The University of Washington’s innovation hub CoMotion is cutting approximately 15 percent of its staff as well as eliminating open positions, as it reorganizes its business model and copes with the loss of a key revenue source.
Following the layoffs of nine people, CoMotion, which helps startups through education and access to experts and funding sources, has a remaining staff of about 50. Originally started as the Center for Commercialization (C4C) at the UW’s main Seattle campus, the program evolved a few years ago from a department that mainly helped commercialize ideas born at the university — it has helped spin out well over 100 startups over the past decade, and 21 in fiscal 2016 — to what it now describes as a “collaborative innovation hub dedicated to expanding the economic and societal impact of the UW community.”
In a statement provided to GeekWire, CoMotion said it hit a “revenue cliff” stemming from a set of patents that were a big funding source for UW and expired in 2014. The patents involved licensed UW technologies used in the production of life-saving biologics, including insulins and hepatitis B vaccines, that brought in more than $350 million for the university over the last 30 years. That money was distributed to the contributing inventors and UW departments, with an administrative fee retained by CoMotion.
Going forward, CoMotion said it plans to continue shifting its focus toward nurturing entrepreneurs and teams in order to create a greater variety of revenue sources.
“Looking ahead, the model of CoMotion will embody the entrepreneurial spirit and will lead to a diversified revenue base, based on incubation, investment, philanthropy, strategic internal and external partnerships, training, licensing, equity, and university support,” according to the statement. “From a philosophical viewpoint of innovation, the emphasis will change from solely intellectual property and patents to innovators, teams and organizations.”
CoMotion said it first looked to trim programs and eliminate open positions before cutting staff.
CoMotion has grouped together three buildings into a newly-established “CoMotion Labs” that consists of its new headquarters in the University District, which houses the region’s only incubator focused on virtual and augmented reality startups; the CoMotion Incubator at Fluke Hall, which helps startups working on healthcare and biotech; and Startup Hall, where there is co-working space geared to software and IT startups, while also home to the Founder’s Co-op venture capital firm and Techstars Seattle.
CoMotion Labs earlier this year announced plans to open a new space in Spokane, focused on manufacturing, healthcare, agriculture, and robotics.
Here is the entire statement on the layoffs from UW CoMotion:
CoMotion’s mission is to expand the economic and societal impact of UW’s innovations, while also building an inclusive innovation mindset for the entire community. Looking ahead, the model of CoMotion will embody the entrepreneurial spirit and will lead to a diversified revenue base, based on incubation, investment, philanthropy, strategic internal and external partnerships, training, licensing, equity, and university support. From a philosophical viewpoint of innovation, the emphasis will change from solely intellectual property and patents to innovators, teams and organizations. CoMotion had to make the difficult decision to layoff about 15% of our staff and elimination of open positions across CoMotion units. In order to reduce the impact on our employees, we first looked at programs to cut, second looked at open positions to cut, and only after that we looked at which positions to cut.
A set of well-regarded licensed UW technologies (the Hall patents) generated immense societal and economic value and funded the Washington Research Foundation which has been a great asset to our state. As a symptom of an outmoded tech transfer business model, CoMotion expectedly hit a revenue cliff from the expiration of the Hall patents. These “black swan” events need environments to come to fruition while having a realistic business model for sustainability. The layoff decisions were not determined by performance and were necessitated by budget cuts at CoMotion. The decisions were made with great care and thought to align to our mission and business models going forward.