How to Reduce the Risk of New Technology Commercialization Failure

1. The Intelligence Collaborative
http://IntelCollab.com #IntelCollab
Powered by
How to Reduce the Risk of
New Technology
Commercialization Failure
A Complimentary Webinar from Aurora WDC
12:00 Noon Eastern /// Wednesday 8 April 2015
~ featuring ~
Clay Phillips Arik Johnson

2. The Intelligence Collaborative
http://IntelCollab.com #IntelCollab
Powered by
Clay Phillips
Clay Phillips is VP Business Development ofLaunchPad Central, where he leads the cultivation ofnew
relationships and consulting engagements involving the application oflean start-up innovation methods
with large enterprises that need to accelerateand improve the commercialization ofnew technologies
and business models. With 30 years ofaccumulated experience, his professionalinterests and expertise
are in the areas ofbusiness development, strategicintelligence,transformative innovation, and alliance
management. As an independent advisor, he helped technology start-ups discover new growth
opportunities, worked with an NGO on sustainablemobility technology and business model strategies,
and served as an instructor for an NSF sponsored Innovation Corps program focused on energy and
transportation led by the University of Michigan and Next Energy, a Detroit based incubator. As an
executive for General Motors, he led and participated in some of the most criticaldecisions faced by the
company. These included working with Clayton Christensen and his team on disruptive technologies and
business models in the transportation sector for a new R&D structure and investment portfolio, leading
the strategic due diligence effort for several major alliancepartnerships, serving as a founding member
of the company’s corporate venture capital arm, running the company’s strategic intelligence effort, and
overseeing the development of commercialization, open innovation and partnering strategies for several
advanced technology internal start-up programs. Clay served as an intelligenceofficer with the U.S.
Navy. He holds a BA degree from Trinity College in Hartford, Connecticut and an MBA from Columbia
University in New York City. Clay is an avid musician who plays guitar and sings in a classic and originals
rock band that performs exclusively for charities and fundraising events.
Email: clayphillips3@comcast.net
The Intelligence Collaborative is the online learning and networking
community powered by Aurora WDC, our clients, partners and other friends
and dedicated to exploring how to apply intelligence methods to solve real-
world business problems.
Apply for a free 30-day trial membership at http://IntelCollab.com or learn
more about Aurora at http://AuroraWDC.com – see you next time!

3. The Intelligence Collaborative
http://IntelCollab.com #IntelCollab
Powered by
α Use the Questions pane onyour
GoToWebinar control panel and all questions
will be answeredin the secondhalf of the
hour.
α You are welcome totweet any comments on
Twitter where we are monitoring the
hashtag #IntelCollab or eavesdrop via
http://tweetchat.com/room/IntelCollab
α Slides will be available after the webinar for
embedding and sharing via
http://slideshare.net/IntelCollab
α To viewthe recording anddownload the PPT
file, please register for atrial membershipat
http://IntelCollab.com.
Questions,Commentary & Content

4. Lean Innovation & Intelligence:
How to Reduce the Risk of New
Technology Commercialization Failure
Clay Phillips
Aurora WDC
April 2015
1

5. Outline
• Reprise from Indianapolis 2013: “Innovation Intelligence”
• What is “Lean Innovation?”
• How does lean innovation work in practice?
• Case1: Flow battery technology start-up
• Case 2: Habit formation for a large health care provider
2

6. 3
• Intelligence can have an important strategic role and impact when
an industry is going through fundamental disruptive changes
• Different frameworks, tools, skills, and methods are needed to be
effective in a disruptive environment
• Innovation intelligence: the application of intelligence principles to
the creation of a new and unique competitive advantage, new
businesses, and the transformation or destruction of old ones
Innovation Intelligence
G2 Indianapolis, October 2013

7. Innovation Intelligence
G2 Indianapolis, October 2013
“The application of intelligence principles to the creation of a new and
unique competitive advantage,new businesses,and the transformation or
destructionof old ones”
• Systems level view
• Blind-spots and orthogonal sectors / actors
• Leave no assumption unturned
• Draw from and influence corporate VC, M&A and alliance formation
• Draw from and influence IP strategy
• Balance new business models with new technology
• Ambidextrous and agile
• Creative, constructive, and credible
4

