Great ideas don’t become innovations unless they make it to market. That normally entails finding a match between an idea and someone who knows how to exploit and sell it. It’s not as easy as it sounds. Two of my recent posts [A New Approach to Innovation & More Prizes for Innovation] have discussed how firms and foundations are offering cash rewards for ideas that solve identified challenges. Those approaches can be hit or miss. The person with a great idea may not know that someone is looking for it and those with problems may not know where to look for someone with the solution. Louis Lavelle, writing in BusinessWeek, focuses on a company, UTEK, that acts as a matchmaker for inventors, and the company is making a handsome profit doing so [“A Matchmaker for Inventors,” 26 February 2007]. Lavelle begins his piece talking about how one inventor used UTEK to get his idea to market:

“For George E. Inglett, a researcher with the Agriculture Dept., the eureka moment came in 1995. Searching for a use for oat hulls, he shoveled a couple of pounds into a high-speed centrifuge in his lab in Peoria. What emerged was a white gel with no taste or calories. Adding it to food cut the fat and calories dramatically—Inglett managed to drop 50 pounds eating the stuff—but the gel had no impact on taste or texture. Inglett had discovered nutrition’s Holy Grail: an all-natural fat substitute. Inglett’s discovery might have been for naught without an outfit called UTEK Corp., which ultimately found a small company to commercialize his product: ZTrim in Mundelein, Ill. UTEK, a technology matchmaker with an unusual business model, gives researchers like Inglett an outlet for their ideas, and it gives companies like ZTrim a way to outsource innovation by providing access to a database of more than 35,000 discoveries that would otherwise go unnoticed.”

Such matchmaking does not come cheap, which is what makes UTEK’s business model so unique. Most brokers simply collect a fee on each deal and make their money by doing a lot of deals. Finding matches for inventors and manufacturers, however, is time consuming and, therefore, the quantity of matches to be made is limited. To overcome this drawback, UTEK becomes an investor not just a broker.

“Unlike other technology-transfer companies, which license technologies they’ve acquired or charge fees to broker deals, UTEK pays the research lab for licensing rights to its discovery. It then sells those rights to the client company for shares of stock, which UTEK agrees to hold for one year. UTEK might pay $500,000 for the discovery and receive stock worth $2.5 million. A lot can happen in a year—UTEK’s stake in ZTrim, for example, ballooned to $6 million. On the other hand, in a dozen deals since the company’s inception in 1997, the client company ceased operations, and UTEK’s stake evaporated. But UTEK has had more hits than misses, including deals involving technologies for fertilizer production, pollution monitoring, even land mine detection. Since 2003 the number of tech transfer deals UTEK has brokered has quadrupled, despite robust competition, which includes 10 publicly traded tech-transfer companies.”

Universities have been hotbeds of research for years. Research is what attracts most leading academics to top notch institutions. To keep them there, universities have struggled to come up with a process that permits researchers to profit from their ideas — a process for getting ideas to market. There have been some successes, but not as many as there could have been. Lavelle reports:

“For university and government researchers struggling to license their discoveries, UTEK can make all the difference. Many universities have technology-transfer offices that are understaffed and underfunded. And many risk-averse companies are unwilling to take a flyer on an interesting idea with uncertain commercial potential. The result: Only about 30% of the 18,000 discoveries made by university and government researchers each year ever see the light of day as commercial products. North Carolina A&T State University’s experience is instructive. When a researcher there stumbled upon a way to detect microscopic cracks in an airplane fuselage, the discovery, while promising, turned out to be nearly impossible to sell. The technology-transfer office spent two years scouring North America and Europe for a buyer. Many companies wanted to see a prototype—typically a more than $200,000 investment—and others simply weren’t interested. Then UTEK showed up, with Material Technologies Inc. in tow. Material Technologies, which specializes in monitoring metal fatigue, was interested in commercializing the technology, but its intent was to check the structural integrity of bridges and highway overpasses, not planes. In August the three parties struck a deal.”

Makes you want to break out in song from Fiddler on the Roof — “matchmaker, matchmaker, make me match, find me find, catch me catch!” With R&D funding as scarce as it is, organizations need to take advantage of every possible avenue to find solutions to challenges and to turn potentially profitable ideas into real products. Companies can’t afford to let ideas lie fallow in some forgotten field of dreams. UTEK’s high risk/high potential business model might not be for everyone or for every idea, but it is a welcome addition to the innovation sector.