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Funding Faculty Entrepreneurs

A School of Engineering center helps faculty develop promising ideas for the marketplace.

A beige plastic human head sits on a table in the corner of MIT’s Hatsolpoulos Microfluids Laboratory. It’s an incongruous sight in a lab devoted to swirling currents and dynamic flows, but then, innovations usually do cross boundaries. Professor Douglas Hart, SM ‘85, turns on his prototype video system, and a 3-D image of the head appears on a nearby computer monitor. He clicks on the image with a mouse, and it rotates from ear to ear. Touch the plastic head, and instantly your hand appears in the 3-D scene on-screen.

The link between fluids and faces is an innovative image correlation algorithm that Hart developed as a fluid analysis tool, but which he later adapted for a promising commercial opportunity in industrial 3-D imaging. Like many innovations by MIT faculty and their research teams, however, Hart’s work threatened to stall on its way from the lab to the market for lack of funding. “There’s no government support for this kind of instrumentation research,” Hart explains. And commercial support, his other likely option, was limited to some entertainment-industry sponsorship of a niche application in 3-D animation.

Fortunately for Hart and his team, funding for the imaging system arrived last year from a new MIT organization designed to aid engineering faculty entrepreneurs: the Deshpande Center for Technological Innovation. “The Deshpande Center is our own mini National Science Foundation, but with greater speed and flexibility,” says dean of engineering Thomas Magnanti. With a potent mix of grants and support services, the center is helping faculty develop promising ideas toward commercial success. Projects funded in the first year range across engineering’s leading edges: infotech, biotech, nanotech, complex systems, and energy. And the center’s approach to nurturing new technologies is as innovative as the technologies themselves.

Creating Fertile Ground

A $20 million gift from Jaishree and Desh Deshpande launched the center in 2002. Desh Deshpande, who is a member of the MIT Corporation, is revered in New England’s high-tech circles as a cofounder of Sycamore Networks and Cascade Communications, two of the most successful telecom startup companies ever. By funding the center, Deshpande found a way to connect his affinity for spurring technology to market with MIT’s wellspring of innovation. Deshpande hopes that the center’s support will help MIT faculty and researchers address the growing “innovation gap” by moving more technology to market.

This gap is expanding just as the market’s need for new technologies is accelerating and corporate research and development budgets are shrinking. Many universities are encouraging faculty with entrepreneurial leanings to fill the space, but it’s not easy. Unproven technologies are particularly prone to a chicken-and-egg problem when it comes to sources of financing, says Krisztina Holly ‘89, MS ‘92, the Deshpande Center’s executive director. “Prior to proof of concept, traditional sources like the National Institutes of Health or the National Science Foundation usually won’t fund technology-oriented research.” And although commercial investors could reap huge payoffs from early investments, they tend to view projects fresh from research as too risky to support.

The Deshpande Center, on the other hand, helps MIT cultivate promising ideas from engineering faculty without concern for external limitations. Twice a year the center’s steering committee, working with MIT experts and business advisors, considers proposals, evaluating their novelty, feasibility, and market potential and selecting projects to finance. During its first year, the center funded 17 of 81 proposed projects. Many of the projects came from established engineering research programs; others involved interdisciplinary collaborations between engineering faculty and those in other MIT schools.

The center awards two kinds of grants that target different stages in the research-to-market cycle. The $50,000 Ignition Grant helps the youngest projects achieve that essential proof-of-concept stage. Its funds might be used to hire a graduate student, start a lab, or create a first prototype. The $250,000 Innovation Program Grant supports researchers with projects that have established technical feasibility and allows them to hire more staff, refine and test prototypes, and finalize their market strategies. The goal is to make these technologies ready for market and eligible for conventional financing, such as venture capital, and for business partnerships negotiated through MIT’s Technology Licensing Office.

With his Innovation Program Grant, Hart founded Brontes Technologies to take his 3-D technology to market. He is thrilled and just a bit awestruck by the chance to add “faculty entrepreneur” to his MIT credentials. The company’s startup team includes Harvard Business School students and MIT research scientists, postdoctoral scholars, and engineering doctoral candidates. “If it weren’t for our grant, we’d probably be left trying to license the basic technology without fully developing it,” Hart explains. Instead, the team is relishing the opportunity to bring an exciting technology to market itself.

