 It must be four o'clock, four o'clock rock. Susan Yamada and Omar Sultan and Kyle Chang. Let me explain. Susan is the director of PACE, the Pacific Asia Center for Entrepreneurship. Whoa! Doing great down there in these years. Oh, thank you. And Omar Sultan, he's a founder and director of Accelerator and Sultan Ventures. Welcome to the show. That's one and two. We're going to go with three now. Sounds good. OK. And Kyle Chang, he's, what are you, Kyle? You're with Accelerator. You're a graduate. Yes, a graduate. Yeah, OK. Very important. Now, we're going to talk about here on Think Tech Tech Talks. Can you say that five times fast? No. We'll talk about the Innovation Initiative, OK? And that springs out of mostly the university. Yeah, totally. Mostly out of the childless school. No, I think it's from the whole system level. OK. And it's a commitment to entrepreneurship, innovation, commercialization of research that's going on at the university. And that's the point of our show today. We want to find out where it came from, what programs it has, how they work together, and how it's affecting our existing innovation economy and taking it to the next level, and ultimately saving our state. Nothing modest here. I forgot my cape at home. So why don't you begin, Susan? Where does this come from? What is it intended to do? How does PACE play into it? OK. So the Hawaii Innovation Initiative was started, I'd say, maybe five years ago. And the whole idea was to really have the university be at the forefront of research and innovation in the state. And there's about $400 million worth of research money that comes into the university every year. And I think we can do a better job of improving the commercialization of those innovations and make it more of applied research, where it's applied to a specific solution. So there's been a lot of work being done over the eight, nine years that I've been there. You had Vasile Sermos, who's our vice president of research and innovation on a couple of weeks ago. And he has done a lot, in my opinion, in moving us more forward as far as his vision for what we need to be doing at the university. So as far as PACE is concerned, and what I do is we are a program that is run out of the Schuyler College of Business. We have about 20 different programs that we administer every academic year. Examples? So the business plan competition, pitch competitions, microloan programs, mentoring, coaching, speaker series. Trying to stimulate people to do entrepreneurial things. Think entrepreneurially. We want them to think entrepreneurially. And so we do that. But we are open only to faculty and students. But 90% of who we, or even 95% of who we serve are students. So it's really an educational role that we play. And historically, once you hit the business plan competition, you are done. You hit the pinnacle of the PACE programs. But that's only historical. We're going further than that now. So now we're moving to the 21st century now. And under Vasilis' leadership, he felt that we needed an accelerator. And so he formed, da-da-da-da. Accelerator. OK. She's passing it off to you, Oman. I've got the baton. I'm ready. So Kesska, say accelerator. So accelerate UH. It's a spelling for me because it's a cute spelling. Sure. It's XLR8UH. It's like a vanity plate. So you read it, accelerate UH. So Sultan Ventures formed it as a public-private partnership with the University of Hawaii system. The whole idea is to be able to invest in the research that's arising within the university, as well as the talent that's associated with the university. So really kind of focusing on the human capital aspect of it, as well as the intellectual property. Why did you want to do this? Through our work, the Upside Fund. So there's a seed sage venture fund that's run out of UH Foundation that we also help manage. We saw that there was a lot of need and pent up demand at the university. So as Susan mentioned, people who are interested in entrepreneurship, people who are interested in starting their own ventures, regardless of what that was, they would go through the PACE programs, which there's 20 of them. So the significant amount of resources available to students and faculty there. And then after they finished those programs and matriculated out of them, they were kind of met with a cliff. And so a bunch of us got together. Susan obviously was one of them as well. And we said, how can we approach to? I need to know this. Ash, I don't know. You guys had the idea initially. You went to Vassilis. Vassilis supported it. This is the way things happen. Yeah, exactly. And Omar and his brother, they were part of our business plan competition when they were getting their MBAs at Scheidler. And frankly, there was no place for them to go after the business plan competition. We could send them to other business plan competitions across the country. But there was really nothing at home that we could refer you to, to extend the runway, so to speak. So we experienced, absolutely. I mean, we experienced, Susan just mentioned, we experienced that problem firsthand. So through our work of managing this other fund now, we said, all right, now's the time to actually change all of this. The planet's aligned and the store's aligned, as Susan says. So we took this idea to VP Cermose, VP for Research and Innovation. And we said, here's our plan. Here's what we believe the university needs and how