An Article for the Technolink Association:
Dr. Kevin J. Scanlon and Ms. Jessica Seay-Klatt
Pasadena Angels Investment Group
Society today continues to benefit from game-changing
innovations in medicine and business through successful
partnerships involving the investment community,
government, and young entrepreneurs. These partnerships
provide the support and knowledge necessary for validating
and successfully bringing to market such innovations. This is
best exemplified by the evolution of the Internet on its
amazing 30 year journey from university and government
research tool to worldwide social and business media
network. The continued success of innovative inventions
depends largely upon business embracing young
entrepreneurs as they continue to create new ideas for
products and services. Business investment partnerships allow
communities of seasoned and knowledgeable business
veterans to not only help young entrepreneurs achieve
successful commercialization of their products and markets, but
also provide them with incubators and mentorships. This
coupling of institutional knowledge of successful
investments and capital investment with innovation is the
driving force behind capitalism and sustainable economies.
The investment community can develop a strong innovation
infrastructure that leads to commercialization, entrepreneurship,
industry creation, and job creation that all result in a thriving
economy. Universities, with their young students and
researchers, are one of the main sources of innovative ideas.
The government has helped these innovative ideas grow
by actively funding the universities for the past seventy years
in medicine and engineering.
This process has worked well in the online and digital field,
but there has been a poor conversion of funded research and
life sciences to commercialized brands because of the high
barriers for safety standards. One positive case in point is
the field of antibiotics. The early successes of treating
infectious diseases with antibiotics, lead to the expectation
that treatment of other human diseases would rapidly follow;
such as cancer, cardiovascular disease and AIDS.
Unfortunately, treating these human diseases turned out to be
biologically and pathologically more complex than expected.
Antibiotics selectively killed bacteria and were relatively
non-toxic to the patient. Conversely, selective and non-toxic
therapies for treating human diseases have been much
slower in coming to the clinic. There existed new barriers
for the innovator and therefore a need for new funding and
commercialization of these new medical ideas.
Innovative ideas create disruptive technology, which is
technology that improves a product or service in a way that the
mainstream market did not expect in its growing trajectory.
Examples of disruptive technology are the digital camera, the
photocopier, and the personal computer. Innovators of these
disruptive technologies are experts in their field who also have
an inclination and the enthusiasm to improve a product and
process.
The universities allow students and researchers to become
experts in established methods and technologies. Furthermore,
the universities cultivate young students’ enthusiasm to
innovate, even after mastery of their field. The experts can
quickly become the innovators if given the space and time of
the university because it is there where risks can be taken
and ideas can be tested, unhindered from failure. But once
innovators have success and their ideas grow-up into novel
concepts, where do they find the funds to support their ideas?
Although universities and the government have held a long
relationship of funding basic research, they have had limited
success in commercializing these ideas. One only needs to
look at the example of the Internet. The Internet came out of
the U.S. government’s Defense Advanced Research Projects
Agency (DARPA) and MIT’s Lincoln Lab, back in the 1960s.
But the notion of global interconnected networks did not reach
commercial maturity until the mid-1990s, when the Web
browser came into existence. The thirty-year research and
development period would not have been sustainable without
the enormous DARPA funding that stimulated much of the
U.S.- led innovation over the last four decades of the previous
century. This type of gestation period is simply not viable
without government funding and commitment, and without the
framework of universities and research labs being the
incubators for fundamental innovation.
The investment community can help the university and
government-funded innovators excel in commercializing
disruptive technologies in the best potential markets. Existing
businesses usually do not fund innovative and disruptive
technology because they either fail to recognize its ability to
disrupt or because it competes and interferes with the current,
sustainable technologies and products that existing customers
already demand. This allows the private and angel investors to
step in, and seek out entrepreneurs with disruptive technology.
Investors’ funding is obviously important, however, it is
actually the experience of the investment community that
allows the innovation economy to thrive. Investors have
institutional knowledge of mentoring sustainable companies,
which is what universities need. They know the flaws and
barriers in an established process of specific markets. The
investors’ institutional knowledge of the market and the
market’s barriers help an entrepreneur find the fastest and
most successful way to grow their business. This mentorship
is key for entrepreneurs in an economy that quickly and
constantly changes directions. The investment community’s
networks of business domains help entrepreneurs create and
work within new market spaces.
