Jeff Bargiel (GRS ’09) was still a graduate student when he got his start in the alternative energy industry.
His break came in the fall of 2007, two months after he enrolled in the Science and Technology Entrepreneurship Program (STEP) at Case Western Reserve University. He’d arrived on campus that summer with a bachelor’s degree in applied physics and three years of experience as an optical engineer. Before choosing STEP, he had looked at several professional master of science programs, all of which combined advanced science instruction with business courses. STEP appealed to him because of its distinctive focus on innovation and entrepreneurship.
Like all STEP students, Bargiel was expected to find an internship that involved bringing new technologies to market. So he started networking in the Cleveland area. One afternoon he made the rounds at a university career fair, handing his resume to corporate recruiters and hoping for interviews.
As the hours passed, though, he felt increasingly out of place. Most of the recruiters were from large, established companies; he could tell by the professionally printed signs surrounding their tables. When he introduced himself, they thanked him for his interest and said, “Please go to our website and apply.” That’s where the conversations ended.
Bargiel concluded that he would have to pursue his search elsewhere. “But as I was leaving,” he says, “I saw a poster board with some pictures taped to it. And I thought, ‘Ah ha! You’re a startup company. Your resources are still going to technical development and not yet to marketing.’”
He approached the table with the makeshift display and soon found himself talking with J. Kevin Berner and Chris Brett, two former management consultants. They were just launching Phycal, an energy company specializing in converting algae to biofuel. Today, the best-known biofuel in the U.S. is corn-derived ethanol. But algae yields far more biofuel per acre than corn or any other crop. Phycal’s goal was to develop methods for growing algae and extracting the oil on a commercial scale.
Two days after the fair, Bargiel went in for an interview and got his internship. Within three months, he was working full-time at Phycal while continuing his studies in STEP. For his master’s thesis, he outlined a plan for adapting a new, expensive technology and making it affordable for biofuel production. Securing grant funding for this project, and seeing the technology develop, has been one of his proudest achievements.
“I started so early with Phycal, I feel that I’ve helped build it to where it is now,” Bargiel says. He has led the firm’s successful efforts to win government and private support; Phycal’s funders include the U.S. Department of Energy, the U.S. Department of Agriculture, the National Science Foundation and the Air Force Research Laboratory. In addition, he has contributed to “nearly every aspect of the growth of a newly formed company,” from accounting to market analysis to information technology.
In the process, Bargiel has seen the company change “at a lightning-fast pace.” He was Phycal’s fourth employee; today there are 50. Along with its main office and research facility in Highland Heights, Ohio, Phycal operates a biotechnology lab in St. Louis, and it is building an algae pilot plant in Hawaii with a $50 million grant from the Department of Energy.
“There has been a lot to learn,” Bargiel says, and he credits STEP with alerting him to the challenges he would face.
“A lot of scientists and engineers come in thinking that the business side of things isn’t all that hard,” he observes. “After all, it is typical human behavior to underestimate what we do not know. But STEP prepared me by showing me the breadth of skills that were going to be needed to assess the commercial viability of a technology, establish an early business plan, get the business off the ground and make it grow.”
Bargiel is one of more than 60 alumni who have completed the STEP program since 2001. Collectively, they have played a significant role in raising more than $125 million in growth capital for startups and small companies, according to program director Edward Caner (GRS ’03), a STEP graduate himself.
As Caner points out, STEP alumni are assets not only to their employers, but also to society. They are helping develop products that are “smaller, faster, cheaper, more efficient” than what came before. “If innovation is truly happening,” Caner says, “the world becomes a better place.”
He has learned to recognize prospective students who will make such advances possible. “Most of them are very passionate about the science and the engineering and the technology,” Caner says. “But at the same time, there is some kind of passion for striking out on their own or being part of a team that’s doing something brand new.”
STEP is actually a family of master’s degree programs, offering tracks in physics entrepreneurship, entrepreneurial biotechnology and chemistry entrepreneurship. The tracks share several core courses that introduce students to business and finance, technology transfer and theories of innovation.
The concept originated in the physics department in the late 1990s. Recognizing that startup companies had become a major source of technological advances, members of the physics faculty began looking for ways to teach students to flourish in entrepreneurial settings.
The idea found favor with many of the department’s alumni, says Dean Cyrus C. Taylor, the Albert A. Michelson Professor in Physics and the program’s founding director.
“We had graduates who had gone off and pursued entrepreneurial careers,” Taylor recalls. “Some had started companies right after completing their degrees, and some had worked for a while first.” These alumni felt that future generations of physics graduates shouldn’t have to “learn all the lessons in the school of hard knocks.”
The program’s first and most generous benefactor, Robert Stieglitz (CIT ’62, MS ’64, PhD ’68), shared this belief. In the spring of 1998, he funded a lecture series that brought physics entrepreneurs to campus, where they met with faculty and students and shared their ideas about entrepreneurship education. The presenters included the donor’s brother, Richard, a nuclear engineer who had started a government consulting firm.
