Working out of the old Luther’s Blues building, Discovery to Product helped 17 entrepreneurs make the jump from loosely defined projects to a business. Although it was a successful approach, the program struggled without UW support.
UW-Madison’s Discovery To Product program was launched in 2013 asking the still vital question: What could be done to bring the great breakthroughs produced by the nation’s sixth largest research university to the broader public?
Historically, these advances have done everything from transform Wisconsin agriculture to produce life-saving medical and health advances. That’s the sacrosanct Wisconsin Idea of spreading the university’s best work far and wide. Such beneficence has also produced a veritable fortune in patenting and licensing revenue to fund the university.
That’s why the stakes are so high to keep UW’s research dynamo humming. It’s also why Discovery To Product program, known by the acronym D2P, was relaunched earlier this year under new leadership and a new mission in an effort to right the ship.
The refocused D2P will serve as a portal to the scores of campus business-assistance programs like the UW Law and Entrepreneurship Center and Merlin’s Mentors. A new campus-wide coordination council has been tasked with bringing user coherence to those scattered and autonomous offerings.
Not forgotten is the D2P’s original goal of advancing the bright ideas of campus students and faculty. Project leaders have hired two commercialization tutors in food sciences and and engineering to flesh out a five-week mentoring program. A publicist has been hired to spread the cheery word.
This is “D2P 2.0,” as Andrew Richards, the new director, promised last December at a gathering at the Wisconsin Institute for Discovery. “D2P did a really good job to help entrepreneurs on campus,” he said of 1.0, and then paused. “At the same time, it sort of lost its way.”
I think the stronger case is that the new Discovery To Product has lost its way. That D2P exemplifies what the campus keeps getting wrong on entrepreneurialism.
Over the past five years D2P has — at different times — been heralded, well funded, disparaged, put on ice, reconfigured and revived at a far more modest scale than originally envisioned.
Along the way D2P also became an archetype of both the university’s talent at spinning a good story (UW is flush with publicists) and of UW-style Game of Thrones palace intrigue that sometimes leaves blood on the floor.
The program was created to assist both seasoned faculty researchers and ambitious students to get their bright ideas to market. Its boosters included campus notables Paul DeLuca, spotlighted in our story on UW med school innovations, and Mark Cook, a revered ag school researcher and serial entrepreneur. D2P’s decline, in part, can be connected to DeLuca’s retirement as campus provost in 2014 and Cook’s death in 2017 at age 61. Two important D2P sentinels were gone, and the effort suffered.
“It was slow death by a thousand cuts,” recounts former D2P staffer Will Robus. He cites how budget cuts, a hiring freeze and the overt hostility of its campus overseer, Vice Chancellor for Research and Graduate Education Marsha Mailick, crippled D2P. (Mailick, now retired, declined to be interviewed for this story.)
Andrew Richards is Mailick’s former chief of staff. He chaired a 12-member campus review committee that helped depose his predecessor, John Biondi, by reporting only “modest progress” in three of D2P’s priority areas and “negligible” progress in two others.
Tech-minded observers saw it differently.
“John was a major trooper. He had great credentials. He had great intentions. But his hands were tied,” say tech veteran Allen Dines.
“John did a good job in tough circumstances. There were too little resources,” says Rock Mackie, a med school pioneer in radiation therapy.
The irony is that D2P’s biggest accomplishment — securing funding for projects to refine their commercial vision — was faulted for diverting the program from its bureaucratic mission of being a clearinghouse for campus tech programs.
“They took all the money and tools away and turned D2P into an information desk,” grumbles Biondi, who stepped down in August 2017.
Robus calls the information desk a dated approach. “It was tried by many, many organizations, and it just didn’t move the needle.” In contrast, he says D2P schooled its project teams in customer development and direct contact with potential marketplace partners.
“It was a hands-on approach,” Robus says.
D2P had a splashy debut in 2013. Newly installed as chancellor, Rebecca Blank embraced D2P as “a big step forward in our support of entrepreneurship among both faculty and students.” She described universities as “idea factories” that keep American companies competitive.
“I want to make sure that UW-Madison is on the cutting edge of entrepreneurship and technology commercialization,” Blank declared.
The university put its money where its mouth was. The campus and its patenting and licensing partner, the Wisconsin Alumni Research Foundation, each kicked in $1.6 million to cover the first three years of operating expenses.
Then, the icing on the cake: the UW System awarded the effort a $2.4 million “Igniter” grant to fund exploratory costs for the most promising faculty and student projects. Biondi, a veteran of Ohmeda medical devices in Madison and of a half-dozen startups, brought what’s called a lean startup methodology to Discovery To Product.
His team offered business plan advice, market insights, financing contacts and handholding to four cohorts of entrepreneurs who worked out of the old Luther’s Blues building on University Avenue. Seventeen jumped from a loosely defined project to a specific business, most in biotechnology and medical products.
This includes Cook’s last startup, Ab E Discovery, whose product portfolio includes an all-natural feed ingredient for cattle, swine and poultry that can replace industrial farming’s reliance on antibiotic-laced animal feed.
