What’s ComingWhat’s Coming TodayToday

Group market research presentations (45’)Group market research presentations (45’) Work Session with advisors- market research refinement (30’)Work Session with advisors- market research refinement (30’) Commercialization options and approach (40’) Commercialization options and approach (40’)

Assignment: Schedule first meeting with inventor and collect questions for Assignment: Schedule first meeting with inventor and collect questions for them. Meet with your group to collect information, questions, and ideas for them. Meet with your group to collect information, questions, and ideas for mentor work sessionmentor work session

Wednesday (1/28)Wednesday (1/28) Work session with mentors (60’)Work session with mentors (60’)

Assignment: Develop and refine commercialization plan. Prepare an (ungraded) Assignment: Develop and refine commercialization plan. Prepare an (ungraded) presentation on your progress for Mondaypresentation on your progress for Monday

Commercialization Options-Commercialization Options-► Your challenge- extract the commercial value from your Your challenge- extract the commercial value from your

invention!invention!

► As you develop your commercialization strategy, you will need As you develop your commercialization strategy, you will need to consider four related decisions:to consider four related decisions: Form of your offering-Form of your offering- product, service, “razor blade” model, product, service, “razor blade” model, Commercialization approach-Commercialization approach- spinoff vs licensing spinoff vs licensing Position in the Value chain-Position in the Value chain- where are there profitable openings? where are there profitable openings? Risk vs benefit-Risk vs benefit- harvest the “low-hanging fruit” or plant and cultivate the harvest the “low-hanging fruit” or plant and cultivate the

tree? tree?

► Decisions for each will depend uponDecisions for each will depend upon The nature and state of development of your intellectual propertyThe nature and state of development of your intellectual property Effective market research- KNOW YOUR CUSTOMER, MARKET, AND Effective market research- KNOW YOUR CUSTOMER, MARKET, AND

COMPETITION!COMPETITION!

Form of Commercial OfferingForm of Commercial Offering► Be creative in defining your market entry!Be creative in defining your market entry!

► There are many ways to extract value from intellectual There are many ways to extract value from intellectual propertyproperty Consumer productConsumer product Consumer serviceConsumer service B2B product or serviceB2B product or service Host unit and replacement modelHost unit and replacement model EtcEtc

► This is where you can add the greatest value! This is where you can add the greatest value! YouYou have a very different perspective than the inventors have a very different perspective than the inventors Consult with your mentors on this- they have experience with all Consult with your mentors on this- they have experience with all

of these modelsof these models

Commercialization ApproachCommercialization Approach► All IP under consideration is either All IP under consideration is either

““owned” by OSU, which as a public entity cannot run a for-owned” by OSU, which as a public entity cannot run a for-profit enterpriseprofit enterprise

Developed by HP, but does not fit with their strategic product Developed by HP, but does not fit with their strategic product portfolio (but still has value!!)portfolio (but still has value!!)

► Fundamental possibilities are Fundamental possibilities are Spin-offSpin-off: Start a new company from the ground, transfer : Start a new company from the ground, transfer

rights to the new company to market products or services rights to the new company to market products or services based on IPbased on IP

LicenseLicense: Identify an established company which could benefit : Identify an established company which could benefit from use of IP to improve its product, reduce costs, etc. Sell a from use of IP to improve its product, reduce costs, etc. Sell a license to use IP. license to use IP.

Start-up, License, or somewhere betweenStart-up, License, or somewhere between

Spin-off FirmSpin-off Firm License to License to Established FirmEstablished Firm

RadicalRadical IncrementalIncrementalTacitTacit CodifiedCodifiedEarly StageEarly Stage Late StageLate StageGeneral PurposeGeneral Purpose Specific PurposeSpecific PurposeSignificant Customer Significant Customer ValueValue

Moderate Customer ValueModerate Customer Value

Major Technical Major Technical AdvanceAdvance

Minor technical Minor technical advanceadvance

Strong IP ProtectionStrong IP Protection Weak IP ProtectionWeak IP Protection

??? ???

Commercialization ContinuumCommercialization Continuum

Additional IP needed-Cross license, acquire, etc Development needed before

licensing to enhance IP value

Start-up License-ready

The grey zone-Strategic alliances -NRE funding for custom engineering-Plan to be acquired

Risk Risk

Potential Value

Potential Value

Positioning in the Value Positioning in the Value ChainChain

Value chain: Value chain: “The activities that one “The activities that one undertakes to deliver a product or service”undertakes to deliver a product or service”

Identify the best entry points into the value Identify the best entry points into the value chain that offered by your IP whichchain that offered by your IP which* * Have a low barrier to entryHave a low barrier to entry* Can be protected with existing IP or available IP, * Can be protected with existing IP or available IP, combined with publicly available informationcombined with publicly available information* Have perceived value to customers (this can * Have perceived value to customers (this can be the consumer or other businesses- B2B) be the consumer or other businesses- B2B)

* Are most profitable!* Are most profitable!

Risk vs BenefitRisk vs Benefit► Know the risks in your commercialization plan, and be Know the risks in your commercialization plan, and be

intentional about balancing risk and benefit. The intentional about balancing risk and benefit. The balance point should be agreed upon by the balance point should be agreed upon by the entrepreneur and investors.entrepreneur and investors.

► Be up-front about the risks and have a plan to address Be up-front about the risks and have a plan to address them!them!

► Types of risk: People, funding, infrastructure, Types of risk: People, funding, infrastructure, technology, market acceptance, regulatory issues, technology, market acceptance, regulatory issues, schedule…schedule…

► Risk is not always bad! Risk is not always bad! Avoid risk without a corresponding benefit Avoid risk without a corresponding benefit Is there a less risky way to achieve the same benefit ?Is there a less risky way to achieve the same benefit ? Know the “break points” in risk (or effort) versus benefitKnow the “break points” in risk (or effort) versus benefit

Technology Development “Break-points”Technology Development “Break-points”

Value

Idea Proof of Concept Prototype

Customer feedback

Manufacturing ready

Time, Effort, or Investment

Risk

Tasks for this week: Inventor/Mentor Tasks for this week: Inventor/Mentor ConversationsConversations

►With InventorWith Inventor►Confirm your understanding of technology and capabilitiesConfirm your understanding of technology and capabilities►Understand the maturity of technology (idea, prototype, etc Understand the maturity of technology (idea, prototype, etc

and next steps)and next steps)

►With MentorWith Mentor- - prepare for a discussion onprepare for a discussion on Form of your offering- product, service, “razor blade” model,Form of your offering- product, service, “razor blade” model, Commercialization approach- spinoff, licensing, or hybridCommercialization approach- spinoff, licensing, or hybrid Position in the Value chain- where are there profitable openings?Position in the Value chain- where are there profitable openings? Risk vs benefit- harvest the “low-hanging fruit” or plant and Risk vs benefit- harvest the “low-hanging fruit” or plant and

cultivate the tree a bitcultivate the tree a bit

Hint: More research will be needed!Hint: More research will be needed!

Let’s get started!!!Let’s get started!!!