Incubators and accelerators are places for entrepreneurs to seek
out the necessary mentorship of the investment community.
They exist to aid entrepreneurs, who need funding and
direction in turning their innovative technology into a company
and brand. The Business Technology Center of Los Angeles
County in Altadena, California, a government run incubator
(BTC) and Idea lab in Pasadena, California, a privately run
incubator, both have a track record of 15 years in incubating
entrepreneurs. Both are examples of incubators that assist
start-ups and early stage technology companies. The Pasadena
Angels, whose offices are located in the BTC, have been
funding and mentoring entrepreneurs out of this incubator for
the past 12 years. These investments lead to natural growth for
the companies, which, for the majority of companies, means
job creation. The Pasadena Angels’ mentoring gives the
companies institutional knowledge of both the market space
and new market potential. As the entrepreneur is lead into
successful markets and funded properly, the innovation
infrastructure takes shape.
There are tremendous benefits for well-funded innovation
infrastructures in the U.S. university community. The
universities, especially the California university system, all want
this opportunity to exploit their resources for entrepreneurship
and industry creation. Government funding initially allows
universities the space and time to take risks on innovating
products and systems. The investment community, with their
institutional knowledge of funding entrepreneurs, can help
innovators turn into successful businessmen allowing new
ideas to be successfully branded. The commercialization of
disruptive technology creates new markets that break through old
industry, causing the economy to grow. With information
democratized on the Internet, there is no longer knowledge that is
unique to one group or nation. Other countries in Europe and
Asia are now able to develop at this infrastructure by copying our
model. The competition is now all on equal footing.
As we emerge from this financial crisis, we need to make
innovation a central priority. Capitalism is successful with
the collaboration of the universities, government, and
investment community. The challenge is to bring the young
entrepreneur into this innovation system. Accelerators,
incubators, and the investment community are finding
success through seeking out disruptive technology and
mentoring the enthusiastic innovators behind them. We
need to embrace the young entrepreneurs’ new
perspectives on old problems and share with them our
experienced perspectives and advice on new markets.
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The Innovation Economy
July 19, 2012
An Article for the Technolink Association:
Dr. Kevin J. Scanlon and Ms. Jessica Seay-Klatt
Pasadena Angels Investment Group
Society today continues to benefit from game-changing
innovations in medicine and business through successful
partnerships involving the investment community,
government, and young entrepreneurs. These partnerships
provide the support and knowledge necessary for validating
and successfully bringing to market such innovations. This is
best exemplified by the evolution of the Internet on its
amazing 30 year journey from university and government
research tool to worldwide social and business media
network. The continued success of innovative inventions
depends largely upon business embracing young
entrepreneurs as they continue to create new ideas for
products and services. Business investment partnerships allow
communities of seasoned and knowledgeable business
veterans to not only help young entrepreneurs achieve
successful commercialization of their products and markets, but
also provide them with incubators and mentorships. This
coupling of institutional knowledge of successful
investments and capital investment with innovation is the
driving force behind capitalism and sustainable economies.
The investment community can develop a strong innovation
infrastructure that leads to commercialization, entrepreneurship,
industry creation, and job creation that all result in a thriving
economy. Universities, with their young students and
researchers, are one of the main sources of innovative ideas.
The government has helped these innovative ideas grow
by actively funding the universities for the past seventy years
in medicine and engineering.
This process has worked well in the online and digital field,
but there has been a poor conversion of funded research and
life sciences to commercialized brands because of the high
barriers for safety standards. One positive case in point is
the field of antibiotics. The early successes of treating
infectious diseases with antibiotics, lead to the expectation
that treatment of other human diseases would rapidly follow;
such as cancer, cardiovascular disease and AIDS.
Unfortunately, treating these human diseases turned out to be
biologically and pathologically more complex than expected.
Antibiotics selectively killed bacteria and were relatively
non-toxic to the patient. Conversely, selective and non-toxic
therapies for treating human diseases have been much
slower in coming to the clinic. There existed new barriers
for the innovator and therefore a need for new funding and
commercialization of these new medical ideas.
Innovative ideas create disruptive technology, which is
technology that improves a product or service in a way that the
mainstream market did not expect in its growing trajectory.
