I received a phone call from a marketing person with the Federal Reserve Bank (Minneapolis) last week. He is doing an article on successful university lead technology transfer programs. From the data he relayed to me, it appears that Montana State is doing a better than average job at transferring technology to start-ups. And quite a bit better than average at that. Based on that data, MSU is in the top quartile of universities when you consider the number of technology licenses executed with start-ups relative to MSU's overall research expenditures. And most, if not all of those licenses are to Montana based companies. His question to me, Why? What makes MSU, Bozeman or Montana different?

There is no single driver of this but here is stab at a core reason. A significant portion of MSU research is in areas that lend themselves to efficient and economical start-up opportunities. Consider the front end costs of starting a pharmaceutical business v. those costs of starting a business based on technologies such as photonics, thin films and software. Software companies can have market ready products in days. Pharmaceutical companies? Decades. Obviously research related to the pursuit of new drugs is being done on campus but there is a lot more activity in the EE department. When you consider the fact there is little to no private equity in Montana the chance of a researcher finding multiple millions of dollars for a drug development venture are very slim.

Certainly there are other factors - the Montana work ethic; an entrepreneurial do-it-yourself attitude that perhaps has its roots in ranching and farming; entrepreneur support organizations such as TechRanch; and obviously kick-ass research. But it's the nature of the technology itself - those endeavors that can be commercialized on little or no capital that are at the core of this argument.

For many reasons Montana will continue to be ignored by the capital markets for the foreseeable future. As such, the successful technology entrepreneurs in Montana will be those that commercialize technology that does not need significant investment in R and D.