Eye on Innovation: UCI Retools for the Startup Economy

ack in the day, universities walked a straight line, educating students in the basics and turning out academicians first and foremost. Even as they tossed tasseled caps into the air, graduates anticipated further studies in law or medicine or were gearing up for entry-level positions that promised a lifetime of job security, retirement savings and, for the go-getters, management promotions.

Many see this scenario going the way of the Princess phone and the wood-paneled station wagon. Secondary education in 2018 still hews to the three Rs, but it also is assuming a vital role in the startup economy. The beneficiaries extend well beyond the students and into the localities surrounding these institutes of higher learning.

Increasingly, towns, cities and community business councils work side by side with colleges to identify, attract, retain and invest in promising entrepreneurs and technicians, engineers and researchers well before they don their caps and gowns. The University of California, Irvine, has fostered just such a partnership, and all parties are reaping the rewards.

“We’re positioning Orange County as a place where an incredible lifestyle meets a robust business community and entrepreneurial ecosystem.” —Richard Sudek

“The key is to make Orange County a globally recognized entrepreneurial region,” said Richard Sudek, executive director and chief innovation officer of UCI Applied Innovation. “That’s an outward-facing vision. The community is a top priority, because if we raise the tide of entrepreneurship in Orange County, that helps the energy here on campus.”

At UCI Applied Innovation, which is the school’s central clearinghouse for technology transfer, industry-sponsored research and entrepreneurial support to many campus programs, fully a third of the 40,000-square-foot facility, known as the Cove, is occupied by outside entities: venture capital firms, angel investment groups, accelerators and industry associations. The long waitlist for office and lab space is one of the reasons behind the Cove’s imminent expansion to 68,000 square feet. “More and more companies are outsourcing the ‘R’ of R&D,” said Sudek.

The mandate for UCI Applied Innovation, which has the firm support of the university’s chancellor, Howard Gilman, and its provost, Enrique Lavernia, is to break down barriers between campus startup and local business communities. Sudek, who took the helm of the program in 2014, noted that Irvine was the first UC campus to figure out how a state school could house and rent to for-profit companies.

“We wanted to bring the ecosystem in-house and create a center of gravity for entrepreneurial activity in Orange County,” said Sudek, who at 25 created his own startup. Sudek went on to lead the huge investor group Tech Coast Angels, earn an MBA, a master’s degree and a doctorate, teach entrepreneurship and organizational behavior at Chapman University, and head up the Leatherby Center, Chapman’s version of Applied Innovation. “I’m wired to work,” he quipped.

“The goal is to create unplanned collisions between entrepreneurs and startups, the business community of Orange County and, to a lesser degree, San Diego and Los Angeles,” said Sudek. “We’ve become a place where business organizations can find strategic investment opportunities and acquisition targets.”

A glance at the visitor log hints at the model’s success. Government and business representatives from Finland, France, Great Britain and other countries want to help their startups establish a presence on the West Coast. UCI Applied Innovation recently signed a memorandum of understanding with Canada to create collaborative opportunities between Canadian and Orange County startups.

“UCI is becoming a portal to the California market,” said Sudek. “We’re positioning Orange County as a place where an incredible lifestyle meets a robust business community and entrepreneurial ecosystem.”

PROBOKNOW

Irvine’s location in the heart of Orange County, and the county’s status as a global medical device powerhouse, might lead one to assume that all local startups are technical. Chad Trainer must not have gotten the message when he decided to launch his legal website, Proboknow, inside the city limits.

Trainer had the rotten luck of finishing law school in 2008, right in the middle of the financial crisis. Jobs were impossible to find, so after passing the New York bar exam he relocated to Russia, where he worked for a number of years before returning to the U.S. and settling in Southern California.

“My dream was always to be a public defender,” said Trainer. “Ever since I was a kid I’ve had a very strong sense of justice. I was consumed by what I could do to correct the wrongs I saw in the world.”