Stieglitz died in February 1999, at age 58. He had told his brother he planned to make a major gift to the physics department to help students learn “what’s possible in the real world, beyond their laboratories and computer rooms.” His $1.6 million bequest spurred the creation of the Physics Entrepreneurship Program, the precursor to STEP, that fall.
In designing the curriculum, Taylor collaborated with Robert D. Hisrich, an authority on entrepreneurship who had joined the faculty of the Weatherhead School of Management.
“The advice we’d gotten from the alumni and others was, ‘Keep it lean, flexible and grounded in the real world,’” Taylor recalls. “So we threw out the prevailing model for interdisciplinary programs and decided to structure it anew. For example, our students would write a master’s thesis, but it had to involve a real project in technology commercialization.”
At the time, the concept of physics entrepreneurship was unfamiliar, and even suspect, to much of his profession, Taylor says. But within a few years, his ideas had gained a more receptive audience. In 2002, he was named an American Physical Society Fellow for “providing a new paradigm for graduate education in physics.” The following year, he and Hisrich, who now teaches at the Thunderbird School of Management, received the Price Institute Innovative Entrepreneurship Educators Award from the Stanford Roundtable on Entrepreneurship Education.
The philanthropic community also recognized the program’s significance. STEP has received support from the Coleman Foundation, the Burton D. Morgan Foundation, the Alfred P. Sloan Foundation and the National Collegiate Inventors and Innovators Alliance.
“I continue to believe that this is an important part of what the mission of the university should be,” Taylor says. “It’s not the only thing, and that’s not to take away from the traditional missions. But I believe it’s important for society.”
Today’s STEP students explore business and innovation with Bruce Terry, the retired president of Cleveland-based Mayfran International. “I signed on to be a mentor and an industrial liaison,” he recalls, “and I ended up teaching two of the core classes.”
In these classes, students learn how to perform a market analysis and determine whether a technology is ready for commercialization. They acquire the skills they will need to develop and implement a business plan. Along the way, they hear from a series of guest speakers, including experts on intellectual property, founders of successful startups and aspiring entrepreneurs seeking feedback about their ideas.
While teaching in STEP, Terry has become familiar with what he calls an “ecosystem” of innovation in Northeast Ohio. The area is home to scores of high-tech companies, especially in biomedicine, nurtured by business development organizations such as BioEnterprise and JumpStart. The resulting opportunities help explain why 68 percent of STEP alumni have stayed in the area after graduating, even though only 16 percent lived here when they applied to the program.
Yukang Zhao (GRS ’07) launched his career at Arteriocyte, a local spin-off from the university’s Center for Stem Cell and Regenerative Medicine. When he joined the company, Arteriocyte specialized in developing therapies to regenerate damaged blood vessels in patients with heart disease and other conditions. Since then, Zhao has led its efforts to expand, diversify and establish a global presence.
Zhao had long dreamed of working at such a firm. He was born in Beijing, where his mother practices medicine, and as a child he often accompanied her on hospital visits. “I saw how happy patients were when they recovered, and how appreciative their families were,” he recalls. “This was when I began to think I wanted to do similar things when I grew up.” But instead of becoming a doctor, he resolved to help patients gain access to new scientific discoveries.
Zhao earned a bachelor’s degree in biology from China’s Fudan University before coming to the United States to enroll in STEP. He landed an internship at Arteriocyte in 2005 and quickly demonstrated his value to the company. According to CEO Don Brown, Zhao was a key person in obtaining a $2 million grant from the Defense Advanced Research Projects Agency (DARPA), which recognized stem cell therapy’s potential for treating battlefield injuries. The grant, Brown says, was “a critical component in the growth of Arteriocyte.”
Since then, Zhao has overseen the implementation of two product lines that now earn Arteriocyte millions of dollars each year. One of these products, the NANEX system, addresses a major challenge in stem cell therapy: generating sufficient numbers of cells to create an effective dose. NANEX fosters the rapid proliferation of hematopoietic stem cells, which have the potential to develop into blood cells. It does this by mimicking the bone marrow environment in which blood cells are naturally produced. Arteriocyte licensed the technology from Johns Hopkins University and put it on the market in December 2010.
“Some people may not realize the challenges of taking a technology from the academic lab to the next level,” Zhao says. “The requirements for a lab are very different from the requirements for large-scale production. In addition, NANEX is among the first nanofiber-based cell culture systems. It took a lot of marketing efforts to persuade customers to try it. We were so excited when we got the first order, and more excited when customers came back and ordered again and again.”
NANEX is currently used in research laboratories, but Zhao is guiding development of a clinic-ready version to facilitate the treatment of patients with blood-borne cancers. In July 2011, Ohio Third Frontier awarded Arteriocyte $1 million for this project. All told, Zhao has helped the company raise $6 million in grant funding since 2005.
