April 25, 2017 —
[00:00:00] Scott Aughenbaugh: This is an MD5 podcast. My name is Scott Aughenbaugh and today I am sitting down with Ben Solomon, the Founder of Fed Tech, to learn about the organization, tech transfer, and few success stories.
Ben give a little background on who you are and how this organization started.
[00:15.42] Ben Solomon: I am Ben Solomon and a Founder of a program called Fed Tech that I am going to talk about today. I get to play in what I call a bunch of pretty cool sandboxes. So, I started Fed Tech, I own a little company called Hyperion Technologies that does consulting work within innovation and commercialization. I’m also an adjunct at the Smith School of Business, actually where I did my MBA. But, I’ll just talk a little bit about the origin of Fed Tech, what led us to start this.
Back in 2013, the DC iCorps node was getting spun up as a partnership between University of Maryland, George Washington University, Virginia Tech, and Johns Hopkins. And, if you know anything about iCorps, ok big National Science Foundation innovation program, started when NSF saw $7 billion dollars a year of research funding going into largely universities, but NSF really wasn't getting the commercialization out that they wanted. So, they created this program called iCorps, “Innovation Corps,” was a big hit on a national level and in 13—2013—they decided that they would stand up a regional node in the district in the mid-Atlantic states. And, within kind of the DC region we saw a pretty unique opportunity to work with not only that $7 billion dollars of research from NSF funding, but also $140 billion dollars of funding that goes to all the other labs, so we were thinking Department of Defense, were thinking Department of Energy, NASA, FFRDCs, USDA, just a rich, rich collection of labs in the mid-Atlantic states that we wanted to figure out a way. Ok, how do you access technologies from those labs to do great things from a commercial standpoint? So building ideally startups that can have a profound influence on government customers—meaning the transition technologies to applied users within government—but also have really compelling dual-use, so being able to spin-out and affect commercial markets in a big way.
[02:24.75] Scott Aughenbaugh: How did you develop the process for Fed Tech?
[02:27.21] Ben Solomon: When we first started engaging and doing our customer discovery with the federal labs, I went out and talked to folks in the region at Naval Research Lab, Army Research Lab, and asked them the question, “How do we get your technologies out to the entrepreneurial community?” We have this process that involves seven weeks of customer discovery, we do one hundred interviews, and it takes about 10-20 hours a week of time, and they said that sounds like a great program, but our people are already now working on new taxpayer funded initiatives and they don’t have time to do something related to their old inventions that is that time intensive. So we had to develop a model where we essentially bring new stakeholders into the mix.
The first group that we decided to try working with were actually MBA students from Smith School of Business in Maryland where we said ok, we are going to take inventions from the labs and pair them up with MBA students to go through this customer discovery process on behalf of the lab. So we had a value proposition when we went to our federal partners that was, "Hey we can go and do seven weeks of customer interviews on your behalf, all of the outreach and all the customer discovery that you want to do, but you don’t have time. We are going to essentially enlist really good grad students to do that on your behalf and then come back to you after the cohort has ended and give you all of the learnings and contacts that we made. This was really, really quickly adopted by the lab community where I had more demand from the labs then we knew what to do with. So really we run the program with grad students since 2013, where we essentially get grad students, figure out what they are interested in, create this marketplace, where we then pair them up with federal partners to go through this process. Since then, we've really come full circle. Now the labs are sending their inventors along with our grad students to participate in this process. And in addition to grad students we are working to recruit now entrepreneurs from just the venture ecosystem. So we work with a number of different sources to find people who are maybe not in school, but are really interested in their next gigs. So, we are doing that now as well.
[04:40.68] Scott Aughenbaugh: What are some success stories you can share with our audience?
[04:43.48] Ben Solomon: So a couple companies have come out of this process, really, were proud of. So, the first cohort that we ever ran we had a part-time MBA from University of Maryland, he was very enterprising. And we paired him up with this material coating from Naval Research Lab, an inventor there had developed basically a coating that goes on fabrics that can break down nerve gas into water. So it was designed originally to replace hazmat suits. The idea instead of wearing a hazmat suit in 110 degree heat, you could wear fabric that was coated with this material and if you got blasted with this gas, it would break down and you would be able to stay safe. So lots of investment, lots of time spent by the Navy developing this. Unfortunately, when we had started working with the technology, this had never really moved past the basic research level at NRL. So our part-time MBA went out and interviewed all of these different places. He interviewed Under Armor and said, "Could we use this to make new workout clothes that would be self-cleaning?" Wasn’t a great fit there. He interviewed manufacturers within air filtration systems and said, "Can we make new air filters with this material?" Not quite a fit. Ultimately found, a very compelling use-case, not with soldiers, not with the group that the technology was originally developed for, but with Homeland Security and first responders. So, firemen, policemen, rescue workers. Homeland Security actually had a real requirement for this technology and our student basically created a company licensed from Naval Research Lab, was able to immediately raise significant amount of seed funding—$75,000—to do prototyping which he actually did up in an Army lab up at Fort Detrick. So, I always call it a great federal love story, where you have a Naval technology being licensed, being funded by Department of Homeland Security, and prototyped in an Army lab. Pretty neat story. The team has since won some additional follow-on money and is off to the races. Started a company called Grey Matter. So that’s one neat story.