Proboknow is a nonprofit startup that connects low-income clients with attorneys looking to gain practical experience. The attorneys work at no cost and are guided by more experienced mentors. They can opt to participate as a mentor in one area of expertise while working as a mentee in another. “We understand that the way to increase pro bono engagement is to make it as convenient and enjoyable as possible,” said Trainer. “On the client side there is huge demand. The challenge is to get more attorneys engaged.”

“We’ve connected with outstanding mentors at UCI Applied Innovation. We wouldn’t be where we are today without the Wayfinder program.” —Chad Trainer

While 80 percent of attorneys in the U.S. engage in pro bono work, inconvenience and lack of time are cited as the main obstacles to doing more. “Proboknow is a practical tool for new attorneys,” said Trainer, “but in our testing, the most prolific users were experienced lawyers looking to identify pro bono opportunities.”

Trainer started Proboknow with two cofounders: a tech whiz and a legal aid expert. Since January 2017 the trio has been refining that platform and its partner platform, a for-profit site called Lowboknow, which connects working-class clients with affordable legal help. They have been supported by UCI Applied Innovation’s Wayfinder incubator program. In May 2017, Proboknow won first place in the poverty alleviation track at a startup competition hosted by UCI. The team took home $10,000 and enjoyed valuable media coverage.

“We’ve connected with outstanding mentors at UCI Applied Innovation,” said Trainer, adding that a benefit of the incubator is interacting with other teams. “We wouldn’t be where we are today without the Wayfinder program.”

Trainer hopes that Lowboknow and Proboknow will one day open the door to attorney-client connections across the country. “The societal costs of letting low-income and working-class people go without legal representation are enormous,” he said. “They’re often going to end up homeless. None of this takes much imagination; it happens all the time. Funders need to see that the root of the problem is the lack of legal representation.”

VELOX BIOSYSTEMS

Developed and founded by UCI professor Dr. Weian Zhao and Dr. Christopher Heylman, Velox Biosystems is a prime example of the ways in which UCI Applied Innovation helps to incubate a biomedical high-tech startup. The technology was licensed from UCI, and the startup has benefited from research grants, VC investor access and partnering projects.

Velox’s sophisticated technology, combined with the classic razor blade business model, allows doctors to find the proverbial needle in the haystack through rapid and highly sensitive diagnostic testing. Products in the pipeline include one that tests for urinary tract infections; another that screens blood for genetic markers indicating cancer; and a third, a rapid-detection test for bloodstream infections and sepsis. The team hopes to bring the first product to market by 2020.

The early stage startup team strives to remain nimble and responsive. “We have five employees and several part-time employees and consultants,” said CEO Dr. Byron Shen. “We can be very efficient because we can leverage the resources offered through UCI. This ongoing collaboration allows us to focus on strategic and flexible growth.”

Building on the technology coming out of UCI, Velox has entered into strategic partnerships with global pharmaceutical and diagnostic companies to explore opportunities such as food safety applications. The decision to remain in Irvine once Velox launches was an easy one for Shen. “We are located within a cluster of technology and biotech companies, and have access to resources and a high-quality labor pool.

The problem we wish to solve exists across the globe, in both developed and underdeveloped regions, and since a couple of our investors are Chinese venture capital firms, being in California and closer to Asia is a plus.” Irvine is known for its prowess in the medical device field, but less so, according to Shen, on the diagnostic side. “We hope to become a multibillion-dollar diagnostic company and be a leading player in this space,” he said. “We have a big vision; we think we’ll be very successful. And we have every intention of giving back to UCI once we get there.”

Lucy Dunn, the president and CEO of the Orange County Business Council, has been involved with UCI for 15 years and sits on the UCI Foundation board. Dunn sees nothing but upside for the partnership between the university and the city of Irvine, and she credits Chancellor Gilman with achieving national and international recognition for his collaborative model.

“UCI’s diverse student body offers a competitive advantage in our increasingly global economy,” she said. “If we want to enhance Orange County’s economic prosperity, we need to focus on growing high-paying jobs, so attracting and retaining UCI graduates, with their talent for innovation, is a priority for the county of Orange. It puts us on the map.”