Wednesday, August 12, 2015

UNICORN HUNTERS: NEW JOB DESCRIPTION FOR VCs?



The unicorns are coming. Everything about startups and the venture capital industry has become about startups valued at $1 billion or more – even for companies that may not generate close to any revenue at all.

Those in my industry, “VCs”, know that unicorns are rare. Yet, like the Holy Grail, everyone is in hot pursuit of it. Arguably, VCs refer to these companies as unicorns because  they are rare (although table below suggests that they are not as rare as the actual four legged unicorns).

Why a unicorn and not a Pegasus? In my limited knowledge of mystical creatures, Pegasus is not only a god but a much rarer and in my opinion far cooler. It has wings and can fly! I am still not sure what a unicorn does except possibly having the ability to impale its rider.

But, what really defines the success of a VC?





1. ARE VCs RIGHT TO CHASE UNICORNS?

I have a few issues with VC industry’s obsession with unicorns. Unicorns, as VCs understand them, mostly exist among companies that disrupt the market place (such Uber, Airbnb and the like) but with few notable exceptions do not get their market traction from innovative new technologies. Second, I am concerned about these huge valuations that prompts other VCs to throw money at the next unicorn thus creating a considerable bubble. It is never good for the market when a bubble bursts. Third, a unicorn reflects the vision and investment strategy of Silicon Valley focused funds (or those with similar vision) and takes away the attention from investment activities targeting hard core technology creation. Finally, when such numbers ranging from 1 billion to 20 billion fly around, I am concerned that we are all losing sight on what is the purpose and actual success of a VC. Are we a successful VC when the company we invested in reaches these numbers or when the company goes IPO and market verifies the valuation? Not to mention how sustainable the companies eventually become while being traded in open market? Are they going to be stable and stay in business for a long time, will they show ability to change, adapt and keep innovating to survive technology and market shifts? [2]

Obviously, for a VC success is an investment in a company that reaches big valuations, especially if you are an early stage investor and manage an exit (monetize your investment) when following rounds of investments come in. It is true that a VC’s primary fiduciary responsibility is towards its investors.  But as VCs are an important clog in the machine of taking technologies to the market, we have a long term vested interest in creating value for the entrepreneurs, the society at large and other VCs.

A VCs mission should be win, win, win (W3).
  •        Win for the fund
  •        Win for the entrepreneur; and
  •        Win for society.


A VCs success should be measured not only in ROI (return on investment) but also on the cool stories they have authored with the entrepreneur. No doubt, some of the big boys in the VC industry have managed that, and we are grateful.

One particular issue I have is that we hear so much about Uber, Airbnb, Pinterest but rarely about a startup in the biotech or medical spaces – a startup focused on groundbreaking, life-changing innovations.


2. BEING A VC: INVESTING IN KNOWLEDGE vs. BUSINESS MODEL

So what do I do for a living?

I am also a VC. And, I would love to have unicorn in my barn, stable, whatever. But, I am not a unicorn hunter. It is not because I don’t believe in unicorns.

Some suggest that the geography where my fund is focused (Turkey) cannot generate a unicorn anytime soon. I don’t believe that. I refuse to believe that good ideas, nay great ideas such as Uber will only come from the Valley with few exceptions such as Skype and Xiaomi merely confirming the rule. I have had the pleasure of having early access to a great book written by Elmira Bayrasli “From the Other Side of the World: Extraordinary Entrepreneurs, Unlikely Places” (to be released on September 8th, 2015) where she proposes that new ideas are universal and next great idea is as likely to come from Pakistan and not from San Francisco. In a global world, with ever-growing access to information, funding and markets, it would be ridiculous to assume that human ingenuity, drive  and intelligence is limited to few lucky geographic areas[3].

I am not a unicorn hunter because I like to think of myself a realist. Our fund, Diffusion Capital Partners (“DCP”) is a relatively small fund (30 Million Euros). Having raised our first fund, thus we lack the war stories that veteran venture capitalists do. Actual field experience is obviously important to quickly spot the right deal, the promising technology, and the team to drive the startup.

