While IISc has always been one of the premier research institutions in the country, the institute has lately been seeing an increasing number of its scholars and faculty coming forward to translate their research into commercial ventures. Considering the impact this can make on society the institution has been encouraging this through various measures such as weekly offs and sabbaticals to work on start-ups.
Nevertheless, given the still nascent ecosystem for deep-science start-ups in the country, challenges persist.
In an interview with The Hindu, C.S. Murali, Chairman of STEM Cell, Foundation for Science, Innovation and Development (FSID), IISc, talks about the facility, the increasing interest among scholars to start-up and what different stakeholders can do to support them.
Can you tell us about FSID and STEM Cell?
The Foundation for Science Innovation Development (FSID) was set up as Society for Innovation and Development in 1991 to act as a single window of interaction between IISc and the external world for various types of collaboration. Now, based on more recent updates from the government on how incubators should function, we formed a Section 8 company, which is what FSID is. So, SID is transitioning into FSID.
The main objective is to enable IISc’s collaboration with the outside world. That happens in two or three different buckets. One is collaborative research with large enterprises, be it Indian or multinational. Then there are a couple of other divisions which focus on small to medium enterprises because their needs are very different. The third one is the STEM cell.
Conventionally STEM stands for Science, Engineering, Technology and Maths. Whereas our STEM stands for something slightly different – Science, Technology, Entrepreneurship and Money.
The reason for this is that the start-ups that we incubate are commercial enterprises at the end of the day. So, we want to emphasize to entrepreneurs that they are not here to do research, but to actually make money.
Tell us about the start-ups you support.
We want to make sure that the start-ups that we support are truly based on science.
The term deep tech is used very freely. Almost any business today needs to use technology, but they are not building technology. Most of our companies are here for building technologies. We are more of a deep science start-up incubator rather than a deep tech start-up incubator.
Start-ups from within and outside the organisation are welcome. We will listen to their ideas, evaluate and make a decision.
We are domain agnostic and to date we have incubated more than 100 start-up companies. We incubate 10 to 15 new start-ups every year. Of the 100 plus companies that we have incubated, you will find start-ups across space technology, agricultural technology, life sciences, drones…pretty much anything that you can think of.
Once we incubate them, we give them physical space. They don’t have to pay rent for it, which is a huge advantage because start-ups usually don’t have money. Many incubators charge them rent, which becomes a burden on them.
For all their employees, we provide group medical insurance. In other words, everything that we can do to reduce the cash burden on them in the initial stages, we do.
One of our faculties would typically be a technical mentor for them. They can access IISc’s equipment for development and testing.
We help them from moving from a prototype kind of situation to building a product that is marketable.
Since these are truly science-based products and involve invariably some kind of hardware, the time taken is usually anywhere from two to four years. So, that is the duration for which they stay with us on campus.
And in return for all of this, we take an equity stake in the startups.
Are most applications from within the institution?
We see applications both from faculty as well as from outside. We have incubated around 107 start-ups so far. Roughly one third of them are by faculty.
The institute has come up with policies to encourage faculty because if you do research and if it remains as research, it is of no use to anyone. So, we encourage them to translate their research into useful products. Many faculty are now coming forward.
This would not have happened 20 years ago. To further enable this positive trend IISc gives them one day off per week to focus entirely on their company. Depending on how long they have been with the institute, they can even take a one-year sabbatical and be full-time with the company during that period.
What are the challenges deep science start-ups face?
The biggest of course is funding at the early stage.
Second, for us, has been physical space because they require more space. In fact, we have had to turn down some applications due to lack of space currently. But there is a new building coming up next door. That will give us a little more space.
A third challenge is with regard to the founders. Most of them are techies or PhD scholars. They understand the technology and know how to build the product. But they don’t necessarily know how to sell. One of the biggest challenges they face is the ability to successfully get into the market. Some people sort of pick it up as they go along. But it’s not easy.
So, one of the concepts that we have introduced, which we believe is unique to us, is a deep mentorship programme. When a company is close to getting ready for the market, we, through our network, try to find industry people from that domain. Typically, these are people who are either retired or about to retire, who have been in the industry long enough to know exactly how the industry functions.
They will work with the company in a very active way. Many of them spend one day per week at the company. To make it effective and serious, we pay them a monthly retainer, even though these are people who are willing to do it without money.
We do this for a period of 6 to 12 months. This programme is working very well.
What can various stakeholders do to further accelerate or boost deep science start-ups?
One of the stakeholders is, of course, the founders themselves. They need to be committed and very clear about why they are doing it. A start-up is a marathon, not a sprint. It takes a long time to succeed.
Second is us incubators. We do whatever we can to support them.
Third is industry. Corporates can play a big role in helping start-ups with testing out their products in the market.
The next, of course, is investors. If investors can come in a little earlier that would really help in bridging the funding gap in the first couple of years of these start-ups. It’s slowly happening, but not enough.
The last one is the government, and it has multiple roles to play. Defining policies clearly is one thing. They should also speed up the process of getting regulatory certification. The second biggest role the government has to play is that of a buyer. The government must look into revising its procurement policies. For example, during bidding by vendors, if one of the conditions is that the vendor needs to have ₹10 crore revenue, then you are straight away ruling out start-ups. Many of them acknowledge that these start-ups have better technology than existing products. But unfortunately, some of them lose out due to these kinds of things.
Does STEM Cell provide grants?
No, we don’t have our own money because IISc cannot give us money. Our main source of money is government grants. In the last few years, we also raised money from companies under the CSR programme. A good thing that the government did was to include technology incubators under CSR.
So, our only two sources of money are government grants and CSR. In fact, that has been the biggest challenge for start-ups, because in the first couple of years of their existence, hardly any investor will come forward. So, the question is what do they do till then? These grants are very small. That continues to be a challenge. We are hoping to solve it in different ways.