we can add into this continuum of commercialization activities and entrepreneurial activities. OK, just to sort of follow in that a little bit, commercialization, what does it mean in this context? What was missing and what now does accelerator provide? Sure. So commercialization, and really the most simple terms is there's two types of research. There's basic research that's done in labs and then there's applied research. Commercialization is trying to take things from that basic research where it just sits in a lab to a specific application that can exist in the marketplace to benefit people of Hawaii, the people of the world, et cetera. So commercialization is about spinning that research out into the marketplace. And making money. Of course. Making money, that tends to drive people. Definitely. But I mean, that's the thing. I think you got a lot of, and some of them sat at this table, researchers who are brilliant, dedicated, creative. I mean, all that you'd ever want. I mean, we have a world-class thing going on. Yeah. And these guys are fabulous. But they don't have either the knowledge or the experience or either knowledge or experience to actually bring it to commercialization and make money. That's absolutely correct. Yeah? And so that was the idea of our programs. Exactly, right. OK, how do you commercialize? I mean, if I say, Omar, could you please commercialize this for me? I'd say a short thing. No, I think Kyle can probably speak to that. Because he's an undergraduate, very little business experience. He has an idea. He has a team that he's working with. And so I think he can speak to what education he needs. I've been through two phases now, so both the phase one and phase two of the Accelerate New Age program. And just going from a small business idea to now actually applying real-world knowledge on how to fundraise, how to build good PR, build good marketing, and then also knowing how to pitch it to investors that all came through this program alongside PACE and the numerous UH resources out there for students, not just undergraduates, but MBAs, PhDs who want to take their small idea and scale it to huge money-making opportunities. So you're doing that. You're a case study. You've grown a case study with you. We always want to have case studies. How many case studies do we have right now? We have 24, actually. 24, yeah. And a lot of case studies, what do you like? So 24 companies we've invested in, trained, and sent out to flourish in the last two years. Like children, I think. OK, well, you know, in the pitch world, that's an entrepreneurial term. Oh, you're good. I'm sure you heard that in a few times. I'm sure you've heard it and made it also. So Kyle, give us 90 seconds on what you're doing. Sure. I'm with Health Tech Apps. Health Tech Apps, we believe that the best person to tell your health story is you. So we have a developed an app that helps athletes, active individuals, and doctors to both monitor and manage a head injury or a sports concussion with video features on their mobile device. So through my experience getting two head injuries, I've found out that, hey, it's hard to track my symptoms and my triggers and share that with my doctor. So through our technology, we're allowing video capturing features to bring that to life and help patients like myself or other people to share that with their doctors. OK, how do you make money from it now again? So we actually, it's a little complex, but we work with health plans. So we charge health plans a PMPM model, which is, like, per month. It's kind of on premium co-pays. It's hard to explain, but it's very lucrative. So the plans are your customers? Yes, our customers are health plans. And they deploy the app. Exactly, through their providers. OK, and you learned a lot of this from the accelerator? Accelerator, and then just, again, being out into the field and really getting the hands-on experience from talking to investors, going to conferences. I think it's really important that our listeners know what it means to be in the accelerator. So I wake up one morning and I say, gee, I got this great idea. We had one yesterday, by the way. A good idea? From HIGP, yeah. A guy named James Foster, if you know. He's got this fabulous app that's deploying in Chile. And it can tell with using multiple cell phones when there's going to be an earthquake. And in Chile, they've got lots of earthquakes. And this saves lives. And this is one country among many that could use it. In fact, Hawaii could use this as well. And they're doing it on a scientific level. It hasn't gotten. I'm suggesting an idea for you guys to pursue it. James Foster, I'm writing it down. Anyway, so I wake up one morning. I get this idea about the app, whatnot. And I say, gee, I got to get a call the accelerator. I got to see what I can learn from the accelerator. What's my experience like then? Do I call you, Susan? Do I call you, Omar? How do I get started? Where do I go first? So if you were a UH student or faculty, we could help you. If you're not a UH student or faculty, you can go straight to not, if you were alumni, you could go to Accelerate. So you have to have some sort of affiliation with the university to be part of Accelerate UH. But there are other accelerators in the community that you don't have to have that affiliation. So you can go. They have a certain criteria that you need to fill out to explain your idea, why