Last week I had a very interesting meeting with QUANTION from Barcelona (http://www.quantion.com). I felt in love with the concept that the company represents. I realized that QUANTION has been able to cover a space that years ago I analyzed from a different perspective, from an approach of University – Industry relationship. I expose my reasoning here. As you know, I have worked (both at management level and academically) in the field of technology transfer from the public to the private sector. More than a dozen years ago I wrote some articles on different models of transfer offices in universities around the world. But in one of those papers we also analyzed private technology transfer companies. I then said the following about them (please, again, remember that the text was written at the beginning of the century).
We distinguish two main types of private companies that develop their work in the field of public technology transfer, according to their orientation and strategy and their business models: Supply and Demand oriented.
- Supply-oriented. Supply-oriented companies analyze the public research environment by trying to identify technologies and good business opportunities. Once these technologies are identified, those companies establish an agreement with the University and they take responsibility for transferring each technology to the market, assuming the economic cost involved in that process. Their business model is usually based on receiving part of the royalties if it is a classic license or taking equity in the company if the spin-off route is selected. Companies that have this model are BTG, RCT, MedInnova Partners, MedTech Partners and Techtran. In summary, its way of operating is the search for interesting technologies and pursuing actions in order to introduce them in the market. One example of this model is the British Technology Group (BTG). BTG has its origins in a public initiative in the United Kingdom, the National Research Development Corporation (NRDC), created in 1948 with the aim of commercializing public research. In 1975, the British government created the National Enterprise Board (NEB) to support the private sector and allocate resources to the manufacturing industry. Shortly afterwards, in 1981, both organizations, NRDC and NEB, merged and formed the British Technology Group. In 1990, BTG opened a branch in the United States, in 1992 it was privatized and in 1995 it was listed on the London Stock Exchange. BTG currently operates mainly in the United States, Japan and the United Kingdom, although it has also carried out some operations in other countries, such as Spain. In 2004, it had about 170 employees and a portfolio of 280 technologies protected by 3,800 patents. That portfolio had enabled it to formalize 200 licensing agreements and create about 30 technology-based companies. In 2004, it acquired 34 new technologies from different research centers, invested £5.4m in 9 companies and formalized 17 new patent licensing agreements. In addition, it identified 700 technologies from a selection so demanding, that after discarding half of them in a first analysis, of the remaining 350, only 34 passed into their portfolio. It is an approximate percentage of 5%.
- Demand oriented. Another group of private companies operating in the field of technology transfer are those that are oriented to the demand, that is, to the companies. Its objective is to identify the business technological needs (so-called wish lists) and, from that list of requirements, go to the public research system looking for technologies that can solve them. Companies like Competitive Technologies, Falco-Archer, UTEK Corporation and UTEK-Pax operate in this way. In short, the way they operate is to identify technological needs and search for technologies that can cover them. The business model may be different in each case: some of the companies charge for mediation services rendered, other cases are based on a percentage of the royalties of the agreement that is established between the parties and in some cases they take equity in the company that exploits the technology. Competitive Technologies, Inc (CTT), founded in 1968, is an example of this model. It has been listed on the American Stock Exchange (AMEX) since 1971. Its clients and activities are global. Based on the identification of the technological requirements of its client companies and based on both its portfolio of technologies and its extensive network of contacts in universities and other research centers, it seeks to identify and provide the final solution to the customer. Since its inception, CTT has evaluated more than 25,000 technologies and licensed more than 500 of them to about 400 organizations. However, for three consecutive years the company had losses. In any case, 2004 suggested a recovery. UTEK is also a demand-oriented company but its modus operandi is different. In a first stage, UTEK establishes a strategic agreement with a company from which it learns the business and, with it, determines its technological needs. In a second stage, it searches in the best universities of the world research groups that can develop a solution to that need. UTEK entrusts the project and finances development. It adopts, in short, the role that would have corresponded to the company with which it has allied, assuming its risks. When the technology has been developed, UTEK gives it to its partner in exchange for shares in the company. It is for this reason that only operates with listed companies.
The previous text was written in a world in which Research (pursued by universities, hospitals, public R&D centers) had to be linked to the Industry. Today (more than a dozen years after the previous text was written) we have a “new world” in which STARTUPS have been configured as the most powerful source of technology, innovation and disruption. In this world of startups, making a simile with the previous typologies, we can have:
1) Accelerators and certain consultancy companies, oriented to grow startups, as well as M&A experts, that facilitate their final acquisition process.
2) Corporate Venturing programs, oriented to corporations and their needs and to cover them through startups.
QUANTION, in our actual world, is a company that knows how to detect the needs of its customers (medium and large companies and also institutions) and find the solution in the STARTUPS. QUANTION analyzes those needs and has, in addition to its own experts, a portfolio of solutions based on disruptive startups that have been selected from all over the world. For example in fields such as virtual reality and interactive 3D, augmented reality, smart e-commerce, gamification, internet of things, geolocation, etc.
Therefore, in addition to being technology providers, QUANTION is a Corporate Venturing Program. But it is an evolution of the Corporate Venturing programs that we are developing here in our ecosystem. Put simply, I think there are two types of Corporate programs:
1) Those that contribute (to the corporations that promote them) with technology and innovation to influence their current products and also the products those corporations should have in the short or medium term. It is a very pragmatic model, very “business-oriented”.
2) Those that are an incursion in the future, which seek to identify potentially disruptive technology that will complement, replace or threaten future products of the company, or its business model. This is a model of expectations and risks, more “speculative”, surely more disordered as well.
Here in our environment, every company that develops Corporate Venturing programs tries to define its own model. Frequently, elements of each typology are mixed. But paradoxically it is more complicated to influence the short and medium term. It seems easier to develop models that do not have the pressure of immediacy (when evidently the results in these models will be more complicated to achieve).
QUANTION belongs to the first type. It is a pragmatic corporate program that provides, based on selected startups from around the world, technology and innovation for current or immediate corporate products. From another point of view, QUANTION assumes the new role that seems to correspond to the business consultants in the future: the connection between the disruption and the client companies of these consultancies. I remember a conference of the President of EVERIS, Fernando Frances, in which he affirmed that idea and justified thus the effort of Everis to construct a great database of world startups.
In conclusion: Congratulations to QUANTION for your good work and your technological leadership !!