COMMERCIALIZING INNOVATION

TURNING TECHNOLOGY BREAKTHROUGHS INTO PRODUCTS

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Jerry Schaufeld

Commercializing Innovation: Turning Technology Breakthroughs into Products

Copyright © 2015 by Jerry Schaufeld

Contents

About the Author

Acknowledgments

Introduction

Chapter 1: Technology Commercialization

Chapter 2: The Commercialization Model

Chapter 3: The Sources of Ideas for Commercialization: Are There Enough?

Chapter 4: Winnowing Down: The Challenge of Opportunity Recognition

Chapter 5: Feasibility Analysis

Chapter 6: The Project Plan

Chapter 7: To Market or Not

Chapter 8: The Numbers

Chapter 9: Organizational Dynamics

Chapter 10: ROI: Does It Make Sense?

Chapter 11: Big Brother and Global Competition

Chapter 12: Looking Forward

Appendix A: Sample US Patent

Index

About the Author

Jerry Schaufeld’s wealth of experience in entrepreneurship, operations, and general management of technology-based companies ranges from his current role as Professor of Entrepreneurship and Technology Commericalization at Worcester Polytechnic Institute (WPI) to an assignment as a consultant at the technology transfer interface of Children’s Hospital in Boston.

He served as Director of the RI Slater Fund, (a state-level investment resource for early stage companies), was President and CEO of Mass Ventures (a quasi-public technology incubator), and has a “hands-on” track records ranging from functional to board-level advisory roles in several early-stage companies. He is a founding member of the Launchpad Angel Group in Wellesley and co-founder of the Cherrystone Angels in Rhode Island. In addition, Mr. Schaufeld is an advisor to the Boynton Angel Group in Central Massachusetts, a charter member of the national Angel Capital Association (ACA), and a founder/participant in the regional NE Angels ACA group. Mr. Schaufeld was a founder and the first Chairman of the MIT Enterprise Forum, which now has 23 chapters around the world. He also founded the Incus Group, which is a CEO-level business acquisition and resource collaboration.

Mr. Schaufeld was co-founder and COO of Phoenix Controls Corporation. The company pioneered an approach to the control of air flow in critical laboratory and hospital environments. After ten operational years, it was successfully sold to a Fortune 500 company.

With a graduate engineering degree, research experience at MIT, an MBA, a professional engineer’s license, and a Professional Board Director’s Certificate, Mr. Schaufeld has a distinguished technical and operations-savvy managerial career. His current interest and research is in the area of improving the probability of success of early stage, innovative, technology-based ventures in their quest for commercializing innovative opportunities.

Introduction

We live in a time of unprecedented attention to the forces of innovation and entrepreneurship. Throughout the world, the combination of these two focused efforts affords us the opportunity to both compete and profit on a global basis. To enable this, the technology that allows us to benefit and the channels of information that can communicate these ideas to those who can utilize them, are both changing at warp speed.

Within this dramatic environment, the processes for improving the probability of commercial success of these ideas lags behind. This book offers a model for increasing the odds as well as the narrative that supports it. Much of the work presented is derived from a graduate course I teach in the Worcester Polytechnic Institute (WPI) School of Business entitled “Technology Commercialization.”

Rapid change affords opportunities we could only have imagined a few years ago. The drama of the change in “technology commercialization” is awesome. New models of nimble and adaptive thinking anchored in solid business fundamentals are required to realize its benefits.

CHAPTER  1

Technology Commercialization

The Legacy

We live in a time of incredible technological change. It is characterized by significant dislocations of people, political infrastructures, capital formation, and material resources. It is fueled by significant investments in innovation and entrepreneurship at levels of public and private funding. The dimensions are global and empowered by enabling forces such as the Internet, Facebook, Twitter, Google, and a seemingly endless list of social media-based design and communication tools. They use a new vocabulary that enables rapid and international levels of collaboration. The implications of all this are just becoming understood.

