The President's Speech

Posted on July 23, 2014 by Gerald Barnett

Here is a transcript I made of UW President Michael Young’s remarks on the opening of Fluke Hall as an incubator for UW startup companies, February 2, 2012 from video available at GeekWire. These remarks are the foundation, it appears, for the claim that President Young challenged C4C to double the number of startups. Young’s challenge is the basis for C4C’s claim to have started 35 companies in the past two fiscal years, when the public record indicates only 13 companies, and only 1 in the last fiscal year. That is, C4C has not doubled the number of startups over FY2006-08, but is running at about 75% of that pace, at double the expenditure! At least something has doubled!

Given the loss of the Hall patent and its royalty income, and the amazingly poor record of C4C’s own expenditures over the past five years–a hole of $100M that has to be filled before anything can be called a roaring success–it would appear that C4C is going to have to shed a substantial portion of its budget. Since C4C is spending north of $4M per year on patent work, that is one area to watch closely. What will C4C do? Time will tell.

I have broken President Young’s talk into paragraphs to help with reading. Otherwise, the transcript would read more like Lucky’s speech in Waiting for Godot. In one spot I cannot catch the word and transcribe what I hear plus a possible alternative in square brackets.  I include various hesitation marks–ums and ahs, mostly, but also a few repeated words. I considered whether I ought to “clean up” President Young’s diction, and decided that these marks carried tone and intention, and removing them would alter the conditions of interpretation more than would retaining them. Of course, you can watch the video (as long as it remains up) at GeekWire and hear for yourself.

President Young:

Thank-you. Speaking of forces of nature. [laughter] Um, I’m delighted to be here today. Continue reading →

Posted in Metrics, Policy, Technology Transfer | Comments Off on The President's Speech

The $100M Rain Dance

Posted on July 7, 2014 by Gerald Barnett

A basic premise of university technology transfer is that research conducted at a university produces discoveries and inventions that otherwise would not be made, patents are issued on these discoveries and inventions, and the patent position induces investors and companies to develop commercial products in reliance on the patent rights, paying royalties to the inventors (and especially to university administrators). That is, a university startup company, to be called a “university startup” or “university spin-out,” depends on research-originated findings. It is not simply any company that might happen to start in the general vicinity of a university. Those companies do start all the time, but they do not take a research finding from basic research to translate into a commercial product.

Similarly, university faculty may offer services such as publications, consulting, training, software, and reference materials. Any of these may be privatized and made to take the form of a company. That is not done all the time, and for good reason, as the public is often served best by keeping distribution neutral, free from any particular need for proprietary positions, for owners to “extract” value, such as by driving up the price or by creating false scarcity or trying to drive competing products out of the market.

Beyond these considerations, however, is the problem that efforts to privatize public services, even when appropriate, generally do not meet the basic premise of university startups–that is, taking research and building a new product.

Continue reading →

Posted in Bozonet, Metrics, Technology Transfer | Tagged , , , , , , , , , | Comments Off on The $100M Rain Dance

Faked Metrics in University of Washington “Commercialization”

Posted on July 6, 2014 by Gerald Barnett

[Updated to include a detail on the collateral damage done by UW taking over Fluke Hall. Updated also with a link to a discussion of SNUPI–rebranded WallyHome, tech acquired by Sears. Update 6/1/17 to include a discussion of IDGenomics; Update 12/21/22 Sears pulled the plug on the cloud services required by WallyHome’s leak detection product some time before November 2020. Sorry about the lost links in these older articles. The WayBack Machine does not archive all. Updated 4/16/23 IDGenomics got a $300K grant in 2021 for covid variants rapid test. Still living on federal grants, $3.4M, so far. But will it ever be more than a research front?]

