A matchmaker for technology Featured

10:02am EDT July 22, 2002

When you're in the market for a new home or a good oil painting or a thousand shares of Microsoft stock, you'd probably consult a broker to help search or execute the transaction. So why can't a business looking for a new piece of technology to improve its market position do the same?

If the vision of the area's corporate behemoths comes to pass, smaller companies will soon have that very option. A company could put the challenge to a technology broker: Find me a piece of technology that helps solve my technical puzzle and get to market faster, and in return you'll get a slice of the licensing royalties.

In fact, for the last 15 months, Ken Zinda, a naval veteran and former Westinghouse engineer, has been tackling dozens of these searches as part of a feasibility study of "corporate mining" for Cleveland Tomorrow, the group of leaders from the area's largest institutions, including its largest companies. Already his mining expeditions have taken him to companies in Idaho and universities in Tennessee, looking for just the right piece of technology for his clients.

When people think of technology, Zinda argues, they tend to picture flashy, cutting-edge systems such as those developed for the space program. But the reality is generally more prosaic. "Technology has a lot of different forms: There's fundamental research, applied research, product development. There's a whole stratification of where that technology can be found." Often, it's a simple off-the-shelf component sitting largely unused on a back shelf of a large company that might unlock a rich new marketplace for another company that licenses its use. And finding that strategic missing piece is where the technology broker comes in.

Zinda concedes that corporate mining has thus far been driven not by the demand side but by the suppliers, Fortune 500 companies eager to wring additional revenues from R&D spending. Cleveland Tomorrow is on record in its intention to leverage more activity and value from the estimated $2 billion in annual R&D spending in this region. Nationally, about $1 trillion is tied up in corporate patent portfolios, and much of that remains underutilized and even untapped. "There is a tremendous amount of wealth there, but most of those portfolios are not well-managed. It has not been perceived as a source of recurring revenues to this point," Zinda says.

But he maintains that a number of trends are converging to make the licensing of these technologies just as attractive a financial proposition to the smaller companies buying them as to the larger ones selling. Rather than invest in the expensive engineering talent and waiting for the long lead time of R&D projects, more smaller companies, pressed by the relentless demands to get to the market faster, are increasingly buying technology already developed by others. In the increasingly faster economy, "time-to-market constraints are incredible," Zinda says. "It's the same story I hear everywhere: They just can't handle the time and money it takes to do these things [develop technologies], and they want to buy it, invest in it, rather than manage the whole process and take the risks." And a company that can find a component shortly after it's developed often has a tremendous competitive weapon.

At the same time, as companies experience diminishing savings from such fading fads as just-in-time manufacturing, they're being pressed to look elsewhere to boost efficiency. "You're not going to be able to squeeze much more blood out of that stone [just-in-time], but you can go a long way with new technology to improve productivity," says Zinda.

Thus far, with his position being underwritten by two charitable foundations, Zinda's brokering services have been free to clients. But in the year that remains of his feasibility study, he hopes to demonstrate the business case for technology brokering, or corporate mining, as an activity that can stand on its own as a revenue-generating activity. He says some investors, whom he declines to name, have even expressed an interest in technology brokering as a method for investing in new technologies and bringing them to market.

There are plenty of practical hurdles to be ironed out first, though. "Obviously, there are a lot of methodological problems: How do you separate people out who are just trying to acquire competitive intelligence, how do you guard against people who are trying to get your knowledge and not pay for it, how do you separate people who are just sifting the water vs. people who are seriously buying. And then how do you get them to pay once you've found it?"

For him, the biggest challenge in pulling off technology brokering is to think cross-industrially, to bring potential technical solutions to clients from outside their own industries. "You have to be able to work cross-disciplinary and at high levels of abstraction" to see potential technology application fits, he says. "I think the cross-industrial matches are where the real power is going to come in technology brokering. A lot of people know what's going on in their industries, so there are very few stones you can turn up that they don't know about. So you have to find things in other industries."

There's no getting around the fact, too, that technology brokering requires sorting out winners and losers from among potential clients. "I can spend a lot of time looking for a technology that will only net a $1,000 licensing agreement because the market [for the product produced with it] isn't that big. But if I want to make this a good business, I have to find technology needs that could lead to $100-million licensing agreements. We never divorce the technology side from the business side."

Though chambers of commerce, government agencies and university outreach programs all are in the business these days of helping companies find operating solutions, he insists that his less parochial mandate provides greater flexibility to find the best answers, regardless of their origin. "We're not constrained in the same way that other organizations are. I don't care where I get the technologies from. What Cleveland Tomorrow is looking at is how can we improve Cleveland's technology-based economy, so as long as I'm bringing it here to the Cleveland area, that works for us."

How to reach: Ken L. Zinda (216) 574-6276 or kzinda@stratos.net