you would benefit from being in an accelerator. You basically apply. You apply to a cohort. And as far as the cohort is concerned, the management in each of the accelerators takes a look, evaluates the team, the idea, and whether they can help them. And then they select a cohort that they're going to work with for the next 15 weeks or so. OK, put me in a cohort. I'm in the cohort. I made the grade. I'm happy. Now I say, well, OK, let's get down to the brass tax. Teach me. Tell me. Show me. Mentor me. What do you do for me? So the program we've been very calculating in terms of how we've split it up. So we call it split up into three distinct phases. A lean phase, a build phase, and a pitch phase. And it's specifically designed that way to either figure out that there's an opportunity there quick or to fail fast and use that energy and time for a different idea. So during the lean phase, we are heavy proponents of the lean startup methodology. So that means going out there and talking to anyone, everyone, that can materially affect your business. I think in the 24 companies that we've invested in, they've spoken to over, what is it, like 2,700 individuals? This is cold calls, so what? Cold calls. Keep it on the street. Potential investors, customers. I want to add something. So my customer interviews were mainly doctors. And they had a requirement of 10 to 15 interviews per week. So can you imagine me trying to cold call 10 doctors and get meetings? That enough was grand. That's what I mean. So that was another drive to just really push and really learn from that experience how to go out there and get out. What did you learn? Give it to us now. We're going to whizz from you. What I learned mainly from my customer, my business, was that doctors aren't very appreciative when you cold call and ask for meetings. So I really had to play on the, oh, I'm a desperate college student. I need some help. And that kind of got me into some doors. But most of it was just through the program learning that customer discovery is not just your paying customers or your users, but it could be really anybody, like parents or other athletes or really organizations as well. Do you want to know who Kyle has spoken to? Do you want notes from him? Oh, we get him. Oh, yeah. Oh, OK. We get them every week. He tells you who he's talked to and what came out of it. Yeah, those 10 to 15 are definitely the store points for the early stage entrepreneurs. But it's something that's absolutely needed. I mean, when you think about it, your most valuable resource is time. So why are you going to waste your time, rather, on an idea that nobody wants, or maybe five people want? So the whole point of the lean process in that first five weeks is to go out there and make sure that there is a market for that, that there is a customer or a user for that idea that you have. Otherwise, scrap it and spend that time and energy on something else. So this is a different idea, right? Because before, it used to be, I got an idea. I'm going to be very secretive about it, because I don't want anybody to copy it. And I'm going to work in my garage. I'm going to come up with it. I'm going to order 1,000 of them. And then everybody's going to want to buy it. And then nobody buys it. And now you've got 1,000, whatever, t-shirts in your garage that you can't get rid of. Right. So what we're saying is, and we follow, our programs follow that same methodology, is you need to talk to your customer to find out if you are solving a problem that they have. This is like design thinking. Exactly. It follows specifically that thought process. And in the process, you evolve the product. Exactly. You make it better to meet them already. Exactly. To what your customer wants. Like, who is your customer? What do they want? And test your product on them. Is this something that you would use? Is this something you'd want? You would pay for it. If you'd pay for it, how much would you pay for it? And so if you get all that done in the first phase, as Omar was saying, the rest of the phases become very simple. Everything falls into place. Well, I'm assuming that the caller comes back and he says, Omar, Susan, this is what I learned about the market. And then you consult with him. And you say, maybe you want to tweak the product a little bit, or maybe you want to throw it out. You have to respond to that. You have to build that into your thinking somehow. This is a big lesson. It's an academic lesson in many ways, but it's a practical lesson that you have to learn in business or you want to survive. So don't build the features that you think are called. Build the features that your customer is telling you that they want. The old problem falling in love with your own product. Exactly. So what's phase two and phase three? So phase two is you take all of those customer learnings and that customer development, and you start building. You start building your product, and you start building your business around what the market has told you that they're interested in using or interested in paying for. The final phase is the pitch phase where it's not just you get a fancy deck together and you go do a three or four minute presentation in front of an audience and everyone's high five and afterwards. And then the first time an investor comes up to you and asks you a diligence question, the whole house of cards falls apart. So the pitch phase. You do a