The University of Washington has spread its claim to being among the top in the nation in starting companies based on its research. In its public announcements, UW claims 35 startups in the past two years. The actual number appears to be 13, with most of these paper shell companies to cover for continuing research. Despite UW’s claim to be a national leader in startup creation, UW’s self-styled Vice Provost for Commercialization is leaving just as the Hall patents have expired and the flow of royalty revenue is about to dry up. Here is some documentation to help your sense of wonder about what is going on.

The President’s Challenge

In January 2013, its Center for Commercialization unit posted on its web site an announcement of eight “new startups” in six months:

c4c-8The post contained an endorsement from UW President Michael Young, who is depicted as “challenging” C4C to increase the number of startups. A published interview quotes President Young on this challenge:

I think we can do even better. Over the next few years, our goal is to double the number of new companies spun out by the UW. We plan to create a new culture of entrepreneurship.  We will do this with public/private partnerships, creating on-campus incubator space for new companies, and more effectively putting our talented students to work on real world problems.  We’ve already taken some big steps in this direction.

The challenge was first made, apparently, at a ceremony marking the takeover of Fluke Hall by the University of Washington, turning it from a state-operated facility to support regional business seeking to partner with UW on research into a UW facility housing its own startup companies. A local blog recorded the moment in pictures. A related blog was upbeat as well. Clearly, C4C’s effort has not been flying under the radar of senior administration. Continue reading →

Posted in Bozonet, Metrics | Tagged , , , , | 2 Comments

Only 1 University of Washington Startup for FY 2014

Posted on July 4, 2014 by Gerald Barnett

We have been asking whether public universities are honestly reporting their economic development activities, and at least for the University of Washington, the answer is “no.”

The University of Washington released a list of 18 startup companies it claimed to have “launched” in Fiscal Year 14–that would be between July 1, 2013 and June 30, 2014. I previously pointed out the problem with claiming Ennaid Therapeutics. Let’s look at the rest. [I have updated my reporting to account for information that indicates a company started in FY2013 may have received a software license from UW–so perhaps it is UW-launched, but still not in FY2014.][Added some updates, July 2019.][More updates Feb 2022]

Of the companies listed, just one of the 18 can be verified to have been started in FY14:

  • NaviSonics (December 2013)

NaviSonics has a principal executive splitting time as the Chief Medical Officer of both NaviSonics and Aqueduct Neurosciences. [As of November 2018, NaviSonics “headquarters” appears to be a private residence in the woods of west Shoreline, Washington. According to Pitchbook, the company received $500k in funding in 2014 from WRF Capital and/or the W Fund. WRF Capital is a venture capital company formed to manage UW inventions and since transitioned to funding startups in the Seattle area, making an annual payment of income to UW. The W Fund is a spin off created by WRF Capital with investment funds provided by among other institutions, the University of Washington and was managed (in a strange conflict of interest that was approved by UW) by the same person managing UW’s C4C. In 2016, one or both of these organizations made a second investment of $335K. Essentially, UW-affilates have put $835K into Navisonics. The company’s website still consists of the single word “Navisonics.” As one description of the company puts it, Navisonics is a startup in “stealth” mode. Truly.][As of July 2019, there’s no internet evidence that Navisonics continues to operate but its Washington state business registration is current through December 2019. Still lists its principal office as a residence in the Shoreline woods.][As of February 2022, Washington state business registration listed as “delinquent”]

What about the rest? Continue reading →

Posted in Bozonet, Metrics, Technology Transfer | Tagged , , | 3 Comments

How is this a UW startup for FY14?

Posted on July 4, 2014 by Gerald Barnett

[See below for an update from 5/28/16 on the patent situation and how UW might be involved in Ennaid, and how that still does not make Ennaid a UW startup.]

We have been tracking down the University of Washington’s C4C unit’s claims to be a startup powerhouse. Here is a snapshot update. C4C claims it is in the top tier of startup activity, but the public information indicates that C4C is playing fast and loose with the facts and UW’s own public information officers don’t appear to care.

