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Iowa State University
Ames, IA 50011-2153
email: preinig@iastate.edu

Got an attitude? Looking to start something?

Great: if that attitude is entrepreneurial ambition and you’re looking to start a new business—well, the state of Iowa is looking for you.

Associate professor of mechanical engineering Atul Kelkar wasn’t looking to start anything when Cedar Falls dentist Ken Budke came looking to start something with him. Budke was seeking a way to damp the noise of dental drills that had contributed to his patient’s discomfort and his own hearing loss over a thirty-year career. That led him to Iowa State’s Institute for Physical Research and Technology, which in turn pointed him to Kelkar, an expert in acoustic noise and vibration control technologies.

That was fifteen months ago. Today, Kelkar is chief technology officer of Vibroacoustic Solutions, Inc., a small startup in the ISU Research Park. Budke, who already had a history of successful business startups, is CEO. Together, they’re developing vibration and noise control technologies that have the potential to soundproof everything from walls to washing machines.

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Although he flirted briefly with starting his own business earlier in his career, Kelkar is new to entrepreneurship. “I remember going to the small business office in 1995 when I was at NASA Langley to see what was involved in starting a company,” he recalls. “But then I went to Kansas State as an assistant professor and told myself I couldn’t deviate from academics. I needed to get tenure and establish myself.”

Reconciling Conflicting Imperatives
Associate Dean for Research Ted Okiishi would like to see more of his colleagues leverage the technologies they develop at the college into startup businesses. Yet, he concedes, Kelkar’s misgivings are common and not unfounded: the traditional reward structures of academia were not designed to support the leap from classroom to boardroom, even for scholars who have already earned tenure.

“The five years of arduous work it takes to get tenure will be with us for some time,” Okiishi observes. “Most mentors will tell an assistant professor, ‘Keep your nose to the grindstone, write papers, bring in federal funds, help your students learn, get famous—that will get you tenure.’” Because of its land-grant mission, however, Okiishi feels that Iowa State also has an obligation to the people of Iowa to leverage technologies developed here into the types of businesses that will help the state prosper in the 21st century.

Faculty startups are one way to meet that obligation and represent a form of economic development Ken Kirkland of the Iowa State University Research Foundation wishes to encourage. While his first responsibility lies with protecting the university’s intellectual property, Kirkland says, ISURF feels that smaller businesses are often more dedicated to developing a given technology than larger corporate licensees, and that few are more invested in the success of a commercial application than a technology’s creators.

“Whenever faculty come to us with a disclosure,” Kirkland says, “we ask them about the possibility of a startup. We give our startups some breaks and help them in other ways—up to $5,000 in attorney time, for example. We’re very keen to see them succeed, and we’ve had some notable examples out at the Research Park that are still doing well today.”

A Case Study for Success
One such example is Palisade Systems, Inc., a security software firm launched in 1996 by Associate Professor of Electrical and Computer Engineering Doug Jacobson, along with his wife and another couple. Unlike Kelkar, Jacobson did have prior business experience. But the Des Moines native had never attempted anything on the scale of Palisade.

“Palisade started with technology developed at Iowa State,” Jacobson recalls. “The university owned the core technology in the patent, but instead of going out to license it, they asked if I would like to create a company.”

ISURF encouraged Jacobson to speak with Steve Carter and his staff in the Research Park, where Palisade eventually located. “We were in the ‘incubator,’” Jacobson recalls, “a little office about ten feet by twelve feet with no windows.” ISURF, he adds, also helped him draft a business plan and line up legal help in advance of incorporation.

Today Palisade has 18 employees and plans to hire additional staff in sales and marketing. Its product line sells worldwide and has garnered two R&D 100 awards for Jacobson. With five distinct network security offerings to date, the company is preparing to release an entirely new product suite early this summer. In short, Jacobson says, Palisade offers a case study in what Iowa must do to build a 21st-century economy.

“The original support from Iowa State under the grant program that funded us was under $70,000,” he notes. “So an investment of $70,000 has created a company that today pumps nearly a million dollars in payroll a year into the economy.” By more vigorously encouraging applied research, he adds, college faculty will create ready-to-market technologies that can be licensed externally or by faculty themselves to generate startups like Palisade.

A “Fantastic Model for Iowa”
Less than two years out, Kelkar and his private-sector partners are demonstrating the same entrepreneurial attitude that has made Palisade a success. And while he says he will always view himself as a scholar first, these are nonetheless heady times for Kelkar. From a $100,000 Phase I NSF Small Business Innovation Research (SBIR) grant the partners won in 2004, Kelkar’s startup is poised to compete for a $500,000 Phase II SBIR that will develop its proof-of-concept into a commercial prototype.

Moreover, Budke and Kelkar have acquired a controlling interest in Creative Composites of Brooklyn, Iowa, a startup specializing in passive composites for controls. “There was fantastic synergy,” says Kelkar, who credits the merger for helping their first SBIR application stand out from the crowd. That synergy has taken the partners beyond their original focus: they’ve established contacts with VT Industries of Holstein, Iowa, to develop soundproof cores for high-end architectural doors and field-tested lubrication sticks made of soybean grease and natural fibers that can replace the petroleum-based sticks currently used in railroad cars.

“Here’s a fantastic model for Iowa,” Kelkar says, hefting one of the shrink-wrapped prototypes in his hands. “Lou Honary at the University of Northern Iowa patented the soybean grease, and we came up with the natural fiber stick we can engineer to adjust the wear rate.” Honary’s lubricant, he adds, was developed by Environmental Lubricants Manufacturing Inc., a joint venture started by the UNI Research Foundation and private investors. Kelkar’s firm is currently negotiating a three-year contract with a railroad. “We’ll be limited only by the rate at which we can manufacture them.”

In fact, Kelkar’s “fantastic model” of collaboration among Regents institutions, coupled with public-private partnerships, embodies College of Engineering Dean Mark J. Kushner’s vision of an I-80 “research corridor” anchored on either end by Iowa State and the University of Iowa, an economic engine that will generate high-tech startups across the state. But to realize this vision, college leaders acknowledge, faculty must first have more incentives to step down from the ivory tower’s “marketplace of ideas” and into the rough and tumble of the marketplace proper.

That, Ted Okiishi says, will require a change in attitude. “Engineering education can be a conservative profession,” Okiishi observes, “and risk takers are sometimes rare in this business. But we have a strategic plan coming along that will encourage more of us to go to the marketplace with our ideas. We’re firm believers that intellectual activity on campus can and should lead to wealth creation for the state.”

Doug Jacobson—a man who knows how to start something—agrees. “The way to get high-tech companies growing in Iowa,” he says, “is to more aggressively market the intellectual capital in the state. And, he adds, “particularly at Iowa State.”

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