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The Minnesota Daily

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The Minnesota Daily

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CSOM creates new business enterprise, development program

According to its mission statement, the University doesn’t run itself like a business.

But with a new business program, a research and technology park blocks from campus, and new funding sources, the process of turning University research into business is getting easier.

A business school program, the New Business Development Enterprise, will soon begin scouring the University for the next science-fiction-turned-commodity.

“It’s (both) a course and an enterprise – a mini-business, really,” said Harry Sapienza, one of the class’ instructors.

NBDE is one of three new and complimentary programs designed to expedite technology commercialization, and it’s the one with the most University connections.

The other two: the Biomedical Innovation and Commercialization Initiative and a proposed research and technology park – a fund and potential home for spun-off companies, respectively – are federally and privately funded. And the University has only one of seven spots on BICI’s director’s board.

But inside the NBDE, 23 Carlson School of Management master of business administration students and faculty members make the decisions. Next September, CSOM will provide entrepreneurial education for 30 to 60 technology-based doctoral students.

NBDE provides students “the knowledge to prepare a plan, raise money and get the company started,” said NBDE director Doug Johnson, a CSOM professor with experience investing in start-up technologies – the type of research the class will consider most. Students will also be evaluating non-University technologies.

Researchers, Johnson said, often don’t know how to price potential products and lack the experience to recruit investments and actually run the business.

Johnson estimated the potential business success ratio for new technologies at one in a hundred.

So the job of the students – a third of which have at least an undergraduate science degree – is talking to deans and scientists to root out that 1 percent by evaluating hundreds of technologies over the course of the semester, Johnson said.

But really, teams only have to “seriously evaluate one out of five.” The rest of them can be easily dismissed as lacking business potential, either because “the market’s too small or there’s competitors already,” he said.

To explain why the University implemented this program, Johnson pointed to Gopher – an Internet browser developed at the University. Gopher predated all other browsers, but because its developers didn’t recognize its market potential, a University of Illinois professor capitalized and developed Netscape Navigator.

With tomorrow’s Netscape potentially in their hands, the MBA students will be contacting investors, evaluating market potential and assisting in initial management.

But they also have to manage themselves. The class started this semester and, as Sapienza said, “the enterprise itself is a start-up.”

The potential profits are enormous. But so too are potential conflicts of interest.

Johnson said those teaching the class will refrain from investing in products evaluated in it. But the students and other faculty are free to do so.

Graduate School Dean Chris Maziar addressed the class early in the semester about scientific conflicts of interest and said, “My standard presentation about the commercialization of technology – explaining why we do what we do, what some of the misconceptions are (and) gave them some factual data.”

Students have also spent time with a patent lawyer.

Besides the students, the NBDE helps scientists and outside investors who receive sound advice cheaply; in exchange for the aid, CSOM receives stock in spin-off companies.

Once these small businesses dislodge from the University, they will need offices, possibly as close to the University as the 14-acre research and technology park that will be next to the parking lots east of Mariucci Arena.

The Minneapolis Community Development Agency received a proposal this week from The Wall Companies in excess of $10 million dollars.

Evaluating the proposal will be a lengthy process, said Jim Forsyth, project manager at MCDA, but he said he hopes the City Council will give its approval by the end of the year.

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