USTAR Tech Outreach Makes the Connections

by Michael O'Malley, USTAR Marketing and Communications

As one of the most entrepreneurial states in the nation, Utah has its share of new and growing businesses with potentially market-leading technology under development. However, many up-and-coming companies that show great promise have difficulty focusing on key markets, developing the management “bench strength” to grow, connecting with the early-stage investment community, or finding growth synergies with other companies. Where can some of them turn for help? USTAR’s Technology Outreach and Innovation Program (TOIP).

In March 2006, the Utah State Legislature passed Senate Bill 75 creating the Utah Science Technology and Research Initiative (USTAR). In part, this measure invests in world-class innovation teams and facilities at the University of Utah and Utah State University.

Additionally, the legislation created a means for innovation-based businesses anywhere in the state to benefit from targeted assistance through TOIP, with the overall goal of maximizing the economic impact of new technologies in Utah. For more than a year, TOIP has provided dozens of technology innovators and entrepreneurs assistance in business plan development and market opportunity analysis. The program has helped others develop proposals to take to the venture capital community for funding. Still others have benefited from TOIP connections with established industry contacts.

“Tech Outreach directors have in-depth knowledge of the businesses and technological needs in their regions,” said Steven Roy, Central Utah TOIP Director. “We are good ‘economic matchmakers,’ connecting the people with innovative technology with the people that can use it or fund it.”

The TOIP teams located around the state lend experienced leadership, deep business understanding, and functional expertise to promising opportunities. The program is led by five directors each of whom heads an outreach center located at one of the State’s higher educational institutions. Locations include Utah State University-Uintah Basin, Weber State University, Salt Lake Community College, Utah Valley University, and Dixie College. A satellite office is also located at Southern Utah University.

USTAR supports a wide range of technology-driven innovation, and follows a defined process to determine where to deploy its free services for the greatest impact. Based on experience garnered in working with more than 130 Utah companies, TOIP directors use three primary considerations for making a decision to engage in an in-depth project with a specific company:

• 1) Technology: First of all, the proposed technology should meet an identifiable need in the marketplace. The more pain (in the marketplace) usually leads to more gain (for the growing company). Second, there should be evidence that customers will buy the technology, and this evidence may be current revenues, or some actual indication – such as a purchase order or letter – from a potential customer that sales would be forthcoming if development of the technology is completed as designed.

  Finally, there should be some intellectual property rights or other sustainable competitive advantage that would prevent others from mimicking the technology directly. Patentable technology is the “secret sauce” that can make a big difference in the long-term prospects of the business.

• 2) Market: The nature and size of the market opportunity are important factors. Identifiable markets less than $100 million in annual revenue do not generally lead to the launch of scalable businesses that create many high-paying jobs. It is hard for directors to make a case for USTAR services below this level. Ideally, the minimum market size is $1 billion – the level at which venture capital sits up and takes notice - however USTAR will work with companies that are below this threshold, if the technology at play is compelling and the market is growing significantly.

  In addition, the definition of market should be sufficiently narrow as to represent the addressable market for the technology at hand and not the market for all things surrounding the technology. (Think of the market for nails vs. the market for construction.)

• 3) Management: In the world of technology commercialization, often the scarcest resource is management experience. Sometimes highly creative researchers and inventors lack the fully-developed business background and people-management skills to drive a fast-growing organization. USTAR assesses the willingness of existing management (even if it’s a lone inventor) to acknowledge gaps and cede some control to put a strong management team in place.

USTAR directors weigh these factors to determine which opportunities hold the most promise for growing the Utah tax base through high-growth companies with high-paying jobs. TOIP acts as a resource to screen and broker new ideas, technologies and services to entrepreneurs and businesses to ensure that the ones with the highest growth potential receive the most targeted services and attention. Innovators, researchers, and entrepreneurs are encouraged to find more information at www.ustar.utah.gov.