Research projects graduate from university to marketplace

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: It was the University of Arizona business school’s annual Fame or Flame day, and faculty members were rating business ideas pitched by students of a entrepreneurship program as either first rate or feeble.

To the disappointment of Sara Conrad and Daniel Berger, who were both juniors in the McGuire Entrepreneurship Program three autumns ago, the rating on their idea to develop customer-service kiosks in retail stores was: flame. The judges said the project was unfeasible because it would be too easy to copy and would have a low return on investment. “We had to start all over again,” Ms Conrad said.

To help them, a professor gave them a catalog compiled by the university’s Office of Technology Transfer that described dozens of technologies developed in the university’s physics, engineering and other scientific laboratories with the potential for being used commercially.

The invention that grabbed their interest involved two professors in the medical school who had designed a portable device able to peer into children’s eyes and photograph the retinas to detect shaken-baby syndrome. The two students reached an agreement with the researchers to develop a business plan to sell the product.

The two students conducted focus groups, analysed competing products, determined a target price and estimated the market size. The doctors had envisioned selling the device to ophthalmologists; the students added pediatricians, hospitals and emergency rooms as potential customers. “They had a device that was outstanding,” Ms Conrad said. “Dan and I took what they had and built it a little more to take it to a market they hadn’t thought of, and built a financial plan they hadn’t thought of.”

They proposed a price of $5,500, a third of what the least-expensive competing product was selling for. They incorporated the company as Optica Inc. and laid out an exit strategy with details of how the ownership would be divided among the founders if the company was acquired.

After Berger and Conrad graduated the following year, the doctors sold the prototype and business plan to a local business group in return for shares in the company for themselves as well as Berger and Conrad. The company, now called Optica Technologies Inc, expects to have the Prism1 retinal camera instrument on sale within six months.