Improving the commercialisation skillset of the Researcher Founder

This paper continues assessing the methods available to improve the business acumen and depth of the commercialisation toolkit of the University Researcher turned Founder/Start-up Director.

No one expects an expert Researcher to suddenly be able to be a highly successful Founder/Company Director from the get-go. Developing these skills requires a concerted, focused effort over several/many years. This needed roadmap must be addressed to improve the likelihood of commercial success for the start-up.

The usual route for the University Researcher is to create a spin-off or start-up company that harnesses the patented technology they and their labs have developed. The University owns the IP and, under a carefully crafted term sheet, will licence the technology to the start-up. This will include specific expectations for the start-up, milestones, conditions and, in effect, required KPIs. The transition bridge is the University technology transfer office- or commercialisation/innovation department.

This University run department/section handles the specifics of the term sheets and the legal aspects and assists in creating a smooth bridge for the spin-out of the IP. They manage the project. If there are contractual issues or business-related problems, it is understandably the responsibility of the Transition office to address and assist in correcting these hurdles. In some cases, this may not be easy and requires advanced negotiation skills, but for any capable University office, this should be a straightforward complement to their skill set.

Unable or unwilling to perform this service is suboptimal, leaving the Transfer office open to justifiable criticism of their failure to provide a duty of care.

The onus also falls to the Researcher/Founder to achieve a harmonious outcome for all parties. This may be beyond the Researcher's capabilities, which can be understandable. The Researcher often needs help to acknowledge their limitations and proactively address potential skill gaps. Surely this could be a function of an efficient, high-performing Technology transfer / Innovation office? Plans should be actuated to help the lead academic Researcher significantly improve the chances of positive rewards for their start-up. Given that this dramatically assists the value of the IP for the University.

The Researcher needs to develop self-awareness, improve business acumen, and access new learning for best practices of excellent company governance. Building a diverse managerial team is an integral part of the success of a start-up. This should be a significant focus of the Researcher/Founder to create a solid foundation for future business success.

The researcher Founder may be good at building academic lab scientific teams

Building a diverse managerial team is an integral part of the success of a start-up. A diverse group brings together individuals with different backgrounds, experiences, skill sets, and perspectives, which can contribute to various aspects of the start-up's growth and development.

Here are some benefits of having a diverse managerial team in a start-up:

1. Enhances complementary skills: A diverse team can combine different skill sets, allowing each member to contribute their unique expertise and knowledge. This can help cover various business functions, such as product development, marketing, sales, finance, and operations.
2. Improves problem-solving and decision-making: Diverse perspectives can lead to more creative and effective problem-solving as team members approach challenges from different angles and offer unique solutions. This can result in better decision-making and improved outcomes for the start-up.
3. Increases adaptability and resilience: A diverse team is better equipped to adapt to changing market conditions, customer preferences, and competitive landscapes. In addition, the team's varied experiences and backgrounds can help the start-up navigate uncertainties and maintain resilience in the face of challenges.
4. Strengthens innovation and creativity: Diversity can foster a culture of innovation and creativity as team members bring different ideas and viewpoints. This can lead to the development of new products, services, and strategies that drive the start-up's growth.
5. Expands market reach: A diverse managerial team can better understand and address the needs of different customer segments and markets, helping the start-up to expand its reach and tap into new opportunities.
6. Stronger company culture: A diverse team can create an inclusive and supportive company culture, attracting and retaining top talent, boosting employee morale, and ultimately contributing to the start-up's success.
7. Richer positive reputation: Demonstrating a commitment to diversity can enhance the start-up's reputation among customers, investors, and other stakeholders, increasing trust and support for the business.

To build a diverse managerial team, start-ups should focus on recruiting from various backgrounds, cultures, and experiences and promoting diversity and inclusion within the organisation. This approach can help start-ups leverage the full potential of their team and improve their chances of success in the competitive business landscape.

Being an excellent researcher doesn't necessarily translate to running a start-up ethically, compellingly, or even successfully with appropriate sound good governance principles.

Building a successful academic lab team and running a start-up requires different skills and approaches. While a researcher-founder may excel at assembling and leading a research team, this may not automatically translate to effectively managing a start-up.