Key to Biondi’s approach was hammering out “technical proof of concept” and “market de-risking.” That is, did a project’s invention or discovery actually do what it claimed? And if it did, well, how exactly could it be marketed to make money? Who were the customers? Why should they buy this product?
This is not easy stuff. Half of startups flatline. Or if they survive, they create only a handful of jobs. Tech insiders have a scary phrase to capture this ugly reality. How do entrepreneurs survive “the valley of death” and stride confidently into success? Usually it comes down to securing gap financing to keep the wheels turning at make-or-break moments.
Biondi had a plan. As he tells it, D2P’s best projects were usually birthed in basic research funded by the National Science Foundation or the National Institutes of Health. Thanks to Igniter funding, D2P could help them refine their discoveries and figure out a market niche. But once these promising projects were ready to flap their wings and launch as businesses, they had to leave the campus cocoon and make money.
UW-Madison/Bryce Richter
Tech veteran John Biondi says he was replaced as the director of D2P by “a guy who’s never run a lemonade stand much less raised a penny of equity.”
Biondi’s strategy? Create a UW-focused “seed” fund to invest in these fledgling businesses so they could hire talent and energize their business concept. The plan struck a chord with the state-sponsored Wisconsin Economic Development Corp., which in fall 2015 gave preliminary approval to a $1 million grant.
A WEDC evaluator noted such programs were common all across the university world at levels up to hundreds of millions of dollars. The UW proposal for $1 million was appraised as “a modest but crucial first step” in UW catching up in technology transfer.
Indeed, UW-Madison was lagging even in the Big Ten. Six universities — Minnesota, Michigan, Indiana, Iowa, Illinois and Michigan State — already had campus-focused venture funds, according to Biondi’s research.
This is a critical issue for the Madison campus. UW’s lackluster 40th place in the Milken Institute’s 2016 overall ranking of best universities for technology transfer was driven largely by its disappointing performance in the startups category.
Just one problem: The $1 million WEDC grant required a UW match of $1 million.
Campus leaders were not enthusiastic. The usual donors — WARF, the UW Foundation, successful alums — didn’t step up even though the foundation had submitted the grant application.
Timing was bad. The campus was facing another tuition freeze. State funding was under the knife. And marketing university research is still suspect in certain quarters of campus. The rejection of the WEDC award was the second time in recent years the UW had turned its back on a commercialization grant.
“D2P did a really good job to help entrepreneurs on campus. At the same time, it sort of lost its way.” —Andrew Richards, director of “D2P 2.0”
The first was a much larger $10 million grant offered in 2012 by the Wallace H. Coulter Foundation to further medical device development at UW-Madison. Bill Checovich, a local biotech executive who ran UW’s Coulter grant program, says the university didn’t raise the required $10 million local match, and so campus investigators lost Coulter’s $10 million.
“It seemed like the perfect situation since the Coulter Foundation wanted nothing in return,” Checovich says. “I just scratch my head.”
For Biondi, the loss of the WEDC investment program signaled how D2P’s fortunes had radically shifted. He spent three-and-a-half years at the helm — he says the first 18 months were great, the last two years horrible.
It wasn’t just the hiring freeze and budget cut that hamstrung D2P. As Biondi tells it, Mailick, his boss, had worked regularly with D2P when she was interim vice chancellor, but then slammed the door when she was named to the post. Increasingly isolated, he had “maybe 30 minutes of conversation with her” in the roughly two or so years that followed.
“I no longer had a seat at the table,” he says when it came to policy.
Adding to his woes, a campus committee studying conflict of interest issues unexpectedly ruled that two veteran Wisconsin tech executives and venture capitalists — Paul Shain and Fred Robertson — should be dropped from the D2P advisory board because they might financially benefit from inside information.
The move was stupefying to Biondi because Shain and Robertson, both avid Bucky boosters, provided real-world advice based on deep business experience to D2P’s newbie entrepreneurs. Mackie says the perceived problem could easily have been resolved by making public all advisory board activities. DeLuca offers a simpler solution: Prohibit advisors from investing in D2P projects.
“Every institution that does this stuff faces conflicts of interest,” says DeLuca. “You need to work it out. Be creative. My god, what the heck was the problem here?”
Biondi’s decision to leave D2P wasn’t a surprise. He now runs a cider spirits operation, The Cider Farm, outside of Mineral Point with his wife, Deirdre Birmingham. They’re expanding, bottling hard cider and apple brandy from their orchard and will soon open a tasting room on Madison’s west side.
Biondi is incredulous that his D2P successor “is a guy who’s never run a lemonade stand much less raised a penny of equity money or ever met a payroll.” When I asked Richards, who’s worked in government all his life, about pertinent experience, he says economic development is part of his portfolio and that his insider knowledge of public institutions is a plus for running a startup program in an academic setting.
Grant Richards his point, but his charge is to get university technologies out of the academic setting. D2P’s lack of project-support money and history of — what else to call it? — bureaucratic sabotage does not inspire confidence.
In a high stakes competition, Discovery To Product is a missed opportunity.
Part IV in this series will look at WARF’s pivotal role in fostering an entrepreneurial university.
All the stories in this series on UW-Madison research can be found at isthmus.com/topics/uws-challenge/