The stage is set for this book’s premise in the first chapter. It starts with a suspicion that we look to innovation and entrepreneurship as directions to confront declining manufacturing bases, shortages of raw materials, environmental concerns, and a significantly changing global mix of wealth distribution. The attention to innovation has produced many new ideas and visions for directions ahead. The attention and the methods for converting those ideas to commercial reality have lagged behind.

This book argues that commercializing technology can be accomplished more efficiently and with greater probability of success than it has been done before. Enabling tools and information are more prevalent than ever. Methods that worked in the past to bring technology to market in various forms no longer work as well as they once did. Even still, we persist in employing them.

What works better now, for example, is to seek ideas for commercialization from multiple sources. Then, to consider the alternatives for creating commercial pathways to get products and services to the market based on unifying goals and visions. To accomplish this we need to look at the overall process of moving ideas to market reality.

First, how did we get to this point? It can be argued that things evolved as they did based on a somewhat stable model of economic order. Industrial strength was centered in the United States and Europe. Material resources were consumed by these nations from what seemed a limitless supply. Much of the new wealth created was built on the backs of impoverished nations like China, India, and South Africa. Although the riches of this approach were unevenly distributed, the model seemed to work. Today, forces like unemployment, poverty, large gaps in wealth, insufficient healthcare delivery and education, and diminishing resources like energy (and its impact on the environment) also share the stage of world economic concerns.

We simply have to do better! Uneven distribution leads to an unequal capacity to change. Investments in education, Internet-based communications, and formal research and development are so disparate that they make it difficult to create new solutions.

 Note  Innovation and entrepreneurship are not sufficient to ensure future change. Business decisions must focus attention on the processes for bringing those ideas to commercial reality so that they yield the highest probability of success.

Books, articles, professors, and pundits worldwide expound constantly on the need to promote innovation and entrepreneurship. These, we are told, will help sort out a new world order and provide more wealth and opportunity for all. Perhaps, but in my view, the current level of innovative ideas coupled with less disruptive entrepreneurial initiatives may not be sufficient to provide a better economy for all. Incremental gains fall short when we need more dramatic returns on innovation. Educators, business leaders, and innovative change agents must focus on improving the probability of success of their projects so that usable ideas come to the marketplace.

The attention to innovation has brought with it a flood of well-intentioned resources into focus. It has also brought with it a commoditization of our attention. An example is a project I worked on while serving as a consultant to the Technology Transfer Office of Children’s Hospital in Boston (CHB). It was observed that bringing ideas to the pediatric market would be enhanced by a collaboration among six leading pediatric hospitals in the country. We coined a name for this project and called it the Institute for Pediatric Innovation (IPI). To ensure that we weren’t infringing on someone else’s trademark, we asked our attorney if we could use that name. She researched the name and said it was okay, but she also reported that there were 96 organizations in the greater Boston area alone that used the term “innovation” in their titles—wow!

We have more innovative ideas every day but, paradoxically, fewer life-changing breakthroughs. We are hamstrung by business models that reflect a prior age and rely on quarterly performance rather than metrics of innovation and change. An example might be in the automotive industry where yearly model changes are characterized by changes in color, name, and incremental feature modification. Disruptive changes do not appear to be part of the model.

Many innovators believe the best way (and maybe the only way) to commercialize an innovation is to start a new company. As this book will show, there are multiple pathways to bring ideas to market. Paying attention to how ideas reach commercial reality, the focus of this book, can change the game for innovators, entrepreneurs, and customers. You will learn more ways to bring products and services to market, helping speed the process of innovation and providing the potential for the dramatic breakthroughs we need to keep technology and society both progressing. Best of all, you’ll learn new models that promise improved probabilities of bringing your ideas to the market successfully.

Waypoints in Innovative Commercialization

As with all complex stories, the history of technology commercialization is not smooth and continuous. Innovative ideas have been with us since the beginning of time. Cavemen struck flint stones against rock to create fire in their caves. The fire was used for warmth and for cooking food. If fire were the only outcome, the story would have been lost in the noise of history. That there was not a complementary sustainable value proposition in food and shelter, the importance of flint and rocks would have been trivial.