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  1. 1. Open Innovation Tools and Methods Dr. Eugene Buff, CLP, RTTP
  2. 2. Setting the Stage…
  3. 3. – Global leader in intellectual property(IP) licensing, acquisition and consulting Formed in ‟99. Advisory Board includes: AGFA, Air Products, Bayer, DSM, DuPont, Philips, P&G, Takeda Full range of services to assist clients in licensing and technology acquisition Offices in US, UK, Japan internet presence is unique resource to facilitate deals – – 120,000+ registered users – Network of 10,000+ smaller companies ($10-500m) Completed 100+ deals with clients
  4. 4. services – Generating value in IP Technology Acquisition / Open Innovation Technology Licensing • Platforms for non-strategic applications • Leading edge innovations from Small-Medium-sized companies Patent Trading • Private sales of non-core patent portfolios • Anonymous acquisition of strategic patents Technology and Needs Identification / Prioritization
  5. 5.….Experts in Bringing all the PiecesTogether Global Technology/ Market IP Knowledge People & Capital Experience
  6. 6. and Open Innovation We‟ve worked with 8,000+ buyers of technology – Key success determinants (structure, culture, incentives, etc) Conducted 300+ proactive searches on behalf of technology acquirers – How to maintain anonymity – How to maximize valuable responses, and filter out non- valuable ones Access to the processes of most of the F500 – 2-3 years ago – only 3-5 really serious companies – Today – most clients are moving to OI models
  7. 7. Why use – Global network NETWORK: YOUR NETWORK: -Rolodex / competencies database borne of 8000+ introductions -Suppliers between buyers and sellers -Select university -100,000+ online global, cross- relationships industry connections -Conferences/trade -Direct access to 10,000+ SMEs shows -Broad reach to -Industry universities/research orgs/VCs journals/colleagues -Global network of affiliated brokersBoth networks important, but will yield different responses
  8. 8. Relationship-based global network
  9. 9. Connect - Our Marketing employs multiple channels to make connections: Direct ‘Rolodex’ channels  competencies database  SME Network  Relationships borne of over 5000 introductions between buyers and sellers (including University, Research, VC)  External expert network Broadcast channels  Marketplace, email communications  Syndication partners and Broker relationships
  10. 10. Government Experience Department of the Air Force, Air Force Materiel Command, AFRL: OPEN INNOVATION SUPPORT SERVICES (March 7, 2007)  Remote cloud-height and visibility sensing for weather and aviation  High-Birefringence Optical Material  Rapid DC Magnetron Sputtering  Reflective Aerosol NASA/Lyndon B. Johnson Space Center Contract Award: Innovation Support Services (Sep 29, 2009)  Bone Density Measurement  Real-time Microbiological Monitoring of Water and Biocides  Radioprotectants  Exoterrestrial Life Differentiation  Portable Imaging  Food Protection Y12 National Security Complex. Open Innovation Support Services (ongoing)
  11. 11. Open Innovation and Technology Scouting… Background and Concepts Market Benchmarks Key Terminology
  12. 12. Open Innovation DefinedOld model (closed innovation): Companies must generate their own ideas, then develop, manufacture, market, distribute and service those ideas themselves. Spectacular successes of central R&D such as Bell Labs.Open Innovation: Useful knowledge is widely disseminated, and ideas must be used with alacrity. If not, they will be lost. Role of R&D extends far beyond the boundaries of the enterprise. Companies must now harness outside ideas to advance their own businesses while leveraging their internal ideas outside their current operations.Open Innovation: The New Imperative for Creating and Profiting from Technology, Henry Chesbrough
  13. 13. Open Innovation Defined (continued) CUSTOMERS‟ UNMET NEEDSMissing feature / performance Improve an existing product issue / legislation change Improve price Reduce cost / identify manufacturing efficiencies Step function change in Monitor next generation performance technology curves Wholly unmet need Expand into new “white space”
  14. 14. Technology Scouting – the Why (key motivations)  Market Intelligence  Speed to Market  Non-Core Technology Opportunities – One-off Needs – Technology Platform partners – a consistent innovation pipeline  Move into „White spaces‟Consistent organic growth is rarely achieved yet hugely valued
  15. 15. The Why - Best Practices goal settingFrom DSM‟s Rob Kirschbaum: Commit to Innovation! – DSM set a goal of €1b new revenue in 5 yrs Plus‟s /Minus‟s of Open Innovation + Shorter time to market - Info overflow + Higher chance of success - Culture change is slow + More funnel output - Many legal contracts + Lower innovation costs - IP leakage (China) + Mitigated risk (options) - Balance of power + Reputation ; recruitment - Upfront Investment + Knowledge based economy - Less job rotation
