Give us a brief introduction to yourself.
I come from Israel, born and raised there, and I have worked in Israel for some years as an intellectual property (IP) attorney. That brought me to working with a lot of high-tech and startup companies and I figured that pure law was not my forte and I really enjoyed the interplay between business and innovation. That actually brought me to China about seven years ago.
I got my MBA at Tsinghua University, and when I graduated I had just heard of X-lab, so it was really just the beginning of this innovation entrepreneurship platform for Tsinghua University, and I decided to join the core team. I have been working with them for almost five years.
Introduce Tsinghua University.
Tsinghua is basically the equivalent of Massachusetts Institute of Technology (MIT). It is ranked number one in China and globally – I just saw a 2018 university ranking that ranked it number one in computer science and engineering, actually overtaking MIT. Tsinghua is very much focused on engineering and hard sciences, but also has quite a few schools doing liberal arts, so it is a very interesting place to bring together people from different disciplines. That is what stands at the core of X-lab as well.
Describe what X-lab does and why it has been set up.
Tsinghua has people that really stick to their own vertical – people who are med school talking to other people from med school. There really was not a lot of mixing around with people from different backgrounds. We are trying to change that by opening up these verticals, and we created X-lab. It is an innovation platform. We do not call ourselves an incubator, even though we do incubate teams, because it is much more comprehensive.
The target is to facilitate and cultivate start-ups and bring people together from different disciplines. What makes it really special is a unique approach to entrepreneurship.
We are not sector-specific. We believe innovation can come from anywhere and everywhere. There is no ageism. We work with undergrads, master’s and PhD students. Most of them are master’s and PhD, but a really big alumni group as well. And we really do not care if you graduated five years ago or 20 years ago. We really value people with industry experience, and it makes it a very interesting dynamic place where people with a lot of different backgrounds come together.
We cater to early-stage start-ups and we try to provide whatever we can in support services and resources, bringing mentors, venture capital, consultancy, experiecne of specific sectors. Since we started about four and a half years ago, now we stand at a little over 1,190 project teams we are nurturing. Most of them are still active and about 485 are already incorporated. About 150 of those raised over $375m, so you can appreciate that most of them are early-stage start-ups but we have got a growing number of start-ups that are in growth stage already, and talking about A, B and C rounds. It is a very exciting place to be.
How does China’s ecosystem comparing with other places, like Israel and the US?
The innovation hub in China is and always has been Beijing, and a lot of people are surprised to hear it, but it really has become number one for innovation in China because it brings together people from all backgrounds. It is not sector-specific, and it has become a real draw for people with really interesting backgrounds.
To compare with Israel, the innovation ecosystem is growing much more organically I would say. Because it is such a small country, people do not have as much difficulty getting to know one another, and military service brings people together. China is far different in the sense that starting in 2014, the government pretty much said: “We want to try to become a higher-value-based economy.” So they started diverting a lot of funding and resources to building the ecosystem up. X-lab, by the way, started a year earlier. So we were ahead of the curve.
The view of entrepreneurship is also different. In Israel it would be much more organic and solution-oriented, whereas you would it find more lifestyle-oriented in the San Francisco Bay area in the US. In Israel, industries are much more solution-based, so you have got agri-tech, you have got cybersecurity, you have got some biotech. Automotive is picking up in recent years. And it is all stemming from the fact that it started as a country with a lot of problems and really not a whole lot of anything else. So you really needed to solve these problems and it has very much shaped the entrepreneurial mindset of Israelis.
Chinese are somewhere in the middle. So I think it is geared towards quick, super-strong, super-aggressive commercialisation, but there are also many very serious scientists and researchers. So you kind of get everything in China. And being such a huge market it is not surprising.
Some say China just copied products and software from the west. Do you believe this is true?
In the past decade China’s IP environment has matured, really made leaps and bounds in my personal view. It is an imperfect system like everywhere else, so I am sure that you will be able to find people saying otherwise. But at least in tier-one and tier-two cities, you see that the situation has changed significantly.
There are professional IP courts now, with professional judges, and you can see that in terms of damages and decisions on IP infringements and other violations in favour of foreign companies operating in China.
As China becomes a higher-value economy, it is becoming more innovative, and it has to comply with international IP treaties. In order for others to protect their own inventions, they have to comply with and offer the same terms and conditions within mainland China. As I said, it is an imperfect system, but I really feel that it is going in the right direction.
I share this view with Ian Harvey, who chairs X-lab’s IP centre, the international advisory board, and we work together. It has been an uphill struggle to try to tell people: “You may have been right in the past but things are really changing rapidly here, and you have to give it another look and understand that it is not what it used to be. And at the same time, there are other barriers and other obstacles that you need to take into consideration.”
In which sectors is China now moving ahead, and where could it become dominant?
