Episode 59: Building Innovation Ecosystems in Biotech with Key Opinion Leader Mark Crowell (RE-RELEASE)

What are innovation ecosystems? In this fan-favorite episode, learn how to drive authentic partnerships and how to develop a successful innovation ecosystem in your region.

You're listening to Bio from the Bayou, featuring stories and industry insights from experts in the bustling biotech scene of New Orleans.

The entire Gulf Coast region is buzzing with expertise and excitement. We're here to bring you frontline access to this vibrant ecosystem direct from NOLA, a city that provides a little lagniappe with everything we do.

Where people come for the science and stay for the food, festivals, and resilient culture. Today's guest is Mark Kroll. He is the co-founder of Arcane Innovation and the executive entrepreneur in residence at the Eshelman Institute for Innovation at the University of North Carolina at Chapel Hill. Welcome to the show, Mark.

Thank you. Glad to be here.

So you've been at many institutions in a chief innovation officer role throughout your career, but you were always focused on building an ecosystem as part of those efforts. Even before it was in vogue to do so. Innovation ecosystem is a term we now hear quite often. How do you define an innovation ecosystem?

You know, I think of it to sort of steal Hillary Clinton's book title, It Takes a Village. I don't know of any ecosystems, even Silicon Valley, San Diego, Boston, that have every resource, every capability that they need to advance high-risk, early-stage innovation through the translational pipeline. The innovation ecosystem that I think about Involves bringing together people like you've done here with Bio on the Bayou, bringing together company partners, investor partners, entrepreneurs, mentors, facilities such as medicinal chemistry labs, CROs, all the things necessary to take an early-stage innovation through that very challenging valley of death, a term that I hate, but it's pretty apropos, right? And to get it what I call investor-ready.

Right. And it sounds like you're saying that there isn't a one-size-fits-all formula. You know, you've got— we think of innovation ecosystems, as you mentioned, in the Bay Area or in Boston, Research Triangle Park. For a place like New Orleans or other smaller ecosystems, what do you think are some of those key elements that are going to be needed to build that?

Well, I think it requires a lot of flexibility and a lot of willingness to network and to partner. And again, I'm blown away by the quality and strength of the partnerships you're building here in this region. I've worked in Research Triangle Park. Everybody thinks of that as a very strong ecosystem. I've worked in San Diego, obviously another strong ecosystem. When I got to Charlottesville, Virginia in 2010, you have a well-branded university, but no venture capital, no biotechs, no pharma industry, no mentors in residence, no obvious talent and money and other resources needed to take early-stage assets out of a very strong research program at the university. And begin that arduous journey through Valley of Death. So looking to see what we needed in that case were some unique initiatives to bring people to Charlottesville. It was a flyover zone, so what could we do? We thought not just, for example, not just have a pitch event for venture capitalists, but we had an event where we told them, if you come to Charlottesville, we'll spend one day telling you what you're gonna be investing in 10 years from now, and the next day we'll pitch. And so it became kind of a little bit of a gimmick, but it was a great way to begin to build interest and a buzz around the pipeline that we had in Charlottesville. And after 4 years of doing that, a study came out that showed that Charlottesville was the fastest growth area for venture capital investment in the US for that last year that I was there.

Oh, wow.

So I think it's a critical example, if you will, of the value of not just sort of looking inward, but looking outward and beginning to partner in a very Some might even say a promiscuous way, being open to any and all partners that want to come work with you.

Absolutely. And I think that's a big part of what Bio on the Bayou is about, what we're here today to do. And also from the Bio from the Bayou podcast is kind of building that ecosystem in a nursery-like environment that doesn't have the same way as Charlottesville probably didn't, all of those pieces and parts, but make a compelling argument to bring those people down here and work with us so we can get our message out. And I think also it's— you're right, you say that first day, it's not about pitching, pitching, pitching. This is why you're going to invest in us.

That's right.

Build that partnership, build those relationships, and then hopefully that will pay dividends in the future and continue to do so instead of just that singular deal.

That's right. I think what you're doing here is something that we really perfected, I think, at UVA, which we called authentic partnering. So we didn't just tell companies and venture investors and entrepreneurs to come and listen to what we wanted to sell them. We said, come and tell us what you're interested in learning about and investing in and sponsoring, and we're going to tell you what we've got going on that kind of fits your interests, or we're going to work with you to define a program that reflects your interests and the interests of our scientists and entrepreneurs. And over time, some amazing examples of success came out of that very deliberate approach to partner in such an authentic way.

That's great, and I think that's exactly what we are trying to do down here. So it's nice to hear that validated in something that had worked in another region of the country. And I do believe James Zanewicz, one of our co-hosts on this podcast, he's definitely been a mentor to me into the importance of those relationships. And it certainly has paid dividends recently at LSU Health New Orleans and some of the deals that we've created through creating relationships and with nothing expected on the front end, but really getting out and finding what can we provide those other external partners. So traditional tech transfer offices play a critical role in many ecosystems. What are the challenges and opportunities you see in enhancing the effectiveness of these groups as they contribute to an ecosystem's development?