C4C’s latest announcement claims that C4C has started 18 companies in FY14 (July 1, 2013 to June 30, 2014). Here is the headline:

University of Washington launches record 18 start-ups in FY14; UW ranks third in nation for number of companies spinning out of a university

One of the companies listed in C4C’s announcement is Ennaid Therapeutics. According to multiple public sources, Ennaid was started in November 2012–that would be fiscal year 2013, not 2014. But wait, that’s just the start of it. Continue reading →

Posted in Bozonet, Metrics, Technology Transfer | 1 Comment

Things Get Worser at C4C–Updated

Posted on July 3, 2014 by Gerald Barnett

The University of Washington’s Center for Commercialization has just published a new list of startups for fiscal year 2014 (July 1, 2013 to June 30, 2014). I just had to take a look, so last night into the wee hours of today, I went through the 18 companies C4C champions as their new startups for FY14.

I will have to give some companies a closer look to get a better idea of what is going on, but here are some findings that are worth noting (and subject to revision as I check further):

  • Of the 18 companies, only four one appears to have been formed in FY14;
  • Six Eight of the companies started in FY13, but C4C did not report these for FY13;
  • The rest appear to have been started between 2001 and 2012 (but in FY12).

The upshot is that C4C’s FY13 list grows to 1012–still not 17, and the list is still populated with iffy companies, such as non-profits, products listed as if they were companies, companies operating out of apartments, and long-standing product distribution programs–essentially state services– repackaged as “for-profit” startups. Not “high-value, success-bound” companies arising from university research results in need of product development. Happy companies, perhaps. Good people in them, certainly. But not what was promised, or what is needed. C4C is playing the public, and the state legislature, for fools.

The downshot, so to speak, is that C4C’s activity for FY14 looks worse than FY13. While C4C reports an increase in company formation –from 17 to 18–it appears that the numbers are actually downward–from 1012 in FY13 to 4 1in FY14. Of course, given that C4C appears happy to play fast and loose with its accounting, perhaps six more companies have already started in FY14–just that C4C doesn’t know about them yet.

What is not clear, and hence the need for more digging, is the connection, if any, these companies have to UW research results or to state economic development. I will post my documentation as soon as I have the time. In the meantime, feel free to check for yourself. You might find the Bizapedia.com site helpful. Also the Wayback Machine. And whois.net.

Posted in Bozonet, Metrics, Technology Transfer | Comments Off on Things Get Worser at C4C–Updated

How University Capitalism Suppresses Business Opportunity

Posted on July 3, 2014 by Gerald Barnett

The Washington Business Alliance has just posted a discussion of the University of Washington’s Center for Commercialization. The WBA still presents C4C’s published information on startups as facts, but then offers some alternative, even contrarian, perspectives on the claims–something that no-one in the press has been willing to do, not at Xconomy or GeekWire, not at the Seattle Times, and certainly not by UW’s own press office, which has been in full rah-rah mode.

Given that the local mainstream press is unwilling or disinterested in examining the underlying fundamentals of university IP management and startup activity, it is good to see that the WBA is taking a look. Certainly there are challenges, as Egils Milbergs points out in the WBA discussion. In addition to finding funding for prototypes, and for scaling prototypes into viable commercial products, there is also the issue of whether university administrators, by demanding ownership of research intellectual property, make the search for funding more difficult, and expand the number of projects competing for early stage funding from investors.  Continue reading →

Posted in Freedom, Policy, Technology Transfer | Comments Off on How University Capitalism Suppresses Business Opportunity

4 Not 17 University of Washington Startups in FY13

Posted on July 2, 2014 by Gerald Barnett

[Update: There are only 4 FY13 companies on UW’s list for FY13–but UW’s list for FY14 adds 8 9 more, even while being wrong about 17 of the 18 companies it claims for FY14–crazy!

