choose to. Is it a headache, which is a little bit more problematic, causes them maybe some significant discomfort. Or is it a migraine? Is a migraine that is so bad that it makes them right off that day or a couple of days or a week and they are unable to do anything else other than think about how terrible this pain is. And based upon the level of that problem that the level of that need, again, it might positively or negatively attracted towards that market opportunity if we are trying to solve a problem that is a migraine where customers really are searching hard for some solution to that problem that can be really exciting. Have something that perfectly matches what they're looking for around that market opportunity, whichever one we end up picking for one of those application areas. There's always this process of productisation. There's choosing exactly what is the best packaging, What is the best strategy for that product to end up in the hands of the customers. What do they want? And that maybe depends on what are the competitors are doing. And maybe that depends on exactly what the user need is or anything kind of along those lines. But at the end of the day, what that produces for us is a company or a product, or a solution or service, or some combination of those ideas. 8. The Caffeine Example: Although this might be a slightly facetious example that has exactly what turns this, which is the caffeine molecule into something like this. Starbucks, which absolutely might sound a bit silly, but is absolutely true in application if you were the inventor of this magical molecule called caffeine, in which case "God Bless You" You have a bunch of different application areas that you can apply this technology into. One of them absolutely is the caffeine and restaurants market, which ultimately is where Starbucks resides. But equally, you could have produced this into a caffeine pill and you could have competed in the supplements market. You could have turned it into an energy drink, and you could have competed in the energy drinks market. Ultimately, the end of the day, Starbucks chose the market area that they did, the application in the field of use that they did for whatever reason, maybe the market was best for them there maybe they were most familiar with the customer need a new best, how to tackle it. But at the end of the day, that's the opportunity they picked. And from that point, they chose a productization strategy. Regardless of what your views are on Starbucks. Whether you think they are the ethical saviors of coffee making, or whether you're slightly less impressed by their resume. They picked a price point of medium, medium, too expensive. As a coffee distributor, they aren't a $1 coffee. Equally, they aren't a twenty-five dollar coffee distributor if those exist, I'm sure they do. They picked a position in the marketplace probably dictated and influenced by the competitors that were out there. This process is exactly how technology's find application in the real world. So understanding it and taking a bit of time to kind of map out the different fields of use as well as the different productization strategies is really important. 9. The Quantum Example: I want to give just a slightly more technical example of this technology push process. So the fullest, scientifically curious around us, we have some, some interesting concept to look at. We worked a while ago with a client that had developed a gas sensing approach that was based on a piece of quantum technology that gave them some unfair advantage, some incredible advantage in sensing remotely from a distance different, different gas populations, the fields of US that they were interested in applying this technology into where things like sensing of CO2. Sensing got methane, sensing of ethanes, the sensing if helium, the sensing of a whole different range of different gas populations that they thought they could detect. Out of all of these populations, there are a bunch of different market opportunities associated with going in any particular direction. But at the end of the day, they chose to look at methane because they were interested that it was a greenhouse gas and they thought they could tackle a big kind of problem with climate change. Methane is 80 times more potent as a greenhouse gas and CO2. So tackling that is really important. But they also saw who has a problem with methane? Well, the oil and gas industry. And if they are leaking methane into the atmosphere, maybe there's two birds with one stone that they can tackle. They can not only reduce greenhouse gas emissions, but they can also hopefully save that company some lost product, some, some revenue by consequences, and there's probably some money to be made and that market is probably big enough to be interesting. But what they had beyond that point was a really complicated productisation strategy conversation. They could produce a piece of technology that was maybe a handheld sensor that an engineer could go round and scan, say, an oil and gas pipeline and look for different methane leaks. Say, they could equally have mounted this technology onto a drone and flown it up and down and oil and gas pipeline and these things are really long. So maybe that is a better approach to solving the problem. Maybe instead though, they could shoot this thing up into space and mount it on a satellite. And then from a single fixed point, be able to map any oil and gas pipeline within a massive, if not global landscape. Or maybe something a little bit more simple. They could just take the technology and apply it onto a pole and stick that pole on the ground and cool the thing. A cctv camera for gas emissions. Ultimately, what the company chose to do first at least, was to apply it onto a drone. This company became QLM Tech Ltd, which are based in Bristol and are still working hard to tackle this problem. 10. Lessons From Ziylo: This is one of the things that we considered a lot when we were sitting in Ziylo. If not, maybe we spent too much time thinking about these different application areas. We knew that the molecular compounds that we had to play with was really, really strong, really high affinity glucose binder, which obviously said to us, or we definitely could try and tackle some sort of diagnostic in diabetes or maybe even a therapeutic and diabetes. But equally, we were kind of hoping that maybe there was going to be an easier opportunity first. That could mean that we could win some initial revenues before we tried to tackle the bigger scarier ideas of going through clinical trials to get our product to market. We hoped, and we kind of started to lean towards, at least in the early days, the idea that we might be able to sense sugar levels in different kind of brewing and fermentation processes. Maybe brewing beer or maybe, or maybe fermenting wine, that would give brewers better control of the flavor profiles in their drinks. Sounds silly, but absolutely, we spent quite a lot of time thinking about this. And other application was the idea that we could sense the sugar levels in crops. So we could know maybe the time to perfectly harvest them, or maybe if they were starting to ferment and go bad when they were stored in warehouses. Importantly, it's good to consider all the options, as I said before, but definitely focus at the end of the day on one of these or maybe tops two of these and push it forward so that you can start making meaningful progress. In one area we definitely suffered in the early days of trying to push forward three or four or maybe even five ideas all at the same time. And we kind of made five or 10 percent progress in each of them, rather than sprinting ahead in one in particular, and proving or disproving that it was going to be a winner or loser for us? Absolutely. That's something that we would have changed kind of in retrospect and we would have focused much harder on one area in particular. 