During the post-apartheid era, the higher education landscape in South Africa has been changing rapidly and drastically. The merger of the Rand Afrikaans University (RAU) and the Technikon Witwatersrand (TWR) was a trying and challenging event. Preparation for the merger started with the announcement of the merger in June 2002 (Department of Education
Many educational institutions strive to forge strong and loyal bonds with their alumni for purposes of fundraising, community engagement, networking opportunities and career advancement (Barnard, Rensleigh & Niemann
It was also necessary to present to the alumni of both merging institutions benefits of and incentives for involvement as the new brand would have no impact in terms of loyalty and allegiance from their point of view. Generation X alumni has an increasing attitude of ‘what's in it for me’ with regard to institutional involvement, and higher education institutions have to find innovative and novel ways of proving the value of involvement to the new generation alumni (Yrle, Hartman & Payne
This article is a case study of the conceptualisation and development of a research-based, spin-off company, Gradnet, which entails the development of an academic research project into a commercialised entity (Barnard & Rensleigh
Phases of the longitudinal research project.
Innovation usually arises as a result of a felt need to improve the status quo and identify more opportunities for resource generation (Barnard & Van der Merwe
At the time, the creator of Gradnet was employed as the Head of Alumni Relations at one of the pre-merger institutions. The limited number of staff members in this office, the annually increasing number of graduates from the institution that needed to be added and managed on the alumni database, as well as a limited budget to engage with alumni were catalysts in the innovation process that commenced in 2003. The employee wanted to conduct research into the most effective ways of engaging with alumni that would save money, time and resources for the institution. However, a core objective was to convince alumni to be more supportive of the activities of the institution, especially since the institution was facing a difficult and much-contested merger. Action needed to be taken if the sense of alienation within the alumni stakeholder groups from both pre-merger institutions were to be transcended. The employee decided to enrol for a Master's degree in Information Science at the institution to conduct formalised research for the purposes as set out above.
According to the Workers’ Compensation Board (n.d.), research is an attempt by careful enquiry, experimentation, study, observation, analysis and recording to:
discover new facts, knowledge and information
develop new interpretations of facts, knowledge or information
discover new means of applying existing knowledge.
Rowley (
add to existing knowledge
have a clear purpose or research question
be objective and reliable
address the issues of access (to people, organisations, data, etc.) politics (internal) and ethical conduct (with regard to privacy, confidentiality and transparency).
The rapid development of information and communication technology (ICT) is a factor that needs to be borne in mind in terms of research time and time to application. An innovative and active research model is necessary to accommodate this ever-changing, fast-evolving environment (Wieringa & Morali
… action research depends upon a collaborative problem-solving relationship between the researcher and the client with the aim of both solving a problem, and generating new knowledge. An action researcher working inside an organisation has two roles: that of employee and that of researcher. (p. 209)
Feurer and Chaharbaghi (
Due to the practical nature of the research topic, it was decided to follow an applied action research approach by which a useful, real-world solution to a problem is devised. The implementation of the research results into something workable was the main aim of this type of approach and falls under Pasteur's quadrant of use-inspired research (Stokes
The first phase of the longitudinal study took 11 months to complete (Barnard
When it was established by Barnard (
Both quantitative and qualitative approaches were taken with the second phase of the research project. As part of the quantitative study, an empirical survey was conducted amongst the ‘new’ (post-merger) alumni of the University of Johannesburg to determine their information needs with regard an online community portal and the content required for such a community Web model. A total number of 10 380 questionnaires was distributed over 17 days to graduates of the University of Johannesburg at the graduation ceremonies, thereby making it a self-selecting, purposeful and convenient sample. The questionnaire consisted of four sections, namely biographical information, online activities, alumni information services and alumni community needs. The final sample group, namely those who thoroughly completed the questionnaire, came to a total number of 1139 participants.
In order to establish what the impact of this research project could be on the wider alumni audiences of South African higher education institutions, qualitative research was conducted as a second component of the empirical research. This consisted of a discussion forum that was hosted by the UJ Alumni Relations Office to which all the management representatives for Alumni Relations and Fundraising of all the state-subsidised tertiary institutions in South Africa were invited. The objective of these discussions was primarily to test their opinions on the use of Web technology (such as online community portals) for meeting the needs of their alumni target audience. Of the 17 institutions that were invited, the total number of participants for this empirical phase came to 14 institutions, with 35 representatives attending. The need for knowledge sharing was determined when the representatives called for a consortium to be established as a result of the discussions.
