Innovation Begins With Listening: Leith Martin Discuss NSF I-Corps Program and Commercialization for Innovators

Speaker A: Welcome to this special series of the Commons, recorded live from the floor of the Bio International Conference in San Diego, California. At the Commons, we explore the people, ideas and places shaping our future. And over the next 11 special episodes,

Speaker B: we're turning our attention to one of

Speaker A: the most compelling bioscience growth stories in the country, that of Phoenix, Arizona. Across this series, we'll sit down with leaders from research institutions, health care systems, startups, investors, philanthropy and economic development to better understand what it takes to build a world class innovation ecosystem. Phoenix's rise has not happened by accident. It is being driven by intentional partnerships, long term investment, entrepreneurial energy, and a shared belief that breakthroughs in bioscience can create healthier communities and stronger economies. From translational research and commercialization to talent, capital and the power of place, these conversations will explore how an ecosystem comes together and what other regions can learn from this journey. Thanks for joining us for these special episodes. I'm your host, Thomas Osha, and this is the Commons coming to you live from San Diego. Uh, this week the Commons is coming

Speaker B: to you live from the show floor at the Bio International Conference in San Diego.

Speaker A: Looking at all the different booths, the

Speaker B: technologies, the economic development opportunities that the combination of research, entrepreneurial activity, corporate engagement and community inclusion all bring. And it is research heavy, but for decades, universities have invested heavily in that research excellence. But breakthrough science does not automatically become breakthrough companies. The challenge is translation, helping researchers understand whether a discovery solves a real problem, who needs it, and how it reaches the market. And that's where I Corps comes in. My guest today is Leith Martin. He is the co director of the NSF Desert Pacific Region Hub, uh, the I Corps program that services nine states, including Arizona. He actually is out of the University of Nevada, Las Vegas, and right now he's sitting across the table from me. Leith, welcome to the comments.

Speaker C: Thank you so much. Good to be here. Thanks, Tom.

Speaker B: It's good to have you. And it is often that great science fails to reach the market. And so NSF several years ago created I Corps to solve that problem. Take us a little deeper.

Speaker C: Sure. Um, about 15 years ago, the National Science foundation annually funds somewhere between eight and $10 billion a year in translational. The vast majority of that research historically ended up in an academic journal or a white paper or maybe even a patent, but seldom was commercialized. And so the idea behind I Corps was how do we take it from the lab and actually create companies with that? And so I Corps was created to specifically train faculty, grad students and researchers on commercialization skills. Specifically how to do customer discovery to determine whether or not their research is commercially viable, and can you build a company and does it solve a problem or not? Over time, research has changed and the culture of research has changed to where now that commercialization impact or broader impacts is what we call it, um, is considered when actually funding grants now as well. And so over the last 15 years, the culture of research commercialization has become a greater factor in the research they fund as well.

Speaker B: So that really means that the days of research, just for the sake of increasing the base of knowledge are giving way to really research m that improves the human condition.

Speaker C: Yeah, correct. I think that, you know, ultimately we're spending taxpayer dollars through things like National Science foundation, and the idea is that should have an impact for good on the people that actually ultimately fund it. Um, both from an opportunity, maybe economic development, for example, potentially creating jobs and other things, but also advancing science to the point where it actually creates benefit for the people that are ultimately funding those resources or providing those resources.

Speaker B: So explain the model a little in that most people think commercialization starts with the patent. Uh, you're arguing it starts quite a bit earlier. So how do you, how do you get researchers in the frame of mind to be thinking about the customer, the patient downstream, even before the patent or discovery stage?

Speaker C: That's a good question. I think, as I mentioned before, the culture of research is changing. And one of the reasons it's changing is because you fill out a federal grant today. There's a section called broader impacts, and it includes potential commercialization opportunities. As part of that broader impact, federal funding is also changing. And as a result of that, many faculty members are now thinking, what should I be working on and what can I get funded? And as a result of that, some of them are actually doing some customer discovery before they even submit the grant to have a better understanding of what the commercialization aspect of their research might be.

Speaker B: Is that something excused along seniority lines? Are you finding this is something younger faculty gravitate to rather than perhaps folks a little bit later in their career?

Speaker C: It's a good question. I think that ideally, you know, the concept of tenure, the idea behind the concept of tenure was it provided a little more academic or research freedom. Um, and because they do have tenure, maybe they have the flexibility from a time perspective to spend time on more commercialization activity. But what we're also finding is a lot of newer faculty, or actually or younger faculty are saying, I'm not exactly sure where I should spend my career researching. And so maybe commercialization is at least one of the factors they use to determine where they should focus as well. Now, the reality is, as many young faculty or faculty that aren't quite tenured yet, uh, are limited in how much time they can spend on activities that fall outside of their promotion and tenure, um program. And so while some universities have started adding things like patent or IP on the path or as one of the tools they use to determine promotion and tenure, other universities are still trying to develop that path.

Speaker B: The vast majority are still trying to develop it, aren't they?

Speaker C: That's correct.

Speaker B: Uh, who's doing it? Well, in terms of maybe a little bit more progressive and considering business activity for promotion and tenure.

