Innovation generates enterprises
Chicago Innovation Exchange is building a startup “ecosystem” on the city's South Side.
John Flavin stands in the Harper Court Skydeck, overlooking Chicago’s South Side, illuminated by a spotlight. Around him, in a loose semicircle, about 100 onlookers fill the 12th-floor space with a buzzing intensity. Flavin draws them in. “Everybody huddle up,” he says. “Let’s form a scrum.”
Four UChicago research teams are at the Skydeck to receive Innovation Fund awards from the Chicago Innovation Exchange (CIE), a University initiative launched in 2013 to help business startups in a setting of multidisciplinary collaboration setting. Flavin, director of the CIE, is working the sports metaphor because after more than two decades launching successful life sciences ventures, he knows that turning innovation into a viable company is not a solo proposition—it takes a team.
“Starting a business—any business—is hard,” Flavin tells the crowd. “You need mentors and capital, space, and training.”
The CIE is building on a receptive UChicago entrepreneurial culture and a history of breakthroughs that spawn businesses. Research by UChicago biochemist Eugene Goldwasser, SB’43, PhD’50, in the 1970s led to one of the most important products of the biotechnology industry, the anemia drug erythropoietin, or Epo. Today, researchers like Prof. Maryellen L. Giger, PhD’85, a pioneer in computer-aided diagnosis, are leading the next generation of research that benefits consumers while creating new economic opportunities. And the University’s Institute for Molecular Engineering is working with Argonne National Laboratory and other partners on research with entrepreneurial potential, including new federal initiatives to accelerate energy storage technology, design novel materials, and develop digital manufacturing in Chicago.
The local fuel for the CIE also comes from long-established innovation resources at the University, namely key partners UChicagoTech—the University of Chicago’s Center for Technology Development and Ventures—and Chicago Booth's Polsky Center for Entrepreneurship and Innovation. The University has received $15 million in funding for the Polsky Center from entrepreneur Michael P. Polsky, MBA’87, the founder, president, and CEO of Invenergy LLC and a University Trustee. Chicago Booth Dean Sunil Kumar has noted that the Polsky Center will be “both a partner and an advisor to the CIE.”
In the past, UChicago Tech and the Polsky Center occupied “different corners” of the innovation landscape, says Alan Thomas, MBA’91, associate vice president and director of UChicagoTech. Thomas’ office would focus on commercializing faculty research largely in science and technology, and the Polsky Center fostered student entrepreneurship. Those goals are increasingly linked, thanks in part to the CIE.
“The Exchange gives us a place where we can locate all of our programming, so that our people can start bumping into each other,” Thomas says.
Shaping smart ideas for the market
Flavin is charged with bringing those players together to build what he calls an “ecosystem,” an innovation hub at the University of Chicago where the world-class research generated on campus and in suburban laboratories like Argonne can connect easily with business know-how and investment opportunities to move products efficiently into the marketplace. The timing could not be better.
“You have corporations that increasingly have dwindling pipelines of products and a need for accessing cutting-edge technology,” Flavin says, “and you have faculty who have the technologies but may not know if they have a place in the market.”
The Chicago Innovation Exchange provides a space in which researchers seeking early-market feedback can consult with corporate partners or venture capitalists looking to invest in something new and promising. “Faculty can explore things like, ‘Is it too expensive to manufacture?’ or ‘Would anybody want to buy it?’” Flavin adds. “All those questions can be asked at an early stage when they can still make changes or decide to do something differently.”
Helping innovators and investors find each other is just one aspect of that culture. Another is making sure an idea has enough early funding, or “proof-of-concept” dollars, to keep it from reaching a dead-end (known in the startup world as the “valley of death.”) “Great ideas can hit a dirt road on the pathway to market because no one is there to help move them forward,” Flavin says. The research team awards, drawn from the Chicago Innovation Exchange’s $20 million Innovation Fund, will help researchers avoid that pitfall, particularly in an era of diminished federal funding for scientific research.
Positive impact on the local economy
The Chicago Innovation Exchange operated first out of two upper-floor conference rooms in the University’s Harper Court building. In fall 2014, it planned to unveil an additional 34,000 square feet of space nearby, in two locations along 53rd Street—a sun-drenched conferencing area, multipurpose room, and coffee bar located above the Harper Theater, and a state-of-the-art fabrication laboratory across the street on the southwest corner. Flavin sees the new facilities as the beginnings of an innovation campus where nascent companies could set up shop, develop—and then remain in Hyde Park. “Imagine the enormous economic impact that could have,” he says. “These could be companies with a national, and even global, reach.”
That goal is not far-fetched. Students from Booth’s Edward L. Kaplan, MBA’71, New Venture Challenge, a top, national start-up program, could begin using space at the Exchange to incubate their early stage companies, says Ellen Rudnick, MBA’73, executive director of the Polsky Center. That means introducing some serious entrepreneurial talent into the ecosystem. Since its founding in 1996, the New Venture Challenge has launched more than 95 companies that have raised more than $355 million in funding and created thousands of jobs. “One of the things we bring are students who can help the researcher who’s asking, ‘How would I commercialize my idea?’” Rudnick adds.
There is clear precedent for such collaborations. In 2009, Giger, the A. N. Pritzker Professor of Radiology, teamed up with Chicago Booth MBA students to enter her latest innovation in the New Venture Challenge: a device to assist radiologists in achieving better and more efficient breast cancer diagnoses. The team became finalists and formed the company Quantitative Insights to launch their product, QuantX, an intuitive clinical interface that merges digital image analysis methods with the display of mammography, ultrasound, and MRI. An Innovation Fund award recipient, Giger’s team is now enabled to clear the final hurdles to FDA approval—to conduct a study to demonstrate that use of QuantX can yield statistically significant improvements in breast cancer MRI interpretations.
The Chicago Innovation Exchange aims to create the conditions for more success stories like Giger’s, and in doing so create a vital node in what Flavin sees as an emergent citywide innovation ecosystem. “Chicago is reawakening to an entrepreneurial mindset,” he says, pointing to incubators at Northwestern University and the University of Illinois at Chicago, as well as new downtown initiatives like 1871, a hub for digital tech startups.
It begins with fostering a startup culture, a spirit of trying, failing, and trying again. “We have to engineer an ecosystem where failure is accepted and risk-taking is celebrated,” Flavin says. “That’s what happens in places like Silicon Valley. It’s not you fail and you’re done; it’s you fail and then you come back with the next idea.”
Story originally published May 22, 2014 by UChicago News.