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From Science to Business: New ISTC Commercialization

Support Services

Laura Schmidt WilliamsDeputy Executive Director for Partnering & Sustainability

ISTC

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New ISTC Commercialization Services

• Focused on supporting long-term sustainability for former Soviet weapons scientists.– Commercialization Initiatives and Lessons Learned– Other ISTC Commercialization Services:

• Advanced Matchmaking • Pre-Commercialization Support• IPR Asset Inventory and Analysis

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Commercialization Initiatives (CIs)

• Commercialization Support Program goals:– Bring marketable, revenue-producing hi-tech goods/services in

advanced stages of development from former defense institutes to the market

– Support technology transfer that brings revenue to former defense institutes

– Create sustainable jobs for former defense experts• Funded by Parties and government Partners. Co-funding

can be provided by outside investors, including host government agencies and private companies.

• 13 CIs funded to date (2 completed, 11 underway)

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Terms of Support

• The program positions itself in early phase of hi-tech commercialization process as a risk-sharing mechanism to support mature civilian technologies from former defense experts to the point where investors, commercial partners, etc. become involved.– ISTC exits when a technology becomes profitable or the CI

becomes financially self-sustainable.– ISTC takes no profits, royalties, equities.– ISTC takes no part in beneficiary’s business decision-making

process, but can advise if requested, under appropriate legal protections.

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Types of Support

• Available only for ISTC beneficiaries within our mandate (former military scientists & experts).

• Support can include:– Capital equipment and materials– Infrastructure upgrades– 3rd party services (consulting, marketing, advertising)– Training, travel for networking purposes.

• No-interest payback provisions for capital equipment when agreed conditions are reached.

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Lessons Learned from CIs at ISTC

• Initial delays caused by lack of CI procedures, lack of staff experience & understanding re implementation.

• ISTC staff lacked commercialization/business skills. Needed to hire outside experts and Russian consultants.

• Significant challenges with CI implementation: sustained ISTC project management attention throughout the CI is critical.– Providing the funds is not enough!– Delays resulted until PPMs were assigned to manage CIs, similar

to projects.– ComSP staff and consultants provide advise/support during

implementation. • Good internal communication critical. (Don’t hide the problems.)

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More Lessons Learned

• Preparing and approving a CI is lengthy and difficult. Delays create business risks—working to streamline our process.– ISTC only develops CIs we believe are likely to receive funding.

• Once approved, CI implementation usually takes longer than expected—most CIs receive no-cost extensions.

• Workplace creation also takes longer than expected.• Many delays caused by procurement issues (no workplan for early

CIs, procurement staff not consulted). • Some delays caused by creation of start-ups, spin-offs (often first step

in implementing a CI, so this delays the entire CI).• These delays can cause the CI to lose customers/investors, causing

the CI to fail!

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Still More Lessons Learned

• Need to manage CI implementation similar to projects—develop workplans; involve finance, procurement staff early and adhere to all ISTC procedures.

• Importance of proactive and committed institute management—without this, CIs cannot succeed.– Institute management changes lead to CI delays/revisions

• HGC not required for many CIs, but lack of HGC can lead to delays/problems.

• Easier to implement CIs at sites with easy access.• How to monitor success after CI completion?

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Advanced Matchmaking (AMM): What Is It?

• Traditional matchmaking often focuses on identifying a good “match” between CIS institute and international Partner, then facilitating the introduction—taking the first step.

• AMM is designed to:– 1.Bring together participants in a possible commercial deal

(ISTC beneficiary and commercial partner, customer, investor, etc.), and

– 2. Provide “hands-on” business development support to the ISTC beneficiary until the deal is reached.

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AMM Support

• Support can include:– Travel to meet potential partners, attend conferences and

trade fairs– Business and legal consulting support– Support in preparing targeted business-attractive

presentations– Help developing mini-business plans, limited market surveys,

business models, etc. • No grants or equipment provided to scientists, no site

access, no host government concurrence required.

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Pre-Commercialization Support

• Modest support that strengthens the business case and business capabilities of ISTC beneficiary institutes.

• Ex. Market research, biz planning, biz/legal consulting, travel support for customer search, training, etc.

• No scientist grants or equipment provided, no site access required.

• Therefore, no host govt. concurrence is required.• Services range from very small ($1-2K for travel) to rare

cases of up to $100K (w/legal consulting and several-stage biz planning and development work.)

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IPR Asset Inventory and Analysis (IPRA)

• By Russian law, all state-owned research institutes must perform an IPR asset inventory.

• Many institutes unclear how to do this.• ISTC can help.

• IPRA is a key input to development of commercialization priorities and an institute sustainability plan.

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Goals of IPRA

• Assist ISTC beneficiaries to address the following:– Which IPR is most valuable, should it be protected and how?– Does institute have all IPR needed for success (incl.

background & foreground, an IPR “portfolio”)?– What legal/contractual limitations may hinder success?– How to develop a sustainability strategy that helps the

institute prioritize its human and asset capital to exploit most valuable IPR for maximum return?

– How to develop expertise and procedures to empower institutes to perform their own IPR asset inventories?

• Provide coaching and training so institutes can develop their own IPR asset inventory processes and expertise

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Integration w/other ISTC Activities

• IPRA can find and develop potentially commercializable projects & business models for follow up through:

• Regular or Partner projects• Advanced Matchmaking• Commercialization Initiatives or other commercial deals• Patent Support Program• Technology Promotion Program

• ISTC preparing to run a test case of this new service at three selected institutes.

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Contact Information for Sustainability Programs at ISTC

• Deputy Executive Director for Partnering & Sustainability Laura Schmidt Williams– Telephone 8-495-982-3111– Email Williams@istc.ru

• Competency Building Program Manager Mikhail Korotkov– Telephone 8-495-982-3234– Email Korotkov@istc.ru

• ComSP Group Manager Tim Murray– Telephone 8-495-982-3163– Email Murray@istc.ru