Our focus is on early stage startups – and on those startups focused on true, groundbreaking innovations. Hence, my partners and I spend a lot of time at universities and research institutions. We are interested in individuals working on a given technology that can be commercialized.

Finally, our investment criterion is investing in pure technology that has a form of IP protection (ideally patents) where our spinouts have a competitive advantage because they have access to great technology as opposed to a strong market / user basis.  With such a mandate, even if I had access to a time machine, I still could not, even if I wanted to, go back in time and be one of the early investors of one of today’s unicorns.

Going with the equestrian theme, DCP is not looking for unicorns. Rather we are looking for a good horse and a good rider.

With regards to the horse, we are hoping to identify pure breed while still a foal (baby horse) make sure it has the required physical capacities for the purpose it is indented for. I.e. We would like to invest in an Arabian for endurance if we feel that being stout, and short is more important that being a tall and fast animal. Conversely, if feel that market needs a sprinter, we would be hoping to invest in an English horse.

We will need the rider to be qualified and have the required skills to ride the animal through the dangerous and hazard filled journey that every startup has to go through. In our world where most entrepreneur candidates tend to come from academia, finding the right rider is often harder than finding the right horse.

So what do we do? We go to universities with proven record of cutting edge research. We look at what they have, we talk with researchers in effort to ascertain their drive to take the technology to the market. We then try to identify the best business model, sometimes intervene in the patent application process, conduct a technical and market due diligence, create a road map and hope that the entrepreneur has the will to take it forward. This last bit is often about motivating the entrepreneur, add new members to the team and sometimes considerable hand holding. There is a quite bit of upstream work in what we do.

Our goal? Obviously to maximize the RoI for our investors. But we also want to create great stories. Not stories full of unicorns, griffins and knights battling dragons but stories of success, a great product that helps people that wouldn’t be in the market but for our investment, something that creates impact and motivates others to try their hand in this very difficult game that technology entrepreneurship can be, a story that we can tell our future investors and to our children a like. Basically, a story that we can be proud to claim co-author credit with out entrepreneur.

So we will stay on this realm and not cross over to tolkienesque parallel universe looking for mystical horses. You will find us, proudly, on the filed, in the stable, grooming and hauling hay.



[1] Source: Economist
[2] Read this great article by Andrew Chen: http://andrewchen.co/why-we-should-aim-to-build-a-forever-company-not-just-a-unicorn/
[3] Note that Flipkart with USD 15 billion valuation is an Indian Company and Xiaomi is a Chinese company that creates hardware. Both in top 10 unicorn list.

Friday, June 6, 2014

WHY TRAVELLING TO NEGOTIATE A DEAL MATTERS

CREATING TARGETS OF OPPORTUNITY:
WHY TRAVELLING TO NEGOTIATE A DEAL MATTERS

I have always valued face to face meetings over all other connection alternatives that the current and evolving communication technologies provide.

A very recent experience proved once again, how actually taking the time (and pay the travel costs) to meet a potential licensee at their home turf can accelerate or in fact salvage a potential deal that was stalling.

We have been engaged with a potential licensee with its base of operations in faraway lands. The initial contact had been made a little over year ago through emails. It was evident from the get go that contemplated deal was interesting to both sides and both parties were forthcoming in stating their interest in taking the matter forward.

Initial contacts and subsequent fact finding / due diligence stages took full advantages of common communication tools such as emails, skype calls, document sharing platforms. However, despite the fact  that both parties were quite sophisticated and clearly serious about communicating with each other, there were sometimes considerable time gaps in responding to inquiries and requests for further details. We started to lose the initial momentum and as matters started to lag, there was a very real risk that one party or the other may, most likely inadvertently, drop the ball.