Here are some reasons why these roles differ and can create challenges for the researcher-founder:

• Different goals and priorities: Academic labs focus on generating knowledge, publishing papers, and securing grants, while start-ups prioritise product development, market penetration, revenue generation, and growth. Balancing these different objectives can be difficult for a researcher-founder.
• Business acumen: Researcher-founders may lack the necessary business and managerial skills to run a start-up effectively, such as strategy development, financial management, marketing, sales, and customer relations.
• Time management: Leading an academic lab and managing a start-up simultaneously can create significant time constraints for the researcher-founder, making allocating sufficient attention and effort to both roles difficult.
• Team dynamics: While an academic lab team typically consists of researchers with similar interests and backgrounds, a start-up team requires a diverse range of skills and expertise, including business, technical, and creative roles. Managing these different team dynamics can be challenging for a researcher-founder.
• Resource allocation: Researcher-founders may struggle to allocate resources effectively between their academic lab and start-up, potentially leading to conflicts of interest or resource shortages.
• Regulatory and compliance issues: Start-ups may face different regulatory requirements and compliance challenges compared to academic labs, which researcher-founders may not be familiar with or equipped to handle.
• Ethical considerations: The commercial nature of start-ups may give rise to ethical concerns not typically encountered in academic research, such as conflicts of interest, data privacy, and fair competition.

To overcome these challenges and ensure the ethical, effective governance, and successful management of their start-up, researcher-founders should consider the following:

Collaborate with experienced entrepreneurs or business professionals who can complement their skills and provide valuable insights.

Seek mentorship and advice from individuals with start-up and industry experience.

In addition, they should be pursuing relevant training or education to develop business skills and knowledge.

• Create clear boundaries and communication channels* these should be established between their academic lab and start-up to manage potential conflicts of interest and resource allocation issues in real-time.
• Building a diverse and capable start-up team* that can support the researcher-founder in various business functions and ensure effective decision-making.
• Staying informed about industry-specific regulatory and compliance requirements and seeking expert guidance.
• Acknowledge and address the differences* between leading an academic lab and managing a start-up; researcher-founders can improve their chances of success and contribute to the growth and development of their ventures ethically and effectively.

When a start-up takes on external outside funding, this changes the landscape immediately and dramatically from a functional and legal perspective. As a Director, the Researcher/Founder has fiduciary duties with clear-cut legal responsibilities. The Researcher Founder should realise that it is no longer appropriate for them to be the overall Director/Board Chairman and should seek other managerial leadership in these roles.

This is important because when a start-up takes on external funding, it is a significant turning point that signals the critical need for the researcher-founder to reevaluate their role within the company.

Investors often expect a clear level of business expertise, professional management skills, and an unconflicted commitment to the start-up's growth.

There are several reasons for this:

1. Accountability: External funding introduces new stakeholders, such as investors and new board members, who expect the company's leadership to deliver results and meet performance targets. The Researcher-Founder may not have the necessary experience or skills to meet these expectations. They may even try to dissuade or prevent others from joining the Board if accountability is an issue.
2. Time commitment: Managing a growing start-up demands significant time and effort, especially with external funding. The researcher-founder may struggle to balance this commitment with their academic responsibilities. Especially if they are attempting to be "all things." They could be stretching the mantle too thin if they were to be executive Directors.
3. Business expertise/ acumen: As the start-up grows and evolves, it will require more advanced business expertise and industry knowledge, which the researcher-founder may lack.
4. Scaling and expansion: The growth and development of a start-up can bring new challenges that the researcher-founder may not be equipped to handle, such as hiring and managing a larger team, navigating new markets, and dealing with increased operational complexity.
5. Conflict of interest: As highlighted above, the researcher-founder's dual roles may create conflicts of interest as they balance their obligations to the University, the start-up, and the external investors. Remember having the "COI policy" is 1/10th of the way there. It doesn't mean much if not supervised, independently audited and critically discussed. These conflicts can be minimised by bringing in experienced managerial leadership.
6. Diverse perspectives: A new leader (different CEO, new independent Directors or Board Chairman) with different backgrounds and skill sets can bring valuable insights and views to the start-up, helping to drive innovation and growth.

At the first external investment phase, the researcher-founder should consider whether it is appropriate for them to continue as the overall Director. They should seek other managerial leadership input.

Given the factors described above, the researcher-founder's role is indeed complex. With appropriate mentorship, University supervision and guidance, and personal reflection, the Researcher/ Founder who experiences difficulty should consider stepping back from the overall director role.

They would be wise to focus on a more specialised function, such as a technical advisor, chief scientific officer, or contributing board member.

This allows them to channel their expertise while making room for experienced managerial leadership that drives the company's growth and meets the expectations of External Investors.

The self-aware researcher/Founder considers the above factors pre-emptively and adjusts their role before problems arise.

Unfortunately, the ill-prepared are likely to fall, their actions determining how far and who they bring with them.

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