11. Final Thoughts on Spotting Opportunity : When you are looking at different opportunities, it's really important in that first kind of step to look at all the different fields of use, although you might have developed it and they might be kind of an obvious application, you might be missing something. That means that your technology actually could be a platform technology. And that's really exciting if the technology can be used for multiple different application areas. That's something investors want to know about. That's something that will make it much easier for you to raise some money and get the company started because there's potential other markets later down the line after you've tackled the first one, that can have further opportunities for that company. Absolutely. Working out which field of use is the best one to move into first is kind of a slow process, is iterative. You have to go out and explore it, talk to people understand the problem that the customers have. Understand the competitors, understand the size of the market. It does take time. Ultimately, that sort of conversation can go on for months, if not a couple of years. But what you can do very quickly is write off the opportunities that don’t really look quite perfect and hopefully narrow it down to maybe one or two that you are really pushing forward for. And if later down the line you need to pivot and jump somewhere else. That's okay. You've already thought of different application areas for where your technology might fit. Taking a bit of time to really spot the opportunity is really important. And it also can open the doors for further development opportunities that you might try and target. 12. How to Build Your Case: Once you have found that opportunity that you think is sufficiently exciting, and this is by no means is a done deal ever you can keep revisiting which opportunity, which application areas, the right one for your technology, kind of forever, ultimately end of the day. But it's very important early on, do this step which I call building your case in the future. If you are thinking about starting a company or equally, if you're thinking about licensing your technology into industry, you're going to need to start to convince people. You're going to need to start to bring people on board that your technology, your approach, the opportunity that you've spotted in the marketplace is the real deal and it isn't a pipe dream. Some people that you're going to need to convince are the university. You might need to convince them to maybe patent the technology. Maybe and/or actually decide whether to spin out the technology or license it. You'll need them onside. And the more you can do to bring them onside, the more favorable of position and negotiating position that you'll be in. Equally your investors. You'll want to prove to them as closely as possible that this will be a profitable endeavor because they're going to be trusting you at the end of the day with some amount of their money and they want to see some return from that. And kinda third and finally, the group that I would consider would be your co-founders, your team, that in the early days when you don't have much finance behind you it could potentially be hard times to get the company started. You might need to start putting in some hard and long hours to get things to happen, to commit to the vision that you have for the company. So bringing them on board as tightly as possible is really important. 13. Engineering Your Success: So I always advise that there's three really important things that you should go out and you should start to do arguably as early as possible if you are thinking about starting a company. Number one, build the knowledge base required to start a business. And that can sound slightly daunting. But if you tackle it in small steps, absolutely very achievable. Number to start to build a team around you. And start also to build a team of advisors around you that have skill sets totally different to your own. That's really important. The most important one, however, is to go out and to find some proof that there really is a problem in the market. And that your idea fits, that solves that problem. Don't worry about going out and writing a business plan. That's absolutely probably the last thing that you should worry about doing that is absolutely not the first step. Importantly, if you are going out and you're starting to talk to people, don't disclose the technical details of your idea unless you have already firmly protected it. To give you kind of a line of comparison as to what counts or what doesn't count as a disclosure. If I were to say to you, I have developed some quantum advantage based gas sensing technology, and I'm looking to apply that into the methane market. Use a competitor, have absolutely no understanding of the technical approach that I am taking to solve that problem. And really is the technical approach. That is the bit keep on to your hat. That's the bit to keep kind of secretive. The general kind of ambition, the opportunity. You actually don't need to be that secretive with that, because it's very hard, It's very hard to replicate. It's very hard to tackle. 14. Expand Your Commercial Knowledge: So number 1, first concept to start to try and tackle is building that knowledge base that allows you to kind of speak commercial language. You as a researcher and academic will be very familiar with the concept of properly turning up to an academic conference and maybe seeing someone out of the corner of your eye that has been out of the field maybe for a year or two. When they come back and they start to engage with the ideas, they just don't phrase them in the way that you're kind of expecting. They almost feel like they're slightly talking a different language, a different, a different tongue to your own. And you can spot them from a million miles away. What you're about to go and do is to launch a company and operate in the commercial world. You don't want people that are familiar with that commercial world to spot you coming a million miles away and say, Oh, the academic is coming. Because maybe then they won't listened to you in the way they should listen to you. Maybe then they'll try and take advantage of you in ways they shouldn't take advantage of you. You want to essentially blend in with the crowd as boring and unappealing of the concept as that sounds. And really that's just starting to develop the vernacular that allows you to communicate and treat knowledge concepts. The important thing to remember about business is that unlike scientific study, which is oftentimes very narrow but very, very, very deep, business is comparably quite shallow, but just very, very, very broad. I usually refer to it by saying there were a million five-minute topics, topics that you can individually master in about five minutes, but there are just so many of them. You'll spend three to five years before you stop being surprised by new topics that you've never heard of before. And that's totally okay. The important thing to start to develop is what I call a working entrepreneurs knowledge. The idea that you are kind of familiar with most of these important concepts. But by no means do you have to be a master of any, the beautiful thing about starting a company is that you can hire people to be those experts in those different areas. So you don't have to, but you need to know enough about them to spot whether that person actually is an expert or not, or whether they're just inflating the amount of knowledge that they appear to know. 15. 