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CIT TESLA Actions 18th and 19 th May 2012
CIT Actions
• Work Package 1 (led by EBN)• Action 2: New product design and development
• Ronan Coleman – Commercialisation Specialist
• Work Package 2 (led by CIT)• Action 4: Internationalisation
• Paul Healy – Rubicon Centre Manager
• Kieran Moynihan – Entrepreneur-in-Residence
• Action 5: Transnational Placements • Carole O’Leary – Industry Liaison Manager
• Work Package 3 (led by Bangor University)• Action 8: Spin ins
• Ronan Coleman – Commercialisation Specialist
TESLAWP1 Action 2 –
New Product Design & Development
Ronan ColemanCIT Commercialisation Specialist
WP1 Action 2 – NPD&D• A number of gaps has been identified in
the partner regions business incubators which limit the commercial performance of their client high technology start-up companies
• Gaps:1. New product design & development (NPD&D)
skills.
2. New product design & development (NPD&D) process design & implementation.
New Product Design & Development – Teams in Established Companies
Customers
FinanceFinance
SalesSales
Legal/IPLegal/IP
CEM1
CEM2
CEM3
PM
AdminAdminManu Eng
Manu Eng
BuyerBuyer
Software Eng
Software EngMech
EngMechEng
MarketingMarketing
Elec EngElec Eng
Ind.Design
Ind.Design
Test EngTest Eng
New Product Design & Development – Start-up Companies
FinanceFinance
Legal/IPLegal/IP
Sales/Marketing
/Admin/Buyer
CEO CTOElec Eng?
CEM1
CEM2
CEM3
Customers
Manu Eng
Manu Eng
Software Eng
Software Eng
MechEng
MechEng
Ind.Design
Ind.Design
NPD&D Expert Services – Example 1
FinanceFinance
Legal/IPLegal/IP
CEO CTO
CEM1
CEM2
Customers
Manu Eng
Manu Eng
Software Eng
Software Eng
MechEng
MechEng
Ind.Design
Ind.Design
NPD&D Expert
NPD&D Expert
Expert sets up and manages the Sub-contract manufacturers
NPD&D Expert Services – Example 2
FinanceFinance
Legal/IPLegal/IP
CEO CTO
CEM1
CEM2
CEM3
Customers
Manu Eng
Manu Eng
Elec EngElec Eng
MechEng
MechEng
Ind.Design
Ind.Design
NPD&D Expert
NPD&D Expert
Expert works with the CEO, CTO & their
customers to define the product and manages
the sub-contract technical specialists
• A secondary role of the NPD Specialist will be to:• Assist young, inexperienced start-up companies to
design a NPD process that fits their company profile.
• Carry out a NPD skills gap analysis on the designed NPD process.
• Assist the company in filling in these gaps by identifying the necessary internal and external resources that will allow them to carry out their NPD functions.
• In general the company will initially use mainly external NPD resources but over time it will add its own internal NPD capabilities and expertise.
NPD&D Expert Supports
NPD StageGate Process• Pioneered and developed by Dr. Robert G. Cooper – MacMaster
University, Canada and Penn State University, US.
• Conceptual and operational roadmap for moving a new-product project from idea to launch
• Distinct stages separated by management decision gates – hence StageGate
• Stages/Gate processes vary by business sector and the degree of uncertainty in the project
• The model below can be easily modified to fit most NPD project types
Output Targets
Output CIT Bangor LMT Total
No. of participating incubators
1 1 1 3
No. of participating client companies
20 20 15 55
No. of NPD&D expert days provided
80 80 60 220
Next Steps• Each participating partner:
• Carries out a gap analysis with participating partners business incubator client companies to ascertain the required skill set of the NPD&D specialist.
