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A startup ecosystem

For success in innovating, look for support in academia, industry and government.

Features | May 9, 2022 | By: Seshadri Ramkumar

This oil-absorbent fibrous product showcases a successful academia and industry collaboration in support of a startup. Photo: Brad Thomas, Texas Tech University. 

The recent COVID-19 pandemic has emphasized the need for, and the benefits of, translational research, which enables startups. “Startups are akin to having new plants and trees in an ecosystem,” says Dr. Atul Parvatiyar, director, Center for Sales & Customer Relationship Excellence at Texas Tech University. “Without new plants and trees, we will have a shrinking ecosystem, unable to rejuvenate itself and remain vibrant. The startups bring innovations to market, thereby exerting competitive pressure on existing businesses to adopt innovations.” 

A startup ecosystem is, in fact, an important pillar of the modern economy. Since the 1990s, the Information Technology (IT) sector in particular has grown tremendously, due to many nascent operations that have evolved into multibillion dollar corporations, such as Meta (formerly Facebook), Google and others. It is understandable that initial capital investments in the IT sector are relatively less compared to textiles or the chemical industry, as the IT sector relies on technically advanced human capital. But there are valuable lessons about risk undertaking that the textile industry can learn from the IT industry. 

The IT sector has created a culture that provides freedom to its workforce, which leads to more empowerment and enhances creativity and productivity. It is also built on the concept of accepting risks to get rewarded. Traditional sectors like textile manufacturing must engage in diversification of projects by spinning off into small startups to develop value-added products.

Building success

Concerning the necessity of startups, Prof. Sridhar Narayanan, founder of Chennai, India-based Grand Alliance for Management Excellence, says, “Startups bring in agility, solutions to existing problems, employment generation, and they bring in funds leading to a positive economic cycle.”

Jennifer Souter, licensing associate at the Office of Research Commercialization, Texas Tech, elaborated on “failure” and its role in future success. “Many startups fail, and entrepreneurs must be willing to fail before they can succeed,” Souter says. “It is often an entrepreneur’s second, third, or even fourth venture that is the one that is successful in the end. They should also be willing to seek out and avail themselves of all the different resources available and take advantage of the many great mentors that are out there for support.” 

Risk-taking approaches

Conventional sectors like textiles, petrochemicals and energy were regulated for decades in major manufacturing countries like India and China and are dependent on government supports such as power and tax subsidies, which take them away from risk-taking approaches. Developed economies, including the U.S. and Europe, need to revitalize their manufacturing to safeguard their own supply chains. Two important pathways could be helpful: diversification and startup spin-offs. 

As we know, COVID 19 disrupted supply chains and impacted geopolitical circumstances. But uncertain weather patterns also impact the textile industry and have forced the industry to look for new opportunities. Advanced textile innovations are not only possible but will continue to be important in those fields that enhance human life, support energy conservation and protect the environment. 

Research commercialization

Universities are now emphasizing commercializing research as a way of creating jobs through startups that are founded by students, with faculty having a stake in the companies if they contributed to the student projects. Startups need this support to make the move to commercialization from research ideas that come out of academia, private and public research laboratories. Universities serve as a cradle for the startup ecosystem. We have plenty of successful models as examples, such as Research Triangle Park in North Carolina, IT hubs in Silicon Valley and biomedical hubs in the Boston area. 

“Compared to the past, many universities have now better understood the value and their role in supporting an ecosystem of research commercialization, driving market-level innovation, sparking entrepreneurship and energizing the business ecosystem within its sphere,” says Dr. Parvatiyar.

“So many great ideas are borne on university campuses and labs,” Souter says. “The challenge, however, is that they are often early stage and have been developed without any insight from the market. Translating that underlying research into a marketable product is therefore often challenging because it is often very disconnected. Knowing who your customer is, what products exist and where there is still an unmet need helps ensure you are developing technology that can be competitively differentiated. It is these technologies that have the highest chance of success in getting to the marketplace.”