15 Advisors and Team 15: The second, the second really important thing that you can do to start building your case is to build a team. Importantly, I always state two core principles to starting companies. Don't start a company alone. Don't, don't start a company as a founder size of one. And also though it might sound the same, don't start a company with yourself. The last thing you want is a team of physicists starting a company, because physicists will all have the same background they'll all think the same way broadly about a problem. You want people with different backgrounds so that you can tackle problems that you might otherwise be unfamiliar with. You want people from commercial background, you want people from an investing background. You want people absolutely from a technical background. You want people that are just experienced operating companies. The faster you can find those people, the better you will be at tackling a really broad range of problems that will arise as a necessary result of trying to get a company up and off the ground. What, I would always say as a piece of advice is that people in the early days, in the early days at the very least, should be reasonably happy talking to you for free. You shouldn't really ever feel like people are going to charge you for conversations. Particularly not advisors, even kind of consultants, I would say. Now where that changes is if you want them to actually do some work for you. If you want to, if you want them to go out and do some market research, if you want them to open their contact book and start talking to investors they know on your behalf. If you want them to do kind of regularity Advisory Sessions. Same time, 04:00 PM, Thursday, every single week. That's when maybe you should start having a conversation around. Okay. Should I be paying you something or, or should I be giving you a small piece of equity in the company or something along those lines. And start these conversations early because you don't leave them until things have, things have become a little bit awkward. I bring that up because that group is really important to bring on and you don't want to lose them just when things are starting to get interesting and you don't want them suddenly. So to start holding anything over your head. Once things get interesting, you want to have worked out nice and early. What the kinda commercial terms are, what the kind of arrangement is between those two groups. Bringing that group of advisors or bringing that team on board, will allow you to move much, much, much faster than you will be able to try and do things on your own. It will also lend to you all the borrowed credibility of all those individual people, which might be all that is required to push a potential deal over the line. It's really important to bring those people on board, bring them on board nice and early to help you with that process. 16. Finding Proof of Market Need: Third and finally, most important piece of the puzzle is going out and making sure that this grand idea that you have for a business is actually real. That there is actually a problem out there, said before, people often express, express once, but ultimately at the end of the day they buy things that they need. They buy the Toyota, they don't buy the Ferrari. When we talked before, we said, let's try and work out how big the problem actually is in the marketplace. Is it an itch? Is it headache or is it a migraine? Is it something absolutely, people cannot possibly ignore? They desperately need a solution. The way you go out and you find that is actually quite complicated. And I think the best kind of piece of reference material that I can point you towards is the book called The Mom Test. Mom test, which essentially says that most people lie to you. There's no reference to any kind of motherly issues, but most people lie to you when they hear the pitch for your idea, the pitch for your company. And they lie to you because they're polite, because standing in front of an entrepreneur that's excited and telling someone about their, their technology or their company idea. Most people don't really have the heart to say, that sounds terrible unless they're on Dragon's Den. Those who are investors, most people, most potential customers don't have the heart to say, this is something I would never buy in a million years. So the goal, the difficulty becomes, how do you collect really accurate evidence, really accurate evidence of market need. And the advice that is evolved through this book. And what we kind of closely teach to, and closely follow is to ignore people's response to your idea. Don't even tell them your idea. Don't even tell them about your interesting technology. Instead, spend your time understanding how they behave. If, as an example, you're maybe trying to launch an app for helping people to work out. If you go out and you start to people, talk to people that you might assume would be your prospective customers and you start asking them things about their experience. Maybe you might ask them, when is the last time you looked through the App Store to find an app to help you work out. If they said, well, actually I did that last week and I also did it the week before. That's really interesting because that's some concrete evidence of behavior. Well, that tells you is that person is out there looking for solutions and invites you to ask the question, well, you know what was wrong with the apps that you saw? And that person might say, "Well, they only offered yoga workouts, or they only offered weights workouts and I wanted to mix." And suddenly you've learned something about that prospective customer that some sort of the features that they are looking for maybe map perfectly to the product that you're thinking about. Maybe your idea was exactly that. An app that had a bunch of different workout opportunities from different kinds of styles of working out and secretly in your mind you say, Great, I'm really excited. But the danger of instead of trying to find that evidence first and instead pitching your idea to the customer and asking them what they think about it is that at the end of the day, you haven't got your product developed and you can't ask them to pay for it then and there. And the only metric that matters is whether people actually go through with exchanging money in order to receive the value that you're offering. That's the only KPI, the key performance indicator to care about in terms of how successful your product is. And as you present it to them, if it isn't ready, if it isn't finished, the only thing they can do is give you kind of a broad generalization. Yeah, it looks really interesting. And you might hear that and say, great, definitely got a sale. But they might in their heads be saying, looks really interesting. But for $9.99 a month, I'm never spending that. If that's a recurring fee every single month, That's a ridiculous amount of money or great. That looks really interesting, but I don't even really, I don't even really like working out. I worked out in six months. Actually, that wasn't even a customer for you in the first place. It's really important to understand behavior first, worry about building the perfect product, the perfect solution to, to fit that hole, fit that problem. Much later, you always care about people's behaviors first, because behaviors, their past behaviours are evidence, you can rely on people are very likely to repeat them, particularly if they're out there searching for better solutions. That's this little opportunity you want to find. That's really good proof of a problem in the market. 17. Introduction to Protecting Your Ideas: Well, we usually advice next, so this will totally depend on the nature of the university and the technology transfer team that you have within the university that you start to consider how to protect your idea. The reason we don't do it straight off the bat the second we make a discovery is because there's an opportunity cost associated with patenting. Patenting takes time, it takes money, and it's something that typically your university will pay for. But the university will have a reasonably limited budget for pursuing new patents on a year-by-year basis. So first we always go out and we try and understand what is the opportunity. Then we build our case, we build our evidence-base to showcase that the money that they may need to invest is actually going to be worth it because there's a really big opportunity, a really big need. And you have a great team that can help you deliver on that opportunity behind you. When you go and protect your idea. There's a lot of kind of nuance, a lot of different kind of topics that we could cover. And because they are so case-by-case sensitive, I don't wanna get too deep into the minutia. I want to give us some just very broad principles that we can think about. Here is where I will emphasize, go and talk to a patent attorney. The first conversations you have with them, probably the first five to ten conversations you have with them will be totally free of charge. If they're not free of charge, find a different patent attorney. Because most of them are happy to build a bit of rapport with you so that you feel comfortable working with them. You just need some advice to understand what's the best course of action. That bit absolutely should be free. They will tell you before they start charging you. So with that caveat, I want to move into kind of the topic areas or give us a bit of foundation of how do we think about ideas, how we think about intellectual property, and how do we think about protecting intellectual property. 