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“Connecting the Dots… from Researcher to Market”

Harvesting the value of innovation

Courtney Price, Ph.D.

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Overview—Technology Commercialization at Federal Laboratories

• VentureQuest Overview • Synopsis of Federal Laboratory Programs• Six-Step Commercialization Process• Quick Commercialization Opportunity

Screening Tool• Lessons Learned

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Mission

“Harvest the value of innovation and technology to create enduring companies.”

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History• Founded in 1988 as PEP (Premier Entrepreneurship

Programs) • Selected by the Kauffman Foundation as the “best

entrepreneurship training initiative in America”• Programs used by over 200,000 participants worldwide• Founders authored the Internationally recognized

Premier FastTrac programs • Consult with federal labs, technology companies, and

universities• Broad industry and organization experience through

strategic alliances and associate relationships

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Lab Commercialization Projects Managing Intellectual Property Guide (LANL) Management Overview: Accelerating Technology

Commercialization (LLNL) Technology Commercialization Overview (for PIs and

researchers) (ORNL) Technology Opportunity Assessment (LLNL) Market Validation (LANL) Commercialization Plan (DOE) Licensing Guide for Technology Valuation (LLNL) Technology Opportunity Presentation Toolbox (NASA) Technology Data Sheets (SNL)

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A member of the audience commented that, in his experience, the interns got more out of the process than he did. He frequently got useful models or other information; however, the successful use of this information required the application of professional expertise beyond the experience of most interns.

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Audience Members Suggested:

• Passion for the technology

• Acceptable payback period

• Low risk of losses

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Commercialization Evaluation

• Venture Capitalists investment decision based on:

1. People

2. Market

3. Technology• Technology Transfer Professionals evaluate

inventions based on :

1. Technology

2. Market

3. People

Should technology managers place more emphasis on the inventors and the market?

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Licensee Evaluation

• Company history and background

• Management Philosophy

• Technical Portfolio Analysis

• Management & Organization

• Market Analysis

• Financial Considerations

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IP Universe

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Six-Step Commercialization ProcessThink 1. Idea Generation

Screen 2. Pre- screening

Protect 3. Idea Protection

Assess 4. Business and Market Development

Validate 5. Product Development and Testing

Execute

6. Commercial- ization Strategy

Scientific discovery

Opportunity discovery

Customer- driven problem solving

Laboratory notebooks

Disclosure forms

Technical evaluation

Lab prototype?

Business Concept

Seven-Step Opportunity Evaluation

Model Opportunity

Patent Copyright Trademark Trade secret

Opportunity Assessment

Executive Summary Innovation Team Product/ Service Analysis Market Strategy Financial Projections Valuation Analysis

Market validation

Experts Competitors Customers Licensees

Customer prototype

Beta test

Refinement

Maturation

Commercial- ization Plan

Licensing Bartering Work-for- hire R&D funding Spin-in

Business Plan Spin-outJoint Venture Strategic partnership

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Commercialization Practices???

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• Scientist, engineers, and innovators focus on opportunities• Idea creation is disconnected from core business

Typical Innovative Process

Opportunity

Generation

Pre-ScreeningPre-Screening

Internal Market AnalysisInternal Market Analysis

Business StrategyBusiness Strategy

IP ProtectionIP Protection

IP committee Functional evaluation Focus on potential revenue before market validation Outside legal council

“Glory Patents” Inadequate strategy and protection Company vs. Inventor

Industry analysis Size of opportunity “Water-cooler” research

Develop and execute business plans with unvalidated assumptions Inflated “Hockey Stick” projections not achieved

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• Ideas (not viable business concepts)• Unrealized projected revenue• No customer prototype• Slow process (typically, 12-18 mo.)• Poor innovation success rates• Missed window of opportunity• Lack of innovation protocols• Inadequate market validation process • Little innovator involvement

Typical Innovation Results

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Technology Commercialization Challenges

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Innovation to Market Challenges?• Too early stage• Overvaluation of opportunity• Too many features, too few benefits• Weak value proposition• Competition barriers• Unvalidated market assumptions• Over reliance on technical evaluations • Too risky• Unproven business model• Slow adoption curve

Your Challenges??

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Technology Adoption CurveM

arke

t S

ize

Time

Mature Saturated Market

Rapid Growth

Early adopters Niche markets

Declining Market

New Replacement Technology

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Prescreening Technologies

Opportunity Quick Screening Tools• Concept Development• Seven-Step Opportunity Evaluation• Model Technology • Screening Tool Summary

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Screening Tool Summary7-

Step

Score

(45)

Product

Service

Score

(70)

Market

Score

(70)

Financial

Score

(50)

Legal

Risks

Score

(50)

Total

Score

(285)

Ranking

Opportunity A 17 39 49 34 21 160 3

Opportunity B 35 62 45 47 28 217 1

Opportunity C 32 51 64 38 19 204 2

Average

Category

Score

51

B

53

B

40

B+

23

C

194

B+

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Technology Truths

Reinforce with inventors/researchers…

• Technology has no inherent value

• Value occurs when it’s commercialized

• Technology commercialized using different business models yields different economic values

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Action Plan

• Diagnosis: Where are you today?

• Determine: Where do you want to be?

• Plan: Next steps?

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Wrap-Up• In Conclusion….

• Innovation is a journey on a rocky road• Intellectual property creates value• Validating the opportunity is a process• Market validation minimizes risks and

establishes a commercialization strategy• Your innovation hit rate can be improved