They already are, and if I am wrong, they are well on their way to dominating everything to do with artificial intelligence (AI). They are really right now at the top. You need AI to analyse the massive quantities of data – aggregation and then analysis and trying to analyse trends, whether it is for consumption or everything else. And we are hearing more and more about facial recognition software. So they are integrating everything.
I talk about “innovative new value chains” – how we are going to connect new technologies and start-ups to create different models, be that in digital health, cloud data, autonomous vehicles. So in terms of X-lab, how are you seeing your start-ups fitting into these new business models and these new value chains?
The whole value proposition that X-lab offers is bringing people in from different disciplines, so they each come with a different viewpoint about how to approach problems and what you can do to alleviate some of the issues we deal with, whether in daily life or something more significant.
We have quite a few start-ups that are doing digital health and remote connectivity devices. Everything to do with thinking about how you can tie it in with, for example, automotive. So you have entertainment systems analysing your wants and preferences. At the same time, it is analysing your heart rate and pulse and breathing, and trying to send information to your insurance companies, saying: “What was your role in this or that accident?” Or how it should translate to your policy.
This is very much the way that Chinese entrepreneurs approach it, first of all because it is encouraged and it is much easier with huge quantities of data from a lot of multiple sources, including some issues that the government is interested in solving. They are making this data available to people, and it is just a matter of trying to tap into it and see what you can do with it. Having a central government helps to a certain extent, with certain policies put in place.
X-lab is becoming very much a base for having people solve these issues and bring about all kinds of innovative new value chains, approaching things that you have not seen before. That makes it very interesting to watch and support.
Are you seeing global corporates now coming to connect with that sort of ecosystem?
We have worked with a lot of international companies. Because we are non-profit, X-lab is very much reliant on collaboration with industry. We have worked before with automotive companies, for example Audi and Volkswagen. With Volkswagen, we had a hackathon, so they wanted to get either access to talent or specific problems that they want to solve.
With Audi we did something much more significant. We ran an app challenge with them. It was a three-month challenge where we recruited several teams to build apps around the car’s entertainment system. It was a combination of hardware and software. They were working with people from design backgrounds, also with their R&D people. A very interesting initiative, trying to think about the entertainment system, what you can integrate into it to become a much more comprehensive experience, not only from the way you use it but the way that the entertainment system collects information on you – your habits, what you are doing, how it translates to everything from the car experience. .
We were also working with Facebook, which approached X-lab. They wanted to come more from an educational perspective, because they are not currently active in mainland China. But we ran a semester-long course with them on entrepreneurship, trying to articulate insights from what they have done in Silicon Valley and how you build successful start-ups.
We brought a bunch of their senior executives out to China through a semester-long process, where we had our own mentors work with students to help them apply some of the teachings and some of the insights that people shared with them.
Whether it is much more pragmatic, projected-based or whether we are targeting education on a broader scope, we try to attack innovation and entrepreneurship from multiple perspectives at X-lab.
What do you do to relax?
My role is so intellectual most of the time that I like to do things with my hands, so I bake. I make really nice stuff, especially breads.
Give us a brief introduction to yourself.
I head Warwick Ventures, University of Warwick’s technology transfer office (TTO). We help commercialise Warwick research and promote knowledge exchange with industry. I also manage Warwick’s spinout equity portfolio, and I am the lead sponsor of the Warwick Enterprise Partnership, a collaboration of various departments here, which supports and promotes enterprise among students, staff and the wider university community.
I came to Warwick after about 20 years working in startups as a co-founder and CEO. I started in software in California in the 1990s, novel composite materials (RolaTube), super-hydrophobic nanotechnology (P2i) and renewable energy – so really very diverse technologies where my role was one of getting them from technology to first product markets. Before that, I had roles in international business development and consulting.
Describe Warwick Ventures.
University of Warwick is a UK top 10 and global top 100 research-intensive university. Its research covers most sciences, medicine, arts and social sciences.
Warwick Ventures has a team of 10, including the two directors, with a range of expertise to cover all these fields of Warwick research. Each year we record about 100 innovation disclosures, file over 30 patent applications, negotiate about 20 licences and create about five new spinout companies. Our spinout portfolio of active companies currently numbers 24 in a wide variety of technologies and market sectors.
Explain your purpose and process.
Warwick Ventures’ main purpose is to help Warwick research get into public use so that it is of benefit to the economy and society. This is mainly via the commercial routes of licensing Warwick IP to corporates and by creating spinout companies. These routes are mainly for technologies from the science, technology, engineering and maths faculties, but we also support academics in the arts, humanities and social sciences, finding additional ways for their research to benefit society which may not be commercial, for example data analysis, social enterprises, education and the application of behavioural science to social policies.
The technologies coming out of our university labs are usually very early stage. So our process is to help get them ready for licensing or, if a spinout, ready for investment.
