Technology commercialization, innovation, technology transfer

1. TechConnect
Section Two
Moving from idea to invoice

2. TechConnect Day two agenda
Review of job-mapping exercise
Importance of innovation science
Identifying new opportunities
Segmenting the market
Barriers to adoption
Creating the compelling value proposition:
• Offering pain killers or vitamins
• Creating the value proposition
Choosing a commercialization strategy
Licensing versus new venture creation
Lessons learned

3. Importance of innovation science
• Technologists believe that offering a better
technology leads to market success
• However, commercial success requires both making
money and stimulating adoption
• You will make money if you ensure that you:
• Have enough cash – or have the ability to generate cash
• Can raise sufficient cash to fund negative cash flow
• You will stimulate adoption if you understand how
potential customers make decisions:
• What will motivate them to purchase?
• How you can overcome innovation inertia?
• How will you leverage early adoption to stimulate growth?
• Which market segment to attack first

4. Understanding how different solutions
lead to different strategic choices
• Pain killers - take away a pain
• Offer a pain killer that addresses a real problem that
the customer is already aware of
• Vitamins - provide a gain
• Offer a vitamin that will help the customer address
an issue that you have an anticipated

5. If you have a pain killer
• How big is customers’ pain: what does it cost?
• Are they motivated to look for pain relief?
• How do alternate solutions compare?
• Can you demonstrate your pain killer works?
• What features offer competitive advantage?
• Typical pain points:
– High cost,
– Low quality,
– Poor service,
– High risk

6. If you have a vitamin
• How would you build awareness of benefits?
• How can you motivate interest?
• How can you show it works?
• How can you demonstrate/measure benefits?
• How will customer measure outcomes?
• Typical gains: Enhanced competitiveness, improved
performance, new levels of service, enhanced well
being, reduced environmental/social impact

7. Bring to the exercise insights from
previous day
• Technology unknowns
• Application unknowns
• New applications
• Considering the applications:
– review the competitive advantages associated with each
technology

8. TECHNOLOGY UNKNOWNS
Transfer from previous sheet
Development
Performance
Cost Integration
TRANSFER FROM
PREVIOUS SHEET:
NEW
APPLICATIONS
APPLICATION UNKNOWNS
Transfer from previous sheet
Market Segment
Barriers to entry
Competition Stakeholders
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Prototype
development
time
Performance
comparison
Technology
reliability
Unit cost
Ease of
technology
integration
Market
segment
Competitor
reactions
Cost to
change
Benefits to
stakeholders
Competitive
advantage
Perceived
technology
risk
Solution in
same
industry
Solution for
same
application
Similar
application,
new
industry
Radical
application,
new
industry

9. COMPETITIVE
ADVANTAGE
How does this solution offer an
advantage over other solutions
(including doing nothing)?
• Initial cost
• Speed
• Performance
• Reliability
• Installation
• Integration
• Operating cost
• Reputation
• Availability
• Choice
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How does the capital cost
of acquisition (including
installation) compare to
alternate solutions?
How does the operating
cost of the technology
compare to alternate
solutions?
How does the technology
enable the customer to
offer a lower cost solution
to their customers?
How does the technical
performance compare to
alternate solutions?
How does the reliability
compare to alternate
solutions?
How does the ease of
installation (or
maintenance) compare to
alternate solutions?
How does the ease of
integration with existing
technologies compare to
alternate solutions?
How does the reputation of
this technology (or
company) influence
compare to solutions from
alternate providers?
How does availability of the
technology (or of add-ons
for the technology)
compare to alternate
solutions?
Is there a perceived value
in offering the customer a
choice?

10. Customer segmentation

11. Crossing the chasm:
Identifying first customers
Moore, G (1991)
Crossing the chasm.

12. MARKET
SEGMENT
How does this solution offer an
advantage over other solutions
(including doing nothing)?
• Market size
• Market dynamics
• Adoption rates
• Resource requirements
• Stakeholders
• Influencers
• Proximity
• Complementarities
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What are the different
markets in which this
technology offers an
advantage?
Within each market, what
are the market segments
you can identify, by
industry, by application…?
Within each market are
there groups of customers
who can be viewed as a
segment?
How dynamic is each
market segment (nature of
competition)?
What is the speed of
introduction of new
technology in each market
segment?
Has technology leadership
played a role in building
market share?
What are the resource
requirements associated
with attacking each market
segment (people,
technology, financial)?
Within each segment, who
are the critical stakeholders
who can influence the
adoption decision (users,
economic buyers)?
How does industry or
company leadership impact
the potential for each
market segment?
How big is the market
segment, and how fast is
growing, or declining?
How close (in business or
geographic terms) is the
new market to the market
you now serve?
What are the long term
strategic advantages of one
market segment over
another?

