“Will your product or venture opportunity

make a profit?”

Innovation SPACE© Technology Commercialization ModelPhase 1 : CONCEPT

Stage 1 : DISCOVERYStep 3 : VENTURE ASSESSMENT

The Technology Commercialisation Model

SCIENCE & TECHNOLOGY MARKET ENTERPRISE / BUSINESS

CONCEPT PHASE

STAGE 1 : DISCOVERY Step 1 Technology Analysis

Step 2Market Needs Analysis

Step 3Venture Assessment

CREATION PHASE

STAGE 2 : DO-ABILITY Step 4Technical Feasibility

Step 5Market Study

Step 6Economic Feasibility

STAGE 3 : DESIGN Step 7Engineering Prototype /

Pilot Plant

Step 8Strategic Marketing Plan

Step 9Strategic Business Plan

STAGE 4 : DEPLOYMENT Step 10Pre-production Prototype

Step 11Market Validation

Step 12Business Start-Up

COMMERCIAL PHASE

STAGE 5 : DELIVERY Step 13Production

Step 14Sales & Distribution

Step 15Business Growth

STAGE 6 : DOMINATION Step 16Production Support

Step 17Market Diversification

Step 18Business Maturity

Step 3: Venture AssessmentWill this product or venture opportunity make a profit? • When market research is complete and the

entrepreneur is convinced the product can be made and there is sufficient market demand to justify production, the final step of the investigation stage is the Venture Assessment. This step initially involves answering a series of questions in logical sequence: Does it make more sense to license this product opportunity to a company that can take it to market, or does the entrepreneur have the resources and ability to pursue a commercial venture? If the answer is “yes” to licensing, the next questions are: who are the potential licensees, how much additional development work is required to secure a license, and what are the standard license fees and royalty rates in the industry? If, on the other hand, the entrepreneur decides to pursue a venture, the next questions are: what experts are needed, how much and what kind of capital will be required, and what role will the founder play in the venture? The ultimate question, however, is: will this venture opportunity generate sufficient return on investment to justify the risk?

• Definition: The process of determining whether the business opportunity demonstrates profit potential.

• Objective: The objective of the venture assessment is to determine if the concept offers sufficient profit potential to pursue additional investment of time and money for additional research.

• Product: The product of this step is a brief description of the business model.

• Business Activities: The research activities common to this step are those necessary to demonstrate that the concept will generate a profit and that the organization is capable of taking the product to market.

• During the conceptual phase at least the following activities must be completed:

• • Identify financial, physical, and human resources required forcommercialization;• Identify the status of intellectual property requirements;• Establish a positive profit potential

• Milestones: Preliminary cost and revenue estimate

• Funding Sources: Personal finance, Friends and family

• Business Information: Completion of the conceptual business step will usually result in an estimate of the revenues and costs of product sales, identification of source and use of capital for the development phase.

• Key Questions :

• Do you have experience in launching a business enterprise?Does this venture appear to have profit potential?Are you the right person to commercialize the product?Is your enterprise the right one to commercialize the product?Have you estimated the resources (capital and service providers) required to launch your venture?Have you researched the intellectual property considerations?

KEY QUESTIONS1. Do you have experience in launching a business enterprise?2. Does this venture appear to have profit potential?3. Are you the right person to commercialize the product?4. Is your enterprise the right one to commercialize the product?5. Have you estimated the resources (capital and service providers)

required to launch your venture?6. Have you researched the intellectual property considerations?

Do it yourself (DIY) or LICENSE IT?

5

Automatic hierarchical categorization of music by metadata Patent number: 6928433Filing date: Jan 5, 2001Issue date: Aug 9, 2005

Application number: 9/755,723

A method, performed by software executing on the processor of a portable music playback device, that automatically files tracks according to hierarchical structure of

categories to organize tracks in a logical order. A user interface is utilized to change the hierarchy, view track names, and...

Inventors: Ron Goodman, Howard N. EganAssignee: Creative Technology LTD

Source: bbc.co.uk 30th August 2005

SPOT the DIFFERENCE

Patent Litigation

7Source: bbc.co.uk 30th August 2005

Creative wins MP3 player patentOne of Apple's main rivals, Creative Technology,

hasbeen awarded a patent in the US for the

interfaceused on many digital music players.

"The first portable media player based upon the user interface covered in our Zen Patent was our Nomad Jukebox MP3 player," said Creative CEO

Sim Wong Hoo. "The Apple iPod was only announced in October 2001, 13 months after we had been shipping the Nomad Jukebox based upon the user interface

covered by our Zen Patent." In its press release, Creative said Apple had filed for a patent for a user

interface in a multimedia player in late 2002, but its application had been recently rejected.