18. Types of IP: Intellectual property rights cover kind of a broad class of ideas. There are some concepts that exist automatically. Things like copyright. If you write something down, you can claim copyright over the fact that you wrote it down. And if anyone tries to steal it from you and use it elsewhere, you can take some legal recourse to seek some compensation. The same thing happens around something called design rights. If you produce a design for a particular product, if something looks a certain way, that's automatically protected. If someone copies it and tries to commercially exploit it, you can do something about it. There's also these class of ideas that you need to go and apply for in order to receive any sort of protection around them. And those broadly are things like patents, things like trademarks and things like registered design rights. Now, patents will be the thing that we talk about. Talk about most because that's usually how we protect discoveries that are moving out into the world. But it's important to understand that there is a third class of intellectual property rights, which are know-how and trade secrets. Know how. The best way to kind of to explain it is all of the intangible knowledge that maybe would take so infinitely long to write down into a patent that it doesn't make sense. It's the idea that maybe take an example from my experience when I was a PhD student, we built a new sort of microscopy, microscopy approach. That microscopy approach is something probably that we could have patented. We could have drawn it out. We could have said, put a mirror here, put a mirror here. This sort of laser line works really well for it. But the know-how surrounding that patent would have been things like, well, if on a humid day, you start to notice the thing is not focusing quite as well. Then adjust this mirror here. If the temperature starts to fluctuate during the course of your experiment, the results will look a bit like this. So if you see those results, you know that you need to make sure you stabilize your air conditioning, kind of temperatures within your lab space. All of that kind of intangible knowledge that allows you to actually reliably extract value from the core invention. That's know-how, and that is really valuable in its own right. The other kind of class that we talked about that might be of interest depending on the technology that you're producing is trade secrets. Trade secrets the most famous one, the most famous example is the Coca-Cola recipe, which famously only a few people within the company actually know what the full recipe of ingredients is to produce Coca-Cola. And why did they do that? Keep that a secret rather than patenting it and protecting it. Because a patent at the end of the day is a time limited monopoly. After 20 years, anyone can use the knowledge, the information contained in a pattern, it becomes freely available. And Coca-Cola didn't want that. They wanted to be able to uniquely make their recipe until the end of time. So rather than patenting it, which only protects 20 years, they've decided, let's just keep it a secret within our company. And then we can produce it uniquely ourselves and only ourselves until the end of time. 19. What is a Patent?: To get into a bit more detail about exactly the nature of a patent. A patent is an agreement between an individual that all the inventors, a set of inventors, and the state, the government, if not the governments of several different countries across the world. The whole concept behind patenting is much like academic publishing. It's to encourage the disclosure of ideas. But because these ideas have some commercial value, it's not enough to give academics some impact points associated with these disclosures. The state, the governments of the world also need to afford some sort of protection to those inventors. They need to say, in exchange for the fact that you disclose this, we're going to let you and only you commercially leverage any kind of benefit that this invention might have in the world. As I said before, patents are typically time limited to about 20 years. There are ways that you can extend that, but that's kinda far beyond what we want to talk about in this program. Importantly, absolutely importantly, vitally, you must remember this. You have to patent before you publish the paper. If you publicly disclose your idea, you can no longer patent it. Because public disclosure of ideas moves those ideas into ownership of the public. And you cannot patent things are owned by the public. You can only patent things that are privately known. So if you go out and you talk in a conference, or you talk to your, your group, or you write a paper and publish it in Nature magazine. Then you have disclosed those ideas to the world and they are owned by, by the world at that point and cannot be patented. And that's a very, very important point. Let me tell you why. A patent at the end of the day means that you and only you can commercially exploit your idea. So what that is doing is protecting all of the further development costs that you might incur, the development time that you might incur to turn what was an interesting idea into something that is a product that can be sold. It protects that whole journey. That's why it's kinda of 20 years of protection because it appreciates that maybe five to ten more years is still required of refining and polishing it before the thing can be sold. If you don't have that protection, anyone with more money, more expertise, more committed team can sprint past you and take your discovery and run with it into the marketplace. And oftentimes, who arrives first wins, at least in the early, early stages of that process. So while the patent affords you and why you want it and where you want to make sure that you don't accidentally disclose your idea before patenting it is to protect that journey. And because those patents inherently have some value as a slightly kind of arbitrary figure, if you look at most universities, when they license a patent into a spin out company, they will say this patent is approximately worth about three-quarters of a million pounds. And will that means that the company now has, is that they have exclusive rights to something with three quarters of a million pounds, which means that that company has some value, which means it's easier for that company to go out and raise some money, raised some investment based on their unique access to use a certain technology. So that's why you care about it, because it protects the journey. And ultimately because it has some value and bringing value into your company makes it easier for you to raise investment. 20. Who Owns the IP?: What is important to understand and sometimes this is a slightly kind of controversial point. I would say, is that although you, as an inventor of this technology, are its creator gave, gave it birth from the various deepest point of your mind. Depending on your circumstance, within your university or within your employer, you may not own that intellectual property. You may not own that idea. If you're employed by a university or, or funded by industry or, or paid by industry in some way. Probably the university or the industry. Payer owns that intellectual property, owns that idea. If however, you are a undergraduate student, a master's student, or a PhD student, a PhD researcher. And you are not funded by industry in any way. No one is paying for you to be, be in this position, then probably you own your idea. If say, there is a circumstance where a PhD student and a supervisor together create some discovery, then maybe that is jointly owned by that PhD student as an individual and jointly owned by the university that employs that supervisor. So always the best advice is to ask advice of the University of a patent attorney, of whoever you can kind of reach out to to better understand the circumstance. Most technology transfer teams within the university can very adequately kind of clear this up for you. And I would also say, if you are worried about being in the position of, well, I, I came up with this idea, why do I not own it? One is just a downside of employment law. The trade-off is all of the all of the privileges that employment Brings, such as pension contributions, such as not having to worry about who's going to pay you all of those sorts of things. And actually it's not a bad thing that the intellectual property is owned by the university. In fact, that's kind of seen as a badge of prestige that this company could license. A really interesting idea straight from a university. That's actually something that's kind of exciting to most investors. And it can't even mean that that company is worth more, even if it was the same idea owned by an individual, which is a little bit nonsensical, but is absolutely the way it happens. 