Unlike Zhao, Christian Marin-Muller (GRS ’05) hadn’t always planned on becoming an entrepreneur. As a molecular biology major in college, he seemed destined for an academic career.
“I was fully invested in science and research, which is a great thing in itself,” he says. “But once I had gone through the STEP program, I knew that if I ever went back to science, it was going to be with an eye toward entrepreneurship. I was going to study something that had the potential to be spun off into a company.”
Marin-Muller embarked on his first business venture even before he graduated. In 2004, he co-founded Superior Scientific, a company providing research labs with advanced biotechnology tools along with basic supplies such as gloves and test tubes. Within three years, the firm boasted 600 customers and a catalogue of 750,000 products, and it was valued at $2 million. In 2006, Inside Business magazine named Marin-Muller one of the “Top 10 Entrepreneurs Under Age 30 in Ohio.”
He had hoped the firm would develop its own biotech products, funding research with the profits from its supply business. But the company went in a different direction, so he sold his shares in January 2007. By then, Marin-Muller says, “I realized that I missed the opportunity to do science.” He enrolled that fall in a doctoral program at Baylor College of Medicine. Still, he hadn’t relinquished his entrepreneurial ambitions.
Marin-Muller joined a research group exploring a new form of gene therapy. A few years earlier, scientists had discovered microRNA, a genetic material that regulates the production of proteins in cells. Subsequent studies revealed that patients with some forms of cancer have diminished levels of particular microRNAs. As a result, their tumor cells produce excessive protein, which spurs their cancers to grow and spread to other organs.
In 2009, Marin-Muller identified a microRNA that suppresses production of a network of proteins that are over-expressed in 90 percent of pancreatic cancers. In a series of follow-up experiments, he showed that introducing this microRNA in lab cultures and in mice reduces the aggressiveness of tumor cells. The challenge now is to find a way to deliver the microRNA to human cells.
Toward the end of 2011, as Marin-Muller was completing his PhD in microbiology and molecular virology, he launched his own company, Adjuvat Biosciences, to promote the development and marketing of his new therapy. Eventually, he may join forces with a major pharmaceutical firm, but only under certain conditions.
“Since I understand the technology better than anybody, I wouldn’t want to just license it and give it away,” he explains. “The idea is that I would join that company, and take the technology from the early stage to what is needed so that it can actually become a therapy. The biggest thing I want to accomplish is to get this out to patients as quickly as possible.”
At the same time, Marin-Muller is already looking beyond this project. “If I’m in a position where my idea is moving through the pipeline and everyone is excited about it, I have a better chance to say, ‘Here are 10 other ideas,’ and make them happen more quickly,” he says. “I have that kind of serial entrepreneur mentality.”
Marin-Muller says that he owes this mentality to STEP. “Going into the program, I knew very little about business or entrepreneurship,” he recalls. “I didn’t realize that STEP was going to change my whole outlook on science—and on life, really. It opened my eyes to this whole new world where you can actually make something happen.”
Bringing in More People
Nina Halabisky (GRS ’02) belonged to the inaugural class of physics entrepreneurship students in the College of Arts and Sciences. As an undergraduate, she had majored in physics and mathematics, and if anyone had asked her what she could contribute to the business world, she would have emphasized her scientific expertise.
“I thought, ‘If you’re technically savvy, then you will succeed in life,’” she recalls. “It was a very naïve way of looking at things.”
The entrepreneurs who came to speak to her classes had a different view. They explained that in a corporate setting, people skills are often more important than technical skills. “You have to be able to deal with individuals with different backgrounds and personalities, to handle conflicts, to negotiate,” Halabisky says. It wasn’t a message she expected to hear, but “it really struck a chord.”
After she graduated, one of her classmates made a remark that influenced her just as deeply. Marc Umeno (GRS ’02) had founded a company, NeoMed Technologies, to market a test for detecting coronary artery disease. For her master’s thesis, Halabisky had developed a business plan for a medical diagnostics firm. Umeno hired her as a project manager.
“He was the one who said, ‘You’re really good at taking a chaotic situation and bringing organization to it,’” she recalls. That’s what she has been doing ever since.
Halabisky has managed drug development teams for Nektar Therapeutics and Genentech. Today, she is senior project manager for new product development at Covidien, a leading medical device company.
“With all of the projects that I’ve worked on, the target market has been patients,” she says. “The teams that I manage are working diligently to get products to market in the shortest possible time for the benefit of patients, to improve the quality of their lives. It makes me feel proud to be involved in that.”
Halabisky is one of several STEP alumni who have built successful careers within large corporations. But she dreams of launching a startup someday and is working on a concept.
“I started off thinking I would try to do this alone,” she recalls. “But you can’t just have an idea and expect that, as a party of one, you’re going to hit it big. Currently I have a partner I’m working with, and even between the two of us, we’re saying, ‘Oh my gosh, we need to bring in more people.’” When they do, Halabisky will apply the skills she first learned to value as a student in STEP.