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Visit acs.org/networkandlearn

A Brief Message from ACS Immediate Past President, Dr. Diane Grob Schmidt

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DRIVING INVENTION INTO

SUCCESSFUL INNOVATION:

COLLABORATION IS KEY

Michael Blaustein

MAB Innovation Group

November 15, 2016

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Agenda

• Invention to Innovation: Collaboration is Key

• Collaborations in 2 Dimensions

• Issues to Manage

• Summary and Live Q&A

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Invention ≠ Innovation

Invent*

Innovate*

*Dictionary.com

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Essentials for Successful Innovation

Route to Market • Customer Access

• Production Capability

• End-to-end Supply

Chain

Market Relevance • Real Problem

• High Priority

• Worth Solving

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Uniqueness • Intellectual Property

• Know-how

• Trade Secrets

Essentials for Successful Innovation

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May be

accomplished

on one’s own…

or with

partners

Uniqueness • Intellectual Property

• Know-how

• Trade Secrets

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Essentials for Successful Innovation

Route to Market • Customer Access

• Production Capability

• End-to-end Supply

Chain

Market Relevance • Real Problem

• Worth Solving

• High Priority

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Impossible to

accomplish

alone!

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• Research and Development

• Marketing and Sales

• Operations / Manufacturing

• Corporate Development / Executive Leadership

• Other

At your company, which functions are responsible for innovation? (select all that apply)

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Collaboration in 2 Dimensions

• Insight

• Opportunity

• Customer as partner

• Outsourcing

• Academia / Government /

Industry Partnering

• Venture Investing

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Market Capability Product Capability

Market and Product

knowledge and capability:

Advance in tandem! M

ark

et C

ap

ab

ilit

y

Product Capability

Market Capability:

Insight and Opportunity

• Ensures Market Relevance: Is the

problem you are solving real?

• Requires expertise… depth and

breadth

• Voice of the Customer ≠ Voice of

”Marketing” or “Sales”

• Idea ≠ Opportunity

- Steve Blank Serial Entrepreneur

“There are no facts

inside your building!”

S. Blank Photo: https://breakfastbriefings.stanford.edu/speakers/steve-blank-co-founder-epiphany-author-customer-development-methodolgy-and-lean-start-movem Book photo: Courtesy of Pam Henderson

- Pam Henderson, NewEdge, Inc.

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Market Capability:

Customer as Partner

• Involve current and future customers in end-to-end innovation

• Corporate Innovation Centers enable this approach

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“IMAGINE a planetarium-style presentation about the future

of technology, followed by a tour of dozens of hands-on

exhibits….

Is it the latest science museum, or a new Disney attraction?

No, it’s the “World of Innovation” showroom, a cornerstone

of the 3M Company’s customer innovation center at its

headquarters in St. Paul.”

http://www.nyti mes.com/2009/12/27/business /27pr oto.html

“New ideas become a reality. We believe that together, we can accomplish what no one person, company or organization can address alone…”

http://www.dupont.com/corporate-functions/our-approach/innovation-excellence/science/innovation-centers.html

Product Capability:

Outsourced Testing and Manufacturing

2 Minute Burn Test

Control Test

Example: Quilted Fire-blocking Fabric (1986)

Non-woven

Kevlar® Aramid

Woven

Nomex® Aramid

Internal Technology: High

performance materials and structures

External Resources: Product

assembly and testing

• Fast

• Flexible

• Expert

• Capital and cost effective

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• Almost 1 percent

• Almost 5 percent

• Almost 10 percent

• Almost 15 percent

• Almost 20 percent

According to NSF data from 2016 what percentage of R&D is being done at Universities and Colleges, as measured by spending?

Product Capability:

University, Government and Industry Partnering • Government and universities are significant performers / funders of R&D U.S.

• Industry’s role is to transform basic research into products

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, National Patterns

of R&D Resources (annual series). Science and Engineering Indicators 2016. Accessed October 30, 2016. Total

funding in 2013 was about $450 Billion.