Speaker C: So in terms of universities, I mean, there are no doubt some universities have adopted some. So some universities are counting one to one. For example, a patent or a patent application accounts to some level of publication. So they're actually doing some of that. There are definitely some organizations that are kind of leading the way and promoting it at other universities to try to get that to happen as well. Because federal funding is changing so rapidly, especially in the current environment, that I think that there will be more universities that will have to consider not only commercialization of the federally funding research, but also what corporate partners are going to be willing to fund research in the future as well, because they're going to have to find lots of sources of funding for research, whereas in the past, maybe a few agencies provided the vast majority.

Speaker B: What makes a scientist especially good or bad at entrepreneurship?

Speaker C: That's a good question. A lot of the faculty that we work with, it's foreign to them. Think about it. For most of the faculty, they're the world expert in whatever narrow focus that they know something about, they know more about it than anyone else in the world. And so when we expose them to entrepreneurial principles like customer discovery, one thing is consistent. Many of them are active learners. They enjoy the learning process. And when you say something or provide them with information that's foreign to them, they're interested in that. And so we find many of them are incredibly effective in doing customer discovery. It just takes some training and some effort to get them to do that. Just because they're such active learners, do

Speaker B: they come back to you with things that surprised them when they went out to do customer discovery?

Speaker C: I would say everyone that goes into it and removed the bias associated with what they think they know. They all learn something they had no idea existed. And the number of times that we call it the aha moment in I Corps. And so when they go out and they find out something, they say this was, oh, aha, uh, I didn't think about this. Right. And so that's quite common actually for many of our teens.

Speaker B: Your hub spans multiple states.

Speaker C: So we're at nine universities.

Speaker B: Okay.

Speaker C: It's basically ASU is our lead institution. University of Arizona, nau, Northern Arizona University, Boise State, the University of Idaho system, unlv University Nevada, Las Vegas, UC San Diego, San Diego State and the University of Hawaii system. Those are our nine institutions.

Speaker B: What advantages does that give you to have that kind of regional scale?

Speaker C: Well, I mean, I think that different areas have different expertise or different assets in their communities. So for example San Diego, we're at bio in San Diego. San Diego has a deep, deep history of biotech. And so we can bring faculty member across all of our universities who might be working on biotech, but in their local community maybe that's not very deep in terms of assets or resources. So we can bring them here, they can do their customer discovery here. And so having universities spread across that geography allows us to pull in assets in lots of different industries that benefit the entire ecosystem.

Speaker B: This is a question I think all universities have. How do you work towards building a culture of commercialization?

Speaker C: You know, it's a great question. Many universities are trying to sort this out. I think it's no different than developing ecosystems inside local communities. One of the biggest assets that you can have in developing ecosystem is have successes because successes beget additional successes. Because the reality is people that are faculty members at ah, asu for example, they look and see that somebody was successful in commercialization, it's benefited their career, but also benefited them financially. And then that fear of missing out drives them to try to get engaged. So it's really similar in terms of developing just ecosystems, in terms of startup activity and other things is that if you start small and steward some success, that success breeds additional success. So that's one thing that universities can do is just get some wins on the books. Um, and then that helps entice other people to engage.

Speaker B: So when I think about m, an ecosystem, multiple players right in that ecosystem, certainly investors and industry have their role to play. The inventor has their own role to play. Are there other things the university can do? Policy, incentive, conflict of interest, ip that can help if you will reduce some of the friction?

Speaker C: Well, no doubt promotion and tenure, especially for faculty is the biggest issue. Um, if you know right now, if you look at most universities, the three buckets that count towards promotion and tenure are publishing. So research. Uh, I always say if you're at a research institution, you don't have to be a great teacher, but teacher is one of those things. Um, and then the third thing is service. And no one really knows what goes in service, but just make sure you're on some committee so we can put something in service in your bucket. Right. When it comes to promotion of tenure. But if we can actually include things like invention disclosures or patent or successful commercialization or licensing opportunities in promotion and tenure, that's where the incentives are driven by faculty, no doubt. Now, in terms of other things, different universities have different ways in which they try to incentivize commercialization. Some have, you know, for example, the faculty member gets portion of the royalty associated with the license agreements and things like that. But other universities have very liberal approaches to the way that they approach this, meaning that they'll say, look, we have an entrepreneurial leave policy where you can leave for 12 months or six months and your job will be guaranteed when you return. In fact, we'll pay a portion of your salary during that time when you're working on your commercialization activity. And so anything that we can do to incentivize the faculty to step outside of the traditional pathway is a big benefit in trying to build those ecosystems. For sure.

Speaker B: You've hit on a couple that I've heard from a number of researchers that the policy at their own institution actually prevents that and disincentivizes them from really going much beyond the disclosure stage.

Speaker C: Yes. And you know, when you create those friction points, the reality is people just don't do it because it's too difficult to pull off. And another thing I think is that it has to be quite clear, the pathway in the licensing and all of those things, the more hurdles or friction you put in place, the, the less likely people are just going to do it.

