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1 February 2016

Tom Hockaday to leave Isis Innovation

After sixteen years at Isis Innovation, Tom Hockaday is standing down. Gregg Bayes-Brown speaks to Tom on his legacy with the tech transfer office, current themes in university innovation and what is next for the head of Isis.

Author: Gregg Bayes-Brown, editor

Tom Hockaday is a hard man to drag boasts out of. Even in his final interview as the head of Oxford's technology transfer office (TTO) Isis Innovation, the 27-year tech transfer veteran came across as keen to deflect any credit and praise for his work in leading Isis and instead spread it thickly across Isis and the wider Oxford innovation community.

Despite this, Isis has enjoyed immense success under Hockaday's stewardship. Since he joined the unit in March 2000, the company has completed more than 3,000 commercial deals, has been one of the most prolific generators of high-quality spinouts in the UK and has consistently grown on past successes to the point where the company is developing at a 20% annual growth rate for each year Hockaday has been at the helm since taking over in 2006.

In the time that Global University Venturing has been following Isis, it has continually shown itself to be the most active, most engaging TTO in the country, leading to us naming it TTO of the year in 2014. Oxford University has seen its intellectual property turn into thriving companies and bring in megadeals, such as 2014's sale of gaming animation company NaturalMotion to gaming firm Zynga in a $527m transaction that returned $50m to Oxford – one of the biggest exits we have covered. The university also set up the world's largest university venturing fund at a staggering £320m ($460m) in the summer of 2015.

Meeting me in Oxford's Said Business School, Tom described his time with Isis as a fantastic experience, adding that it had been "one hell of a ride, as they say".

Hockaday has watched the TTO evolve during his time there. "In 2000, there were about 16 or 17 people. In 2006, there were about 30 to 35 of us. Now, Isis is an organisation with 100 people, mainly based in Oxford, but also a number at locations around the world. It has become, without question, one of the few leading university technology commercialisation organisations in the world."

Hockaday attributes this success to what he describes as amazing support from the university, as well as engagement and involvement from the academic community. Yet, the most crucial part of Isis's evolution for him has been the people working at Isis, and building a team of those who understand universities, science and technology, while also understanding intellectual property management and business.

"That has been one of the key to successes for Isis," said Hockaday. "We have grown a team of people who can sit in between universities, business, startups, entrepreneurs and investors, and help make connections between those worlds."

Not only has Isis evolved in size and scale, but it has also developed a breadth of activities. In 2002, Oxford University Consulting became a part of Isis Innovation, which meant Isis was not just transferring technologies from the university, but also bringing Oxford expertise to clients around the world.

However, the biggest single change Hockaday has seen is the presence of proof-of-concept (POC) funds, seed funds and university venturing funds. "We have had a whole series of seed funds start, grow and develop throughout that time. In the old days, we might have said that a POC fund is something that is nice to have. But what we say now is that university technology transfer is difficult to do anyway – doing it without a seed fund makes it nigh on impossible."

So with all that positive momentum accomplished during his tenure, what have been Hockaday's greatest accomplishments in his eyes?

"That is a tricky one," he joked. "I think one of the keys to success for those in the tech transfer office is to hang your pride up on the door as you walk into the office every day. There is enough pride and egos involved anyway without the tech transfer people trying to lay their own on it as well.

"Isis growing and becoming an organisation that employs 100 people that is sustainable and successful is fantastic, and I am pleased about that. The fact that we have grown the business at 20% compound annual growth rate for the past 10 years, including during one of the greatest recessions we have ever seen, that is huge. It reflects well on Isis, but also the brilliance of the research base at Oxford."

Hockaday will be handing over the reins to Linda Naylor, who will be joined by a new chief executive once the board has completed its search. He leaves Isis in a strong position, with one particular development acting as a major catalyst in the work the TTO conducts.

"One of the really significant things that has happened is the advent of Oxford Sciences Innovation (OSI). That is a very significant, immensely positive game-changer for commercialisation at Oxford. This is a £320m company which has got going in a remarkably short space of time and is already making investments with a huge amount of capital behind it.

"But it is not just the money that OSI brings, it is the network – not only the investors, but the network of individuals involved in creating OSI, which enables an incredible pull through from the university out into the investment and business world. It means that we are going to have the ability to grow Oxford spinouts so much faster. In the coming years, it is going to have monumental impact here."

Tom Hockaday and Linda Naylor collect a GUV award in 2014

Tom Hockaday and Linda Naylor collect a GUV award on behalf of Isis Innovation at the GUV Summit 2014.

One aspect of that evolving relationship with the investment world has been the Enterprise Investment Scheme and Seed Enterprise Investment Scheme (EIS/SEIS) funds. Hockaday said that Parkwalk Advisors, which now runs seed funds for Oxford, Cambridge and Bristol universities, has done a sensational job of getting university-linked seed funds going through EIS/SEIS, broadening the range of investors who can put money into the spinouts.

