Sunday, September 30, 2007
VT KnowledgeWorks helps companies succeed
In three years, VT KnowledgeWorks has worked with more than 30 new technology businesses.
Video
Matt Gentry | The Roanoke Times
Holly Heart is an official spokesrobot for Sister to Sister, a nonprofit organization dedicated to educating women about heart disease and encouraging them to change their behavior to prevent or minimize their cardiac risk factors. KnowledgeWorks member TORC Technologies, an applied research and technology company, conducted the engineering design and manufacturing of Holly Heart.
Video: See what else goes on inside VTKnowledgeWorks.
Giving support
- Located at the Virginia Tech Corporate Research Center, VT KnowledgeWorks provides its tenants with “a comprehensive mix of services carefully designed to reduce risk in a systematic manner by nurturing core business competencies within each member company, helping them maintain strategic focus, minimizing administrative overhead and supporting their executive leadership.”
- The incubator offers its program along two tracks: one for businesses applying for SBIR or STTR funding and the other for companies on a commercial track. Both programs offer administrative services, business services education and counseling, strategic assistance, mentoring and executive support.
- Organizationally, KnowledgeWorks is a division of the Virginia Tech Corporate Research Center, a for-profit subsidiary of the Virginia Tech Foundation.
SOURCE: VT KnowledgeWorks
By the numbers
- 34: Current KnowledgeWorks members; of those, 20 are in the preparation stage, six are in startup and eight are in ramp-up
- 2: KnowledgeWorks graduates
- 3: KnowledgeWorks fizzles (companies that failed to launch)
- $300: Monthly services fee per company (with additional rental fees) post-launch
- $6 million: Cost to build VT KnowledgeWorks Building I. Of that, $4 million came from the Virginia Tech Foundation and $2 million came from the U.S. Economic Development Administration
- 45,000: Incubator square footage
- $2,500: Initial member entry fee (fee structure depends on whether companies are on a commercial or SBIR/STTR track). The fee gets companies up to the launch phase.
- 1,400 to 1,500:
Number of incubators in North America
SOURCES: VT KnowledgeWorks and the National Business Incubation Association
BLACKSBURG -- Walk down a VT KnowledgeWorks hallway and you're likely to find a variety of small businesses brewing.
Behind one door, a Cooperative Leadership Institute employee scrolls through video footage. Behind the next, Matt and Lindsay Barron discuss lesson plans for The Whole Child Learning Co.'s Gigglebytes curriculum. And just across the hall, NBE Tech president Guo-Quan Lu opens a tub of newly mixed nano-silver paste.
For KnowledgeWorks Director Jim Flowers, the activity behind these doors is the lifeblood of a business incubator he hopes will one day be known among the nation's best.
"I would personally like this place to be nationally recognized as a standard of excellence kind of place for university-based incubation," Flowers said. "I don't know how long it will take ... but it's within our reach, and we're playing for that now."
Opened three years ago to help entrepreneurs turn ideas into successful companies, KnowledgeWorks is now home to 34 businesses representing a range of technology, from water purification to online study help.
Of those, Flowers said most -- 20 of 34 -- are in the preparation phase, meaning they have yet to launch.
"In an area our size, just from a sheer population numbers standpoint, we don't have nearly as many people writing business plans or even conceiving businesses," Flowers said. So "what we do is open up the door to people who are just thinking about opening a business and help them from the very beginning" -- people such as Lu.
NBE Tech
When NBE Tech's Lu joined KnowledgeWorks in early 2004 he was admittedly a "nerd person."
But he was a nerd person with a marketable idea.
In his research as a materials science and engineering professor at Virginia Tech, Lu had developed a nano-silver paste that could be used to interconnect semiconductor devices. Unlike material used now, Lu said his nanoTach has better thermal, mechanical and electrical properties, allowing chips to run hotter and more efficiently.
What Lu didn't have was business acumen.
Flowers "is basically teaching me business 1-2-3," he said. "In the university, you focus on theory, you focus on understanding, and in the business world, it's the bottom line -- [you] generate the profit and sales and customer relations -- and that's very different."
Three years after entering the incubator -- and two years after NBE's official start -- Lu seems to be finding his footing.
The Blacksburg resident has secured startup capital, traveled to technology exhibitions and begun to sell small batches of nanoTach to about 16 power module manufacturers in Europe. In addition, R&D Magazine recently listed the paste as one of the 100 most technologically significant products of 2007.