The research findings provided an indication of the business processes that should be in place to enable the UJ Alumni Relations Department to have a successful information management strategy for optimal relationship management of its alumni stakeholder group. The results of the survey, combined with the results from the discussion forum, were used as the blueprint for the design of a fully functional prototype for an online community portal relevant to higher education alumni. The theoretical framework was set to determine the make-up, context, need and value of an online community portal for higher education alumni. In addition, a gap analysis outlined the current (at the time) state of involvement and information requirements of the alumni stakeholders and the institution versus the ‘to be’ state that needs to be developed to meet those requirements and manage the information flow amongst alumni stakeholders more effectively. The functionality of the prototype had the potential of promoting not only business-to-business (B2B) and business-to-consumer (B2C) interaction but also consumer-to-consume (C2C) interaction. It also had the potential of exploiting the possibility of human-resource placements through career services, amongst other income-generating services. The aim at this stage was not to commercialise the research but to share knowledge and possibly transfer technology to other institutions in South Africa who were faced with similar challenges.
As with managing any project, planning, organising, implementing, controlling and evaluating are critical to the overall success of the execution. An overall objective is necessary to guide the development of the project from launch to end. Van Brakel (
The demand from the tertiary institutions that participated in the qualitative research to obtain a solution for their institutions led to the establishment of a spin-off company to make the technology available on a bigger scale (Barnard & Rensleigh
At this point the intention to commercialise the product started to emerge. A research-based spin-off (Conceicao, Fontes & Calapez
Technology transfer transpires after the commercialisation process (Rasmussen, Mosey & Wright
The Gradnet trademark was registered, and the acquisition process for the relevant web domains was underway. The services of a patent attorney were acquired to execute the legal documentation and processes with regard to the trademark and copyright. In addition, a fiduciary company was appointed to perform the necessary business registration, governance and compliance procedures.
Gradnet showed potential for generating third-stream revenue (meaning income sources from any other means than from student fees and government subsidies) from partnerships and product offerings. This was possible due to the dual nature of the system: Primarily it could be used as a database management, administrative and communication tool by the institution, but equally important, it could be used as an interactive communication platform for the alumni affinity groups and individuals who wanted to network with each other. The portal could be brand customised according to any participating institution's specifications, providing institutions with the freedom and opportunity to enhance and advance their own institutional brand via the portal offering. The value-added modules that were offered via the portal would be designed and developed on a continuous basis to address the pertinent needs and challenges of the business and educational sectors by offering relevant and sustainable solutions, services, products and functionality.
The public would gain access to an updated feed of participating institutional news, events, research output and partnership opportunities via the main web domain, www.gradnet.com, whilst the academic application would provide e-learning opportunities, journal articles, research and fundraising databases to institutional stakeholders. The administrative application made provision for the secure capturing, storing and retrieving of data, statistical reports, content management and stakeholder segmentation for improved relationship marketing. The commercial application included a CV compiler and e-recruitment, qualification authentication and online shops, although this application was at first not a primary focus of the portal.
The mission of Gradnet was to create an optimal online collaborative environment for higher education institutions and their stakeholders that would: (1) promote networking, brand loyalty and lifelong learning (in support of an organisation's intellectual capital, business intelligence and knowledge sharing) and (2) create unique value propositions and mutually beneficial partnerships (Barnard
To enable a stable, scalable and cost-effective structure for the Gradnet portal going forward, the founder started to investigate different options before taking the leap to production. Projections of the marketing and business plan indicated that the amount of active users on the system could reach significant numbers. These growth projections secured seed funding for the first five years. The vastness of the projected growth potential would require a very reliable and stable platform base. Due to the high cost of using and developing on a Microsoft platform, meetings were set up with the Google team in South Africa.
