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Phyl Speser, J.D., Ph.D,, CEOForesight Science & Technology
www.foresightst.com 401,273.4844, ext. 35,
1 Foresight Science & Technology www.ForesightST.com
Finding the CustomerDetermining the 4P’s (Product, Price, Promote, Place)Selling
First SalesLong Term Sales
Technology
End-User Needs
Substitutes
Buyers
Market Orientation
Competitive Advantage
Launch Tactics (4Ps)
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Competitive Openings and Competitive Advantage
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$
Time
Revenuesfrom Sales
Saving from Operations
(Life or death needs such as health, environment, or military requirements and
aesthetics/taste for consumer items are the exception. )Foresight Science & Technology
www.ForesightST.com4
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Developer Producers/Distributors
End-UsersOpinionLeaders
create awareness andstimulate demand
seek product and/or servicecreate awareness and support
legitimizeand stimulatedemand
legitimize and enhance desirability
Seektechnology
5 W’s
Who is doing it?What is being done?Where are they doing itWhy is it being done?When are they doing it?
Technology is a Tool for Doing Something
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Searching the WebFocus on Performance or Functionality Add Term
ProblemNeedRequirement
Check for Fit with Other RequirementsConfirm by Calling Experts and End-Users
Star Trek Gap Analysis
Think Where it Gets Used
Look for Contemporary AnalogueConfirm by Calling Experts and End-Users
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Product Innovation Stage
Bundle of FeaturesStandard User Interface
Process Innovation Stage
Eliminate StepsImprove ReliabilityImprove Efficiency of Resource Use
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Extension
Extension
Extension
CoreEnabling
EnablingCompeting
Time
Strategic
Bohn Knowledge LevelSkills/Know-how
Utility ≈ ValueUMPF
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Ease‐of‐Use
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ButtonManufacturer
ClothingManufacturer
ButtonManufacturer
ClothingManufacturer
MarketForce
HEV Batteries
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Li-ion Battery Functional Decomposition
(B) Product Risks
B-1.0 Lithium Ion Battery
B-001 Available Energy
B-002 Calendar Life
B-003 Cold Cranking Power
B-004 Cost
B-005 Cycle Life
B-006 Efficiency
B-007 Equivalent Electric Range
B-008 Max. System Weight
B-009 Operating Temperature Range
B-010 Peak Pulse Discharge Power
B-011 Production Price
B-012 Regenerative Pulse Power
B-013 Self Discharge
B-175 Safety
B-014 System Recharge Rate
B-015 System Volume
B-016 Thermal Runaway
B-1.1 Cathode
B-017 Cost
B-018 Electrochemical Capacity
B-019 Ionic Conductivity
Red indicates a risk or common design hurdle
Green indicates a goal with specific numerical values
Yellow indicates a goal or a characteristic without a specific value
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Foresight Advanced Energy Storage Portal
http://batteries.foresightst.com
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Ease of Use
Time
Yield
Requirement
S1a
Trajectory
Technology 1 S1c
Requirement
S1b
S2c
S2b
S2a
Trajectory
Technology 2
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Lead Acid Battery
Lithium Ion Battery
new
mod
ified
exis
ting
exis
ting
mod
ified ne
w
Market Product
Market Entry Riskfrom Bacon & Bulter, Planned Innovation
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Variety\Rate of \ Change
Slow or “One Time”
Rapid or “Faster- Paced “
Many Segment-Driven Needs (Screwdrivers)Renewable Clean Energy
Dynamic or Changing Needs(Financial Instruments)Hybrid and Electric Vehicles
Few Infrastructure- Driven Needs (Hoes)Smart Grid
Network-Driven Needs(Cell Phones)Electronic Health Records
Based on Sanderson and Uzumeri, Managing Product Families, (Iwin, 1997)
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Distribution without Market Forceor Barrier
Distribution withMarket Force
and BarrierMarket Force
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Trade-offs and
Concerns affecting Metrics Matrix
Technology’s Yields on Metrics
Needs Relationship Matrix
Importance of Needs
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Referred Literature
Patentsand Applications Trade Press
CompanyWebsites
T‐n T0time
Referred Literature
Patentsand Applications
Trade PressCompanyWebsites
To T+5timeT+1
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COMPARING YOUR TECHNOLOGY WITH OTHERSYOURS
Customer Requirements Rela
tive
Wei
ghti
ng
Total Weight 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Feat
ures
and
Func
tiona
lity
of T
chno
logy
3 Strong2 Medium1 Weak
Ease
-of-U
sePe
rfor
man
cePr
ice
Oth
er
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Is it in a Golden Triangle of Competitive Advantage Sustainability? If so file a Provisional and test market.