21. Should You License or Spinout?: So at this point we've spotted an opportunity for where we might be able to push our idea or technology towards. We've started to build our case. We've started to build a team of commercial advisors around us. We've started maybe to protect the idea where our point, where we should start to decide. Is this idea something that we should turn into a company? Or is this idea is something that we should license out to existing industry? And I kind of explained before some of the difficulties in approaching either of those pathways. But what I want to talk about and share a bit of further light on is exactly what that licensing versus spin out pathway actually looks like. And then I want to give you an example from my own experience involved in Ziylo. 22. How to License: So what I want to talk about first is exactly how the licensing process works. Say in an instance where a piece of intellectual property has been produced, has been invented by an academic. The university in this instance is the employer of that academic, so the University owns that intellectual property. If the decision is made between the academic and the university that we should go out and we should try and find some partner within industry to come in and licensed that technology. Who we might be looking at could be the "GSKs" the "GEs" of the world for the big kind of companies that might be interested in interesting bits of new kind of technology. What the deal is there is that the University will provide an exclusive license, meaning that only this one selected partner can, can access the technology from the university. It won't try and sell it to anyone else. So it usually is just to one person in exchange for some sort of yearly fee that can range from hundreds of pounds to millions of pounds and anything in between. Depending on the idea, depending on the size of the problem, the value that it has to that particular company, but that, that money that is exchanged for the access to that piece of intellectual property is typically split between the university and the academic. And typically they're not always, it depends by university absolutely. Usually slightly favors the university. By oftentimes about 60, 40. So 60 percent of the money going to the university, 40% of the money going to the academic. The argument behind that is that the university has had to do all of the deal-making activities. It's usually incurred the cost of patenting. Patenting the idea is usually spent the money to actually make that process happen. And it's usually paid the legal bills to set up the contract between that industry partner, that industry licensor, and the university itself. So because it's invested all of those costs and all of that time and made the deal happen. It takes slightly the lion's share of the deal, which I think is perfectly reasonable. Honestly. What can happen for the academic beyond that point is that the academic can be brought in as a consultant to help kind of unlock the knowledge that is being licensed by that company. And what that means is essentially they would come in and they would provide know-how. They would say, Okay, you've got access to this patent. But, you know, on rainy days, you'll probably need to tweak these things or if you're running low on this compound, Here's some good kind of substitute compounds that you can use that won't affect the results too badly, provide all of that sort of knowledge. And that can be for a very handsome reward in terms of kind of a daily fee. But that's typically what the licensing structure, what the licensing process looks like. There are a few pros there are a few cons to this as an approach. The pros, I would argue is that it's kind of minimal workload for the academic. The academic doesn't need to go out and find our industry partner. That's something that the university is doing. The benefit also is that you are your selling the idea to someone that is very well positioned to take that idea, realize it into some interesting products, and get it into the hands of a customer. And they have a track record of doing that reliably. And that's how they can afford to access, licencing these sorts of pieces of intellectual property in the first place. Equally, if the academic, because they aren't having to start a company, there is no risk associated that is typically associated with starting that company. They don't need to have learn how to run a business. They don't need to raise money to start the company. All of those kind of difficult tasks are done away with. And equally, there may be some opportunity to do some further research collaboration with that licensing group. So actually it could create some new science, some new opportunity to work together. As a downside, however, it could have the reverse implications. It might actually restrict the fields that a researcher can explore because they might all be kind of commercially sensitive. Or it might mean that just the publication process is significantly slowed down if any progress is made into those areas because that licensing industry partner might want to read through the publications to make sure they don't want to patent first before those ideas are published. So it can have a bit of a downside and that further research in that field might be kind of slowed down. But that by no means is, is that absolute truism? It will absolutely depend on the nature of the transaction, the nature of the groups, and the nature of the research work being conducted. Another downside I would argue also is that because that idea is being licensed quite early in its evolution, because quite a lot of further work needs to be done to turn it into something "market ready". You're oftentimes giving that idea away quite cheaply because it's not really very fully cooked. Maybe if you turned it into a company and spent a year or two more, kind of well rounding that idea, maybe you could have licensed it for double, triple, 10 times the amount that you are now. But you'll never know. It's unfortunately the trade off of that whole process. 23. How to Spinout: By comparison, going down the startup, all the spin out route. And just to clarify the difference of startup versus a spin out. A spin out is essentially starting the company with the university, with the entity where the IP, where the intellectual property originates, forming together to make a new company and then moving a license to that idea into that new company versus a startup is the academic or an individual just deciding to start up a company in their own right. And then maybe approaching the university. Like any other industry collaborator might, and trying to win a license to that idea. Typically, when starting up or spinning out. Because neither of those groups will have access to large pots of finance to, to pay for the license. They will instead trade equity, some shares in the company, or maybe some future royalties, some future kind of share of the profit or share of the revenue that the company makes in exchange to access that intellectual property. But broadly, the result is the same at the end of the day that startup that spin out or that industry partner all now have exclusive access to this piece of intellectual property. Again, there are some pros, there are some cons associated with doing this. Starting a company to actually get an idea out into the world is potentially much more difficult. However, on the flip side, it could be much more lucrative. It's the sort of thing that could make you a millionaire, is the sort of thing that will put you in the driving seat of realising that technology into its final form, into a place where it can actually be of most value to the customer. And it also is an, another kind of associated positive could really drive the amount of research and development activity in this area. And if there is still an associated academic group working in that area, there's also the opportunity with the academic group and the spinout company kind of collaborate to work together and get the best of both worlds, of both the public and the private kind of financing infrastructures that are available to them to both of those groups. However, as I said, startups are hard. Startups are reasonably risky. There is no guarantee of success and they also require quite a lot of time invested. And with much lower kind of job security. You have to weigh these positives against these negatives and make that kind of decision. 