8. Then, I saw the light….of lean innovation
5

9. What is Lean Innovation?
6

10. What is Lean Innovation?
• Customerand business model
discovery
• Hypothesis and evidence based
via open ended interviews (“get
out of the building”)
• Product-market fit
• Ecosystem dynamics
• Minimal viable product
• “Pivots”
• Investment vs. technology
readiness levels
7

11. What Does Lean Innovation Do?
Tests problems before solutions,which saves time and money otherwise spent
trying to refine a productor service that is fundamentally commerciallynon-viable
8

12. The Business Model Canvas
9

13. STEP 1:
ALIGNMENT +
ASSESSMENT
STEP 2:
CORE PRINCIPLES
CUSTOMER
DISCOVERY +
CUSTOMER SEGMENTS
STEP 6:
REVENUES +
UNIT ECONOMICS
STEP 7:
CUSTOMER
RELATIONSHIPS
STEP 8:
SYNTHESIS
+ INVESTMENT
READINESS LEVEL
STEP 3:
PRODUCT-
MARKET FIT
STEP 4:
MAPPING
THE ECOSYSTEM +
SIZING THE
MARKET
STEP 5:
CHANNELS +
PARTNERS ROADMAP TO
IMPLEMENTATION
Typical Steps for a Lean Innovation “Workout”
10

14. Enterprise
Accelerators
Government
Universities
Lean innovation applies to governments, academics,
accelerators and enterprises
• National ScienceFoundation adopted
the methodology as the centerpiece
of the Innovation Corps program
• Graduate level program in leading
universities as fast way to vet pre-
startups
• Increasingly used by angel and
venture investors as the principal
vetting tool for investment candidates
• Tailored application within larger
enterprises to evaluate internal start-
up programs and manage a broader
innovation portfolio
11

15. Find
Filter Fund
• Customer Discovery
• Value Propositions
• Product-Market Fit
• Business Model Canvas
• Minimum Viable Product
• Investment Readiness Levels
• Key Performance Metrics
• Investment Allocation
• Trends and Weak Signals Scanning
• Brainstorming and Ideation
• Blind-spot detection
Refine
Down-select Learn
Integrate
Lean Innovation focuses on filtering ideas and integrating
the complete find-filter-fund cycle
12

16. Markets
Innovation
Incremental
New
New
Transformative
Current
Increasing
Uncertainty
A fundamental problem for larger enterprises is
reaching beyond incremental innovation and growth
13

17. Shark Tanks
Companies
often have too
many ideas to
cull through and
do not have an
efficient way to
figure out which
ones have more
promise than
the others
14

18. Sometimes the “HiPPO*” has the final say
*Highest Paid Person’s Opinion
15

19. Lean Innovation vs. Conventional Product Development
Idea Plan Funding Build Launch Customer Response Go/No Go
Idea Customer Discovery Hypothesis/Test/Iterate Go/No Go Launch Funding Build
No businessplan survivesfirstcontactwiththe customer: mostnewinitiativesfail.
Optimizing thebusiness modelbeforefunding improvesthechances forsuccess
16

20. Start-up Enterprise
Objectives Entrepreneurial success:
launch, funding, speed
Intra-preneurial success:
accelerated growth, integration
Culture Embryonic Established
Structure Flat Hierarchies
Business Models Open Established
Pain Points Business acumen Adopting new business models
Risk Tolerance Moderate to high Low to moderate
Decision Making
Fidelity
Low to moderate High
Bias Disruptive change Incremental change
Startup vs Enterprise Applications of Lean Innovation
17

21. Lean Innovation DNA
Total Quality
Management
(Deming)
Agile
Development
Toyota
Production
System
Lean
Innovation
18

22. Lean Innovation Thought Leaders
19
Alexander
Osterwalder Eric Ries Steven Blank

23. Gasoline is
• liquid
• doesn’t suffer fromrange
anxiety
• pump-able
So is PEF battery !!!
PEF battery = 4X energy of
existing lead-acid,
1/2 cost of Li-ion,
3 minute charge replenishment
RedOx Flow Batteries
Pump-ableFormatHigh Energy Density
SolidLi-ion Batteries
Case 1: Innovation Corps
Flow Batteries Initial Value Proposition
20