• Creates a job specification for the NPD&D specialist for each partner
• Decides on appropriate service offering for client companies, e.g.• Number of client companies to be serviced – from proposal
• NPD&D specialist onsite availability - X days per week for Y weeks
• Number of contact hours per client per week/month
• Advertises, assigns or recruits a NPD&D specialist
• All partners jointly develop a work programme
TESLAWP2 Action 4 -
Internationalisation
Paul HealyRubicon Centre Manager
Kieran Moynihan CIT Entrepreneur-in-Residence
Challenges for HPSUs in Internationalising their business
• Practically every HPSU in each partner region has a key focus on export markets to help drive growth in their business
• A large number of HPSUs struggle in this area due to• Lack of understanding of the new market, its drivers and
mechanisms• Insufficient investment & business planning to enter the
market effectively• Inability to breakthrough to achieve first sales in the market• Inability to effectively support customers and partners in the
new export markets
Best Practice for HPSUs in Internationalising their Business
Market Assessment( Opportunity, competitive landscape, customer drivers, pricing, etc)
Market Assessment( Opportunity, competitive landscape, customer drivers, pricing, etc)
Business strategy, planning and investment( Integrating new market drive into overall business plan)
Business strategy, planning and investment( Integrating new market drive into overall business plan)
Sales & Marketing strategy( go-to-market model(partner/direct), partner selection, target
sectors)
Sales & Marketing strategy( go-to-market model(partner/direct), partner selection, target
sectors)
Product & Support preparations( regulatory approval, localisation support, support model)
Product & Support preparations( regulatory approval, localisation support, support model)
Sales & Marketing execution – Customer support(trials, tender processes, sales wins, support, in-country team)
Sales & Marketing execution – Customer support(trials, tender processes, sales wins, support, in-country team)
Market Assessment
• Ability to Assess the Opportunity -Lack of Market Research skills
-Ability to talk directly to Potential Customers
-Lack of Local Supports
• Presence of Competitors/Alternatives
• Regulation
• Sales Channel - Direct vs. Third Party
Business Planning, Strategy & Investment
• Require for Investment to support market entry
• Lack of Strategy to support Market Entry
• Requirement for Detailed Business Plan with focus on Resources needed to support International Market Entry
Sales & Marketing strategy
• Need to Look at Partner or Local Office
• Partner Selection, Training and Recruitment
• Back up to Support Customers in new Market
• Pricing Models (Allowing for Partners)
• Sales Support for Channel selected
Product & Support Preparations
• Regulatory Compliance
• Localisation
• Installation and After Sales Support
Output Targets
Output CIT Lionra EBN LMT INI-NOV
Total
No. of firms engaging with the internationalisation experts
10 15 20 9 20 74
No. of firms taking part in the pilot internationalisation course
6 8 10 9 10 43
No. of internationalisation expert days provided to companies
80 90 60 27 60 317
Next Steps• Documentation of Needs Analysis of
HPSU’s by each participating partner
• Access to International Sales Mentors for 1:1 Sessions
• Master Classes (Key Elements)
TESLAWP2 Action 5 -
Transnational Placements
Carole O’LearyCIT Industry Liaison Manager
Transnational Placements
• Aims:• To provide partners opportunity to develop skills,
knowledge & expertise through study visits in partner organisations (up to 1 week duration)
• To see best practice in other incubators • To provide networking opportunities • To enhance business linkages in NWE region
• Target Audience:• Incubation Centre Managers• Commercialisation Specialists• Business Development Staff• Technology Transfer Team
Process
Proposal Form designed & circulated to all partners
Partners complete proposal form
Steering Group evaluate proposals
Study Visits
Best Practice Seminars in home region
Output Targets
Output CIT Bangor EBN Ini-Nov Lionra Total
No. of Study Visits completed
3 8 2 2 7 22
No. of Best Practice Seminars Delivered
4 4 3 3 8 22
Next Steps - Proposed
• Action detail designed by participating partners
• September 2012: Design proposal form & evaluation criteria
• October 2012: Publish call for proposals to all partners
• January 2013: First study visit completed
WP3 Action 8 – Spin Ins• Each of the partner regions have a significant number
of large indigenous companies, MNC’s and large public administrations located in the region which are a potential source of new entrepreneurial ideas and ventures.