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Is There a Competitive
Opening?
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Six Degrees of SeparationStart with People Likely to Know or Know Someone to Talk With
Federal, State, and Local Program ManagersChairs and Members of Trade Association and Professional Society CommitteesEditors and AuthorsCenter Directors and Professors who Consult
Network Through to the Right People
Make it Clear Up Front You are NOT SELLINGAlways Ask if You can Use their Name
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STAKEHOLDER ANALYSISLevel of Commitment People or Group
Supply Chain, incl. Targets Regulators Opinion
Leaders Customers Funders NGOs Industry Assoc.
Enthusiastic
Helpful
Compliant
Hesitant
Indifferent
Uncooperative
Opposed
Hostile
Key: O - Level Necessary for SuccessX - Current Level
Get 7 to 15 potential customersSit them in a room with a recording deviceAsk questions and encourage them to “freewheel” about their needsFocus and facilitate the discussion by asking about needs you have identified in literature reviews or earlier discussionsConfirm the Substitutes and their PricesConfirm who your Competitors areDo Gap AnalysisIdentify the Value Network
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Ask Experts who are the ExpertsFive to Seven ExpertsSame QuestionsCycle Answers to Gain Consensus
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Email everyone, ask the questions and offer to chat, but do not rely solely on emailCall early and then around the end of the dayLook for common ground and leverage pointsBe a poor working stiffAsk who else to call when you reach someone
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End User AdviceEnd User Testing
Target Advice
TargetTesting
Idea – Design –
Proof – Brass – Prototype – Product – Production – Sales – Distribution – Customer of of Board
Engineering
Marketing SupportConcept Feasibility
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OffensiveEmerging PacingSpare
DefensiveHedgingImitativeSpare
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Lead all Competitors
Be in Top 5% of all Competitors
Lead all Direct Competitors
Be in Top Half of all Competitors
Crucial for Future Growth
Crucial for Take-off
DefensiveOffensive
Impactfrom Use ofProduct,Service, orTechnology
Function
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Past Present Future
Strength of Intellectual Asset Portfolio
Staff Capacities of to Realize Plan
©
Foresight Science and Technology
High
LowRevenue From Entry Market Application
Long-Term Sustainable Competitive Advantage
Short and Mid-Term Competitive Advantage
Idea BasicResearch
AppliedResearch
ProductDevelopment
MarketIntroduction
ProcessEngineering
0$
CUM
ULA
TIV
E RE
VEN
UES
TIME
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3%
14%
34% 34%
16%
Innovators Early Adopters Early Majority Late Majority Laggards
3%
14%
34% 34%
16%
Innovators Early Adopters Early Majority Late Majority Laggards
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StabilityOf
Dominant Design
Barriers to Entry
Rate ofChange
Concentra-tion
Rivalry
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1) Product2) Price3) Promote4) Place
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Perfor
mance
Ease-of-Use
Skills
Capacities
Goals
Inputs - Outputs
Time 1
Time 2
Attracti
veness
of Tech
nology
Price
MarketForce
MarketForce
MarketForce
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CORE
Technology Familiarity
Mar
ket F
amili
arity
Control
Partner
Divest orMonitor
STRATEGY
Control:InternalDevelopment
AcquisitionsIn-License
Partner:Joint VenturesAlliancesInternal VenturesOut-License
Divest:AssignmentsSales
Monitor:Venture CapitalEducationalAcquisitions
Market Development
TechnologyDevelopment
Adapted from Roberts and Berry, SMR 1988.