As far as I can tell, there were three main reasons why the negotiations started to slow down. 1) The overall value of the potential deal was, while welcome and promising for both parties, was not substantial or critical; 2) For the deal to generate value, there were some contingencies to be addressed as the technology was relatively early-stage and incremental; 3) The parties had never met face to face before, this matter compounded by the fact that parties resided far apart with a substantial time difference that made scheduling conference calls difficult.

As negotiations started the drag on, the opportunity cost of the possible deal started to rise.
Two things happened, by chance to vitalize the deal. One of the parties’ agents travelled to Turkey for an independent reason but took advantage of the trip to visit us. Thus, they were able  to visit our premises and meeting people involved in the deal, including the inventor. Almost in parallel, I was invited to speak at a Conference at a country that was near to where our potential licensee was located. So I decided to leave a couple of days early, and spend some more money out of my travel budget to go and visit our potential partner.

The face to face meeting took about two hours. Very quickly, we were able to iron out all of the small details, agree upon the general terms of the collaboration, identify very specific action items and setup a couple of milestones as well as a deadline to execute a finalized contract. Thus, the deal is very much alive and a successful final closing very likely.  Obviously, before the contract is executed, the deal may still disintegrate if one or both of the parties fail to meet a milestone or a dead line. It was also within the realm of possibilities that parties, once in a face to face meeting, realized that areas of mutual benefit and synergy were in fact not present. Such an outcome, while certainly disappointing for us, would have still been beneficial as it is also important to be able to kill deal negotiations as early as possible so that neither party wastes any more time or resources.

In short, taking time (and consequently paying for travel costs, which can sometimes be substantial) to go visit your potential strategic partner is worth the effort. If nothing else, it shows your partner that you take the deal seriously and are committed to see if through. It also establishes an initial element of trust, especially important for parties who don’t have prior experience with each other. Talking over things and addressing potential questions or concerns immediately creates a platform from which you start working together. You are also able to see other party’s body language. Body language and ability to read and interpret it is important.


At the end of the day, the time and money investment that long distance travel entails, even with relatively small deals, both parties end up winners once the deal is made or abandoned for lack of mutual benefit. Thus, one should see the travel costs of doing business internationally, not just as mere costs of doing business, but  a cost of doing business well.

Tuesday, August 20, 2013

LES TURKEY FALL CONFERENCE

LES TURKEY FALL MEETING & NETWORKING COCTAILS 

 “HARNESSING IP RIGHTS THE INDUSTRY PERSPECTIVE” 


 6 SEPTEMBER 2013 @SABANCI UNIVERSITY KARAKÖY CAMPUS
 Minerva Palas, Bankalar Caddesi 2, Karaköy, 34420 İstanbul 

Overview: LES Turkey is proud to host two senior industry representatives to tackle the question of what role IPRs play in sustainable competitive advantage in the world of business and how Turkish businesses need to embrace intellectual asset management as a strategic tool. We will have the CFO of Farplas Holding, Ms. Ahu Serter talk about IP driven strategies from the Turkish perspective and Ms. Ozlem Sivrioglu, Innovation Collaboration Network Operations Leader from General Electric tackle the issue from a global multinational point of view.

About LES: LES Turkey is a member of LES International, an international association of IP, Licensing and Technology Transfer professionals with over 12.000 members across the globe and 32 National chapters. 

MoY Award: Every year LES Turkey awards one if its current members with the Member of the Year (“MoY”) award to recognize exceptional contribution to the IP & Licensing ecosystem and to LES Turkey. This year the board is recognizing Ms. Zeynep Birsel for the work she has performed as one of Turkey’s leading technology transfer professional, in particular her work in setting up and managing the ARTEV Platform, a non partisan platform promoting the role of Intellectual Asset Management within Universities. LES Turkey partnered with the platform along with several leading Turkish universities.