TV show. Perhaps. Shark Tank. Shark Tank, that's the one I'm thinking of. So the whole point of the. I'm not saying you guys remind me of Shark Tank. Definitely not. We're much more intense than Shark Tank. So the whole point of the pitch phase is getting like a sustainable and viable business model together, right? So that you can answer your economic questions. You can answer your business model questions. You can prove to an investor, to a potential partner, even like potential employees that you're planning on bringing on board that you've thought about this. You've done your homework and you know how you're going to grow and scale this business. Convincing people. Totally. Yeah. You've convinced me that we should take a break. Nothing in specific, but we're going to take a one minute break. We're going to regroup. We're going to think about our strategy. We're going to come back and do it some more. I love it. All right. Aloha. My name is Joe Kent. And I'm the vice president of research at the Grassroot Institute of Hawaii. The Grassroot Institute is a public policy think tank. And we try to build a better economy in Hawaii. And you can see us on the TV show Ehana Kako on the Think Tank Hawaii Broadcasting Network every Monday at 2 o'clock. We'll see you there. And let's build a better Hawaii together. Aloha. Aloha, Kako. I'm Marcia Joyner, inviting you to navigate the journey with us. We are here every Wednesday morning at 11 AM. And we really want you to be with us while we look at the options and choices of end of life care. Aloha. I'm Kawe Lucas, host of Hawaii Is My Mainland here on Think Tank Hawaii every Friday at 3 PM. We address issues and importance for those of us who live here on the most isolated land mass on the planet. Please come join me Fridays at 3 PM. Mahalo. Hey, everybody. It's Ian, social media manager here at Think Tank Hawaii. Thanks for tuning in. Sorry to break into your show. If you're listening on the podcast, thanks for listening, watching on YouTube. We appreciate the subscription, et cetera. If you are a longtime listener, a viewer of Think Tank Hawaii, you would know that we are on every day five to six hours a day, basically streaming stuff that's happening here in Hawaii that matters to everybody worldwide, basically. There's a lot of stuff that we've got going on. And we're excited about many of them. 2017 is going to be really cool. Right now, I can tell you that we are on iTunes, where you can listen to all of this stuff now. We're really excited about how that's going. And we have just started on the Street feature, where we take a camera out to the street and stream live to you guys out there and getting what people in the local community out, what they want or are thinking about and sharing that with you. We're really excited about all that stuff. We're really excited about you guys watching and following us on all the social media sort of things, Instagram, Facebook, Twitter, all that good stuff. Look for us. Think Tank H.I. Watch us on O'Lello. Thank you so much. Everybody here appreciate it. Bingo, we're back. OK, so what I get is this is different than Marsha Greenwood's idea about bringing in lots of grant money and treating that as an industry. This is kind of another welcome approach, actually. Maybe it's a continuation of OTED. OTED was out there trying to commercialize for a long time. And I don't know if it ever really got started. The idea was it would help you get patents and start your business of your advice. This is kind of way beyond that, I think, what you're doing. Yeah, I mean, I think if you visualize it like you drop a pebble into the water and the ripples are small. And maybe that's your $400 million in grants. If you get a rock that's twice the size and you drop it in the water, the ripples are even larger. So our work is directly attributable to how big that rock is. I mean, if you double the size of the amount of grants that come in, we will probably have more technology to work with. So we are still very supportive of trying to get more grant money in. That's a whole other strategy that is beyond the table. The more grants you get in, the more likely you're going to get more innovation. More innovation. Applied research that will come out of that. And the more commercialization opportunities. And if you have a big digital island kind of event, then that draws more grants too. So each one feeds the other. Since the university takes equity in these startups, again, it's the virtuous cycle that starts. Any licensing that goes out, the equity that they get, it all flows back to the university. This is very good. This is where the university needs to be, don't you think? The university should be the center of this. If you look at a lot of really successful communities with technology industries, you'll find that the university is smack-deb in the middle of that. But we've seen startups in this community that look pretty good at the beginning. They have good name names. And they were fair-haired boys and girls. And they were making money. They were popular. Everybody was rallying around them. And then, woo! OK, no names here. But the question is, how long to accelerate and stay with them? If Kyle hits it when it appears to be big, how long do you want to stay with him to make sure that he doesn't lose it the minute after he stops accelerating? I think that's the aspect that's important in having equity, right? Because our interests are aligned. We want his company to be successful. We want Kyle to be successful. So we stay with him as long as he needs us to stay with him. I mean, that's the simple answer. Is that five years? 