Get Out of the Office: The NSF I-Corps Way (Guest Post)
December 2nd, 2015 by John Chamberlin
John Chamberlin, president of BioDetection Instruments and a member of the Fund for Arkansas’ Future investment committee, contributed this post to L2L.
Sometimes it came as a general call from the organizers that it was time to hit the road and do interviews. (We had to schedule 100+ interviews to test our hypotheses about the fit of product to market and about the value of the product to potential customers.) Other times it was directed at a specific team that badly needed feedback from interviews.
By the second day, we saw the results of getting out of the office/lab versus not getting out and talking.
One of the teams had a marvelous new plastic that they thought would be ideal for podiatric appliances. Having spent years developing the plastic, they were convinced that it would make a great product and a possible SBIR-based company. But they had never spoken with a podiatrist! The first interview ended quickly when the podiatrist pulled out a similar product that had better characteristics. The team had to pivot and decide if they needed a technology fix or a shift in market.
NSF is big on changing the research culture in America, encouraging researchers to think about uses for their work and problems that they can solve. That means rearranging the grant structure to provide opportunity to reduce both market and technology risk for commercialization. I-Corps is a way to reduce market risk and increase business savvy. Other programs like Advanced Innovative Research (AIR) grants exist to reduce technology risk prior to SBIR grants.
As is common practice for I-Corps, we used the Lean Startup method with the nine linked statements or hypotheses of the Lean Canvas as the model for each business. Each statement can be tested by interviews or through other person-to-person contact. As the program went on, other teams came to the moment of discovery — Did their potential product fit their supposed market?
One theme that developed was the case of products that have to exist in a regulated environment, such as medical devices, environmental products, or energy-related products. A team that hypothesized they would sell their wonderful detector of low levels of mercury to power plants soon found the plants did not want to detect at lower than the level they were required to meet. A team whose product treated waste from fracking and generated power found regulations were in their favor, making their product more valuable to well operators.
Sometimes a team learned their market was not where they thought it was. A team with a product that shifted the wavelength of reflected sunlight to frequencies that pass transparently through the atmosphere saw this as a way to cool data centers. They were electrical engineers, and that was the first application that crossed their mind. They found it a hard sell to data centers where air conditioning was not as great an energy cost as power for servers. The NSF faculty made them get out and talk to mall operators and building complexes. In that context their story was met with excitement, which triggered a major pivot in business plan. I saw a press release about their business last month, and things seem to be going well.
Often teams started with the idea that their market was “everyone,” or a huge sector. One found their real market was 11 companies in the U.S. and Canada. Fortunately, their idea was very valuable to those 11 companies, so it was possible to plan a business with high initial price and large annual fees. During I-Corps they visited six of the 11 prospects and were close to closing deals.
I wish I had encountered the “Get out of the office” phrase earlier.
I remember an email from a researcher who had a week to complete his grant proposal. One of the final requirements was to show the relevance of the work to the local economy. He wanted me to find a company that would write a letter of support—in 7 days. There were several candidate companies, but I had to tell the researcher that he should have been visiting those companies when he first got interested in the project. If I could change one thing about the university system, it would be to encouragefaculty to have some number of relevant community contacts each year.
The Lean Startup approach is not unique to NSF. It has been adopted by the National Institutes of Health and, to a degree, by the Department of Energy. There are several Lean Startup programs in Arkansas—some with staged funding and access to pre-accelerators and accelerators for businesses. Recently, the University of Arkansas at Little Rock helped sponsor an on-campus startup weekend based on the Lean Startup model. These programs are additional options for researchers interested in getting out of the lab and starting a business.