Minimize
Maximize
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Most Feasible
Customer/Target
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Market Fit
Product/MaturityFit
CapabilityFit
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\\YouYou\\
Them Them \\
You Do DealYou Do Deal You Walk AwayYou Walk Away
They Do DealThey Do Deal $10m, $0.5m$10m, $0.5m --$0.05m, $0.05m, --$0.01m$0.01m
They Walk They Walk AwayAway
$0.1m, $0.1m, --$0.05m$0.05m
--$0.01m, $0.01m, --$0.01m$0.01m
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Google, Bing, etc. On-Line Papers and Magazines
Wall Street Journal, New York Times, etc.Business Week, Fortune, etc.Thomasnet, Globalspec, etc.Sector or Technology Specific Websites
Cooperate InformationYahoo FinanceHooversCompany SitesSEC Edgar
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Frost and SullivanFreedoniaGartnerForesight T2+2™Entrepreneur
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5252
Let’s try an expert, shall we?
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HooversForesight T2+2™ Entrepreneur
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MailersNon-Proprietary
Fact Sheet, Quad Chart, Specifications Sheet, BrochureWhite PaperPatents/ Published Patent Applications
ProprietaryTest Protocols and ResultsUnpublished Patent Applications
DemonstrationsWorking, Tested PrototypePresentation SlidesFollow-Along Manual and/or Check List
Legal DocumentsStandard Contract or LicenseOne-Way and/or Two-Way Non-Disclosure AgreementsMaterials Transfer Agreement where Relevant
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The substantive process drives the cost calculationThe cost calculation, together with the revenue projections, drives the net value
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Net Operating Income/Loss and Cummulated Cashflows with Breakeven
-50000000
0
50000000
100000000
150000000
200000000
250000000
300000000
350000000
400000000
3652
5
3725
6
3798
6
3871
7
3944
7
4017
8
4090
8
4163
9
4236
9
4310
0
4383
0
4456
1
Net Operating Income/(Losses)
Net Difference of Cummulated Cashflows
Process Contribution to Total Project Cost(excl. Investments)
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
Res
earc
h
Fina
ncin
g
Des
ign
Impl
& E
ng
Test
Mgt
Mfg
Pl &
Ctrl
Prc
& Eq
uip
Log
& Di
sp
Man
agem
ent
Dist
& S
rvc
Cos
t in
% o
f Tot
al
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Technical and firm specific risk are the basis for the discount rate.
Market risk is a probability distribution for outcomes.
Cost vs. Delays for all Risks along Value Chain
0%
5%
10%
15%
20%
25%
30%
0% 5% 10% 15% 20%
Resulting DelaysR
esul
ting
Cos
t Inc
reas
es
58
Risk Level Approximate DR(%) DescriptionRisk Free 10-18 Existing product, high demand,
building more of the same
Very Low Risk 15-20 New well understood technology for an existing product
Low Risk 20-30 New features, well understood technology into an existing market
Moderate Risk 25-35 New product, well understood technology into market with competition
High Risk 30-40 New product, not well understood technology into an existing market.
