Starlight generates graphical representations of relationships among various types of information

There's More Than One Route to the Marketplace

February / March 2008 By: Christy Lambert Volume 6 Number 1

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With thousands of researchers working in national laboratories across the country, innovations happen almost every day. Yet many of these innovations never see the light of day. Luckily, when it came to commercializing the much lauded Starlight—„ software, Pacific Northwest National Laboratory developed a commercialization solution almost as innovative as the technology itself.

The solution includes a unique arrangement that gives PNNL flexibility to continue ongoing research and development for government clients while Future Point Systems, a private company, markets and licenses Starlight to clients in the private and government sectors. Starlight is a powerful information analysis tool that was developed to help government analysts solve the problem of information overload. The software analyzes large datasets based on common themes and quickly finds relationships. The technology has long been recognized in the science and technical communities for its capabilities in information analysis and advanced visualization research.

"Starlight software is unique because it can integrate many different data types and formats to perform high-speed, high-efficiency analysis," said Bill Farris, PNNL commercialization manager. "Starlight's flexibility allows the software to enable solutions to a wide range of analytical problems that used to be difficult or impossible to interpret. It essentially allows you to see connections and relationships that you could not otherwise find."

The versatility of Starlight software was recognized to have potential commercial applications. Researchers envisioned it being used for medical data analysis, consumer preference research and current events monitoring. This government research tool developed to meet a government need had serious commercial potential.

As part of PNNL's commercialization efforts, the Starlight team completed a market analysis with Frost and Sullivan, developed a business plan and devised a commercialization strategy to launch Starlight into the commercial realm. The strategy was so successful that more than 40 licenses were negotiated with as many clients, including several Fortune 500 companies.

"Customer response was tremendous," said Cheryl Cejka, director of technology commercialization at PNNL. "We were hearing that Starlight was providing customers with a higher level of visualization analytics capability than any other product on the market."

In 2006, Proctor & Gamble estimated that Starlight helped save or create tens of millions of dollars of value by enabling the company to uncover fraud, identify supply chain issues and track customer trends. A major automotive manufacturer claimed it saved nearly $1 million for each day Starlight cut from the elapsed time required to identify an assembly line defect.

"These savings can be passed on to the customer," Cejka said. "Consumers will benefit from products that better meet their needs and companies will experience improved customer satisfaction."

When researchers realized the magnitude of Starlight's potential they turned to Battelle, the operating contractor of PNNL, to explore options for future development. Battelle sets aside corporate independent research and development (IR&D) funds to help transition early stage technologies into viable commercial products. Products given corporate IR&D funding stand a much greater chance of long-term commercial success. These corporate resources are instrumental in bridging the "valley of death" that so often separates government-derived technologies from commercial adoption.

As the demand for Starlight grew, so did the challenge of supporting the commercialization of the product. With dozens of commercial customers, there was constant pressure to customize the software. At the same time serial entrepreneur Mike Lyons was looking for his next big opportunity. Lyons understood the opportunities that exist for entrepreneurs willing to navigate the national laboratory system. In fact, he had worked with PNNL in the past to start SafeView, a successful business built on millimeter wave technology developed at PNNL. The startup company was acquired by multinational corporation, L-3 Communications, in 2006.

"As an entrepreneur, I see working with a national laboratory as a unique opportunity to take innovative technologies already in existence and market them for commercial use," said Lyons. "PNNL has a track record of developing viable technologies and sheparding them through the commercialization process."

Lyons spent months of his time going to the PNNL campus looking for a technology with near-term commercial promise. After tracking Starlight's development from about 2002, he could see the software's eventual commercial value. The technology already looked and felt like a commercial software product, but without the support infrastructure needed to maximize commercial opportunities.
After obtaining an option agreement in 2006 to license the technology, Lyons started a new company called Future Point Systems. FPS spent a year gathering sophisticated equity investors who invested their own money into the company betting on large gains. In 2007, FPS raised an additional $2.5 million through its angel network. Because of its initial investment with corporate IR&D funds, Battelle also received equity in the new company.

Under terms of the deal and the direction of CEO Paul D'Antilio, FPS will provide much needed backend support for existing clients and will sell the software to new clients. At the same time, PNNL will team with FPS to provide ongoing research on new Starlight capabilities to better meet the needs of government clients. New capabilities developed by PNNL may be incorporated into future commercial releases of the software. FPS is in the process of getting Starlight ready for a large-scale commercial launch in early 2008.

"Paul has built an exceptional team and, together with a highly experienced board, I'm confident we can build a very successful venture," Lyons said.
"It's a win for everyone involved," Farris said. "One of PNNL's missions is to develop and deploy socially and economically valuable science and technology. It was important to the Lab that we do this in a way that would allow us to continue research and development for Starlight. PNNL will continue to provide government clients with valuable research around Starlight, and FPS will have the opportunity to maximize the commercial potential of the product already in existence."

Christy Lambert is a senior media relations specialist at Pacific Northwest National Laboratory.