You have a great idea for a business or perhaps you’ve conducted research which has the potential to be developed into a possibly lucrative business. But what are the steps you need to take to ensure its success? Who should you share the ideas with and whom should you collaborate with, if anyone at all? The University of Malta (UoM) has a number of structures in place that can help guide an academic or entrepreneur in the right direction. I speak to the various experts on campus who guide me through the process of how to turn a university idea into a business.

Types of ideas, research

First things first. Which ideas or types of research qualify to be turned into business ventures? Professor and Entrepreneur Russell Smith (Centre for Entrepreneurship and Business Incubation, UoM, set up in 2013) admits that while the question may sound simple, it is a complicated process. In a nutshell, he notes, ‘you have to have something to sell, that is, a product or service.’

Echoing Smith’s words, Martina Pace (Knowledge Transfer Office (KTO), UoM, set up in 2009) points out how ‘an entrepreneur needs to find opportunities where it makes sense to sell a product or service. If such an opportunity also responds to a national or social need, that’s great, but not necessary for the success of the entrepreneur.’

Unsurprisingly, money is the main problem since one has to raise the finance to get [the idea] from research stage through to commercialisation. ‘A successful venture,’ observes Smith, ‘has to have the opportunity to raise investment (selling shares to investors known as “equity finance”). It has to be something that can sell in huge quantities.’ A drug would be a good example of such an invention.

The KTO has worked with ideas like these and has a long list of successes: 42 patent applications, 20 granted patents, eight design registrations,   and 70 disclosures. It also brought to Malta Climate LaunchPad, a business idea competition, and Falling Walls Labs, another competition for the best research work, ideas, and initiatives.

Pace notes that, if the KTO can show that an idea has commercial potential through its market research, it will choose to spend time trying to promote that idea or technology to potential ‘buyers’. The only determining factor as to whether something can be successfully commercialised is finding the right ‘buyer’. In the case of university technology, this is likely to be a company that is willing to license-in and further develop the technology into an actual product.

Andy Linnas
Photo by Jean Claude Vancell

While everyone agrees there is no quick and easy recipe, Andy Linnas (TAKEOFF Business Incubator, UoM, set up in 2014) underlines some ingredients that can help. His recipe for a successful venture includes working with the right people and having the right culture within the company that will create a good working environment. TAKEOFF tries to bring together these components for technology and knowledge-based entrepreneurs by helping start-ups transform their ideas and innovations into market- and investor-ready businesses.

Starting from scratch… timelines

A point to keep in mind in the development of a university idea is that each idea, each research product is different. Indeed, Smith stresses that ‘the spectrum is vast and the process is definitely not a one size fits all solution.’ In the same way, the timeline is entirely dependent on the product.

Citing an example from his line of research—the development of a cancer treatment—the timeline is a minimum of 10 years to go from the lab to market and costs a whopping $1 billion. On the other hand, there may be other ideas that can be turned into a product rapidly and with less funding. ‘What is definitely required,’ he underlines, ‘is an approach that is specific to the opportunity.’

Building on this, Pace advises ‘spending some time at the start understanding exactly what it is that will be sold, to whom, and why buyers would desire that product/service over other options.’ There is always competition, even if there is no similar product. ‘A customer may decide to do nothing, which is an option which competes with buying your product,’ she notes. ‘Once you have this information,’ continues Pace, ‘expert advice should be sought, for example, through the TAKEOFF Business Incubator to help navigate through the IP (intellectual property) field and other areas, which can be time-consuming and complicated for the entrepreneur.’

Whose line is it anyway?

A key point in the commercialisation of a university idea is that—in Smith’s words—‘nothing belongs to the academics.’ Intellectual property always belongs to the employer, which is, in this case, the University of Malta. ‘So,’ he advises, ‘the academic must speak to the KTO to find a way of working with the University.’

Indeed, partnering with the right people is one of the vital elements in the process of developing a successful business. Smith is adamant that ‘successful businesses are run by business people, and not academics’ and he goes so far as to warn: ‘Academics, don’t do it! Stick to what you are good at,’ is his mantra: ‘world-class academics are great at being world -class academics. They need to match themselves with the right businessman.’ The mistake, he explains, is when they try to be business leaders themselves.

Linnas is of the same opinion and notes how skilled people who will deliver on all the visions, missions, and plans are vital for a successful business. He confides though, that the problem is that ‘skilled people are always involved with some interesting work. The issue is to find a way of attracting someone with the right skills to a project and keeping them engaged over a long period of time.’

Dr Ing. Anton Bartolo. Photo by Jean Claude Vancell

The same works in reverse. If an entrepreneur is looking for, or wishes to create, opportunities, then they can approach the KTO which has a number of technologies/projects which it wishes to commercialise and would be happy to license to an entrepreneur to turn them into a business.  KTO offers support in terms of licensing intellectual property rights and assisting with funding opportunities.