On 24 August 2006, Apple and Creative announced a broad settlement to end their legal disputes. Apple will pay Creative US$100 million for a paid-up license, to use Creative's awarded patent in all Apple products. As part

of the agreement, Apple will recoup part of its payment, if Creative is successful in licensing the patent. 

MAKING the FIRST MILLION

Financial Modeling your Business

BREAK EVEN ANALYSIS (Net Profit = $0)

($500,000.00)

$0.00

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

0 20,478 40,955 61,433 81,910 102,388 122,865 143,343 163,820 184,298 204,776

DOLL

ARS

SALES VOLUME (UNITS)

Breakeven Analysis Chart

FIXED COSTS PER PERIOD TOTAL COSTS TOTAL SALES NET PROFIT (LOSS)

0 69 139 208 278 347 416 486 555 624 694

($6,000.00)

($4,000.00)

($2,000.00)

$0.00

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

Breakeven Analysis Chart

FIXED COSTS PER PERIOD TOTAL COSTS TOTAL SALES NET PROFIT (LOSS)

Sales Volume (Units)

Dolla

rs

0 69 139 208 278 347 416 486 555 624 694

($6,000.00)

($4,000.00)

($2,000.00)

$0.00

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

Breakeven Analysis Chart

FIXED COSTS PER PERIOD TOTAL COSTS TOTAL SALES NET PROFIT (LOSS)

Sales Volume (Units)

Dolla

rs

($500,000.00)

$0.00

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

0 20,478 40,955 61,433 81,910 102,388 122,865 143,343 163,820 184,298 204,776

DOLL

ARS

SALES VOLUME (UNITS)

Breakeven Analysis Chart

FIXED COSTS PER PERIOD TOTAL COSTS TOTAL SALES NET PROFIT (LOSS)

BREAK EVEN ANALYSIS (Net Profit = $1m)

SALES MODEL (3-month Target over 3 years)

SALES VOLUME PER PERIOD (UNITS) 0 20,478 40,955 61,433 81,910 102,388 122,865 143,343 163,820 184,298 204,776SALES PRICE PER UNIT $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50FIXED COSTS PER PERIOD $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00VARIABLE COSTS $0.00 $155,629.39 $311,258.78 $466,888.16 $622,517.55 $778,146.94 $933,776.33 $1,089,405.71 $1,245,035.10 $1,400,664.49 $1,556,293.88TOTAL COSTS $3,400.00 $159,029.39 $314,658.78 $470,288.16 $625,917.55 $781,546.94 $937,176.33 $1,092,805.71 $1,248,435.10 $1,404,064.49 $1,559,693.88TOTAL SALES $0.00 $255,969.39 $511,938.78 $767,908.16 $1,023,877.55 $1,279,846.94 $1,535,816.33 $1,791,785.71 $2,047,755.10 $2,303,724.49 $2,559,693.88NET PROFIT (LOSS) ($3,400.00) $96,940.00 $197,280.00 $297,620.00 $397,960.00 $498,300.00 $598,640.00 $698,980.00 $799,320.00 $899,660.00 $1,000,000.00

TOTAL COSTS $8,597,016.33 Conservative ROI 0.6 XLess ACCUMULATED PROFIT $5,481,300.00

CAPITAL REQUIRED $3,115,716.33 Optimistic ROI 1.8 X

HOW MUCH STARTUP CAPITAL?

STRUGGLING CASE (PESSIMISTIC)ROI Multiple Less than 1.0 X

SURVIVOR CASE (OPTIMISTIC)ROI Multiple Greater than 1.0 X

INVESTOR CASE (CALCULATED RISK)ROI Multiple Greater than 10.0 X

TOTAL COSTS $8,597,016.33Less ACCUMULATED PROFIT $5,481,300.00

CAPITAL REQUIRED $3,115,716.33

THE FINAL ASSESSMENT

Ask me about my 1mdb(One Million Dollar Business)

SIX HATS ASSESSMENT of VENTURE ACCESS TO THE

INDUSTRY1. GOVERNMENT (POLITICS, REGULATIONS, LEGAL) - WHITE2. FUNDERS (BANKERS, INVESTORS) - BLACK3. SUPPLIERS – YELLOW4. BUYERS (DISTRIBUTORS) - BLUE5. CONSUMERS (COMMUNITIES, ENVIRONMENT, SOCIAL, CULTURAL,

ETHICS) - RED6. COMPETITORS (DIRECT, SUBSTITUTES, COMPLEMENTORS) - GREEN

LET’SROLE PLAY

Summary of Industry Competitiveness

“No Competition Please…”

X-Factor Test for Venture Capital Investor

1. Quality of Management Team2. Size of market3. Product qualities (uniqueness,

brands, patents)4. Intensity of competition5. Market growth rate6. Barriers to entry7. Company’s stage of development8. Industry where company is