Hockaday is quick to point out that money for spinouts is not the be all and end all of tech transfer. "As exciting and popular as spinouts are, it is certainly not for everyone and certainly not for every technology. In terms of technology licensing, what is really important is that the university is continuing to show its commitment to investing in its intellectual property through patenting. A fundamentally important part of Isis's business is licensing to existing companies. Looking into the future, it is important not to lose sight of that, and to ensure that Isis continues to have the staff and the expertise to make that happen."

Another important part of Isis's future strategy is ensuring the entire university can feel the positive effect the company brings. The consultancy side of the business has established links with Oxford's social sciences and humanities divisions, and plans to strengthen these as it continues to build.

"One of the things for the future is going to be to see how Isis can support and utilise our expertise in the commercial domain to support researchers across the whole university," adds Hockaday. "That way, Isis can be seen by everybody at Oxford as an organisation that help them do things that they want to do."

Outside Oxford, Hockaday has seen a rapid evolution of technology transfer, and its place within the university innovation ecosystem.

"Fifteen years ago, university tech commercialisation was the story," he said. "But with the recent Research Excellence Framework impact assessment, it has become a small part of a far larger story of how universities interact, connect and have impact not only in an economic and business sense but also in a social, cultural and political way."

Hockaday said the TTO of today might be larger in size, but relatively, it had become a small part of a huge story behind the strategy of how universities connect with the outside world. He believes this will continue, and presents a challenge, as tech transfer professionals need to continue to explain to their own universities that what they do is a valid part of building those connections, as well as, possibly, making money.

"There is this balance between focusing on trying to generate impact from university activities and generate income from spinouts and the like. Conversations around that balance will likely dominate conversations for the next five to 10 years, partly because universities have to wrestle with the question of how technology transfer and knowledge transfer activities get paid for," he said.

"On one hand, universities would love not to have to focus on the financial aspects of technology transfer, but on the other hand, they know they have an opportunity to make money to invest back into their core activities and that they have an activity in tech transfer that consumes resources and needs to pay for itself one way or another."

Hockaday sees the solution continuing to make the case for what TTOs do for the universities. "They must ensure that having impact and making those connections from the university to the outside world via the commercial route is seen, quite rightly, as valid, important and justified. Sometimes going down the commercial route is absolutely the best thing and the right thing to do with your research output.

"Every research university in the UK now has a tech transfer capability, and they have built up track records and successes. Using that, they can explain that their activities have both financial benefit, but also non-financial benefits. What they need to make clear to university leaders is that it is the pursuit of these non-financial benefits that could also lead to more financial returns."

As noted, one of the biggest changes Hockaday has seen is the arrival of university venturing, ranging from POC and seed funds to the £320m behemoths. The momentum is surely pointing towards a greater number of funds popping up for university innovation, but I was intrigued to see whether Hockaday foresaw a similar upward tick.

"The short answer is yes. On the Parkwalk funds, they have taken advantage of the opportunity of matching high-net-worth individuals with university startups, and taking advantage of the EIS/SEIS tax relief to make it happen. They started with Cambridge, and then we were very pleased to be next, and now with Bristol joining too, what they have accomplished is absolutely superb."

However, Hockaday noted that universities looking to walk a similar path had to be confident that they had a strong enough supply of investible opportunities, and whether they had a sufficiently well-developed tech transfer team to work with Parkwalk or similar to develop strong investment propositions.

In terms of the larger funds, such as University College London's new fund and OSI, Hockaday said the question from the investors was where were they confident there woud be a sufficient supply of high-quality technology opportunities around which they could build really strong early-stage businesses which would then go on to grow.

"With that in mind, I would say it will gradually spread, but I do think there is a critical mass question here of whether a single fund for a certain individual university makes sense or not," he said, adding: "In many ways, we have already lived through this in the 2000s with the evolution of IP Group and Fusion IP working with a number of universities. So I think you will see more universities have greater access to these sorts of funds, yes, but I also think that you will see a growing number of consolidations and collaborations on funding as well."

The topic of consolidations is an intriguing one, as it has long been the opinion of GUV editor-in-chief James Mawson and me that collaborations are the best way for universities to put together an investible pipeline of technologies. However, the leading lights in building these collaborations have been external, private commercialisation companies such as IP Group. Does Hockaday believe there will be a growing number of IP Group-type firms leading commercialisation efforts in the years ahead in place of the traditional TTO?

"Not really. Universities – and for good reasons – will continue to have their own TTO capabilities. They have to have their own tech transfer office to safeguard the interests of the university, and there must be a group of people who manage the interface with investment funds.

"So, in that sense, I have never seen IP Group and the others as an external TTO, but as a great way to access money, expertise and company building capability for a TTO that wants and needs that sort of support. One of the things we have learned from Oxford's first chemistry department deal with IP Group back in 2000 is that yes, you get access to a new network of investors, but also you get access to an incredible network of business and industry contacts that can help accelerate the growth of these companies."