Program:

15:00-15:15 Welcome address: Omer Hiziroglu, CLP. President of LES Turkey
15:15- 16:00 Ms. Ahu Serter, CFO and Member of the Board of Directors, Farplas Holding Turkey
16:00-16:45 Ms. Ozlem Sivrioglu, Innovation Collaboration Network Operations Leader, GE
16:45-17:15 Q&A
17:15-17:30 Member of the Year Award: Ms. Zeynep Birsel
17:30-20:00 Networking Cocktail (Rooftop Minerva Palas)

 REGISTRATION: Space is limited: Please register at esra.bartin@inovent.com.tr

The language of this particular event is in Turkish, unfortunately no translation is available.

Tuesday, May 28, 2013

EVOLVING INTELLECTUAL PROPERTY REGIMES IN TURKEY AND UNIVERSITY INVENTIONS:


EVOLVING INTELLECTUAL PROPERTY REGIMES IN TURKEY AND UNIVERSITY INVENTIONS:
THE NEW ARTICLE 6 OF THE PATENT LAW AND ITS IMPACT ON UNIVERSITY INVENTIONS

By

Omer HIZIROGLU, CLP-General Manager Inovent Corp.
In collaboration with Iclal ARGUC, Technology Transfer Specialist, Sabanci University

When it comes to technology transfer activities Turkey is really not on the map, yet. Lately, Turkey’s dynamic economy is attracting a lot of international attention with a financial sector that is stronger than ever in a Europe that is struggling with economic crises.   Nevertheless, delays in the judicial and legislative processes, weak intellectual property protection and low R&D spending may impede the Turkish government’s ambitious target to take place among the top 10 economies in the world by the year 2023.  Recently, Turkish government has become aware that in order to build a long term sustainable growth and build its competitive edge, technology is a must .Thus, among other government driven initiatives some key measures have been taken to strengthen university research and the current laws on intellectual property. However, these initiatives while worthwhile and necessary do have some short comings and present few challenges for the technology transfer and IP professionals.  

In leading knowledge based economies, universities have been an important source of new, innovative technologies and products. While whether universities should stray from basic research and education to applied research and commercialization avenues is an ongoing debate the fact that is universities contribute a great deal to technological innovation and to new products hitting the market via their spinoff or licensing activities. Some well known examples coming out of university research[1] that changed the market range from Gatorade, CAT scan, LCDs, to your run of the mill large multinational powerhouses such as Google and Yahoo.

In 2011, US universities took the first four places of the top five among universities with the most PCT applications published, with 583 applications in total for the top four. Incidentally, the fifth university is the Korea Advanced Institute of Science and Technology with 103 applications[2].

Turkey is currently considerably behind with regards to university originated inventions being commercialized. Change, however, is on the horizon for those stakeholders with some vision and patience. Three government incentives in particular should be noted: the revision of the Decree Law 551 (“DL 551”) on patents that contains important changes regarding inventions made within universities, TUBITAK’s (The Scientific and Technological Research Council of Turkey) new grant 1513 to promote the creation of technology transfer offices (“TTO”) within universities, PROs and research or technology parks, and finally the publication of Turkey’s top innovative and entrepreneurial universities index by Ministry of Science, Industry and Technology (“MSIT”).

Currently, out of 170 or so universities in Turkey, less than a handful has a dedicated technology transfer office (“TTO”). Of those, Sabanci University is leading the pack, having being engaged in technology transfer and commercialization activities since 2005. We should also note the substantial advances made in the recent years by other universities, in particular METU (Middle East Technical University), a public university leveraging its huge academic resources and the knowhow of its academicians, coming up with very interesting inventions and the efforts of its TTO to commercialize resulting patents are to be recommended.  Bosphorus University and Ege University (EBILTEM Program) have also made substantial progress in this regard. A relatively younger university, Özyeğin University has also made an important impact in a very short time span, not so much in technology transfer space but in its focus on entrepreneurship with the launch of very successful “Startup Factory” within the university supporting early stage entrepreneurship. Those other universities with a dedicated TTO are engaged more in project management and industry liaison type of activities: trying to build a more robust industry sponsored project portfolio, often leveraging government or EU grants. While these efforts are worthwhile, technology transfer in the sense of licensing university technology to industry is almost none-existent and certainly not the priority for most university administrators or for that matter industrial partners. At the risk of oversimplifying the issue we can point to two main reasons: i) universities, for the reasons to be explained below, have no IP portfolios that can be monetized by way of licensing; and ii) industry has yet to see Turkish universities as a potentially important and viable source of core commercial technologies.