• This action will:• Design & deliver programmes to these organisations to:
• Highlight the potential for entrepreneurship and innovation in their organisations
• Create an entrepreneurial culture in the organisation
• Provide opportunities for staff from these organisations to “Spin In” new ventures into partner regions incubators
• Examine potential ownership and management and exit strategies for these “Spin In” companies
Rationale for “Spin In” Action
• Usual R&D growth strategies for large commercial organisations include:
• M&A – acquire a business or product line in the strategic area that you want to move into
• Internal R&D – invest in existing product and processes.
• Corporate venturing or “Intreprenuership” - develop a separate business within the corporate entity
• This is the source of the potential “Spin In” companies!
Block and Subbanarashima Survey on Corporate Venturing
Reasons for Venturing US Companies (%)
Japanese Companies (%)
Maturity of the business base 70 57
To meet strategic goals 76 73
To provide challenges to managers
46 15
To develop future managers 30 17
To survive 35 28
To provide employment 3 24
49 US companies and 149 Japanese companies were surveyed in 1989 – from Corporate Venturing by Block & MacMillan
What is a Corporate Venture or “Spin In”?
The project is a venture when it:•Involves an activity new to the organisation•Is initiated or conducted internally•Involves significantly higher risk of failure or large losses than the organisations core business•Is characterised by far greater uncertainty than the organisations core business•Will be managed separately at some point during its life•Is undertaken for the purpose of increasing sales profit, productivity, or quality
Examples
• Toys R Us – created Kids R Us• New product line into existing market
• Royal Dutch/Shell Group’s - GameChanger• Provided seed funding to new ideas in the exploration division
swiftly, without going through the traditional layers of hierarchy
• Lucent - Lucent’s New Ventures Group• Generates cash from selling or licensing unused corporate
resources
• Thermo Electron Corporation• 12 separate spin-out companies in which TEC had a majority
shareholding but each traded separately• 100 managers have options in excess of $1 million
Issues for Large Organisations
• Large organisations management structures are designed to manage ongoing processes to produce products/services in the most efficient way possible
• Significant cultural differences between large organisations and ventures which must be managed
• Talent, Roles, Risk, Rules, Performance, Cannibalisation, Brand, Failure, Finance, Staffing, Strategy and Operations • These are all issues that must be considered by the larger
organisation as these are managed and viewed very differently in a new venture
• Must protect the new venture from the larger organisations culture!
Rewards for Parent Organisation• Opens up new strategic markets
• Shields parent from failures and damage to brand
• Adds new technologies and product lines
• Generates income from unused IP and ideas
• High € return if successful
• Huge learning process for parent
• Enhances chance of long term survival - Innovate or die!
Models• Venture Harvesting
• Set up a separate unit to spin-out new business e.g. BT had 14k patents• Spin Ins for partner incubators!
• Ecosystem venturing • Invest in complementary businesses e.g. Intel Capital
• Venture Innovation • Promote entrepreneurial activity in all business function, e.g. Google
invest 10% of technical budget for non-traditional ideas
• Corporate Private Equity • Establish company to act as a private VC e.g. Nokia Growth Partners
invest in mobile technology, services and media.
More failure when no clear Model has been selected
Location of Ventures
• Spin In action’s main focus should be on ventures that will be at arms length from the parent organisation
• Partners will encourage companies considering corporate venturing to locate their new ventures as “Spin Ins” into the partners incubators
• These Spin Ins will need numerous business supports from partner regions incubators
• Incubators could also design programmes to assist corporate ventures that are located within the parent organisation
• These tend to have a lower chance of success due to interference and cultural differences between the parent and the new venture.
Output Targets
Output CIT Lionra Tilburg LMT Total
No. of industry seminars delivered
5 4 2 1 12
No. of participating organisations
20 20 10 10 60
No. of potential “Spin Ins” identified
4 6 5 3 18
Next Steps• Each partner:
• Identifies organisations in their region that they plan to target to participate in the action.
• Designs a high level summary description of what the proposed “Spin In” programme will look like.
• This may need to be modified to target different organisation types (e.g. by business sector, public, indigenous/MNC, etc.)
• Makes contact with each of their target organisations and generates interest and support for the programme
• Obtains feedback from interested organisations and uses this to tailor the programme description where appropriate.
• Uses this description to develop a detailed work programme with participating partners
