I say “phooey” to the Valley of Death

Please bear in mind that the following article is the musings of a practitioner. It is not academic in nature but observational and from the experience of living across many environments of innovation and commercialisation.

Where are we?

In many universities, we are stuck with an organisational model and a process that is out of date.

It is hard to know how it happened, but it seems a more linear-minded group imagined the notion of tech transfer and how universities should go about commercialising their innovations. A possible explanation is that the projects that they modelled around were therapeutics, where a linear approach aligns with protocol and the market dynamics. It is also possible that this is the way we build things and historically develop projects, where you can’t do the next step without finishing the last.

Let’s explore that possibility for a moment. Imagine a new potential therapeutic (a small molecule) that addresses a specific problem/ condition. We know the sufferers (generally the market) and the path to market is through a well-developed regulatory and distribution process to ensure safety and proper use of the innovation. In this world, protecting the invention and seeing which of the drug companies might license the technology is entirely appropriate as an imagined model. It is a technology transfer model, package it into a patent and then transfer it to a commercial firm.

From that “step by step approach”, we build models that are largely centred on patents and selling (not marketing). Whilst complex, the model is flawed for just about everything other than a therapeutic as markets are uncertain, and the path to market can only be navigated as information/ testing becomes known.

Of course, the genesis of the model is hypothetical, but nonetheless, this is the model that universities have been dealing with up until probably 20 or 30 years ago.

It didn’t work for everything, and, even worse, it even stopped working for therapeutics as the major companies decided they would better manage their risk by licensing later given the large costs associated with development, so licensing wasn’t so easy.

Put simply, building linearly doesn’t work. If the process doesn’t work for the innovation projects, then organisationally, there’s a bigger problem.

In my hypothetical, I like to think that the same folk who were all now part of the journey of “tech transfer” wondered what happened. They banded together, or heard someone say it, and labelled the problem “the valley of death”. This was the explanation for the gap between traditional funding in a university grant setting and new funding that would propel the innovation forward, which commercial partners would pick up. There are words like “market failure” bandied around here, too.

I say “phooey”.

This problem or phenomenon has existed from the beginning and is a product of how we as universities have thought and gone about “tech transfer”.

It is our problem.

The notion that organisations simply license patents is only true in some instances. It mainly includes the instances where the market is well defined, and the partner has a direct route to customers or a protected route to customers. This is a very valuable pathway, so it’s important not to throw the “baby out with the bathwater”, but it is far from the only pathway. It never was.

What was missing was taking both a project-based and an organisationally based approach to the notion of “working backwards from the market”. Working at both levels means that there are often specific things that a project needs to graduate being partnered/ invested in, as well as general things we know are true for most all projects. That “most projects” can also be further broken down to the needs of specific areas, which have common themes.

Put simply, it’s that we’ve not built the production line for new technologies. Instead, we’ve labelled it “the valley of death” and made our observations.

Meanwhile, a lot of innovation never went anywhere as it looked across the cavern of its own construction and wondered what it would be like on the other side.

Let’s break this down even further. The “other side” doesn’t want patents, which is the very product of our tech transfer process. Even if they do, they wonder about the value and argue that, alone, they aren’t worth much. Instead, in my experience, they are looking for:

• People/leadership
• Understood risk
• Elimination/ creativity around a cost driver
• Unique technology that has academic/ scientific / use momentum
• Alignment of market elements in development
• Timing is important; execution is more important
• Capacity to pivot/ change key elements
• Connections/ specific market insight

This is a far cry from our present process and begins to inform what a real process might look like in reaching investment or market potential. So, if we are going to “sell” things from research, we need to add or develop the elements that meet the market. Work backwards from what someone wants. Think organisationally about the people we have in tech transfer and the capacity of the organisation to add those elements. 

Each of these elements adds resources and raises the questions: How can we do this in a seemingly unfunded environment? How do we go across all projects, and how do we split the benefits?

These are all good questions to have, because without them, we are back staring in the crevice of our own doing. To solve them is the key. To solve them on an organisational basis and to solve them on a project basis means we’ve built the production line. 

What an amazing challenge. Imagine unlocking a supply chain of innovation that can make lives better.

This thought-starter article is intended to do just that. With the roadmap beginning to appear, there are many ways to build a production line that can work for you. Each is likely to be different. What is important is to address each of the market attributes, and not expect one to be a silver bullet. Otherwise, you are continually building half a product.

A model for success

To give you a snapshot of how we are applying the thinking at the University of Texas at San Antonio (UTSA), we’ve seen the process as a circle of value. Once you do that, you realise that the outside partnerships you need only increase as you go around the circle. It also means a shift from a cost-based service provider to almost a resource provider and ultimately to an investor or shareholder. It challenges the core of the old process. Perhaps it should.

Our model that traverses this process includes unique systems that track opportunities (disclosures) as well as pin down legal agreements for fast execution. It means we know what our stock is in market terms and how the production line will shape success. Importantly, it’s a shopping list for our entrepreneurs.

At UTSA, we have a defined entrepreneur program that gives a defined equity stake and remuneration on each project. It is generous, as the number one issue our markets/ investors want is leadership. Our scientists want to stay scientists.

These projects get the common elements but also get specific elements to help the partnering phase. We are actively building studios to help add more resources and market connections to our projects.  By doing this, we have added the more specific elements for each area without impacting others. It also enables us to make specific partnerships in each studio. Our AI studio, for instance, has technical and platform access, as well as consulting open to our projects.

In another space, I can detail what we at UTSA are doing more specifically. What is important is to have a framework of development and a measurement of success.

As mentioned from the outset, these are the musings of a practitioner. In my mind, there is no such thing as tech transfer. Instead, it is a process of commercial enhancement and building the value that the market wants.

I’ve deliberately spent less time on the details of the solution and skimmed across ours at UTSA, to give a flavour of how it looks.

By saying “phooey”, we can open doors that we only previously explained as an obstacle, rather than perhaps seeing it as one of the greatest opportunities of our time.

Ready for more?

Bringing research to market requires more than patents and licensing. It depends on building the people, partnerships, capabilities, and market connections that help innovations create real-world value.

• Bringing ideas into the world: Foresight’s approach to knowledge transfer and impact explores how knowledge transfer, commercialisation, and relationship-building help research move beyond the university and into practice.
• When research excellence isn’t enough: Communicating value beyond academia argues that research impact depends on understanding external needs and communicating value in ways that help partners, funders, and stakeholders see why university expertise matters.

This article is part of UIIN’s Future of Universities Thoughtbook | Entrepreneurial Edition, a collection of perspectives from university leaders, researchers, policymakers, and innovators exploring how higher education can evolve through entrepreneurship, innovation, and new models of engagement.

Interested in exploring more perspectives on the future of higher education? Discover the full collection in Future of Universities Thoughtbook | Entrepreneurial Edition, where contributors examine topics ranging from entrepreneurial leadership and ecosystem development to student agency, societal impact, and the changing role of universities in an AI-enabled world.

Anthony Francis (author) is Associate Vice President for Innovation and Development at UT Health San Antonio and Director of its Office of Commercialisation and Innovation. He specialises in building innovation ecosystems, strengthening technology transfer, and helping researchers and entrepreneurs transform university research into investable ventures and real-world applications.