Aitor Moringo is executive vice president of Satlantis, the U.S. subsidiary of a 10-year-old Spanish company that makes satellite technology used to study the earth from the International Space Station. Its secret sauce is a “super resolution” algorithm that allows for non-blurry images in space. The technology has applications in other industries, like agriculture, where companies are increasingly using images to study the health of crops.
Matthew Donovan is one of Moringo’s neighbors at UF Innovate, the business accelerator at University of Florida. His company, AgIntel, sells software that allows growers to analyze the nutrients in a plant. AgIntel was relying on ground sensors and drone imagery for analysis until Donovan met Moringo at the incubator last year.
As soon as the duo connected, they began to brainstorm. What if they could use Satlantis’s satellite technology to achieve the same result, but more quickly and at lower cost? “Both of us instantly understood there was potential collaboration there,” Moringo says.
Several Million in Potential Revenue
Last year, the two companies decided to collaborate on a joint venture, signing a memorandum of understanding (MOU). Now they are getting ready to submit a funding proposal to the National Science Foundation to increase the capabilities of the system they are working on. Assuming this goes well, Moringo says the US subsidiary of SAtlantis could see “several million” dollars in revenue for 2023.
Accelerators like UF Innovate are crucial to the early-stage economy, and to innovation in the United States. It’s at places like these that new technologies can be brought to the market, including technologies that with a profound effect on people’s lives and health. One UF Innovate company, for instance, is MYOLYN, which makes therapy systems for people with neurological disorders and injuries, like multiple sclerosis or stroke.
For years, accelerators and incubators have measured success in terms of dollars – either investment returns or jobs created, even for companies creating deep technology that may take years to bring to market. Some in the field are now questioning this metric, according to Amanda Elam, a research fellow at the Diana Research Institute at Babson College. Elam is also the CEO/co-founder of Galaxy Diagnostics, a medical laboratory that offers testing solutions for flea- and tick-borne pathogens—which started in a business accelerator in Research Triangle Park, N.C.
Galaxy Diagnostics was bootstrapped, like many startups founded by women and people of color. “Some of the frustrations are that those are government goals to create jobs and build out the tax base,” Elam says. “The question is, do these incubators effectively drive innovation? Is raising or exiting the right metric? Some incubators will follow graduates after they leave the program to track those metrics. There is a question about whether those are super-accurate. We’ve grown organically for 14 years. Is that a success?
Job creation or capital raised won’t measure the social distance traveled by founders who are disadvantaged from the start, or the value of what he or she is creating for society. And accelerators themselves may change their acceptance criteria to favor startups that can deliver relatively quick results measured in dollars.
Collaboration as a Step Toward Innovation
Data around collaboration is generating interest because cultivating a peer network–one of the most powerful aspects of incubator and accelerator programs—can help to propel projects forward when cash is not available. “For those that hang in there, those can end up being enduring ties and really important personal capital,” says Elam.
Karl LaPan, director of incubation services at UF, began considering metrics like this after attending the Ecosystem Builder program at the Kauffman Foundation, which is focused, in part, on creating more inclusive entrepreneurial communities. “It had us thinking about traditional metrics that maybe less sensitive to underrepresented business owners,” he says.
At UF Innovate, 51% of founders are immigrants or from diverse backgrounds, and many don’t have ties to traditional financing networks. But LaPan could see their startups were still growing at the incubator.
“We need to start including what the industry calls ‘uncommon metrics,’” concluded LaPan.
So, in addition to tracking the percentage of diverse founders, UF Innovate began tracking formal collaboration –efforts such as research & development, co-development and joint product launches. It also tracks the number of startups led by diverse founders.
Its surveys show that currently, one-third of the tenants are collaborating, a metric that has been tracked in the last three of the accelerator’s economic impact studies, LaPan considers the collaborations a victory, given that UF Innovate occupies several large buildings, including the 100,000-square-foot The Hub, and Sid Martin Biotech, a 32,000-square-foot biotechnology incubator.
“We felt really good about how people found each other,” he says.
Underlying the collaborations that spring up at incubators and accelerators that foster “place-based entrepreneurship,” says LaPan, is an intangible–the trust that builds when you see people every day, working alongside of you. “You can’t get that at Starbucks or in your garage,” says LaPan.
The key now, he believes, is to foster more of it.
Creating Guardrails for Collaboration
“Startups have certain capabilities they are really good at,” says LaPan. “When you find two companies that come together where there is synergy as a result of the relationship, those make for the very best collaborations.”
That’s not to say there aren’t pitfalls. LaPan says there need to be ground rules around collaborative relationships, in writing, so the work gets done, he finds. “You need to be very clear on deliverables, resources, expectations and time frame,” he says. “That’s where they run into problems.”
It’s also important to be clear about ownership of the resulting intellectual property, he says. “What happens if what we do adds something to your secret sauce?”
Sometimes the collaborations are more basic than that—and come down to one entrepreneur helping another meet a deadline or fill an order. In the meantime, they help to get the work done, allowing startups to do the next right thing to keep growing.
Bharat Gawande, Ph.D., founder & CEO of 16-month-old Aptus Biosciences, which does chemistry work under a grant from the National Institutes of Health, subcontracted some of the project to another entrepreneur in the facility, Georgiy Nikonov, CEO of AlfaChemInvent. It’s helping his one-man startup grow, and he can’t beat the convenience. “He’s just next door,” says Gawande.
This story and others on Times of E are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.