Three-dimensional imaging is more accurate and reliable than conventional 2-D for checking tolerances in sophisticated machine assembly or for sizing up tumors during laparoscopic medical procedures. But according to research scientist Jnos Rohly, 3-D has been considered too expensive and cumbersome for most uses. The Brontes technology-compact, flexible, and one-tenth the cost of previous solutions-is fast enough to process 3-D data at real-time video rates, which promises the first practical access to depth data for many clients.

Sustaining Support

In its first year, the Deshpande Center has built a strikingly diverse portfolio. Some projects target immediate and specific applications, while others are more fundamental and suggest farther-reaching consequences. Some recipients are already successful entrepreneurs, while others anticipate their first commercial forays. In light of such diversity, the center offers an array of support services to enhance its grants.

Commercial insight is a particularly precious resource. Take the challenge of determining a technology’s core market or application: for teams full of technical vision but short on business experience, an experienced investor’s early advice can provide sharper focus at the most opportune time. According to Stan Reiss, a partner at Waltham, MA-based venture capital firm Matrix Partners who works with the center, “A project might come in with 28 possible applications. We’ll help them focus on the top few and suggest ways to evaluate the final candidates.” Through their association with the center, venture capitalists gain earlier access to promising technologies without assuming the risks of funding research.

Mentoring by veteran faculty entrepreneurs is another center resource that helps those just starting out. Grantee Bill Freeman, PhD ‘92, describes his Ignition Grant project as “trying to get computers to see the way people see,” by recognizing objects in digital images. Freeman, who joined the MIT faculty after 15 years in industry, says he appreciates how the center’s mentoring seminars “help you find balance, developing as a functioning professor and as an entrepreneur.”

Beyond MIT, the Deshpande Center generates buzz for its grant recipients through press releases and marketing programs. After Frdo Durand received his Ignition Grant, several companies called to express their interest in his technology, which could banish washed-out backgrounds and blacked-out silhouettes from digital photos and videos. “Affiliation with MIT has always meant that the research was good,” says Durand. “The Deshpande Center award means it’s not only good, it’s practical.”

The center also encourages teams to tap MIT’s other resources for entrepreneurs. For example, the center has helped Hart’s project become a Sloan School case study, a presentation to the MIT Enterprise Forum, and a runner-up in MIT’s renowned $50K Competition.

Cultivating Serendipity

Despite all of its targeted programs, the Deshpande Center recognizes the power of spontaneous connections. Take the case of nanotech grantees Marc Baldo and Alex Slocum ‘75, SM ‘83, PhD ‘85. Slocum’s “Nanogate” technology, originally geared to molecular-scale fluid-flow control, regulates a nanometer space between two surfaces. Slocum and his collaborator Jeffrey Lang ‘75, SM ‘77, PhD ‘80, won an Innovation Program Grant to adapt the Nanogate as a tunable electronic filter for the wireless-communications market. Baldo’s Ignition Grant project to explore a new class of shape-changing molecular semiconductors, on the other hand, ran up against some nanotech fabrication challenges. Meeting shortly after their grants were awarded, the pair realized that the Nanogate technology might help Baldo study his novel material.

As an experiment in cultivating serendipity, the center created a theme-based Ignition Forum series. Holly says these periodic forums “spark faculty thinking about what’s happening out in the world.” They are also a great way to engage the entire MIT community in the center’s work. The first Ignition Forum on portable power technologies attracted a panel of experts from the U.S. Army, Motorola, Tiax (the Arthur D. Little spinoff), venture investor Rockport Capital Partners, and MIT. About 150 faculty, students, and others joined in a spirited discussion of questions like, What will the mobile employee need in 2005? How about the battlefield warrior in 2008? What technologies seem most promising? At the reception afterward, attendees remarked they’d never seen such technology and market insight combined in one brief event.

As it matures, how will the Deshpande Center gauge its effectiveness? Holly says becoming a model for other institutions is one measure of success, and several other universities have already expressed interest in learning more about the program. Faculty director Charles Cooney, SM ‘67, PhD ‘70, says he’ll consider this first Ignition Forum a success “if we see some good portable-energy proposals in the next grant round.” Deshpande acknowledges that “innovation is a deceptively subtle and time-consuming process,” but he hopes that within a few years the center will “create a flywheel effect, bringing value back into the university” through expanded engagement with investors and business partners.

Although this program to fund faculty entrepreneurship is just beginning, all of the signs point to a bountiful harvest. Magnanti says, “I’m already quite proud of the results.”

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