Examples of disruptive technology are the digital camera, the
photocopier, and the personal computer. Innovators of these
disruptive technologies are experts in their field who also have
an inclination and the enthusiasm to improve a product and
process.
The universities allow students and researchers to become
experts in established methods and technologies. Furthermore,
the universities cultivate young students’ enthusiasm to
innovate, even after mastery of their field. The experts can
quickly become the innovators if given the space and time of
the university because it is there where risks can be taken
and ideas can be tested, unhindered from failure. But once
innovators have success and their ideas grow-up into novel
concepts, where do they find the funds to support their ideas?
Although universities and the government have held a long
relationship of funding basic research, they have had limited
success in commercializing these ideas. One only needs to
look at the example of the Internet. The Internet came out of
the U.S. government’s Defense Advanced Research Projects
Agency (DARPA) and MIT’s Lincoln Lab, back in the 1960s.
But the notion of global interconnected networks did not reach
commercial maturity until the mid-1990s, when the Web
browser came into existence. The thirty-year research and
development period would not have been sustainable without
the enormous DARPA funding that stimulated much of the
U.S.- led innovation over the last four decades of the previous
century. This type of gestation period is simply not viable
without government funding and commitment, and without the
framework of universities and research labs being the
incubators for fundamental innovation.
The investment community can help the university and
government-funded innovators excel in commercializing
disruptive technologies in the best potential markets. Existing
businesses usually do not fund innovative and disruptive
technology because they either fail to recognize its ability to
disrupt or because it competes and interferes with the current,
sustainable technologies and products that existing customers
already demand. This allows the private and angel investors to
step in, and seek out entrepreneurs with disruptive technology.
Investors’ funding is obviously important, however, it is
actually the experience of the investment community that
allows the innovation economy to thrive. Investors have
institutional knowledge of mentoring sustainable companies,
which is what universities need. They know the flaws and
barriers in an established process of specific markets. The
investors’ institutional knowledge of the market and the
market’s barriers help an entrepreneur find the fastest and
most successful way to grow their business. This mentorship
is key for entrepreneurs in an economy that quickly and
constantly changes directions. The investment community’s
networks of business domains help entrepreneurs create and
work within new market spaces.
Incubators and accelerators are places for entrepreneurs to seek
out the necessary mentorship of the investment community.
They exist to aid entrepreneurs, who need funding and
direction in turning their innovative technology into a company
and brand. The Business Technology Center of Los Angeles
County in Altadena, California, a government run incubator
(BTC) and Idea lab in Pasadena, California, a privately run
incubator, both have a track record of 15 years in incubating
entrepreneurs. Both are examples of incubators that assist
start-ups and early stage technology companies. The Pasadena
Angels, whose offices are located in the BTC, have been
funding and mentoring entrepreneurs out of this incubator for
the past 12 years. These investments lead to natural growth for
the companies, which, for the majority of companies, means
job creation. The Pasadena Angels’ mentoring gives the
companies institutional knowledge of both the market space
and new market potential. As the entrepreneur is lead into
successful markets and funded properly, the innovation
infrastructure takes shape.
There are tremendous benefits for well-funded innovation
infrastructures in the U.S. university community. The
universities, especially the California university system, all want
this opportunity to exploit their resources for entrepreneurship
and industry creation. Government funding initially allows
universities the space and time to take risks on innovating
products and systems. The investment community, with their
institutional knowledge of funding entrepreneurs, can help
innovators turn into successful businessmen allowing new
ideas to be successfully branded. The commercialization of
disruptive technology creates new markets that break through old
industry, causing the economy to grow. With information
democratized on the Internet, there is no longer knowledge that is
unique to one group or nation. Other countries in Europe and
Asia are now able to develop at this infrastructure by copying our
model. The competition is now all on equal footing.
As we emerge from this financial crisis, we need to make
innovation a central priority. Capitalism is successful with
the collaboration of the universities, government, and
investment community. The challenge is to bring the young
entrepreneur into this innovation system. Accelerators,
incubators, and the investment community are finding
success through seeking out disruptive technology and
mentoring the enthusiastic innovators behind them. We
need to embrace the young entrepreneurs’ new
perspectives on old problems and share with them our
experienced perspectives and advice on new markets.
For more information visit www.technolinkassoc.org
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