CEO of Nanozyme, Inc. and AeroSonix, Inc.
The breadth of Scott Faris’ entrepreneurial experience ranges from the latest innovations, like nanotechnology, to managing venture capital funds. This breadth of capability may explain why Bright House Networks sought him out as a panelist on their new Shark Tank-style program which will be airing soon. With over 20 technology start-ups under his belt and a deep commitment to the diversification of Central Florida’s economic portfolio, he was ideally positioned to chair the Orlando Economic Development Commission over the past year. With their rollout of the “Orlando, You Don’t Know the Half of It” branding campaign, he has been a tireless advocate of the region’s burgeoning technology and manufacturing sector.
EW: If you were to write a job description for what you do, what would it say?
SF: I am a translator and an intermediary. I sit in this special world of being able to understand the challenges of a sophisticated financial and regulatory world and a very sophisticated technology world, and to create a common language among all those players to find a solution. The solution is usually a company that is launched.
If you’re attentive, ask good questions and listen, you can become a subject expert on almost anything in relatively short order. Can you practice the science? Probably not, but you understand it and see the commonalities.
EW: Let’s begin with your foray into the technology sector, which began basically with commercializing university research while a student at Penn State, correct?
SF: I was a victim of opportunity and only recognized the opportunity after I had chosen to pursue it. In my sophomore year, I took a class in entrepreneurship; it was the first time it had been taught at Penn State. I had started a couple of businesses while I was in high school, so I thought taking a class on starting businesses was a great idea.
There I met a speaker who had just formed a venture capital fund to commercialize technology out of the Penn State research labs and my professor nudged me and said, ‘You should talk to him about a job.’ I didn’t know what a venture fund was, but after landing a job with them, I was soon writing a business plan for a company in diamond materials; mind you, I was a sophomore. I lived in the engineering school studying this technology, though my major was business. Soon I got to know the professors and learned to ask the right questions, so I could present it to people who had a financial background.
I worked with that venture group for four years, and by the time I was a junior, they offered me a full-time position and worked it around my class schedule. I ran a statewide program that showed researchers how to write business plans. Then I was recruited to Florida to work on the state’s early-stage commercialization fund, the Florida Seed Capital Fund, in the late 80s and early 90s, which morphed into Harris Venture First. Though the specific fund didn’t pan out as planned, the joint venture with Harris Corporation did spin 15 or 16 companies, the last of which was AuthenTec.
EW: Do you see a shift towards entrepreneurial activity at the corporate level?
SF: Today, this is more of the corporate norm, but it wasn’t in the 90s. It took 30 years to define that type of success; that entrepreneurship and risk was a viable part of a corporate strategy, within the corporation, next to the corporation or outside the corporation.
EW: Is the likelihood of disruptive technology discoveries increasing?
SF: Yes, the rate of technological change continues to accelerate. The other big thing is the convergence of what were historically separate industries, like cell phones and medical. At one time you had your phone, your camera and your music being delivered on separate devices, now it’s all in one. Our phone cameras have sensors and processors that can detect light far beyond what you need for pictures. That same light can tell you a lot about the condition of your health; the spectrum the camera sees is way beyond what we can see, so why not use that data?
We used to have the paradigm that these detectors reside in the lab and can only be utilized by Ph.D.’s; now that field is collapsing into the consumer electronics world. The disruption could happen where what you went to your general practitioner to diagnose, could be at your fingertips. It is the convergence of technologies into smart things that talk and even socialize with each other.
As we move from reactive healthcare, getting treatment once we’re ill, to proactive health maintenance or staying healthy, this type of technology could play a major role in that equation. We are democratizing healthcare, much like we have done in other arenas, by the availability of information. That is why the Florida Advanced Manufacturing Research Center in Osceola County is so important, as it focuses on providing the knowledge of how to build these next generation devices. It all exists; it is just so expensive to make; only the specialists have access to it.
EW: Financing is where you began and is one of the chief issues with technology startups. What are you seeing?
SF: Funding has changed so dramatically in the last two years. The Jobs Act, which is four years old, had a lot of nice provisions in it, but the SEC seems to be in no hurry to implement any of them. I think they fundamentally don’t like it, as they see it as their duty to protect everybody, even the sophisticated, knowledgeable investors, which the Act is really aimed at, to allow people who know what they’re doing to write small checks – a sort of mini-public market.
What they have said is that you can advertise. That is a major breakthrough, since it used to be very punitive. If I went to a venture forum and announced I was raising money and we closed on a round, and a year later, or 10 years later, something happened, the investors could point back to that event and cause the whole deal to unwind a decade later. They have removed that restriction, so funds and companies can say they are raising capital.
EW: Do you see regulatory controls as a major inhibitor to growth?
SF: We are debating today what they were debating 200 years ago: federalist versus individual or state-based control. Our system isn’t bad from my perspective as a capitalist, because the government generally stays out of the way because of their own inherent gridlock. However, it does drive innovation. Whether their regulatory framework works or not, though you hope it will, currently you just innovate around it. We are at the point where technology is disrupting regulated markets, from energy, to healthcare, to tax collection, by democratization of information and monitoring ability. These sectors are regulated for good reason, but the reality is, the politicians don’t understand the rate of technological change. Most technology people don’t understand the rate of change and so they are constantly playing catch-up.
EW: What about the debate between information and privacy?
SF: That will be ongoing as we have more devices that can monitor our life and communicate with other devices. These hacking scandals at Target and the like, we have to realize that if we create information and put it on the cloud, it exists, and people who want to get access to it, will eventually get to it. Therefore, we as people have to figure out where and how to draw the line.