Very High Risk 35-45 New product, new technology, new market
Extremely High Risk 50-70 New company, unproven technology, new market
Source: Richard Razgaitis, Early Stage Technology
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Focus on the Significant Risks
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Targets and Means MatrixObjectives Action Plan
Obj
ectiv
e 1
(Red
uce/
Incr
ease
)
Obj
ectiv
e 2
Obj
ectiv
e 3
Obj
ectiv
e 4
Obj
ectiv
e 5
Resources Required Who? M
easu
re
J F M A M J J A S O N D Task 1
Task 2
Task 3
Task 4
Task 5
Progress
Time Line
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Any numbers in green found in the following fields can be changed and will be reflected in the tables below
Factor Rate Weight ImpactIndustry Norm 0.0% 0.0 0%
Significance (Breakthrough add 5-10%, Major add 0-5%%, Minor subtract 0-3% 0.0% 3.0 0%Refinement/Maturity of Technology (High add, Low subtract) 0.0% 2.0 0%Breadth and Strength of IP Protection (Yes add, No subtract) 0.0% 2.0 0%Portfolio, Not Single Patent Being Licensed (Yes add, No subtract) 0.0% 2.0 0%Exclusive Market Position in Field of Use Gained (Yes add, No subtract) 0.0% 3.0 0%Immediate Utility in Market (Yes add, No subtract) 0.0% 2.0 0%Commercially Successful (Already Successful in Market add, Not Yet Proven in Market subtract) 0.0% 3.0 0%Competition Exists which Will Inhibit Ability to Exploit (Yes subtract, No add) 0.0% 1.0 0%Foreign Rights (Yes add, No subtract) 0.0% 3.0 0%Sales Conveyed or Highly Likely (Yes add, No subtract) 0.0% 2.0 0%Duration (Over Ten Years add, Under Three Years subtract) 0.0% 1.0 0%Upfront Payment Required (Yes subtract, No or Conditional add, Standard neutral) 0.0% 2.0 0%Minimum Royalties (Yes subtract, no add, Standard neutral) 0.0% 2.0 0%Know-How Included in Deal (Yes add, No subtract, Standard neutral) 0.0% 3.0 0%Support/Training Provided After Initial Transfer (Yes add, No subtract, Standard neutral) 0.0% 2.0 0%Maintenance and Enforcement Burden (Licensee subtract, Licensor add, Standard neutral) 0.0% 2.0 0%Exposure to Liability (Yes subtract, No add, Standard neutral) 0.0% 2.0 0%Total 0%Add to Industry Norm 0.00%RATE 0.000%
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There is always a reason for NO
Understand itRespond to it
Follow-up, Follow-up, Follow-up
Make a listMust HavesNo WaysNice to Have
Be Fair and ReasonableUse Your Nice to Haves to Negotiate for the OthersWhen you have:
Your Must HavesNone of Your No Ways
Sign
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Start at the Top and Work Down
“Profit & Loss”ResponsibilityGatekeepers
Always have a NameAsk for the Secretary/Assistant
Practice Your Elevator Speech
Why Calling ThemValue Proposition
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There is a MarketThey Sell (or Want to Sell) to this Customer SegmentAddressable Market SizePull-Through Likely with Customer Segment
Voice of Customer HeardStakeholder Support
Your Good(s) can Capture a Hefty Market ShareA “PEPPY” Value Proposition: Performance, Ease-of-Use, Price, (PEP) and UMPFConcurrent Engineering Underway
Lead Customers ParticipatingDesigned for Price Flexibility
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Poor Richard: “Pride is as loud a beggar as need and a good deal more saucy”
Everyone always Three Options:
Buy Wait/Stall Walk Away
Ask for the DealIF THEY DO NOT BUY …
ASK WHY!Do not be a “true believer”Do not assume they are stupidUnderstand their needs, requirements, and constraints
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Do you correctly understand why the technology is attractive?What is the decision process and who else is involved in what roles or functions? How long does the decision process take?What criteria will be important and why? What information will they want?What kind of deals have they signed in the past and what do they prefer? Who is (are) the decision maker(s)?Is there other insights they want to pass along to make the process smoother and quicker
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End User
Project Leader
Sponsor
Gatekeeper
Champion
TechnicalExpert
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Poor Richard: “The second vice is lying, the first is running in debt. …It is hard for an empty bag to stand upright”
The deal has to made sound business sense or it is a nightmare to enforceGood Deals are:
Win/Win: Net Positive Cash Flow for All PartiesFair: Allocation of Cash Flow Proportional to Value ContributedSelf-Enforcing
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Poor Richard: “Always taking out of the pot and never putting in one soon comes to the bottom”
Cash Flow is the Lifeblood of Business
The more risk a party bears, the more upside cash flow potential it deservesCash today is worth less than cash tomorrowThe likelihood of cash tomorrow decreases as total risk increasesAllocate risk to the party able to control it or bear it. Use side payment(s) to make the deal “fair.”