We have had another about a year and a half ago. A technology was licensed from NSWC Corona. So, a NAVSEA lab out on the West Coast—small lab doing a lot of work in metrology—but they have this one really smart, or a handful of really smart researchers that actually as a side project built out a new material. A glass foam technology that our team went and looked at a bunch of different applications. Looked at using this in athletic helmets, looked at using this in car bumpers. I remember one of their customer interviews was actually at one of those crash sites where they are testing cars against collisions. So they really immersed in the process and found an application, actually using this in underwater vehicles. AUVs—different kinds of underwater drones and what not—and have since they licensed. They formed a company, they won $100,000 grant over the summer to continue developing the technology and are doing really good things starting to get to the point of producing small batches on their own. So it’s exciting is this is actually tech transfer, working the way it supposed to. Where you develop a technology in a lab, has commercial opportunity and then you find a great group of people that are willing to get it out to real commercial users.
[08:19.93] Scott Aughenbaugh: As part of this methodology, sometimes technologies do not go forward. Why is that an important part of the process?
[08:26.72] Ben Solomon: One of the things that is unique about the process is that we encourage a methodology of going out and testing your assumptions. And what you learn from the market, we can’t predict that at the start of a cohort. So, a lot of times, teams will actually, in the seven or eight weeks, say there isn’t a compelling use case for this technology and I always say it is better to find that out after seven weeks than $7 million dollars or seven years of your life, trying to build a business around a technology that the market might not want. Most startups fail, not because their tech doesn’t work, not because they don’t raise capital, not because the team doesn’t get along, those are all some reasons, but startups traditionally fail because nobody wants to buy what they have. That sucks to be finding that out after a lot of time and money invested. So, we do have times when there isn’t a way forward. Probably, the most often, the most frequent outcome is the teams say there is a way forward, with a caveat, additional development is needed in these areas. Additional data is needed. And the really neat thing is that we have gotten very good at capturing those results and those kind of gaps in bringing those back to our lab partners. And we say, "Ok your technology may not have 100 million dollars in spin out opportunity yet, but if you invest in these areas and do these things we think there is a customer base out there." And we found that has made the program really relevant not only to tech transfer, but tech transition. So, having technologies move up the “TRL,” technology readiness level, ladder to get to end users in often cases with the DoD Labs it’s the warfighter. They actually, Labs want to producing things that are relevant to people at the pointy end of the spear. And we try to capture guidance that is useful from that perspective in addition to just creating new startup companies that are commercially relevant.
[10:25.70] Scott Aughenbaugh: You have a new spring cohort that just started. What can you tell us about it?
[10:28.82] Ben Solomon: So we just a new cohort last Tuesday um, we have 11 teams from labs going through. So this is our biggest cohort ever. Great diversity, so we have some new partners that were working with now. National Security Agency has sent us two teams, were working with MITRE, Army Research Lab, National Radio Astronomy Observatory has a lab in Charlottesville that’s funded by the NSF and a handful of other labs. Two teams from Air Force Research Lab have come online. Really really great technologies and even more importantly we have the best entrepreneur candidates that we’ve had before. We recruited our usual crop of amazing grad students, but we also have people coming from literally all over the entire country to participate in this process. We have people coming from Arizona, Minneapolis, to pair it up with technology that we vetted and to go through and see if there is an opportunity to create a new startup. So, whats going to happen over the next seven weeks, we’ve kicked off, teams have been paired with their technologies, introduced to our methodology, now work starts. So there going to go out and each team will try to get above 50 customer interactions in the 7 weeks. Ideally closer to 100, and in that process every week they pitch what they are learning in their interviews, how it affects business model, how it affects their ability to develop a go-to-market strategy. We have a teaching team and a mentor team that is really direct and really…will chew on every assumption that they make during the cohort to help them develop a true picture of a business model that at the end of the cohort if they were to choose to license and start a company they’d be in the best position.
[12:16.99] Scott Aughenbaugh: What are you looking for in future interactions with Fed Tech?
[12:20.15] Ben Solomon: So for those entrepreneurs that are listening, we want to work with you. The program is very competitive to get into, but if you have a desire to start a tech based company and you don’t necessarily have a tech idea that you think is going to do it. Come apply to our cohorts. We’ll work with you. We’ll find a technology that fits your interest and your skills. Pair you up and give you all the tools to really understand if there is a market opportunity or not. So if you’re an entrepreneur, we want you applying and contacting MD5 as soon as you can.
If you are on the federal labs side, we want to hear from you also. So if you want to have…if you have technologies that you feel like are potentially relevant to markets that you have not been able to export yet. Perfect candidate for our Fed Tech process. If you have inventors that you want to put through a process of really understanding what their users demand, big time gap usually within scientists often don’t really understand the true people that are using their technology. If you want to give that to your people we have a process for that.
And then if you’re an investor and you are interested in early stage startups. We want to hear from you also. We have a cadre after doing this for 3 and a half years now, a cadre of pretty neat tech companies that are formed up but need help getting to the next level. Whether that is capital or mentorship or access to a customers base. So we want to hear from you as well.
[13:51.71] Scott Aughenbaugh: Thank you for listening to this podcast with Ben Solomon, the Founder of Fed Tech. You can visit their website at www.fed-tech.org and for more information on MD5 please visit MD5.net.