It takes time for tech startups to hit stride – SIRTI’s nurturing starts to pay dividends, writes Patrick Tam.

Rome wasn’t built in a day. Nor will a technology economy for the Inland Northwest come to pass quickly.

But a technology future can materialize, through companies forming, surviving and ultimately flourishing, one by one.

Patrick Tam
Special to The Spokesman-Review

http://www.spokesmanreview.com/business/story.asp?ID=17216

This insight is increasingly supported by our tracking data at SIRTI. As we recently prepared an activity report for the state, we were surprised by the amount of capital and grants won by SIRTI alumni.

We follow companies that have received SIRTI commercialization assistance, occupied space in our incubator or who have received SIRTI grant money.

Our analysis shows that they didn’t hit their stride financially until several years after startup. It’s only now that some of the first recipients of SIRTI aid have pulled in large amounts of funding.

ReliOn, formerly Avista Labs, attracted $12.5 million in venture capital over the past 12 months. GenPrime, the Spokane biotech diagnostics start-up, recently announced that it had amassed $850,000 in local venture capital. AHA, a Pullman-based company, can point to an infusion of over $2 million in the past two years, as it became a wholly-owned subsidiary of a New York-based public company called Comtech.

The three local companies all received SIRTI assistance between 1996 and 1999. It’s only in the past year or two that they have attracted these sums.

A lesson for SIRTI and for anyone else who is interested in nurturing technology companies? Keep a full pipeline of prospects and clients. Know that for every success like these three companies, there are several failures.

And be patient. It’s only now that SIRTI can report to the Office of Financial Management that add-on investments to SIRTI clients and alumni over the past two fiscal years exceeded $50 million. And this is a conservative number. Some of companies are reluctant to report new funding sources, for a variety of reasons.

Earlier, our alumni were simply not in a position to attract the kind of funds they recently have.

The virtue of patience speaks directly to the SIRTI approach. We operate in a very hands-on way for our commercialization clients. Although we help many firms over the course of a year, we help only a few over the course of several years. And it’s over that time horizon that an operation like SIRTI adds significant value to a tech startup.

Our goal for this group of clients is to be ready to assist at their different stages of development. The continued state investment in SIRTI — modest we think — allows us to keep this long-term perspective.

This assistance, generally known as commercialization help, is not that well understood throughout the U.S. or here in the Inland Northwest.

In 2003, the Economic Development Administration of the U.S. Department of Commerce published a study that offers the best general description I’ve seen of this misunderstood process. In addition, it offers a definition, in fact, a typology of technology transfer and commercialization.

Titled "Technology Transfer and Commercialization: Their Role in Economic Development," the study is available at http://www.eda.gov/Research/ResearchReports.xml. It documents national and regional trends in moving innovation into the marketplace. It also advances some best practices.

Since I’ve arrived at SIRTI, I’ve taken every opportunity to let the Inland Northwest know that SIRTI’s mission is commercialization. We don’t do research. We don’t engage in the many upstream activities of technology transfer that are the domain of universities and national labs like the Pacific Northwest National Laboratory in Richland.

But we do help create and nurture businesses. Without businesses, little of the hundreds of billions of dollars going to research will ever translate into goods and services.

So it’s been gratifying to observe a recent slew of technology initiatives from state capitols that provide for greater funding for technology transfer and commercialization. In our own state, the Washington Competitiveness Council listed tech transfer as one its five key agenda items. And the Governor’s Economic Development Commission, formed to advise the Office of Trade & Economic Development, recently created its first committee, on commercialization. SIRTI is a member of that committee. Scott Morris, CEO of Avista Utilities, chairs the full commission.

I look for good things for our state’s technology future to emerge from this committee. A key message I will carry to the group is for the state to hurry up its greater investment in commercialization so we can begin to catch up with other states.

And to be patient. Because the results won’t surface for several years.