10 years? It could be. You're going to take your thing right through? Everyone's different. Everyone's different. You make that decision. Yeah, I mean, to the extent that he needs help that we can give him, then we're going to obviously try and increase his chances of success. You're going to run with the winners. If you think he's going to win, you want to be with him to the extent where he does. And you have equity in it. So that makes it, you're motivated by that. You want to get rich, too. See, you're not alone on this, Kyle. How much money do you want to make? Do you have an idea? Sure. Nobody's listening. Yeah, I mean, so our exit strategy really would be acquired by a large health plan like Kaiser or United Health Group or Humana. Dollar figures, I mean, some comps are looking at $400 million to almost $1 billion. So I mean, it's really up in the air. But well, many for us would be acquisition for us. How long would you like help from the accelerator? How long would you like to keep on doing business with Susan and Omar? As long as I can. Good answer. Good answer. You're making friends here, Susan and Mark. So I feel that we are in a time where we ought to be somewhat thoughtful about where we are. You know what I mean? There was a time back in the year 2000 or so when you come back. 2001. 2001, you know, somewhere in there. Susan with the mainland making money on the mainland. Silicon Valley, yeah. What else do you do there, actually? We just sit there and the money just comes in. I don't know. Yeah. Nice to have friends there. So you came back and there was a certain milieu going on here, a certain energy, act 221, lest we forget, right? And now we're in a different place. Where are we now on the continuum of developing innovation industry in Hawaii? And what role are you playing? So that's a complex question. And there are multi-phases. You talked about 221. And I'd just like to just put that behind us because it's so controversial. But even after 221 was completed or run its course, I thought there was a lot of activity that it inspired. Hawaii Angels, the angel investment group was formed, a number of different virtual accelerators were formed, PACE was formed. And then you fast forward to 10 years later. And I think we have made tremendous progress. But even more so than that, my feeling is that we have hit this tipping point where no longer do we have to go and go, no, really, it's important for our community. I think we've proven a lot. And there are people who are jumping on the bandwagon as far as why it's important that we have diversification in the economy. Why having a nice technology industry is good for Hawaii is not using a lot of resources. It's high paying jobs. People can work virtually. So I think that there is more so than ever, not just at the university, but downtown Bishop Street, that there's this understanding that we need to begin to diversify. Where one bird flew away, 1911 away from these stools of our economy collapsing. It's how do we begin to diversify and create jobs that our kids can stay and occupy versus having to go somewhere else. So we've made tremendous progress in, I'd say, the last 15 years. Omar, are we moving fast enough for you? Are you impatient in any way? Definitely impatient. And we're an accelerator. So we like things to keep moving fast. Accelerators always like to go faster. I got it. But I think the pace is really good. Just to kind of piggyback on what Susan was saying, I think what was different before, it was more focused on individual companies and the success or failure of those individual companies. Whereas now it's more holistic. We're trying to build an innovation ecosystem here in the state. So that's third leg of the economy, if you will, to be up there with military and tourism. If you look at other innovation ecosystems around the country, around the world, what's smack dab center in that is a R&D university. And we have one in our backyard, UH, right? Top third in the nation in terms of the federal R&D grants that are going in there. So the university is now stepped up to the plate in a big way, more perhaps so than they ever have in the past. And there's tons and tons of new initiatives with internal to the university. I mean, outside of pace and outside of our accelerator that the university is backing. Whether it's innovation lab that's on campus or some of the new pace center for co-working and whatnot, it's different in the air this time because everyone is working towards creating this innovation economy. And so it's more so than just the success or failure of any one company. So Kyle, we're out of time. I'm sorry. That's why I'm going to offer you the opportunity to close. So to summarize what we said here, what it means here, where we're going here, and how much of what these guys have said, do you agree with, if anything? I mean, I agree with all of it. I mean, just having the R&D university like UH, really pumping money into research and innovation, I mean, that's going to be key for young students like myself. And after, to really know, hey, I can start this tech company or I can go into entrepreneurship as a field for a high-scalable business. Great.