I think you're right in saying they play a critical role in growing and sustaining an ecosystem. Some of the challenges they face are what I would call the competing expectations that often exist. For example, I've been in many locations as a consultant or even a practitioner where we talked about forming companies, bringing in investment, creating jobs, really raising the standard of living, if you will, in a particular region. But then when you go to build out your program and submit your budget request for additional personnel or additional programs, the question that comes back is, how much money did you make last year? And so the question is, is this all about the money or is it about creating value? for a region. My belief is technology transfer offices should lead the conversation about creating value, new companies, new jobs, new partnerships, new research dollars, new research collaborations. And guess what? In my belief, and I think I can point to lots of examples, the money follows if you don't focus only on the money. If you focus only on the money, you're likely to be disappointed.

Yeah, I couldn't agree more. I've been in academic tech transfer for over 20 years now, and I know that all of us in this industry have been making that argument to our superiors for as long as tech transfer has been a thing. And I tend to certainly move towards or want to work for institutions that do value those partnerships and the mission that we're supposed to be following, bringing benefit to the public. And what I always like to say is licensing revenue will follow, and it should be a happy accident of the activity that we're doing anyway, creating those partnerships and bringing those technologies to the marketplace.

Well, I think that's a metric that you're never going to get away from. Of course, it's important.

Of course.

And so I would never argue against that. But people need to look at— I mean, in San Diego, for example, I remember when the San Diego— the UC San Diego folks told me that one of the metrics for their impact assessment was the growth in the endowment of the San Diego Community Foundation. There were more wealthy people who felt like they wanted to give back to the community, who wanted to give back to the university. And those are the kinds of measures that I think we don't typically think of when we think of the value creation that a technology transfer program can help to catalyze.

Great, great. Well, and I think that's a good segue. You know, we're here at BIO in the Bayou in New Orleans. We're meeting with a lot of our external partners. We've got industry, investors, foundations. What are some ways that you think academic institutions can work better with their corporate colleagues and other external partners to kind of help grow this innovation ecosystem we're talking about?

I think the first word I will That comes to mind is transparency, lowering transaction friction, removing the mystery. In my 30 years— see, I've got you by 10— in my 30 years of running technology transfer programs, I wish I had a dollar for every time an industry has said, we don't understand how you do business.

Right.

It's a black box, you know, it's a mystery. And so I think whatever we can do to enhance transparency, remove the mystery, make it clear, post your standard agreements. Post standard term sheets on a website. Really work with the partner to define a program that not only addresses the needs you and your research team have, but addresses what they tell you they're looking for. That looks for long-term value beyond just the immediate license fee and equity stake. Are they willing to fund a postdoc? If the program goes well, might they come back and fund another and then another? Repeat customers. It's one of the actual metrics that I gave at the University of Virginia when I was hired. They asked me what metrics did I want to be evaluated by. And I said, repeat customers is one that I— because they had none.

Right.

The theme in Charlottesville at the time— I shouldn't say all this, but the theme in Charlottesville among the business community was, we got our deal done with UVA. Oh Lord, please don't make us have to do another. That was very much a major goal we had, was to create that kind of a synergistic relationship with our partners.

Well, and it sounds like there was some education on your end to leadership when you joined UVA. And do you think that that's a big part of kind of helping this innovation ecosystem grow, is an internal educational campaign about what our corporate partners expect, what we should be doing to lower that friction and that sort of activity?

I think it's critical, Patrick. I think, you know, that we just came from a breakfast, as you know, where you had the dean of Tulane's medical school and the assistant or associate vice chancellor from your university and having the investors and the company folks present, hearing them talk about how important this is to your universities, it's a critical thing. Too many times people in those positions say they support it, but again, are kind of arm's length and not too sure how to answer questions. It's a high-risk activity, and some of them are so risk-averse that it kind of scares them. So whatever you can do as a TTO director, as a chief innovation officer, to sort of remove that fear factor, Educate them to become your biggest advocates. At the University of Virginia, the president of the university in the 4 years I was there never made a public speech without mentioning the importance of innovation to UVA.

Wow.

And tied it into the very founding of the university. Jefferson was the founder of the Patent Office, and he had this wonderful phrase that said we should make science useful. And that became kind of the bellwether for what we were doing. Go to Saudi Arabia, where I was at King Abdullah University of Science and Technology, and it was all about Shifting the kingdom's economy from an oil economy to a knowledge economy. And all of a sudden, the Minister of Investments, the Minister of Education, the Minister of Health were circling around all the time. What can we do to help you be successful? So having the president and the trustees understand that and reflect that when they were allocating resources and assessing programs was a critical component of success.

So changing gears a little bit, obviously you've been involved with You've worked with many universities over your career, but could you tell us a little bit about your new work with Arcane Innovations and its mission as it relates to building innovation ecosystems?