Serving the industry

Startups can provide support to conventional companies in translating new research and helping with product diversification. Such a collaborative endeavor would serve as a win-win for all parties involved. Recently, India-based Jayalakshmi Textiles, a fine yarn count, 100 percent cotton spinning mill, collaborated with Texas Tech to come-up with an industrial fabric product.

Research endeavors at Texas Tech needed a partner with a cotton manufacturing enterprise to translate lab work into a viable marketplace product. While the two-party collaboration resulted in a commercial product, which has been validated by a third party, marketing help was needed. A new model of collaboration evolved which enlisted a startup to help with marketing. 

Startups can also provide services to industry by serving as contract research and testing laboratories. This model is gaining momentum as many large corporations are using outside help to undertake research. 

Chennai-based Asthagiri Herbal Research Foundation was founded in 2000 to serve industry and academia in developing new ideas and translating them into real products. Among its developments, this institute has come up with an herbal-nanotechnology based microbe killer, which can be used to functionalize textiles to offer new, sustainable, medical textile products.

Dr. Srinivasan Narasimhan, founder and chairman of the foundation says, “Startups are craving for funds to either develop the proof-of-concept or invest in infrastructure for manufacturing,” and he emphasized the need for government support for such research startups. 

Mutually beneficial

Startups need not be heavily concentrated in IT, biotechnology and marketing; there is need in agriculture and manufacturing sectors, as well. “Rural development through agriculture startups can contribute to job creation and help with farm productivity,” adds Dr. Narasimhan.

This startup model, which serves as a contract research laboratory, can also train scientists and researchers for higher degrees such as a Ph.D. Asthagiri Herbal Research Foundation has trained 28 doctoral students, and many of them have gone on to found startups.    

Startups can grow initially with the help of government support both for sourcing ideas and to get financing. Governments, generally, are actively supporting such models in defense and medical areas. The U.S. has been a pioneer in this effort by awarding contracts to leading consulting agencies and contractors. These agencies connect innovators with entrepreneurs, with financial support from government. 

Expositions and business briefing sessions can be arranged where product displays enable investors to connect with latest ideas and innovation. FiberTect® decontamination wipes became a commercial reality through First Line Technology, based in Virginia, and followed this approach.

Marketing potential

Startups can also look to government for marketing support. “Government could provide a marketing portal for posting products and services that can be offered by startups free of cost,” says Dr. Narasimhan.  According to Sridhar Narayanan, “Digital is the way forward for marketing and can be utilized in the best feasible way.” 

Dr. Atul Parvatiyar agrees on the importance of marketing support for young startups. He adds, “A venture with no customer interested in its offerings is essentially a dead venture. So, it is vital to consider markets, potential customers and users of their products and services, the value proposition that could appeal to potential customers, and ways to access markets and build customer relationships. Therefore, it must be deliberately thought through, and marketing ideas must be evaluated before large-scale investments are made in that direction.”

Taysha Williams, senior director of the Innovation Hub at Texas Tech says, “It is important for startups to do ‘gorilla marketing.’ This is hitting the ground with a little budget and talking to friends, family, co-workers, and so forth, about your company. Attend trade shows, get someone on your team who has marketing experience, so you don’t have to outsource everything.” This is sage advice indeed.

Starting early

Narayanan believes learning about entrepreneurship should start even earlier. “A startup mindset should be brought in from the high school level, and parents should be educated about the importance of startups in parent-teacher meetings at schools,” he says.  

Startups that adopt cautious, risk-taking approaches, active technology scouring and sourcing of ideas, as well as seeking help with marketing and promotions will create pathways for success in the advanced textiles sector. Collaborations in research and marketing with established organizations will further support these solid efforts.    

Dr. Seshadri Ramkumar is a professor in the Nonwovens and Advanced Materials Laboratory, Texas Tech University, and a frequent contributor to Advanced Textiles Source.

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