2nd update: The UW vice chancellor heading C4C left her position at the apparent peak of its success, with UW president Young not far behind. After these departures it was announced that C4C was fraught with problems and would be renamed and reorganized out of existence. A silly thing to do with such a successful program. No one has bothered to audit the millions in waste expenditures, the lies, the gross personal conflicts of interest, the clueless incompetence, the illegal UW investments in private equity, the violations of university policy. There have been no public retractions of false UW claims, no corrections of reports provided to the state legislature, no apologies to the public, no consequences. The present UW administration perpetuates the fraud.]

The University of Washington’s C4C unit made a big splash in the press last year with an announcement that it had started 17 companies in fiscal year 2013 (July 1, 2012 to June 30, 2013). UW’s President Young was featured in press releases and events following the announcement. Clearly, the claim was intended to promote the UW’s commercialization investments, which run to more than $100m over the five years that C4C has been in existence. UW also used its announcement to claim it had now joined elite university programs such as MIT’s, and to lobby the state legislature for more funding for research and commercialization. Here is how the Crosscut blog described it:

At a press conference attended by Congressional delegations, tech industry leaders and local luminaries like Bill Gates Sr., UW President Michael Young announced that this was the most productive year in UW’s history for forming new companies. Seventeen new companies were unveiled, more than double the average number created over the past five years.

Crosscut then profiles three companies, one of which (Nortis) is not on the published UW list of startups. In annual reports for FY 2006, 2007, and 2008, UW’s previous technology transfer program, UW TechTrans, reported 10, 11, and 9 startups, respectively. Thus, 17 companies, even if there were 17 companies, would not “more than double” the average from the program that was dismantled to create C4C, even if the claimed figure represented a big improvement over C4C’s own past performance.

C4C was envisioned to be devoted primarily to starting companies while UW TechTrans included startups as one program among others. Yet UW TechTrans appears to have outperformed C4C, and at significantly less cost. Continue reading →

Posted in Bozonet, Metrics, Policy, Technology Transfer | 1 Comment

What do you hope to gain?

Posted on June 15, 2014 by Gerald Barnett

In the comment stream to Tesla’s press release opening up its patent portfolio is this statement by “Oldtimer”:

Elon Musk, you have my unconditional respect…!!

That statement characterizes hundreds of comments. Gaining unconditional respect. It does not get much sweeter, if one is building brand identity.

A few years ago, when I was working on a project at the University of Washington’s Seattle campus, I pushed for the technology transfer office to try an experiment and release just three patents this way. These were not just random patents–they were fundamental, unlicensed after a decade, and had been cited in the patent literature many times. I argued that the response from industry would be positive and would lead to many more opportunities for engagement, research, and innovation. But UW turned up its administrative nose. So the patents sit, unlicensed, awaiting their expiration, existing only as an express offer to any available speculative monopolist and a threat to anyone who might want to use the underlying technology. Indeed, widespread use would be just the thing to attract the speculative monopolist, the troll, the antagonist of use.

Why would not the users just “take” a license? Because none of them cares for exclusivity, and none of them cares to play the role of speculative monopolist. Universities might not be patent trolls, but they are actively creating an environment in which the trolls thrive.

Isn’t it time for a change?

Posted in Technology Transfer | Comments Off on What do you hope to gain?

Tesla's Patent Move That Universities Must Also Make

Posted on June 15, 2014 by Gerald Barnett

Tesla Motors, the electric car manufacturer, has released all of its patents to its competitors. A search at the USPTO for patents and patent applications assigned to Tesla Motors returns 169 issued US patents and 231 published applications. No doubt more patent applications are filed that have not yet been published. At, say, $10K per patent, that’s on the order of $4m in expense for the patent work.

Here is the press release, “All Our Patent Are Belong To You.” In the release, Elon Musk, Tesla’s founder and CEO, makes a case for what Tesla is doing:

Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.

This statement also reflects the university research and patent situation. Continue reading →

Posted in Commons, Freedom, Metrics, Policy, Technology Transfer | Comments Off on Tesla's Patent Move That Universities Must Also Make