First, we have to establish whether there is a market and a scalable business model. One effective way of doing that is to train the junior researcher to get first-hand market data based on an initial hypothetical business model. The researcher then goes out and talks to many businesses and other organisations around the world and comes back with a refined model, validated with some initial evidence. This makes a project more credible to investors. Sometimes the research shows that there is not a scalable business model and the commercial venture should stop. This is a good outcome also as it prevents wasted time and effort.
An additional and lasting benefit, whatever the outcome from the market research, is the development of the awareness, confidence and skills of academics themselves. This can be transformational, with some researchers transferring to be full-time employees of spinouts. For others the process prepares them for an academic future where funders are increasingly seeking economic and social impact. Last but not least, the process gives academics a very useful starting network of industry contacts.
Second, if we have shown there is a market and the project is going to spin out, we can start to attract commercial management to work alongside our researchers. Finding management for our spinouts is another key role for us. Where necessary, we train corporate executives with expertise of large-scale business models and markets, and who are looking for a change in career, how to work with very early-stage university startups. This all part of a general role we have in building the innovation ecosystem around our technologies, including corporates, development partners, business advisers, consultants, investors, facilities and so on.
Last, if we have the market potential and the management, we can go on to help raise the money spinouts need to get off to a good start.
Describe the people in the university, in Warwick Ventures and those outside with whom you engage.
Finding the right people for Warwick Ventures is a real challenge. They have to straddle two worlds – that of our academics and that of business. They need to have the education to understand the research of our academics and build positive relationships with them. They also have the experience and skills to do deals with corporates and investors. If they have an entrepreneurial and consultancy background, so much the better to help in forming spinouts.
Externally, we engage a lot with corporates, such as CVCs with the vision of where technologies and markets may be going, the business units themselves, which may already have contract research relationships with the university, and with financial investors. Warwick runs the Minerva Business Angel Network, one of the largest in the UK, and we have good relatiosnhips with our regional VCs.
I have outlined what I term “innovative new value chains” – connecting new tech, startups and corporates in new business models, such as digital health devices, data in the cloud, new direct relationships with patient consumers, also connected autonomous electric vehicles that car share. What role do you think universities and Warwick Ventures will play in these innovative new value chains?
Universities and TTOs like Warwick Ventures have an important role. Universities are a rich source of innovations and ideas. But chucking the innovations over the wall to be picked up by corporates is not the way to go. We can add a lot of value in developing and derisking them, preparing them for take-up and investment. Increasingly, we take a more holistic approach, seeing how a particular technology fits within a business opportunity and seeing how we can connect the other pieces and resources that can lead to a scalable business model. A new sensor technology, for example, on its own is not enough to build a great business that delivers on our mission to obtain the greatest economic and societal impact from Warwick’s research.
Illustrate what you have described with examples.
One is TrueDR, a new spinout that has high dynamic range (HDR) vision systems and software for terrain identification for autonomous vehicles, for example how to enable a car to distinguish between green grass and green-painted tarmac, or between water and ice, in high-contrast lighting conditions. Before we set up TrueDR, we engaged with an original equipment manufacturer to secure a first proof-of-principle project for the company. Once a couple of those commercial projects are completed successfully by TrueDR, it will be in a good place for Warwick Ventures to introduce it to seed investors and later to corporate investors.
Another is Medherant, which makes novel skin patches for pain relief. This spinout originated from a relationship with adhesives manufacturer Bostik, part of the Arkema group, which had developed a new medical grade adhesive and was looking for applications. Warwick Ventures suggested using it to carry over-the-counter drugs, such as ibuprofen, and provided proof-of-concept funding to one of our senior polymer chemists, Prof David Haddleton, to test whether certain over-the-counter drugs could be got in and out of the adhesive.
It worked, and so we lined up a core management team to work on the business model, helped negotiate a licensing-in of the Bostik material for the spinout and introduced Mercia Fund, a local VC investor. Progress since has been rapid, with further investment rounds, including a £4m ($5.7m) investment round in December, and a team now of more than 15 people.
What do you do to relax?
I am a natural historian and a generalist by nature – interested in nature, science, arts, history, international affairs and business. So I follow many things, but the only thing I really have time for is a bit of gardening and an association I co-founded and chair that promotes research, education and the preservation of the heritage of the peoples and communities of the Levant region in the eastern Mediterranean – the Levantine Heritage Foundation. I have a complicated ancestry part-rooted in the Middle East and met like-minded people who wanted to prevent the intergenerational loss of much heritage and culture.
You can listen to this and other interviews on a podcast, subscribe at gaulesqt.podomatic.com. Andrew Gaule supports innovation programs and collaborations with “innovative new value chains” in global organisations. If you have interview ideas, email andrew.gaule@aimava.com or James Mawson mawson@globalcorporateventuring.com