Business & Tech By Iris Gonzalez | 17 hours ago

Updated 8 hours ago

Capital. Laboratory facilities. Talent pipeline. Scientific collaboration. Innovation.

These elements are most commonly cited by business leadersin talking about what San Antonio needs to build a thriving technology and science ecosystem.

The Rivard Reportrecently visited the University of Texas at San Antonio to learnabout the data-driven assessment of what it takes to build a healthy STEM (science, technology, engineering, and math) ecosystem.

The UTSAInstitute for Economic Development has 10 programs that offer comprehensive resources for business and community development in the region and emphasize scale-up growth industry clusters and technology commercialization.Thenewest isthe Small Business Development Center(SBDC)Technology Commercialization Center.

Dedicated to creating a globally competitive economy in Texas, the Technology CommercializationCenterprovides technical assistance services to science and technology-based small business owners, researchers, and startup entrepreneurs looking to advance their innovations to the marketplace. Established in February 2016, the centerfocuses on aerospace and defense, biotechnology, life sciences, electronics, medical devices, petroleum refining and chemical products, energy, and computer/information technology.

Technology Commercialization Center Director Bijo Mathewand program manager J. Bruce Hughesboth recognized the need forearly support for local businesses developing STEM services or products specifically, to help them successfully commercialize their innovations.

Mathew and Hughes rely on data-driven approaches to assess the state of the tech and science ecosystems in San Antonio. They discovered that mentorship and funding at crucial stages in an entrepreneurs journey help ensure success.

The founding of science and tech businesses are different, especially startups, Mathew said. Because the tech or science proposition is speculative at its genesis, entrepreneurs must perform the due diligence to validate the science, context, competitive advantage, team competencies, market pathways, and potential valuation. The iterative and disciplined process is necessary to refine the value proposition to the commercial market and investors.

Mathew first explainedwhy many startups fail.

Many startups fail because their product or service simply isnt needed, according to CB Insights, a tech market intelligence platform.

CB Insights is a tech market intelligenceplatform that analyzes data on venture capital, startups, patents, and partnerships. Based on itscase studies, the No. 1 reason startups are unsuccessfulis entrepreneurs failureto target a market need. Tackling problems that are interesting to solve rather than those driven by customer need was cited in 42% of cases.The No. 2 reason is running out of cash to complete commercialization.

Typically startups spend lots of their scarce early resources on an idea that they have not properly vetted, Mathew said. The danger is that they run out of cash before they are able to commercialize. We need to help them understand the priority of early value proposition analysis for their innovative product or service and develop a pathway to market for that.

A crucial service Mathews center provides entrepreneurs is free, personalized counseling.The center worked withBianca Cerqueira and Lauren Cornell,co-founders ofNovoThelium, astartup biotechnology company in San Antonio that works on tissue-engineered nipples for breast reconstruction.

[Techniques for] nipple reconstructions have not been updated in over 40 years, so we wanted to provide women an updated option, Cornell said. Were still in the research and development phase. We have not yet reached the human trial phase.

Courtesy photo.

Lauren Cornell (left) and Bianca Cerqueira, co-founders of NovoThelium, are winners of $5,000 from the 2016 Womens Startup Pitch Competition hosted by Texas Womans University and the Governors Business Forum for Women.

Cornell and Cerqueira appreciated being able to share proprietary aspects of their proposed technology with a scientist like Mathew who also could advise them on commercialization.

We both have science backgrounds, but now we have a better understanding of the business aspects also, Cerqueira and Cornell agreed.

Essential to STEM entrepreneurial success is developing a product that has a readily identifiable market.

Proof of concept behind the science or technology is not enough to succeed, an entrepreneur also needs a justifiable business rationale for that tech or science proposition, Mathew said.

The commercialization centeralso helps entrepreneurs access capital at crucial stages in the commercialization process.

It is difficult to raise capital for high-risk technology or scientific propositions. The Government Accountability Office (GAO) charted the funding flows at various stages in the innovation process and found that the largest gap in available funding is between proof of concept and production.

The Government Accountability Office (GAO) found that the largest gap in available funding for innovators is in the span from proof of concept to production.

The Small Business Innovation Research (SBIR) program is a highly competitive federal program that encourages small businesses to engage in federally funded research or research and development that has the potential for commercialization.

In Phase I, startup founders explore the technical feasibility of the proposition. Founders then evaluate the commercialization potential of the innovation in Phase II. However, no SBIR funds are provided for Phase III work, when the innovation transitions from the laboratory to the marketplace.

The commercialization centerhelps entrepreneurs match their technological innovations with available funding opportunities from grant programs such as SBIR and Small Technology Transfer Research (STTR), as well as other federal, state, and local granting agencies, private foundations, and philanthropic institutions.

Mathew helped Cornell and Cerqueira with their application for the SBIR grant, which is awaitingapproval.

[With Mathews help], weve developed a series of business plans and an awareness of the product need, Cornell said.

With [the centers] institutional knowledge in submitting SBIR grants, its so helpful to have advice from someone who has done this and who is also a scientist, Cerqueira said. Since were an early company, we couldnt have afforded consulting fees, so were glad to get this help for free.

Mathew tells startup entrepreneurs to save their money for the business-related work needed for commercialization, since thats the phase where federal funding is not readily available.

By working with the SBDC, entrepreneurs can resolve the commercial and business risks early and pursue high-risk funding resources for the technical aspects of the project.A successful SBIR or STTRaward in conjunction with a vetted business model also builds the companys credibility with potential investors.

Universities are fertile testing ground for discovery, invention and new knowledge, spurring innovation needed to fuel the ecosystem. However, littleSTTR and SBIR federal funding is received for innovative research in Texas. Texas is below the national trend line for STTR and SBIR federal award funding per capita.

State Technology and Science Index

Texas is below the national trend line in federal award amounts per capita from 2010-2014.

Mathew explained there maynot be enough research-driven scientific innovation generated, or perhaps Texas maynot be sufficiently competitive in supporting tech and science businesses pursuing these awards.

To build a sustainable ecosystem, it is necessary to foster and cultivate an environment that encourages university graduates to stay in San Antonio, thereby amplifying the intellectual capital of the ecosystem, Mathew said.

He saidthat a complex and self-sustaining local ecosystem develops quickly when communities form pathways among universities, community resources, SBDCs, economic development organizations, companies and relevant stakeholders to foster tieswith start-up entrepreneurs.

Researchers who pursue their innovations locally will naturally continue to work with the community, industries, and the universities to birth innovative ideas that would attract further research and corporate dollars, jobs, incubators, and new investment opportunities for the region, Mathew said.

As the center celebrates its first year of operations, Mathew is looking to double its busy staff from twoto five. With over 25 clients mentored in just its first year, the center is off to a promising start.

Iris Gonzalez is a contributing writer covering technology, life science, and veteran affairs for the Rivard Report. A first generation Cuban American, she is also a strategic planning consultant for nonprofit and government sectors and a docent at the San Antonio Museum of Art.

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