Lu, who continues to teach at Tech, said he tries to carve out time for NBE at night and on the weekends, but he wants to eventually hire a management team to handle the business side of the company.
In the meantime, NBE remains largely a one-man operation.
"I knew it would be difficult," Lu said of his packed schedule. But "I enjoy this part, and I don't like failures, so basically I'm going to plow through no matter what."
Lu isn't alone in his efforts to balance teaching and entrepreneurship.
Flowers said 10 past and present KnowledgeWorks-member companies were Tech faculty startups. Several others take advantage of the incubator's proximity to the university to recruit employees or use equipment.
Nationally, academic institutions sponsor one out of every five incubators, said Dinah Adkins, president and chief executive officer of the National Business Incubation Association.
The fit is a natural one, she noted, because incubators can provide jobs for graduates and opportunities for collaborative research.
Engineering schools in particular "really get it," Adkins said. "They understand the need to commercialize technology" -- technology such as Cooperative Leadership Institute's leadership learning management system.
Cooperative Leadership Institute
In January 2006, Charles Lattimer found himself at "a crossroads."
Funding for the research project he had started three years earlier to "broaden the university's capacity for leadership development" was about to run out, and he needed to decide what to do.
"I had no idea about how to take intellectual property out of the university and start a private enterprise with it," Lattimer said.
So, like Lu, he turned to KnowledgeWorks.
"For me, it was more of a technology transfer issue," he explained. "It was about how, as a faculty member in the university, could I most deftly traverse the transition, having built intellectual property inside the university."
And because the Virginia Tech Intellectual Properties office is in the KnowledgeWorks building, Lattimer figured the incubator could help.
More than a year and a half later, Cooperative Leadership Institute is working with about eight clients to provide custom-designed leadership development programs.
Of those, one is CLI's KnowledgeWorks neighbor: The Whole Child Learning Co.
"One of the most valuable parts of being a member of VT KnowledgeWorks are the company executives that you interact with on a daily basis," Lattimer said. "The water cooler conversations here are different from any other water cooler conversation you can have at any other place in this region, and that's very energizing."
Yet the incubator community isn't meant to be permanent.
In fact, one of KnowledgeWorks' goals is to graduate companies that then go on to lease space in the Virginia Tech Corporate Research Center.
Thus far, the incubator has graduated two members -- both of which were sold to companies outside the area -- but has chalked up three "fizzles."
The length of time a company spends in an incubator varies by industry sector and business stage upon entry, but Adkins said most tend to graduate within two to three years.
At KnowledgeWorks, however, getting to the graduation stage is likely to take a bit longer.
"About four years," estimated Flowers, pointing to the incubator's emphasis on pre-launch prep.
But while many KnowledgeWorks tenants often have years to make postgraduation plans, some -- such as Whole Child -- have already started strategizing.
The Whole Child Learning Co.
A little after 9 on a recent Wednesday morning, four members of Blacksburg Day Care and Child Development Center's Happy Daisies class sat at a small table, eyes glued to a nearby laptop. On the screen, a mouse in a chef's hat called for quince.
"Can you move your cursor so it's on the letter 'Q' and click?" Whole Child Director of Curriculum Development Lindsay Barron asked one of the children.
Born out of Barron's desire to mix her teaching background with her and her husband's entrepreneurial instincts, the morning's instruction is one in a series of computer-based educational enrichment programs offered by The Whole Child Learning Co.
The programs, including Gigglebytes, Little Amigos and Busy Bodies, are targeted at children ages 2 to 5 for use in preschools, day care centers and private schools. A fourth program, called Great Minds, tutors kids up through the high school level.
Chief Executive Officer Matt Barron said Whole Child began selling its business model, curriculum, training and support through a network of franchises, in 2001 when he and Lindsay were living in Texas.
Five years later, the couple moved to Southwest Virginia and started looking for a new home for their business.
"At that time, we were not looking for an incubator or accelerator program," Matt Barron said. But then they met Flowers, toured his facility, "and said, you know what? We really could use some of the guidance and services that they're using."
About a year later, the company has boosted its number of franchises from about 21 to 30, and Barron said the business feels "more balanced."
Looking forward, Barron said he expects to outgrow the incubator in the next year or so and expand the franchises from 30 to 100 within three years.
"This year has been a year of consolidation and building our infrastructure to support the next level of growth," he said. "I think it'll be easier to get from 30 to 100 than it was to go from zero to 30."