While there is no verifiable data, it is not surprising that Sabanci University is the only Turkish university, know to the authors that has licensed technologies to industrial partners that are in fact generating royalties.

This general picture is, however, grossly misleading regarding the innovative potential of Turkish universities. Indeed, while most universities are not engaged in TTO activities, there are an unknown number of patent applications filed by professors independently from their universities. One reason for this is that current DL 551 still has what is known as “professor’s privilege” in its article 41, referring to an exception to employee inventions principle that allocates the ownership rights of employee inventions to the employers, provided that such inventions were a result of the employee-employer relationship. Thus, until the new draft on the DL 551 is adopted, inventions made within universities belong to the professors and not to the university. The other reason for almost non-existent patent portfolios within universities or commercialized university originated products is that IP rights have never been a strategic consideration for most universities, especially within state universities despite considerable accumulation of knowledge and brain power that these universities can rely upon to launch a very successful technology transfer activity.
Three separate government initiatives that will impact commercialization activities within universities are elaborated more in detail below.

1)    Revisions to the Patent Law (Decree Law 551)

The new draft patent law has been in the pipe line for a long time and does indeed contain important revisions (thus cause for debate) most of which are beyond the scope of this paper. The text is currently in from of the Turkish Parliament and is expected to pass this summer.

Among the most critical changes contained in the text is the removal of the exception to employee inventions for academic inventions at the universities (the so called “Professor’s privilege”), modifying the current article 41 of the DL 551.

New article 6 in the draft text states in its pertinent part that for inventions resulting from scientific research at higher education institutions shall be subject to the provisions regarding employee inventions.

The inventor is required to submit an invention disclosure form to the university and the university has to elect in a timely manner (as specified in a separate regulation) whether to retain ownership rights on the invention. In the event the university elects to retain the rights, the university has to file for a patent protection. If the university elects not to retain ownership rights or does not file for protection within the term specified by the regulation, the invention then becomes a free invention and inventor is free to apply for a patent protection in his or her name. If, at the time inventor submits the invention disclosure form, a patent application has already been filed by the inventor, the university can ask Turkish Patent Institute to be registered as the applicant.

The university may elect not to claim ownership rights and propose to assign the application or the patent to the inventor. In such an event, university may chose to reserve a licensed right to use and exploit the invention. This license however cannot be exclusive and the university is required to pay the inventor a reasonable license fee.

The new article 6 also touches upon the potential revenues generated by the invention in the event of successful commercialization of the invention by the university. The university is required to allocate at least 1/3 of the total revenues to the inventor. What is considered “revenue” is however not defined by the lawmaker. It is also not clear whether the university take into account patent prosecution cost before determining the net revenue generated. This begs to question on what will happen if the university’s TTO elects to pursue alternative methods of revenue generation such as cross licensing or receiving equity from a startup in consideration for the license. The issue may be even more complicated in the event university chooses to monetize by litigation and to legally enforce the patent against a third party infringer. If, after what is bound to be a very expensive process, university receives a settlement or damages, should the university allocate to the inventor 1/3 of the total monies awarded or the net amount after discounting litigation costs? We can assume that some of these questions will be addressed later on as issues arise through actual practice.

A corollary issue that may challenge the TTOs is whether this article requires maximizing the potential financial returns on a patent that can often be at odds with the university’s overall strategies, policies or cultural approach, not to mention difficult to ascertain.

Unlike the current article 41 that dealt specifically with “academic staff” (professors, paid post-docs, etc -- a term defined by the Law on Higher Education, 2547, 1981) the current article 6 is not as precise and refers in determining its scope to “inventor” for inventions made within higher education institutions. While the issue may be dealt with in a separate regulation, without further qualification, one question is whether under graduate, graduate students as well as other university personnel are subject to article 6.