Yeah, Arcane Innovation is a firm that I created several years ago with a group of colleagues that I met in the Middle East. And the other 3 are in Europe. I'm obviously in the US. And we are working with regions and development authorities in various parts of the world that are undertaking initiatives very similar to what you're doing here and what we're doing in RTP. And in fact, I'm I'm a big believer that every economy in the world, every regional economy, has an innovation economy initiative. So we've got to innovate in how we do what we do and always seek to get better and faster and more successful at partnering and networking. Arcane is working with, in one case, for example, with a government authority in Saudi Arabia and a consulting firm in Dubai to develop a strategic plan for a brand new innovation district in the the NEOM development in northwest Saudi Arabia. So this is literally from the ground up, what can we do to begin to build an ecosystem of space, but not just space, of partners, collaborators, investment funds, and other resources that are critical to attracting the best talent, creating an environment where they can thrive and create and innovate and ideate, and in so doing, begin to build a pipeline of companies that will then Leave the innovation district and go populate other parts of Neom, which is a huge project. The landmass the size of Belgium, but the vision is to have oxygens sort of fuel the evolution of Neom over a long period of time. Also working through Arcane with the World Bank to build innovation ecosystems in Eastern Europe. Worked in Serbia. I've done a lot of work recently, recently in Romania. These are ecosystems that have a tradition of very strong science. The old Soviet bloc countries. As you may know, used to have these academies of science, the Academy of Physics, the Academy of Medicine, unbelievable science, but it was all geared toward defense kinds of applications. And there really wasn't a strong infrastructure in place or a culture in place to connect those research assets with market needs. So what we've been doing through Arcane and the World Bank is going in and working with universities, with regional development authorities, and with teams of innovators to begin to advance the specific projects toward the market, and in so doing, leave behind an infrastructure and a capacity that make it easier for them to do it on their own over time.

Sounds like exciting stuff.

Yeah. Well, my educational background is in city and regional planning, so it sort of marries my 30 years of technology transfer with my interest in what I call innovation placemaking. What are the qualities of a geography, of a region, of a location— cultural, financial, resources like incubators and accelerators, access to talent, and where those things are in short supply, what can we do to fuel them? And that's why, back to your original question, it's not a one-size-fits-all. You look at those factors in whatever region or environment you're working in and design an approach to help create a pathway for innovations to have a better opportunity to get to the market.

Well, that's a perfect lead-in to my next question. And obviously we're recording this right in the middle of BIO on the Bayou. Can you tell our listeners why you thought it was worthwhile to make the trip here to join us?

Absolutely. I've been watching this event evolve over the past couple of years. I'm very interested in what I call the, the medium markets or the flyover markets, not Boston, not the Bay Area, not RTP. I don't know that we're quite at the same level as those 2, but it's a very strong ecosystem and on the radar of a lot of folks we want to partner with. Regions like New Orleans and a number of others where I'm working are not necessarily places that you think of in the same breath. You guys have been busting it, and you looked around the room this morning at this breakfast, and you had Silicon Valley Bank and Lilly Ventures and Osage University Partners and quite a few companies and on and on and on. So you've clearly gotten the attention of the investment and biopharma partnering world, and I wanted to come see it. I wanted to come see how you and how LSU and Tulane are working together. It reminds me, I've got to tell you, It reminds me of what I've seen and what I've often referred to as the success factor in Research Triangle Park. I mean, most of my career is in RTP, and when I was president of Autumn or when I've been traveling around the world with some of these other roles, people say they always want to talk about RTP. How did you do that? Right. I grew up in North Carolina, and I remember as a first grader, we were taught to salute the state flag and to say, "I'm from North Carolina," and my my state produces more hosiery, towels, and cigarettes than any other state. We were 49th in per capita income. And so what did we have that we weren't necessarily capitalizing on? We had 3 research universities in close proximity willing to partner. We kill each other like hell on the basketball court.

Right.

But we partner promiscuously. We actually did a study that showed the NIH and NSF grants coming out of each of the 3 schools, well over 50% had co-PIs at one of the other schools or collaborating scientists. So in essence, we're leveraging more than $3.5 billion of research by developing that partnership mentality.

Right.

So I wanted to see how you're doing it here and to bask in the glory of what you guys are building. And as you know, I have strong interests in the area. My wife is a New Orleanian, and I've come here regularly anyway. So we were planning this trip, and next thing I knew, I'm sitting here with you.

Well, we're absolutely thrilled that you were able to make it, and it's been an absolute pleasure talking with you today. And we certainly look forward to following your work in the future. As always, we will have Mark's contact info and informational links posted in our show notes. Make sure you check them out to learn more. Thanks, Mark.

Great. Thank you. Good to be with you.

This episode of BIO From the Bayou was recorded at BIO On the Bayou, our annual event showcasing academic science, biotech, and startups from the entire Gulf South region. Save the date for 2024, October 29th and 30th. Check out bioonthabayou.com for more information. Thanks for joining us for Bio from the Bayou, and we hope you'll join us again.

If you'd like to learn more about the emerging biotech scene in New Orleans and the Gulf Coast region, visit us at biofromthebayou.com, where we have more info on who we are, how to get involved and connected in biotech in New Orleans, and the industry events we'll be hosting where you can meet with us in person.

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We'll catch you on our next episode of Bio from the Bite.