24. Your Research vs Business Roles: There is a spectrum over which you can sit if you are thinking about that startup or spin out route, you don't necessarily have to move as an academic into that startup company full-time and give up all of your future research. If you choose to, you can stay in that full-time academic role. You could instead hire a CEO or hire a CTO, a chief technical officer, or a CSO, chief scientific officer to help run that company for you. As a consequence, you will probably take a much lower equity position, a much lower share position in that company. But the benefit is you get to continue doing your research and maybe you can even collaborate doing research with that spinout company that is formed. Equally if you prefer to be on the more commercial end of the spectrum, you can take a larger equity position in that company and become the CEO or become the CTO or CSO, and directly control the business. Learn that kind of business skill set and take that technology into market yourself is also possible to sit somewhere between those two roles. I would advise not sitting in those two roles for too long. Kind of a year or so. Maximum is really the point which you should commit yourself to one of those pathways or the other. Because both of them arguably a full-time jobs. And you won't be doing either very well if you're trying to do both at the same time, after about a year, you should really try and find yourself in one of those two camps. 25. Licence or Spinout? Deciding Factors: In terms of deciding factors, I would usually push academic teams to licensing. If the technology that they've developed is a small part of a much bigger solution. Or if it's kind of incremental in nature. If there is a buyer on the marketplace that can be easily found if somebody is actively looking to license this thing, rather than starting a company, it might just be easier to, to handover, to sell it to them. Particularly if the technology is quite advanced, I would say if it's at something called a high technology readiness level or high TRL level. If it's almost ready to go into the marketplace, it might be better just to give it to an industry group to get it over the final couple of hurdles. And equally, if you are the sort of person that doesn't actually want to set up that company. So if that's not interesting, that's totally fine. Licensing it is a really, really, really good alternative to realize the full potential of an idea of a discovery. If on the other hand, you're thinking about reasons that would push me towards trying to spin out the company, it's basically the opposite of everything I just said. If, if the idea is still very, very early, then maybe it's good to turn it into a startup company so that idea can be polished and refined a little bit. So the value can kind of be increased at it before you find a seller into industry, or take the product into the market yourself. Equally, if there is a just very strong commercial drive from yourself as the academic or from someone within the group that really wants to start the company really wants to make it happen. Great. Make it happen. I would, I would absolutely say that's a very viable and increasingly more common route to realize these ideas. Increasingly, licensing is quite hard to access, uh, because of the problems that we've kinda mentioned before, industry really just isn't that excited by it, unless it's very impactful and almost cooked, almost finished. Which most of the time, if it's coming out of an academic lab, that's just absolutely not the case. So a spin out is a really good vehicle to kind of do a little bit of manufacturing on top of it before taking it to market or trying to sell it to license it. At some later point. 26. The Story of Ziylo's IP: What I want to tell you now is the story of the intellectual property of Ziylo. And I will caveat that with, I've heavily edited this story, so that it is for educational purposes, specifically educational purposes. And a lot of the facts I have redacted because there is some of them are confidential basically. But I still think there's a lot of learning value and running through how the intellectual property behind Ziylo went from creation, ultimately to sale. In the early 2010's or so, the core piece of intellectual property was developed at the University of Bristol. A spinout company was created in approximately 2013 to try and exploit this really interesting piece of intellectual property. That company licensed the idea that was owned by the university off of the university so that it could start commercial development on that concept. And that was in exchange for maybe some fees, maybe some royalties, maybe some equity, something that the company had to trade, something to access that intellectual property. What the company did for about three years or so, was raise some money and do further research and development. Unfortunately, the first piece of technology that company, the first intellectual property that company, Ziylo, had tried to commercialize after three years, it was realized that it just wasn't very good. It really wasn't going to go anywhere for just some fundamental limitations of that technology. Very luckily, almost exactly the same time. that same academic group, the original academic group, developed a new piece of intellectual property. And very swiftly, that startup company decided our old idea isn't very good. This new idea looks much better. Let's license this into the company for, again, in exchange of maybe some fees, maybe some royalties, maybe some equity. We'll start, we'll shift our whole Technology Roadmap. Our whole plan into developing this concept instead. What happened kind of about a year, year and a half or so later was that Novo Nordisk saw, that this was an interesting technology and decided that they would quite like to acquire it. At that point in time though. Just to kind of give you a lay of the land of and see how the intellectual property kind of gets moved around between all of these different entities. To begin with, the universities is the owner of the intellectual property. The founders and the investors that set up Ziylo own shares in Ziylo and gave some of those shares to the university. So the Ziylo could work on the piece of intellectual property that those founders and the original academic team had developed. So both the university and the Ziylo founders and investors are all shareholders in Ziylo. And Ziylo has a license to intellectual property, but the university, the end of the day, owns that intellectual property. One day, Novo Nordisk turns up and is interested in acquiring Ziylo, but it wants to acquire ultimately the intellectual property. And intellectual property isn't actually owned by Ziylo. Even those Ziylo is developing it for commercial purposes. There is a clause in the contract when you're doing that licensing agreement with the university to say, in the event of an acquisition, if someone tries to acquire the company, to acquire the intellectual property, for a very nominal fee, say one pound Ziylo, the company will pay one pound to the university and the university because there's an acquisition trying to happen and only in this instance will transfer for a single pound the intellectual property over to Ziylo, so Ziylo will become the owner. What happens beyond that point is that Novo Nordisk buys off of the university and offers the founders and the investors of Ziylo their shares. So Novo Nordisk becomes a 100% share owner in Ziylo limited. And by defacto, by owning a 100%of Ziylo, it now owns the intellectual property that it is interested in. It's a bit of a complicated process. And it will absolutely differ on a case-by-case basis. But I think it's interesting to see kind of how these things move around. And at the end of the day, the best advice is hire a good advisory team and talk to the right lawyers. And that's why there are experts out there that you can kind of "recruit in" and help you make these kind of decisions. 