The Article 6 however specifies, by reference to law on Higher Education, ownership rights for research conducted under specific research agreements with public or private institutions by adjunct faculty, interns, teaching assistants and students shall be determined by an agreement between the parties, arguably the university and the institution, party to the research agreement.

A particularly disturbing paragraph in article 6 is the university’s obligation to indemnify the inventor in the event the application or the patent right “ends for whatever reason”.  First issue is why the university has to indemnify the inventor if the university is the rightful holder of property interests on the patent (as in the case of employee inventions). It is unclear whether the law maker intended, erroneously, to reserve a conditional retroactive ownership right in the inventor. The second issue that law maker has clearly not considered the extreme difficulty in evaluating early stage technologies. Arguably such an evaluation will be the basis of the indemnification and Turkish courts are presently ill equipped to handle patent valuation exercises. In the event there is mysterious formula to accurately evaluate early stage technologies that is not known to this author, the corollary question is in which national markets we will try to evaluate the potential value of the patent application? The potential value is likely to be very different in Turkey, in Europe or worldwide. What will happen if a national application is granted but the PCT application succeeds in countries A and B but fails in countries C and D? In addition, does the TTO’s mandate indirectly include implementing an international protection strategy (with the required market research and considerable in house and out-sourced costs) to maximize value? What happens if the TTO files for a national protection, unaware or ignoring foreign commercial potential, that turns into a national patent that has little or no commercial value in the national market? Did the law maker consider the fact one can modify claim structures in the application by considerably narrowing the scope of the protection in order to have an issued patent (thus avoiding the indemnification obligation) that does not provide a real useful protection on what was initially expected?

What about if the application fails due to prior art hurdles, as a result of invalidation action (costly to defend) or because of patent attorneys’ malpractice? Who bears the liability if patent attorneys drop the ball?

All in all, these two lines of the article 6 are ill considered and may create new form of “ambulance chasing” lawyers flirting with professors waiting for an opportunity to sue universities. Thus a type of patent trolls can rise trying to build a portfolio of disgruntled professors ready to pounce on unsuspecting TTOs. The end result is that universities, naturally risk averse, will be pushed to not to claim ownership of university borne technologies thus defeating the main purpose of article 6, that is to push universities to build a patent portfolio, increase their technology transfer activities, creating a functioning and sustainable TTO to contribute to knowledge dissemination, job creation and creating financial and non-financial impact in society.

2)    Publication of University IP and Innovation Index

This year, the Ministry of Science, Industry and Technology published for the first time ever an index ranking Turkish universities based on their entrepreneurial and innovative activities. Of the 170 universities in Turkey, Sabanci University has come on top of this index for this first year.

The index takes into account 20 odd factors grouped under 5 main categories. These categories are:

1.    Scientific and research capacity: This category has a weight of %20 on the overall ranking and takes into account factors such as scientific publications and citations, R&D projects that have received national or international grants and number of PhD students.

2.    IP Portfolio: This category has a weight of %15 and takes into consideration number of patents, patent applications (including utility model applications) and PCT applications.

3.    University-Industry relations and collaborative projects:  This category has a weight of %25 and takes into considerations factors such as R&D projects in the context of University-Industry collaborations, amount of grants received and number of students and professors involved in exchange programs.

4.    Entrepreneurship and innovative culture (weight of %15): This category takes into consideration undergraduate and graduate level entrepreneurship courses, whether the university has a TTO (including number of full time TTO staff) as well the number of workshops and training programs conducted outside the university on entrepreneurship, technology and innovation management.

5.    Economic impact and commercialization: This category has a weight of %25 and takes into account the number of startups in technology parks and technology development zones where professors and/or students (or recent graduates) hold equity, jobs created by these startups as well as number of licensed patents, utility models and industrial design rights by universities.