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Poor Richard: “Those who will not be counselled cannot be helped”
Legal clauses must be taken seriouslyIf you have not been there before, work with someone who has
Not getting your cashGetting the wrong amountGetting Sued
Get Financial folks to confirm the cash flow after taxes & interestGet a lawyer to confirm exposure to liability and difficulty of enforcing
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Poor Richard: “Fair commerce is where equal values are exchanged for equal, the expense of transport included.”
Value is defined by the product of:
(1) The contribution to the utility for the end-user (a percent)The number of units sold The gross profit per unit
Adjusted by the other costs for the buyer when creating that utilityAdjusted by the risk of realizing the value (discounting)
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Poor Richard: “We can give advice, but we cannot give conduct”
The decision is management’sDecide on sound business reasons (personalities change as people change)Don’t get greedy
Go back to your three columns: Must Have and No WayCross off items on Must Have and No Way If no No Ways and all Must Haves, sign
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Allocate tasking to the most competent and cost-efficient partyAllocate liability to the party best able to mitigate itStructure hand-offs for success
Clear Deliverables MilestonesProgress PaymentsPenalties
Use transfer payments to make fair
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Develop a straw man Float it then try itAdapt it to reflect comments and reactionsContinue to no adaptation is needed
Clarify Exit StrategySet Goals and Make and Evaluate PlansBuild Brand Name Loyalty and Goodwill
Listen to Your Customers and RespondObtain Advocates Among StakeholdersAlways Set the Quality Bar Higher
Run as Long as First Mover Advantage Lasts, then Consolidate GainsSit on Standards BodiesGet on Industry Panels with CustomersIncrease Intellectual Assets
Drive Absolute Cost AdvantagesEconomiesControl Over InputsCreate Barriers to Entry
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Revisit Exit StrategyHit Take-Off in Entry Niche then Expand NichesGo Where: Clear Expressions of NeedOpinion Leaders Cross OverCommunication Channels Already Carrying Your MessagesLeverage Scalability and Producability
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Market Orientation Launch Tactics
Product Advantage
New Product Performance Organizational Performance
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Fundamental/ Exploratory Research
Applied Research and Development
Concurrent Engineering
Manufacturing-Sales, Supports
Post-Introduction Improvement
PRODUCTLIFE CYCLE
Expected Results
Demonstrable Steps and/ or Benefits
Relevant Stakeholders
Develop a distinct new technology connected to a market need
Establish technology’s practicability, market potential, and plans for development
Embody thetechnology in production engineered products and/or processes
Get the product or process quickly accepted in the market
Create long-term value by expanding applications of the technology
Technical proof of the ideas, patent, develop vision for the technology
Patent if relevant or not done; ready plans for com-mercialization;prototype, test with key targets
Beta test with key customers, unveil commercial version of the technology, animal trials
Hit take-off (5% -20% penetration)
Obtain substantial financial returns and establish the infrastructure for supporting a product family
Research partners, technical experts in the field
Technical experts, potential investors and other funding sources, targets, end users, opinion leaders in key entry niches
End-users, lead customers, sup-pliers of platform or complementary technologies and products, targets, opinion leaders
Targets, end-users, customers, opinion leaders, others in value network
Company management, others in value network, customers, opinion leaders, R&D partners
Pre-Phase I Phase I Phase II Phase III (and new Pre-Phase I)
Phase III (and new Phase I)
SBIR PHASE
Expanding upon V. Jolly, Commercializing New Technologies, Harvard Business School Press, 1997
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85Value
Proposition
Phone &
Com
petit
ive
Land
scap
e
Sem
i-C
usto
miz
edM
ater
ial
Non
-Pro
p.D
escr
iptio
n
Asks for More
Info and
Gives
Feedback
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Ease‐of‐Use
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•
Nothing happens without a sale.
David Speser
•
If opportunity doesn’t knock, build a door.
Milton Berle
•
A well-defined imagination is the source of great deeds. Chinese Fortune Cookie