Yesterday on Twitter I asked the following question and I wanted to follow up because it is an interesting topic.
Flip but serious: what is lean startup/incubator/hacker version of a university lab?
There is a lot of discussion about funding sources for science/biotechnology as pressure increases on some of the traditional pools of money. Yesterday David Shaywitz shared his thoughts on the challenges of smart young investigators and the challenging environment they face in getting grants dollars. He included David Grainger from Index Ventures and David’s response about resource allocation prompted my note about indirect costs.
The R01 grant from the National Institutes of Health (NIH) is a very common funding mechanism for investigators (generally university professors) to fund the research in their labs. Perhaps I should use a different phrase though as according to Sally Rockey, NIH Deputy Director for Extramural Research (see link for stats):
Application success rates, as I blogged about in December, declined in 2013 to a historic low.
When investigators write a grant application, they include the costs of the research and related items, known collectively as direct costs. Facilities and administrative costs (also known as indirect costs) are:
Costs that are incurred by a grantee for common or joint objectives and that, therefore, cannot be identified specifically with a particular project or program.
Investigators are told to consult their university for the indirect cost rate, which has been negotiated with the government already. So what are we looking at? Here is a blog post with indirect cost rates for 49 institutions that range from 52% to 76.5% (with links).
While I’m not suggesting that industry performance is stellar, the last few years have seen a significant shift for many companies to “capital efficient” models driven by private investors and the public markets. So my flip but serious question:
What is lean startup/incubator/hacker version of a university lab?