This index, while positive has a few shortcomings:

1)      With regards to IP portfolio size, the index takes into account the number of applications and registered patents (including utility models) not taking into account whether the patents were issued or the portfolio represents a commercial value. Arguably the fact that commercial value generated is not being taken into account is balanced to certain extent in the number of licenses (again numbers and not the value of the license), the index nevertheless follows the erroneous “quantity has a quality of its own” approach motivating universities to patent even the most frivolous inventions.

2)      While this index does not presume to quantify the best academic institutions in Turkey, based on public perception it does present a strong and persuasive tool for universities to market themselves to attract the best students. Competing for the best students is, in itself, not wrong but the fairness and the accuracy of these metrics may be misleading.

3)      Universities may, in trying to acquire a larger patent portfolio start pressing academicians for a greater number of invention disclosures, the same way the academicians often find themselves pressured to publish scientific articles (at the very basic level these two requirements, if not well managed by a TTO may be mutually exclusive). It is also important that senior university administrators understand that an increased number of invention disclosures is often the result of an increased research budget. Expecting a larger number of disclosures without creating the research means to do so will also lead to, what at best can be described as, useless patents. In addition, the pressure to file invention disclosures will be felt more by academicians in engineering departments as opposed to faculty in the social sciences. The pressure will also felt differently by scientists focused on basic and theoretical sciences. Finally, universities who are strong on social sciences will have a harder time to aim for higher ranks within the index.

4)      Finally, while important one can question whether patents on their own are a valid indicator of scientific output or innovative capacity.[3]

3. Government Funding for Technology Transfer Offices

This year TUBITAK has announced a comprehensive and substantial grant program to support universities in setting up technology transfer activities (1513 grants).  Only the universities ranking in the top 50 of the innovation and entrepreneurship index (described above) were eligible for the grant. From those eligible, only 10 universities received the grant this year. The grant is substantial: 1 million Turkish Liras (about USD 650.000) per year for 5 years with an option to extend for another 5 years at TUBITAK’s election.

The grant is anchored around 5 modules:

1)      Awareness building activities on IP rights, technology transfer, grant management, etc.

2)      Building infrastructure to manage grant programs.

3)      Project creation activities and management (sponsored research and industrial liaisons in the context of industry – university collaboration).

4)      Technology transfer office activities, licensing and IP rights/portfolio management.

5)      Entrepreneurship and startup creation.

This grant call will be renewed every year, thus more and more universities will have an incentive to set up their own TTOs. Note that, of the five modules for which grant can be sought, only two are directly related to a TTO functions.

One very positive mid-term impact of the grant is to put, the often ignored IP rights and technology transfer activities on the map for senior university administrators.

Few parting comments however; technology transfer requires professionals with a very specific skill set and such professionals are still very few in Turkey. University leaders and stake holders also have to manage their expectations with regards to expected impact of successful TTOs.  I believe two facts can be taken as given: i) building a successful TTO takes a long time and TTO activities depend a large deal on the internal and external ecosystem (i.e.: availability of risk/angel capital, industrial partners willingness to engage universities, etc), ii) a TTO that is under pressure to show profits is likely to be very unsuccessful, thus care should be taken not to benchmark Turkish TTOs performances with AUTM’s heavy hitters who are able to generate very large sums of licensing income.

One negative and immediate impact of this grant program was the proliferation of so-called technology transfer and IP portfolio management “experts” (often patent agent spinoffs with absolutely no experience in technology transfer) hoping to get a piece of the pie by selling their “expertise” flooding universities with their service offers. Such an opportunistic approach will only serve the cloud already not that clear IP and technology transfer ecosystem in Turkey.

In summary, Turkey has made incredible progress within the last five year regarding the importance of IP rights, role of universities in technology creation and overall awareness creation. The efforts, in particular those of the MSIT, TUBITAK and Turkish Patent Institute are worthwhile and should be encouraged. Better an increased collaboration between government actors, NGOs (such as LES), universities and private sector, including qualified service providers is still much needed. Thus to answer a child’s favorite question, “are we there yet?” my answer is not yet, but at least the journey has started.