27. Developing a Launch Plan: The penultimate step in the journey before actually launching the spinout company is arguably the longest and probably the most difficult. It involves simultaneously pulling off five different bodies of activity all at once and having those bodies of activity come to their natural conclusion approximately at the same time. Those five things that all need to come together, or the development of a commercial plan and commercial strategy. The kind of establishment of an agreement with all of the co-founding team as to who owns what percentages in the company and what everyone's roles will be within that company. Equally, there needs to be an agreement between that spin out company and the university, as to what those licensing terms are whether it's equity, whether it's royalties, whether it's some fee that is needed to access that piece of intellectual property within the university. The company will also need two other key assets. It will need some money and it will need some funding. And it will need somewhere ultimately to work. 28. Building a Commercial Strategy: That commercial plan we touched on it before, is typically thought of as the development of a business plan. Now my view always is that a business plan, as soon as you've developed it is completely out of date. But they are unfortunately a necessary evil. There are many places across the Internet where you can find broadly what the template of a business plan looks like. Broadly, what that commercial plan should focus on are two time-frames. The first 18 months or so, the first 18 months typically are chosen because that's the time until a major milestone should be achieved by the company. Maybe that's developing a proof of products, a proof of concept or an alpha product or, or something along those lines, some major milestone is achieved. And that's really where the main focus of activity will be for any monies that are raised into the company. Equally, the commercial plan should reflect what the kind of five-year trajectory of that company is. Very often, if a company is forming out of university, then that company probably will only just be entering the marketplace in year 5, it typically takes a really long time because the idea is start off so early to finesse them enough where they're actually ready to enter the marketplace. But that five-year trajectory should showcase a bit of what that journey might look like and what the company should be at that five-year point. Importantly, what is key to kind of emphasize are the assets needed to successfully deliver those two journeys. The people, the experience those people need, the finance that is required to overcome any obstacles that may arise. The partners that are needed to be involved to access the kind of core expertise or the infrastructure or the facilities or anything along those lines that might be otherwise needed. Ultimately, what you want to produce and agree on amongst the team, the university, and the investment, the investors that are coming on board, is that you have produced a plan and it is the best plan that you can produce. But you also acknowledge that no plan survives first contact with the customer or with reality. And as soon as you've written it, it kind of probably will be out of date, but it is a very effective stage gating process to get everyone involved, all the stakeholders involved, kind of singing from the same hymn sheet. That's why ultimately these things are so important. So take a bit of time, work with kind of the advisors that you have on board, produced that commercial plan, and understand that it is a little bit of a necessary evil. But once you have it, everyone at least should be aligned and on the same vision. And that's a really important place to get the company started. 29. Deciding a Cofounder Agreement: The second point that's incredibly important and can be the thing that undoes companies, is finding agreement amongst your co-founders, making sure that everyone understands what their roles will be, what their responsibilities will be, and that everyone is broadly happy with the roles that they are taking equally. And another kind of point of contention is how the equity will be split amongst that founding team. And that really is, there are a lot of different schools of thought. The school of thought typically that we subscribe to is that if you are creating a company, everyone that comes into that company on day one should be chosen because they are the best people that can be found to run that thing. And as a consequence, you are all part of an equal set of circumstance and equal team. And you should split those equity positions equally because, you know, why should why should you not be hiring someone that's as good as you are? You should be, you should be waiting out to find someone that potentially could be a better role for that position. And I think that sends a nice strong message to investors. They are all equally invested in this concept and incentivized in this concept. And that you share both the risks and the rewards equally. When it comes to deciding things like "who's going to be the CEO?", "who's going to be the CTO?", "who's going to be the CSO?", "who's going to be some of these other roles that are involved in running a company?" I can appreciate, absolutely, that can feel reasonably personal, reasonably tied up in one's own sense of ambition, of prestige, of all of these different factors. What I would strongly advise is that you play to your strengths. You find the people that are best in those roles. The person that is the CEO should be the person that is most commercially savvy, that is most confident in bringing investors on board, is most confident in bringing partners on board, that is also happy to work all the hours of the day to make those things happen equally. The person that sits as the Chief Technology or chief scientific officer has those scientific skill sets, has those technical skill sets to deliver. And oftentimes you might find a lot of the academic teams that we work with. They feel confident in their technical capabilities, but they don't feel confident in leading a team of others to deliver a technical product, at industry speed. And that's okay. It's okay to not feel that you are quite confident, quite ready yet to be the lead role. You can star out there and dropped down when you find a better candidate. Or you can, you can start start in kind of a more junior role and see if someone can be hired in first. At the end of the day, the wonderful thing about STI accompany is that you can choose what role ultimately you play in that company. And you can hire people in to fill all the roles that either you don't want to or you're not able to fulfill the best advice that was given to me. The second you realize you are not the best CEO candidate out there, hire your replacement, hire, hire that better person in. Don't be prideful because at the end of the day, what you want is the mission and the company to be successful. That's your, that's your win condition. If there is a team out there, that is better placed to deliver that, that isn't you, it might be slightly hurtful to your pride, but it will be in the best interests of the company. And I think that is a good kind of initial mindset to always hold as you're finding agreement with your co-founders, as you're setting up that team as you're establishing the roles for yourself. 