Business 71%

Federal government

11%

Universities and Colleges

14%

Other nonprofit

4%

PERFORMING SECTOR (by Spending)

Business

65%

Federal government

27%

Universities and Colleges

3%

Nonfederal government

1%

Other nonprofit

4%

FUNDING SOURCE

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c “…meet the needs of automotive and battery

manufacturers”

Product Capability:

University, Government and Industry Partnering

• Technology licensing by universities and national labs

• Consortia of government, academia, and industry

• Sponsored research and collaboration projects

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Ripped from the headlines… Pharma!

c

Product Capability:

Corporate Venture Capital (CVC)

• CVC is investment in venture-capital financed

companies by corporations

• Emerging technology visibility

• Option creation

• Collaboration

• CVC’s typically invest alongside traditional VC’s

• CVC structure and operations:

• Direct company and fund investments

• Balance of strategic and financial goals

• Equity and strategic rights

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Product Capability:

Corporate Venture Capital (CVC)

• CVC is booming in the U.S. and

globally!

• Great partners for startups

• Alternative route to liquidity in tight

IPO environment

1James Mawson, Shif t Conf erence, October 2016 2CBInsights: https://www.cbinsights.com/research-cvc-trends-mar2016

• CVC raised over $30 Billion capital globally since 20111

• CVC is ~ 20% of global VC funding2

• 1600 CVC groups participate in about 250 deals per year1

21%

27%

22%

12%

6%

12%

CVC Investment by Stage - 20152

Seed / Angel

Series A

Series B

Series C

Series D

44%

15%

18%

6%

14%

CVC Investment By Sector - 20152

Internet

Healthcare

Computers andServicesMobile and Telecom

Software

Other

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Product Capability:

Corporate Venture Capital (CVC) - Example

Press Release - October 8, 2015

Caribou Biosciences and DuPont announce strategic alliance *

• Caribou and DuPont cross-license CRISPR-Cas intellectual property portfolios

• Caribou and DuPont enter into multi-year research collaboration to advance genome

editing technology platform

• DuPont makes equity investment in Caribou

*http://cariboubio.com/in-the-news/press-releases/caribou-biosciences-and-dupont-announce-strategic-alliance

"We are thrilled to partner with

DuPont on this initiative and to work

collaboratively with the company to

speed our product development…”

Rachel Haurwitz, Ph.D., president and

CEO of Caribou

“Caribou is at the forefront of

CRISPR-Cas technology and we are

pleased to be collaborating with them

to advance this important

breakthrough in biology…”

James C. Borel, executiv e vice

president, DuPont

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Collaborative Innovation Challenges Challenge Area How to Address

Sharing the spoils with partners • Ensure win-win for you and partners

• Anticipate / design up front

Intellectual Property • Work under joint development agreements

• Employ sponsored research with academia

“Not Invented Here” syndrome • Reward and recognize “collaboration”

Scientists’ preference for discovery

and inventing

• Redefine scientist role from “invent” to “invent

and integrate”… and reward it.

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For more on the

theory and practice:

Henry Chesbrough

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• Research and Development

• Marketing and Sales

• Operations / Manufacturing

• Corporate Development / Executive Leadership

• All of the above

At your company, which functions should be responsible for innovation?

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Summary

• Innovation is a collaborative process.

• Innovation is an enterprise initiative… not an R&D

responsibility.

• Reach outside your company for insight, opportunities,

and solutions.

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Resources and References

• Pam Henderson, “You can kill an IDEA… but you can’t kill an OPPORTUNITY!”, Wiley, 2013

• 3M Innovation Center: http://multimedia.3m.com/mws/media/1120604O/brochure-science-applied-brand-identity-lr-pdf-trifecta.pdf

• DuPont Innovation Centers: http://www.dupont.com/corporate-functions/our-approach/innovation-excellence/science/innovation-centers.html

• DuPont/Johns Hopkins Ebola Project: http://hub.jhu.edu/2015/09/28/hopkins-dupont-ebola-garment-partnership/

• Battery500 Consortium: http://www.pnnl.gov/news/release.aspx?id=4295

• National Science Foundation: Science and Engineering Indicators: https://www.nsf.gov/statistics/2016/nsb20161/#/

• Pharma Industry Collaborations, from C&E News

http://cen.acs.org/articles/93/i20/Drugmaker-University-Join-Find-Cure.html

http://cen.acs.org/articles/93/i21/Schooled-Pharma-Arts.html

http://cen.acs.org/articles/94/i21/Cancer-therapeutics-found-translation.html

• Corporate VC data: https://www.cbinsights.com/research-cvc-trends-mar2016

• DuPont / Caribou Biosciences: *http://cariboubio.com/in-the-news/press-releases/caribou-biosciences-and-dupont-announce-strategic-alliance

• Henry Chesbrough, “Open Innovation”, Harvard Business School Press, 2003 and “Open Business Models”, Harvard Business School Press, 2006 .

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