Most universities have a large shelf of good ideas that are never implemented in the real world because the people and partners needed to implement the idea are not available. Canterbury Road Partners is a company in Baltimore that specializes in finding hidden gems on these shelves and build companies around them. We talked to Canterbury CEO Matt Van Itallie about their ambition to start 100 companies next year.
What did you do before you became an idea-discoverer and company-organizer?
I majored in Law at Harvard, and then became a management consultant at McKinsey for three years. Here I became active in school reform and ‘charter schools’. I left McKinsey to join a strategy office for schools and advised many schools and school systems on reform. After doing this for a while I wanted to go back to the private sector while still tackling on complicated problems that also had public impact. So I started Canterbury Road Partners.
In a recent talk you mention the moneyball approach to finding Intellectual Property. What exactly does that mean?
Most universities already have a technology transfer office that focuses on transferring their ‘superstar’ technologies: the most recent, most active and probably most valuable inventions. We do not want to compete with these offices. Like the baseball coach Billy Beane (described in the book and movie Moneyball), we systematically look for undervalued patents that are currently not being marketed. We try to find the most valuable patents that the university is not using, obtain those at reasonable price, and then try to build a team around it.
How do you build a team?
Our company idea is that you need a combination of an innovative idea, market experience and customer access, and motivated entrepreneurs. For our teams we thus want to recruit a more senior person with industry experience, and a few talented students that want to gain entrepreneurial experience. We provide the team with a small budget (around $ 10.000,-) These people start off with the idea as a weekend and evenings project and start working on developing the idea and find launching customers or investors.
Are all the teams successful?
Not all the teams result in companies. There is obviously some risk involved. However our ambition is that every team we start becomes a positive learning experience for the people involved and has a positive social benefit in the form of skills and experience. By trying to start 100 companies in The Baltimore area, we thus stimulate the Baltimore economy.
That said, we have also built a process to increase the likelihood that our startups succeed. One part of that process is starting business based on high value patents. Another way is that our teams can “pivot” from one patent to another if market feedback is not favorable. In that way we are betting on a team rather than one patent. In this way we are building on Eric Ries’ work, Lean Startup.
How do you know which patents are valuable?
Instead of handpicking them, which would require too much expertise and would also be a laborious process, we use an analytical and automated approach. Patents link to each other and by analyzing the connections you find patents that are more fundamental and ultimately more likely to be valuable than others. These are the patents that we start with. We do all the search with software to enable us to search tens of thousands of patents in a limited time.
Many startups shun patents and patent applications because of the high costs. How do your startups deal with this?
Patents are indeed costly, but our teams do not necessarily need new patents. We use the patent system to find ideas and then use these ideas to build new companies around it. These new companies will protect their intellectual property like any startup would, depending on the situation.
Can you give an example of the type of ideas and companies that you are aiming at?
One example is mercury emission reduction for power plants. There obviously is value in reducing emissions. We can use our search software for promising patents in this area. We found a few and are now looking at industry experts to develop these technologies and bring these to the market. Other examples are more fanciful: in a talk at Ignite Baltimore I give the examples of birdseed that will not be eaten by squirrels, and lenses for lasers inspired by starfish.
What is the business model of Canterbury Road Partners?
We have a few models. Our search software itself can be used for a fee, either by companies looking for ideas or by universities that want to discover the valuable patents on their shelves. Alternatively, we can organize the creation of startup teams for a region, like we are doing for Baltimore. Our company is based in Baltimore but as a technology company we can do business worldwide.
About the author: Sieuwert van Otterloo (twitter: @entreprenl) is a management consultant with a focus on IT-enabled business. He gives software related advice via the Software Improvement Group, startup and innovation advice via Inbys and manages his own venture fund Otterloo Ventures. He writes for Startupjuncture and Frankwatching.