Friday, July 16, 2010

Tim Mulcahy Strikes Back

University of Minnesota

Research VP Responds to Criticism

[Full disclosure: Although Dr. Mulcahy and I disagree on some of the specifics, we are both in agreement on a common goal - making the U of M a better place. We have had friendly arguments and discussions and I respect his engaging with faculty who do not always share his point of view. We need a lot more of this at the U...]

From one of Thomas Lee's always insightful posts on MedCity News:

Top University of Minnesota research official
fires back at critical legislators

“Here’s what we can propose,” said Mulcahy, vice president of research at the University of Minnesota. “Perhaps the university is too risk averse in our assessment” of potential startups.

“We will make any of those technologies and potential companies that we pass on immediately available for the state to invest in,” he said. “They can put some skin in the game in proportion to their tolerance of risk. That way, we don’t lose anything. Either we fund them or they fund them.”

Um … are you serious?

“Why not? Mulcahy said. “We’re being criticized for due diligence because we’re trying to protect our investment resources and technologies, and being criticized by people who are not in the position of having to make the decision to put skin in the game. If you think we’re doing so badly, we’ll give you the direct opportunity to do it yourself.”

By “people,” Mulcahy is specifically referring to Rep. Tim Mahoney (D-St. Paul). The chairman of the House Bioscience and Workforce Development Committee recently told MedCity News that unless the university adopts a more aggressive approach to tech transfer, he will propose a bill that will privatize the school’s Office for Technology Commercialization (OTC), or recommend hiring a university president to “shake up” the office.

“They’re screening companies to death,” Mahoney said.

Mulcahy, a respected research official and a former top candidate to lead the University of Wisconsin at Madison, is not exactly a loose cannon. He is a politically astute guy who frequently works with legislators like Mahoney.

But in an hour long interview with MedCity News, which he requested, Mulcahy pulled no punches, offering a spirited, often exasperated, defense of the university. He also pushed back hard against Mahoney who says the university is too risk averse in pushing out technologies.

“I actually thought we were working on a team,” Mulcahy said. ” I joke to people: ‘Now I know what Terrell Owens teammates feel like.’ It’s disappointing. I don’t know what [Mahoney] is basing his assessments on. In many regards, he is ill informed or partially informed … Winning an election doesn’t make you an expert.”

Oh, it’s so on.

But Mahoney believes the university should move faster, a criticism rejected by Mulcahy as naive and even reckless.

“That’s easy for someone who doesn’t have to put any skin in the game,” Mulcahy said. “The university owns important technology we can’t afford to jeopardize by making a poor decision. That requires a lot of due diligence. If we were irresponsible, we should be taken out and shot. Starting a company is not a zero sum game. It’s a costly venture. We’re holding a very real financial liability that we may never see” a return on investment.

“It’s ironic,” he continued. “We are being now criticized for bringing the professional due diligence to the operation that people criticized five years ago for lacking.”

But for all of Mulcahy’s efforts, obvious success has been elusive. The university launched only one company last year, compared to four in 2007. And in other key areas, OTC has actually lost ground over the past five years.

In 2009, OTC said revenue totaled $95.2 million, almost double than 2005. But in that same period, U.S. patent filings fell to 65 from 104, disclosures dropped to 244 from 251 and licenses dropped to 50 from 86.

Externals factors like early stage venture capital and partnerships with state government, like Ohio’s widely lauded Third Frontier Program and Wisconsin’s angel investment tax credits, also play major roles in technology transfer. And until recently, Minnesota hasn’t had much of either.

Vance Opperman, a prominent local investor and lawyer who sat on a task force that recommended changes to OTC, gives the university mixed reviews.

“Yeah, there has been some progress,” said Opperman, founder of Key Investments in Minneapolis. “The real question is have they made enough. I think expectations have been too high and OTC has not met those expectations. It depends on the culture [ informing the observer]. The university says it has been a success. But the corporate world probably doesn’t think so.”

Mulcahy said politicians tend to directly connect university research with new companies and jobs, a misguided perception he partially blames on the university. The school should do a better job at managing expectations, he said.

“If you say that the only value add is the number of companies that you started, I will tell you that you’re missing the boat,” Mulcahy said. “It’s a reasonable metric but it is not the sole metric.”

“We as an institution need to inform people, and people have to be open minded to recognize that perhaps the metric that they have glommed onto is not the whole story,” he said.

Given the recent passage of angel credits and the creation of the Minnesota Science and Technology Authority, “I would like the legislature to recognize the urgency [of action] and the possibility that something is within their grasp, and that we should seize upon it.”


This discussion is a great start.

We need an open dialogue between the members of the business community and the higher-ups at the U. What Dr. Mulcahy says above is very encouraging.

I suggest a meeting at the BigTen for burgers, beer, and a discussion between Mulcahy, Mahoney, the U's tech transfer folks and people like Vance O. Let's finally start working together? Also invite some folks from the state legislature, Dems and GOPers, for a serious and frank discussion.

More of this needs to happen and soon.


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