OC learns to do tech entrepreneurship

This week I’m attending a 2-day conference on university-industry relations at the West Coast home of the National Academies of Science and Engineering, back at my alma mater, UCI.

The event is taking place at the Arnold and Mabel Beckman Center — named using the profits from Beckman Instruments, founded in 1935 to make instruments to help grow oranges. Beckman Coulter is now a $3 billion/year company based in nearby Fullerton.

One of the sessions was about UCI’s efforts at developing a technology entrepreneurship ecosystem for Orange County, which has a population of 3.1 million but (unlike most urban counties in California) has no single dominant city.

My PhD studies at UCI overlapped UCI’s first push, with Accelerate (1989 to 1997), a SBDC that was a pale knock-off of the grandaddy of all public university tech hub programs, UCSD’s Connect. Having met Bill Otterson (the successful entrepreneur who created Connect and ran it until his death in 1999), the event planner at the head of Accelerate never had a prayer of duplicating 10% of that success.

Having been away from UCI since 2002 (except an occasional visit now and then and again), it is clear that UCI’s role in this innovation ecosystem has changed dramatically since then.

Phase II began in 2002, and was much more successful. In the Fall 2002, a new program called OCTANe was co-founded by a local executive (Dwight Decker, Chairman of Conexant) and a UCI’s vice-chancellor for fundraising (ex-MIT ILO head Tom Moebus). The program gets a couple of people from UCI, but otherwise is funded outside — from industry membership, program fees or from nonprofit grants.

Headed since March 2004 by Gary Augusta, the organization has an interesting (and perhaps unique) structure.

• OCTANe: the parent, a 501(c)6 trade association
• OCTANe Foundation for Innovation: a 501(c)3 nonprofit that focuses on educational opportunities for students and young adults
• OCTANe Capital Management: for profit entity that provides seed funding for startups (and accrues the profits from those investments).

So far, it has helped create 27 companies, mostly in IT and biomedical. While that’s a small part of the 650 VC-backed companies, it’s a pretty good track record for this new program.

UCI is the informal hub of the OCTANe model, but UCI is more directly at the center of two other initiatives, which were recounted by Dave Schetter, outgoing head of the UCI tech transfer office.

One is the role that UCI plays (like other universities) in accelerating the commercialization of its own technologies through its tech transfer office. Starting from university licensed technology, UCI helps get funding from SBIR, STRR and UC Discovery Grants. To facilitate tech transfer, it also colocates researchers and startups in industrial space at the UCI research park. The acceleration model was a complex PowerPoint animation — I hope that the JPEG below captures some of it.

Second, UCI, its TTO and its entrepreneurship center are jointly running Orange County Business Incubation Network, a group of local incubators. Two already exist — Orange Coast Medical Ventures and Tech Coast Works (IT) — and two others in biotech and aerospace are planned.

Between successful startups (like Allergan, Broadcom and Conexant) and retirees, OC has capital available for startups. One legitimate question from the floor was how to create this sort of infrastructure for tech startups without such capital — which is not a problem that California clusters really have to worry about.

What does it take to create such a system? Augusta said three things: money, leadership and a catalyst to change the culture and create cooperation across boundaries and silos.