Speaker B: Icor has had a number of successes over what, 10 year history or so. What do the next five years look like?

Speaker C: That's a good question. I think that just like building an ecosystem in a community. So for example, in Phoenix, the ecosystem is developing a lot, has developed a lot in the last 10 years. The reality is that as it continues to improve and the culture continues to get better and more people participate, more people know, people see success, then it breeds additional participation. And so, um, you know, over the course of the last 15ish years, and this data is a couple years old, but over the last of the course of the last 15 years, we've started through I Corps, people who participated in an I Corps program have gone on to set up thousands of companies. Those companies have gone on to raise $6 billion in follow on funding and have created, you know, thousands and tens of thousands of jobs. And so that will continue to grow and expand. And those companies that have created in the past will continue to get bigger as well. And so I think it's impact not only in terms of our universities, but also in terms of our nation, but more importantly will be, in my opinion, more globally competitive in many areas because of participation in things like I Corps,

Speaker B: all of these companies from all of these countries are thinking the patent cliff is here. By 2030 we're going to lose 200 different drugs, 70 of them, billion dollar revenue streams. And therefore the M and A activity, the supporting of these startups is now uh, an exercise in not just filling the pipeline, but ensuring your continued relevance going forward. Do you feel that is industry becoming more interested in, in the culture and the work that you do?

Speaker C: Oh, no doubt that, that what's happened over time is not only is federal funding changing, but I think there's a lot more engagement at the corporate level inside research institutions to find the next opportunities that are taking place as well. I think the reality is, is not only as tools become much more sophisticated with AI and others, I think the pipeline is going to be a lot larger on things to work on and we're going to have to find ways through things like Corps to figure out what we should be working on in terms of taking to the next step in terms of commercialization. Because I don't think actually the funnel is going to be, it's going to be fuller than ever because we're going to have a lot more tools that allow us to determine things that we could be working on. The question is what are people going to buy and what problems do they solve? And the truth is that's much more nuanced in the sense that you have to actually talk to people and figure that out. Because while AI tools can give you a lot of direction, the reality is that the underlying incentives that drive what people do or don't do in their buying decisions are often a little more emotionally connected or nuanced than things. That much it's hard to fill out with purely analytical tools.

Speaker B: I've always said that Gatorade created this myth that everything that got discovered was the next Gatorade. And so universities kind of held onto their IP like moon rocks, uh, thinking, you know, not wanting to give away the next Gatorade, which has kind of turned out to be a myth.

Speaker C: Right.

Speaker B: Are There other myths out there for today, you know, that, that, that universities and others should probably dispose of.

Speaker C: Well, so uh, I have to say that my background is not in academia. My background is purely starting companies and I got involved in academia about 10 years ago at UNLV, but my background is purely in startups. So I don't have a history uh, behind the IP protection. And so I have a very different philosophy. In my opinion, universities should develop IP and they should open the book and let anyone take whatever they want. And oh, by the way, just remember where you found it. And they probably will provide a greater return to the university by opening up the IP books and letting people use whatever they want as opposed to making it so hard to get these deals done to get them in the marketplace. In my opinion by being restrictive on the way that they put these licensing deals together, it makes it harder for follow on investment to take place. It makes it harder for actually companies to get organized in such a way because of these licensing agreements. So if uh, it were me, I would open the book and say, come get what you want, just remember where you found it. And I think over the long term it would provide more to the university than the way we do it.

Speaker B: I think we're seeing institutions that have that more enlightened view. Arizona State's one, UNLV one you mentioned, a couple of others in your consortia really are not only benefiting from the licensing of the technology or just actually benefiting from the presence of companies coming to have the conversation at all.

Speaker C: That's right. And you know there are certain universities that have expertise in certain areas where they have companies at the door saying what's happening in there? We'd like to license whatever you have. Can you show us what you have? But for the vast majority of big public research institutions, they're not a long line of people standing at the door. So more technology you get out, the more people will be standing there saying oh, we have expertise in nuclear, whatever or pharmaceutical. And those companies will engage because they see the success of their IP portfolios.

Speaker B: One last question that I'm asking everybody, what are you reading today that I might find interesting?

Speaker C: You know, I'm a bit of a geek when it comes to the disclosure stuff around UFOs, so I'm always potentially reading something about that. I think it's a fascinating time in our country and not only from a scientific advancement standpoint, but in so many different areas. I, I, I can't remember the last time that's uh, over the last 25 years where we have so much going on when it comes to AI, when it comes to research, when it comes to specifically things around all the different topics, types of companies that are being created at scale that's never existed before. So I'm always reading something that's the next.

Speaker B: That's great advice to always be looking for the next. So thank you so much. Have a great show, and thanks for spending time with the Commons.

Speaker C: Of course. Thank you so much.

Speaker A: The Commons is a production of Wexford Science and Technology, llc. Views and opinions expressed are solely those of the host and guest. To view additional material about today's episode, submit questions or story ideas, or learn more about Wexford Science and technology, please visit www.wexfordscitech.com TheCommons I'm your host, Tom Osha.

Speaker B: Thanks for listening.