Of course, finding the right person is the tipping point. Linnas points out that ‘our experience has shown that the lonely entrepreneur is more likely to fail. As the growth of the business takes off, it needs multiple funders who can share the responsibility and divide the activities,’ he comments. He goes on to note how ‘partnering up is much like marriage—it takes time to find the right fit and the path to success can have quite a high “divorce” rate.’

Partnering with the right people is one of the vital elements in the process of developing a successful business.

Money matters

There is no skirting the fact that the issue of finance is a complex one. Smith is direct in explaining that there is not yet an established culture of funding spin-out companies through equity finance in Malta. ‘Loans from banks are impossible when early-stage spin-outs do not have products on the market simply because there is no revenue from which to make repayments,’ he notes.

All is not lost and Smith is keen to promote the new tax incentive scheme for investors that Minister Chris Cardona recently put forward to encourage people to invest in this kind of start-up. Of course, for this to work it has to have a very high rate of return. Smith notes that ‘financiers do not back good ideas. They back good management teams with a good idea.’

Linnas also argues that ‘having enough funds, as well as time, are vital ingredients.’ As with Smith, he explains that such funds will be available ‘once [entrepreneurs] can prove that [they] are capable of solving the problems that need solving, with the right kind of people who love what they are doing.’

Again, the KTO plays a vital role here and offers expertise in applying for local and foreign sources of funding. Funding applies for research and development, as well as for starting a business. The KTO can assist the entrepreneur in accessing these funds, thereby increasing the chances of success of the project.

Be ready to fail

Andras Havasi
Photo by Jean Claude Vancell

While thinking your project through is imperative, being ready to fail is imperative to success. Linnas notes how the perfect product does not always sell or win. ‘Figuring out the product or services is half the solution,’ he says. ‘You will need to know who to sell to and how to do it efficiently over and over again.’

While entrepreneurship is a rewarding path, all agree it is an extremely tough one. No one talks too much about the emotional roller coaster an entrepreneur goes through, reveals Linnas, adding that ‘you will get 1,000 “no”s before striking that golden “yes”. Learning to persevere is another skill that no one will teach you.’

Mum’s the word?

I’m curious to learn how much an academic with a good idea should share with others, perhaps in the hope that sharing a good idea will lead to an even better one. But Smith warns that sharing ideas in this case can destroy the business prospects for an idea or research entirely. ‘It is your duty not to talk about it,’ he asserts, adding that the idea cannot ‘be patented if it is in the public domain.’

Keep your idea secret and speak to the KTO. The KTO has defined a process by which any academic with an idea is guided in order for the feasibility of their idea to be assessed.

Don’t forget those soft skills

Minister for Education and Employment,
Hon. Evarist Bartolo during the launch of TAKEOFF
Photo by Jean Claude Vancell

‘Many starting businesses take their idea very seriously and focus on their product too much,’ says Linnas. New entrepreneurs forget to network, build relationships, spend time with their customers, spend time with their teammates building the culture they really need. In doing so, they overlook the importance of soft skills. Soft skills matter, so ‘your team’s culture will define how the team will act when the going gets tough.’ He says that today there is no room for the old-fashioned ‘employee’ mentality. ‘Everybody needs to make a Herculean effort to get a start-up business off the ground, which means working extra hours and extra hard to build value with customers, because they believe in the company’s mission and not because they need to earn a salary.’

Everybody needs to make a Herculean effort to get a start-up business off the ground, which means working extra hours and extra hard to build value with customers, because they believe in the company’s mission and not because they need to earn a salary.

Steps forward

Luckily in Malta, the University of Malta has been running a Master in Entrepreneurship for three years and will shortly have 75 graduates. ‘Wouldn’t it be great if we could match them to the academics?’ Smith asks. Smith reveals how the University is now working to create a doctorate in Entrepreneurship. This has never been done before and will take the form of a three-year programme. For the first nine months, the doctoral candidates will work with nine opportunities based on the ideas from University academics, looking at one a month. This will give them the understanding of how to assess a business opportunity. Following this they will move into the phase of working with fledgling entrepreneurs, during which time University experts will supervise them. In this way they will help to get the academics moving in the right direction to take up an idea and grow it themselves.

So how do you turn a University idea into a business?

The long and the short of it is that there is no one, clear-cut way of doing so. Depending on the idea, the business can take well over 10 years, as was the case with Prof. Smith’s development of cancer treatment, or much less, if the idea can be turned into a product more rapidly. What is definitely required is an approach that is specific to the opportunity. It is also imperative that you safeguard your idea until you have spoken to the KTO because once it makes it to the public domain, it is no longer your idea. Indeed, the KTO is a key cog in the wheel and seeking their advice is imperative if you want to turn your idea into a business. Some closing words of wisdom? Don’t be afraid to fail, and make sure you have a good management team!