With that said, two major deals have emerged from collaborations without the assistance of IP Group or similar lately – UCL's Technology Fund, worth £50m and backed by Imperial College London's (ICL's) TTO Imperial Innovations, and the £40m Apollo Fund, a £40m investment vehicle supported by ICL, UCL, Cambridge and big pharma. Does this mean that rivalries are being put aside and that there will be more collaboration across the Golden Triangle?

"There is probably far more collaboration than people realise," replied Hockaday. "We all talk to each other a lot and support each other where we can. What might be very interesting is how things develop in London, where you have got Imperial Innovations, which already has its ties to Imperial College and UCL, playing a much stronger role as an investor around the capital, maybe backing other universities in the area. I am also sure that CIC and OSI are developing their own growth plans as well."

Eager to see just how well hatchets are being buried to make innovation happen, I thought it was worth stoking the rivalry fires by asking what it would take for Oxford to become a bigger tech cluster than Cambridge.

"We already are, of course," Hockaday smiled, but refused to take the bait. "Oxford is a world-class technology community and tech cluster, and I feel the same way about Cambridge. I also think that just as every year they run the boat race, every now and then, people try to compare the two tech clusters. What I think is really important here is not who has the biggest cluster, but that both are able to effectively communicate the power and strength of what is going on, and get the message across that there are wonderful opportunities in both places." 

Tom Hockaday giving a talk
Tom Hockaday gives a speech.

Talking more broadly on how a university can develop a tech cluster, Hockaday said it was not just about the university – it was about everyone in the community in the area working together. He praised the work of the Oxfordshire Local Economic Partnership, which has been integral in efforts to pull together the interests of everybody involved with the Oxford tech scene.

"To add to that, there comes a stage where you need space, you need buildings. We know we have got great plans in the works here at the university such as the Bioescalator building and developments at the Begbroke Science Park. But beyond the university, there are a number of commercial property developers building research and science parks around Oxford. The more physical space we can get within the city and around the area for startups and small to medium-sized enterprises to relocate where they are surrounded by like-minded folk and find support, the better. We already have that thriving innovation community – we just want it to thrive even more."

It is easy to sum up tech transfer as a university activity but, in truth, there are four major players. There is obviously the university itself, but what any institution is essentially doing is taking taxpayer cash and turning it into innovations, and therefore government also has a major role. Then there is the end goal of getting it out to the investor and industry communities. As we came towards the end of the interview, I was keen for Hockaday to provide parting advice to these players gained over his 27 years of experience.

"The real thing for governments is consistency and continuity," he said. "When you look at what various governments have done over the past 15 years, there are in fact a lot of real positives, especially the Higher Education Innovation Funding (HEIF) programme. HEIF is the envy of many countries around the world in terms of straight cash support for universities to help them develop their knowledge exchange activities."

Hockaday said government must try to resist the understandable temptation to change things and bring in new initiatives, citing HEIF as a good example.

"The program has been going for some time, and it is really important for universities to have that strong foundation upon which to conduct these activities," he said, adding: "Another thing I would say is that when you get a report as strong as the recent Dowling Report, act on the recommendations rather than commission yet another review."

For universities, Hockaday said it was crucial to continue to recognise that the commercial route by which the outputs of university research find their way into business and become better products and services is entirely valid and important. "It is an appropriate part of what universities are there to do. The commercial routes that we take in tech transfer are, very often, the best ways that research output can have an impact on society."

For investors, he said the most important thing was to get to know the people you are dealing with. "Get to know each other. Get to understand each other. Realise that you have to live with each other's imperfections if you want to stick around and operate in this space. University researchers are always going to be different types of people to the investment community, entrepreneurs, university administrators, tech transfer people, and therefore all sides need recognise that and figure out how to not let that be a problem."

Hockaday had a similar message for corporates, adding that corporates could show more flexibility when engaging with universities.

"I am obviously biased, but if you were to look at the way universities have made huge leaps and bounds in their ability to interact with corporates, and compare this to corporates, then I am not sure corporates have put in the equivalent effort. I think this is a big theme for the future – how can corporates help themselves, but how can everybody encourage corporates to engage more with universities because it is such an important thing to do. But they are only going to do it if they get it and they think it is a good idea, and innovation communities need to convince them of that."

Finally, I wanted to find out what was next for Hockaday himself. Most importantly, would he be looking to move on to another university?

"I started working in this sector around the same time the Berlin Wall came down, in 1989," he replied. "I worked at UCL for four years, Bristol University for seven, and now 16 at Oxford – that is a long time to be working with universities. So, when I do stop at Isis, based on the "three strikes and you are out" rule, I am not immediately planning to work for another one.

"What I do hope to do is to develop a range of activities which keep me busy, but not necessarily as busy as I have been. I will be building on the experience I have got of helping universities and businesses understand each other, helping manage and run POC and university seed funds in an effective way, and use my knowledge of intellectual property management, of universities, of business to help other people." 

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