30. Agreeing Spinout Terms: Finding agreement based on the rights to access the intellectual property that the university holds can take a long time, can take six to nine months. I've seen it take multiple years also working out the terms, whether it's equity royalties and also licensing fees in exchange for that intellectual property takes time. And it's important to understand that although, although the university will have standard templates for what it wants to do, this is your first opportunity to have a commercial discussion and make sure you understand there is a commercial discussion. You are a representative of a spinout company. You are not the academic that is employed by this university where the university is acting in the best interests of you, the employee. You need to represent your company and you need to make sure that whatever is being offered, whatever is being exchanged. You are happy with the deal that is on the table. And you have full rights to negotiate, and most people wouldn't tell you that, but you have full rights to try and negotiate regardless of what the policy is. Because at the end of the day, if you choose to negotiate is an exercise in becoming a better entrepreneur. And ultimately, that company that you are trying to create will have a higher probability of success of survival, by having someone at the helm that is happy to challenge the norms. Ultimately, that's what an entrepreneur does. They challenge the norms and they create innovation and change hopefully for the good, it will feel like a negotiation is taking place because the negotiation is taking place, and that's totally okay. Learn to feel comfortable in that situation. Make sure you have good advisors on board that can support you. Understand that both sides are just trying to make a sensible decision fought for each other. These things at the end of the day, it is important to remember are not personal. And they are about making the best commercial entity possible that can go forward, raise investment, and to deliver this innovation into the marketplace. 31. Securing Finance: The penultimate thing and one of the major barriers to actually getting companies started is having the funds to do so. For an early stage spinout company, there'll be a whole host of different kinds of avenues that you can pursue. From public funding, from kind of from the government or from the university potentially, to more kind of traditional approaches that will be private investment from things like angel investors, maybe things like venture capitalists, or maybe even some industry kind of collaborators. So this is typically a little bit less often, especially in the early days. What is true regardless of the avenue that you choose to fund the company is that it will take time. It will take typically six to 12 months to bring money into a company. With the average for investment being, I think recently I saw about eight months or so to go from starting the investment round to closing the investment round at the moment in the UK, it takes about eight months to get that done. What that means is that if you are a PhD candidate or a postdoctoral researcher and you are approaching the end of your contract. You need to think ahead and to start that process so that you don't, you don't end up on the streets. You keep a roof over your head for the whole duration of you trying to get a company up and off the ground because getting a company up and off the ground is hard enough as it is. You don't want to be worrying about taking or finding a part-time job or a full-time job to keep yourself, to keep yourself fed. You want your full focus to be on starting this company. The advice, absolutely. Start the process as early as you possibly can. Typically, like 12 months is probably about perfect. If it means that someone is trying to put some money in the bank account before the negotiation has finalized with the university. That's actually okay. That might even expedite the process the university is going through to agree those kind of spin out terms. Equally. The university should be helping you kind of find those investors at the same time. But what is important and what I wanna emphasize over all these points that I've just covered is you are the one providing momentum, you're the one providing speed, and no one else will do it for you. Unfortunately, I wish they would, um, but it's, it's for you to win, for you to push for and for you to make happen. So make sure that pace, make sure that strategy and make sure those connections, investment or otherwise are all happening so that they all kind of coincide to come together at the right time, because it's no good having a license to a piece of intellectual property. If you haven't even started the funding raise yet because it'll be another six to 12 months before that company gets started. So make sure all these things come together at the same time is incredibly, incredibly important. 32. Finding a Workspace: Finally, and maybe most obviously is actually finding the facilities that will allow you to work. This is something really important to think about early because a lot of spaces, a lot of regions across the UK, across European, across America. Don't have easily accessible and easily affordable workspaces for companies that require strange things like category two wet labs, like fume hoods, like engineering spaces, all the things that you take absolutely for granted as a researcher in academia or industry, most startup price scales don't allow you to access things like an NMR machine or an HPLC or our UV Vis. Even these things become what was accessible on a day-to-day basis. Something that is quite a high barrier for you to access depending on where you set up. So make sure very early in the process to find a suitable incubator, accelerator, co-working space, if that's what you need, that allows you to access the infrastructure that you will require. Because one of the most expensive bits about setting up companies from university is actually re-equipping the labs re-equipping the lab space with the infrastructure that is taken for granted within the academic system, make sure you find access to those things early, even if it means you need to relocate to another city. If it means the company has the best chance of survival there is probably in your interests to pick up sticks and move. 33. Launching the Spinout: Okay, into the final section, the last bit that we wanna talk about is actually launching the company. And that is a very, very, very big and broad concept than the pathway that lies ahead is arguably quite long, especially for companies that arise from university intellectual property. Typically, the journey beyond that point is anywhere from three to ten years until the company even enters the marketplace for the first time. Broadly, the journey ahead, we'll break into three or four kind of main chunks from taking that early stage idea and trying to prove it, trying to develop a proof of concept before developing a working prototype and trialing that prototype in the field to ultimately, and finally, turning that idea into a business that sells a product on the marketplace and trying to grow that business. The most valuable advice that I can give you is to find a community of people that can support you. Find the incubators, find the accelerators, find the community, the programs, the investors that you need to get your company up and off the ground and be active in searching for them. Don't expect them to come and find you because because they won't, because they won't have heard of you. You need to build your visibility as a brand and make sure you are reaching out to people. Make sure you're publishing your success stories. Make sure that you are findable, as findable as possible. But equally, engineer your own lock, go and make those connections happen. Important to stay focused on the end mission, but don't be scared at the end of the day if you start to change course. That is actually a process that has been proved to yield better results for companies if they pivot because they realize they're going slightly in the wrong direction, even if it means they lose a bit of ground. Ultimately, it will be much more favorable in the long run than heading down a trajectory where they don't think there really is something viable in the market. As a couple final pieces of advice. I want to re-emphasize. You want to go fast, go alone. If you want to go far, go together, bring people with you. The best skill set you can acquire as an entrepreneur, as a founder, as anyone that wants to make anything ambitious happen is the ability to communicate with people and bring them on board to your ideas. Good luck in the journey ahead. I'd love to hear how you get on. Obviously do reach out and maybe there's some way that we can help, but best of luck. And I hope this is the first step on your journey to starting a really interesting company.