24. Nissan Motor Light
Trucks Co.
ScaniaMAN
Freightliner
DAIMLER AG
Geely
Chery
Proton
GAZ
Volvo Truck
RVI / Mack
Great Wall
BYD
50.4%51.2%
41%
5.9%
16.7%
3.5%
89.3%
19.9%
3%
44.4%
15%
99.3% 80.1% 25%
77%
44%51.4%
6%
93.4%100%
100%
100%
100%
100%
100%
45.5%
100% 100%
100%
75% 89.2%
17.4%
100%
85%
54.2%
Last update: April 2014
OEMs in outer ring have ≥5% global market share
italics = voting stock
CHINA / SE ASIA
EUROPEJAPAN
INDIA
3%
15%
100%
70%
14%
2.4%
Traditional Global Automotive“Gameboard”
REALITY CHECK: 20 years TOO SLOW FOR A START-UP TO SURVIVE
21

25. • EUV are simpler stepping stonemarket to thebigger vision
• 5X more EUVs than EV sales !
• BIGGER market with SMALLER value supply chain
• Competition areCHEAP Lead-acid battery
RE-FOCUS BASED ON CUSTOMER DISCOVERY
All ofour yearsofproud earth changing workwith blood sweatand tearswould début in…Baggage
Handlers
EvolvedAwareness:
Electric UtilityVehicles
•TAM$600 M
•SAM $300 M
•Target$75 M
Initial Delusion:
Total USAuto Sales
• TAM$40B
• SAM$10B
• Target$2.5B
CurrentEV Market
•TAM$720 M
•SAM $140 M
•Target$7.2 M
BEFORE I-CORPS AFTER ALL THE INTERVIEWS
22

26. CUSTOMER ARCHETYPE
FLEET of utility vehicles
Controlled ecosystem:
• 10-100 utility vehicles at location
• One recharge/replenishment station
Operate24/7:
• Look for high reliability equipment
• Easy maintenanceor accessibleservices
• Cost may or may not bea critical issue
Influenced by:
• Operations managers, Purchasing offices
• Zero emissions indoors
• May beregulated by city/state
policies/OSHA
Picture fromour in person
customer interview with Voss at
plant floor
23

27. TECHNOLOGY-TO-MARKET
May-June 2014
 Learned:
• Importance of Value Proposition
• CustomerDiscovery Process
• Business Language
• Nuances of EV/OEMworld
• Start-up process
• Funding opportunities
• Policies and Regulations
 Extended the Network
 Identified Path Forward as a Start-up Company
 Found Prospective Partners
December 2014
 Founded “Influit Energy LLC”
24

28. Case 2:
Health
Care in
America
25

29. CLIENT GOALS
1. Improve the clinical care and health outcomes of our patients through the
development of a new clinical product line.
2. Identify specific commercializable product/service initiatives with potential to
generate patient growth and a new revenue stream.
3. Learn a new methodology for accelerating business development and the
commercialization of innovation.
One Healthy Habit is aligned with our commitment to be national
leaders in the transformation of healthcare.

30. Integrated Healthy Habits as Possible Solution
Applying BJ Fogg’s Habit Formation Principles
27

31. 28
Four Independent Initiatives Became an Integrated Portfolio

32. Intelligence is a Critical Element of Lean Innovation
29

33. 30

34. The Intelligence Collaborative
http://IntelCollab.com #IntelCollab
Powered by
Thank you! Now how about a little Q&A?
Clay Phillips
Email: clayphillips3@comcast.net
The Intelligence Collaborative is the online learning and networking
community powered by Aurora WDC, our clients, partners and other friends
and dedicated to exploring how to apply intelligence methods to solve real-
world business problems.
Apply for a free 30-day trial membership at http://IntelCollab.com or learn
more about Aurora at http://AuroraWDC.com – see you next time!

35. The Intelligence Collaborative
http://IntelCollab.com #IntelCollab
Powered by
Still time to register…
G2.RECONVERGE.net