At the time, Google was establishing itself as a strong global competitor for Microsoft with its various Google Apps offerings. The founder was invited to the Google London office for detailed discussions about the possibilities of migrating Gradnet onto the Google platform. The availability of the Google Apps for Education was an excellent match that complimented the Gradnet mission, and the contracts were finalised with Google for the secure and scalable storage of all data on the Google servers (i.e. The Cloud) whilst embedding the Google Education Applications within the Gradnet framework (Barnard
The benefits of Gradnet for institutions included the following:
collaborative knowledge sharing
the creation and execution of partnership opportunities
the recruitment and headhunting of graduates for company vacancies
supporting the institutional value-chain concept
managing customer relationships (CRM) more effectively through improved information management in tertiary institutions.
A major benefit of Gradnet was that, the more institutions participated in the network, the bigger their potential became to generate third-stream revenue as a result of the shared-revenue model, which was made possible by embedding the PayPal system into the portal (Barnard
The PayPal e-commerce engine enabled the proposed split in profit sharing by providing an instant transaction-split functionality that made every transaction transparent to all partners. PayPal was at the core of the payment system with the custom-designed Gradnet billing and invoicing system as well as the custom-built, shop-front functionalities running alongside it. The objective was to provide a secure online-transaction space with minimal risk to all participants. This was also communicated frequently to the institutions via the marketing presentations. End users worldwide are familiar with the PayPal brand and perceive it as a safe place to store their personal financial information. First National Bank is the institution that brought PayPal to South Africa. Companies would be able to sell discounted merchandise to the Gradnet end users via the Gradnet Online Mall with a secure and well-known e-commerce engine. The principles underlining the commercialisation of Gradnet were to provide IT infrastructure to institutions as a tool to motivate more engagement from stakeholders. Therefore, the more active users that joined, the more valuable Gradnet would become, irrespective of actual annual turnover from sales. Financial value would therefore be derived from participation and not from selling off IT infrastructure (Barnard
In terms of human resources, a support team needed to be appointed to assist with the implementation, training and help desk of Gradnet. Because of the web-based nature of the product and enterprise, implementation did not require on-site implementation, but training institutional users to navigate the system optimally was required as well as a fulltime help desk to answer calls for assistance from institutional users. A training manual, which was used as a central guideline document that would assist with the training of users, was therefore written. This was also published on the Help-Desk website for easy reference. Although the system was very user friendly, the manual and website provided step-by-step schedules on how to apply the different functionalities of the system and provided an overview of the navigation structure of the functionalities.
The handling of end users’ biographical data was an important aspect in terms of security and access. During marketing presentations, it was emphasised that all data would be handled to comply with the national Information Security Act. Compliance to this guarantee was core to the ethical business approach of Gradnet.
The actual launch of the Gradnet brand and beta website and services in 2010 was a showcase of all the mentioned aspects to the public and interested parties. A regional representative of Google was the guest speaker at the event, which was held at a five-star hotel in Sandton, South Africa. This was done to create clout and credibility for the newly established brand. The speaker addressed the audience as an authority on Cloud computing and referenced Gradnet as a prime example of an innovative company who was pioneering and embracing new technology. After the conclusion of the formalities at the event, guests could move amongst the mounted plasma screens in the conference venue and ‘test-drive’ the functionalities that formed part of the system. It must be emphasised that the marketing, branding and positioning of an end-product that is being taken to the market is central to a successful commercialisation process.
Following her exit strategy from Gradnet in 2012 with the selling of the Gradnet Holdings companies, the founder can look back at valuable lessons learnt and priceless experience assimilated that form the basis for generating and sharing knowledge in future.
Making the transition from researcher to managing director of a company is a leap by any measure. On paper, a research project can look simple and fairly straightforward, but aspects such as the business plan, legal framework, funding, technology transfer, operations, finances, marketing and brand management are challenges that need to be dealt with swiftly and timeously (Barnard
When a researcher is publishing results under the name of, or in co-operation with, an educational institution, it is important to be aware of the intellectual property policy of that institution. This policy should provide guidelines as to what the initial legal framework would be for setting up the company and shareholding structures. However, it is an acceptable and advisable practice that form should follow function, and therefore, structuring the business side of things should only commence once there is a clear business plan on the table. The business plan should be as comprehensive as possible, keeping in mind that it is a flexible document that should be regarded as a frame of reference, a tactical and strategic guide, for all business endeavours on the short, medium and long-term. The business plan is the central component to secure the funding for the commercialisation process and to document the shared vision comprising the objectives and projections of the enterprise.