13. Barriers to adoption
Getting people to adopt new technologies requires
you to understand
• That change (especially behaviors) is hard
• That organizations discourage risk taking
• That new solutions and new companies have a
liability of newness”
• Thant you need to understand how ideas diffuse,
and how barriers to adoption can be reduced

14. Three laws of innovation inertia
1. There is a natural tendency for organizations to keep doing
what they’re doing and resist changes. In the absence of a
force, they will continue to do what they’ve always done.
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2. Larger organizations require more force to change what
they are doing than smaller organizations.
1. For every force there is a reaction force that is equal in
size, but opposite in direction. When someone exerts a
force on an organization, he or she gets pushed back in
the opposite direction equally hard.

15. BARRIERS TO ADOPTION
What factors limit the
adoption of the
proposed solution?
• Integration
• Changing behaviors
• Compatibility
• Demonstrability
• Trialability
• Embeddedness
• Observability
• Novelty
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Are there technology
issues with building in this
new technology to an
existing solution?
Is the technology
backwards and forwards
compatible?
Will the people using the
technology have to change
their current behaviors?
Will the organizations using
these technologies have to
change their current work
practices?
Can the technology be
trialed before a final
selection decision is made?
Are the results of using the
new technology easy to
measure and observe?
Are there perceptions of
technology risk that might
discourage adoption?
Are there embedded
supplier relationships that
might be difficult to
change?
What are the issues with
approvals?
Is the new business model
for this technology
consistent with existing
business models?
Is it clear who the decision
makers are in adopting this
new technology?

16. Develop the value proposition
to describe perceived benefits
• Explain what job the technology does
• Explain how this creates value (pain killer or
vitamin) for a specific user
• Identify how the customer will measure benefits
• Demonstrate your solution is better than
alternates (including doing nothing)
• Show how the benefits outweigh the costs
• Explain how the risks of adoption are less than
the risk of doing nothing

17. Motivation to adopt
Don’t worry about people stealing your ideas. If your
ideas are any good, you’ll have to ram them down
people’s throats.”
Howard Aiken
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18. VALUE PROPOSITION
Perceived adoption costs
Motivation is the difference between
the perceived value and costs of
adoption
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What provides the motivation
to change?
Perceived value
Identify specific market
segments where there is a
compelling value
proposition
Identify segments in that
market that can be early
adopters, based on need,
risk propensity, or culture
Build a model of the
relevant stakeholders for
each segment
Understand the
competitive nature of the
marketplace, both for your,
and your customers’,
competitors
Identify mechanisms for
communicating the value
and benefits of adoption
Analyze how specific
adoption concerns create a
barrier to adoption
Develop strategic
approaches that might
reduce these barriers
Identify how customers will
measure the value of using
your technology
Look for ways to enhance
the perceived value of the
technology

19. Strategic approaches
to facilitate adoption
Develop partnerships or channels that will overcome
liability of newness and reduce adoption barrier
Find critical client who will partner with you to solve
their problem and become a reference for expansion
Develop a technology/business model that:
• Makes your solution backwards/forwards compatible
• Enable trials and allows observability
• Minimizes the changes in behaviors required
• Reduces acquisition, installation or maintenance costs

20. Alternate revenue models
to facilitate adoption
• Offer for free (trial) before you have to purchase
• Turn a capital purchase into a service agreement
• Charge per use
• Steeped charges for increasing use
• Offer basic service for free, with premium options
• Offer for free and have others pay for data access
• Share use of underutilized resources

21. Licensing or new
venture creation?
• When to create a new venture:
• Technology is sold as a complete solution
• Market for technology is growing, lacks
standards and is not dominated by major player
• Technology + business dev. costs not excessive
• Technology likely to disrupt the market
• Required expertise and resources available
locally and not controlled by competitors
• Inventor wishes to play critical role

22. 5 forces influencing new venture creation
(characteristic in brackets favour new venture creation)
Input factors
Market
dynamics
Demand
conditions
Barriers to
entry
Disruptive
potential
Market dynamics
Market trends (growing, segmenting)
Product life-cycle (short)
Market concentration (low)
Cost relative to total cost (discrete)
Competitor diversity (high)
Disruptive potential
Underserved customers (high)
Changes in price/performance (high)
Alternate revenue/business models (high)
Defendable patent (high)
Input factors
Supplier concentration (low)
Distributor concentration (low)
Capital requirements (low)
Economies of scale (low)
Demand conditions
Customer/buyer characteristics
(incentives)
Performance measures (high)
Perceived need (high)
Price sensitivity (high)
Switching costs (low)
Government legislation (low)
Barriers to entry
Dominant technology (low)
Level of vertical integration (low)
Brand loyalty (low)
Established relationships (low)
Freedom to operate (high)

23. Thank you
• Thanks for participating
• Takeaways
• Novel and proprietary technology necessary, but not sufficient
elements for technology commercialization
• Initial job or market may not be the main, or the first, market
opportunity
• Value proposition must consider competitive solutions
• Need to understand the eco-system, multiple stake holders and
the barriers to adoption
• Myopia can cause you to miss the big opportunity, the novel
business model or the best application
• The TechConnect approach creates opportunities for:
improvement, learning and attitude adjustment
• Follow up