Sufficient funding is arguably the most crucial executor of the commercialisation process. Due to a lack of funding, start-up companies can fail even before they have been properly launched. Innovators and entrepreneurs can have the best of ideas, but without funding, their ideas are dead in the water. When a researcher at a university comes up with a commercially viable project or idea, the institutional commercialisation office usually assists with the sourcing of funds. Agreements should be drafted to determine and formalise the exchange. Usually inventors dilute their initial shareholding in exchange for funding, and this becomes an ongoing process for every fundraising round that the business requires in future. If the institution is not interested in pursuing the commercialisation avenue for a specific research project, the Intellectual Property and Commercialisation Policy of the institution should make provision for that by assigning to the researcher full ownership of intellectual property and the freedom to commercialise. Again, documenting these agreements and sessions are crucial to prevent any future legal disputes. These session agreements with regard to the intellectual property should be regarded as the foundations of the commercialisation process. Acquiring the assistance of experienced intellectual property attorneys is highly recommended.
Company structures should be set up in accordance with the legal requirements of the specific country's regulations and the funding agreements. Determining and establishing the company structure is another important element to be finalised before business transactions can commence. A board of directors, who will govern the company going forward, needs to be appointed or elected. If the founder or the inventor of the company is not trained or experienced in business management, they need to do a crash course in taking on this responsibility themselves. Alternatively, employ someone with business management experience. Occasionally the funders of the business will insist on employing their own CEO or Managing Director to take control of the business aspects of the innovation (Barnard
One of the most expensive exercises for an Internet company is the registration of its brand trademarks and patents internationally. Different countries have different regulations, and this could be a very complex route to follow. An easier and more cost-effective route for brand management would be to register all the web domains (especially the primary ones such as .com, .net, .info, .org) of the Internet company's brand as soon as possible as this gives a professional and international ‘ownership’ to the brand. However, this will not prohibit other companies from registering the brand trademark in foreign countries. Owning all the web domains for that brand can make it very difficult for other companies to do business online using that brand name. Nevertheless, if an Internet company wants to open offices or shops in different foreign countries, it would have to go the route of registering the brand trademark and patents in those specific jurisdictions.
When looking at the complex legal and regulatory framework that accompanied the commercialisation process of Gradnet, it is recommended that researchers and universities appoint a fiduciary company to handle these terms of reference. Many universities in South Africa do not have the necessary skills and hands-on approach that is needed in the business environment. The red tape usually associated with the university milieu is more than often not conducive to quick and efficient decision-making that is an especially critical requirement in a start-up business environment. Running a business successfully requires a fast-pace assertiveness that will ensure a competitive edge for the company.
One of the greatest discoveries made during the innovation process of Gradnet was the interdisciplinary nature of action research. In a tumultuous modern world, it is impossible to ignore the many grey areas that are constantly identified as ‘falling through the cracks’ of the academic and managerial silos that many universities and companies have constructed. It is especially those overlapping areas that can provide the key to unlocking new knowledge and innovative solutions to universal challenges. Multi-layered partnerships and strategic collaboration play a significant role in the innovations of the present and the future.
Another observation is the lack of an integrated and streamlined approach at many South African universities with regard to their commercialisation activities. The University of Stellenbosch serves as a prime example of an institution that is getting it right. Other institutions can look at this institution for mentorship and guidance for their own commercialisation endeavours. There should be stronger collaboration between public universities and government institutions such as TIA (Technological Innovation Agency) and the IDC (Industrial Development Corporation) in order to identify viable research projects and secure seed funding for these innovations.
In conclusion, it must be noted that all academic disciplines have the potential for establishing commercially viable research projects. It is a common misperception that only the ‘hard-core’ sciences have the potential of commercialisation and technology transfer. This is not the case as the global landscape poses many challenges that need resolving. If an applied action research approach is followed in any academic discipline, it could render practical solutions to address those challenges while at the same time provide an enterprise opportunity to the innovators. Looking for these opportunities is where entrepreneurship starts.
The authors declare that they have no financial or personal relationships which may have inappropriately influenced them in writing this article.
Z.B. (University of Johannesburg) conducted the research as part of a PhD postgraduate study under the supervision of C.R. (University of Johannesburg).