  16. 16. The Why – Best Practices goal setting (continued)P&G (Jeff Weedman, head GlobalBusDev) – – “We will acquire 50% of our innovations from outside P&G.” A.G. Lafley, 2000 – External sourced has grown from 10% to 50% in 10 years; R&D productivity has increased by nearly 60 percent – 9000 internal R&D people; 2m relevant external peopleJ&J (Jeff Murphy, Exec Dir) – – Initial metrics (engagement, participation), pipeline growth (growth in active projects by stage), early wins, end-goals (successes – counts, revenues, ROI) – Getting ahead of yourself can lead to unrealistic expectations; falling behind can lead to killed initiativesSara Lee (Paul Chaudury, VP Innovn) - – Steady-state goals: Net sales from [sourced] products; pipeline projected value (yr2 sales, risk adjusted); comparative times to mkt – As important – reporting is institutionalized, and reported to sr mgt routinelySources: Weedman pres‟n to 2009 Executive Briefing Conference; Stefan Lindegaard Innovation Metrics blog
  17. 17. The Why - Economics of technology scouting can becompelling Acquiring a significant technology can obviate significant future cost – Internal R&D success rates widely reported at 10-20% Typical acquisition prices thru yet2 are $100K- $500K (upfront/guaranteed costs) 6 months faster to market = 33% greater after-tax profit (Source: McKinsey study cited in “Optimizing ROI of time-to- market”, Katz, Casey and Aiman-Smith, Research-Technology Mgt, May 1, 2005)
  18. 18. Technology Scouting – the How How to build the organizational groundwork to enable success How to identify „worthy‟ Needs What are best practices for evaluating and actually acquiring How to get started – pilots (and buy-in and metrics)
  19. 19. What is Important for Success – Organizational Groundwork Choice of Project – Conduciveness to search • Likelihood that solution may emerge from beyond your core network – Business Impact / Urgency • Existing product line(s) vs. new business opportunity • Trigger for need (e.g., regulatory requirement, incremental improvement) – Readiness to acquire • Project funding & staffing • Technical competence to evaluate, and/or budget to employ external evaluators • Willingness to complete development Client Role – Ownership – direct involvement of business leader who can “green light” – Involvement – team bi-weekly calls (with preparation) to screen candidates – Engagement w/ external cos. – legal hurdles minimized; sample evaluation – Momentum – maintaining drive throughout process; willing to “close”
  20. 20. Organizing for Success Build dedicated team, but… – Ensure project teams include those who would have developed the solution internally Create incentives for entrepreneurial behavior Staff & skills require a careful mix… – Cooperative competencies – Ability to work with smaller companies Use external resources to extend „reach‟ – Go beyond conversations with suppliers, technical conferences, serendipity Funding – Set aside funding in budget both for “searching” and for “acquisition”
  21. 21. Deals - Factors For Success1. Well described &.accurate Technology Needs and Technologies - upfront advance preparation of content, understanding of strategy and expectations2. Access to diverse, cross industry global community – not just the size of the network but the diversity and relationships3. Entrepreneurial technology and technology need owners – deal orientated, flexible about what a deal looks like4. Personal contact and relationship building is key to closing deals – a marketplace makes you the connection quicker but be ready to engage5. Use experienced facilitators to help create partnerships - understand the nuances between large companies and smaller technology innovators, ensure successful partnerships for both sides.
  22. 22. Key value add of intermediaries Connectivity  Deep reach into corporate technical staffs  Access to key gatekeepers (tech transfer & tech acquisition)  Relationships with venture capital and SMEs Confidentiality  Opportunity screening and initial discussions  Protect client name and application Expertise  Evaluation and communication methods  Market and buy-side knowledge  Business formation and commercialization skills External perspective  Unbiased evaluation and critical thinking
  23. 23. Methodology
  24. 24. Technology Acquisition Process – Needs IdentificationNeeds Identification High Value Cases: Target High Value Cases:• Gather priority needs - Identification Marketing • draws on our from R&D, Marketing, etc • website network and proprietary• Prioritize • Proactive channels competencies database• Build or buy Deals • Anonymity / IP shield, Lead Qualification, Call facilitation, Due diligence, Contract and negotiation support
  25. 25. What is Important for Success – Organizational Groundwork Choice of Project – Conduciveness to search • Narrow vs. broad criteria • Searching already done within same industry? • Likelihood that solution may emerge from beyond your core network – Business Impact / Urgency • Existing product line(s) vs. new business opportunity • Trigger for need (e.g., regulatory requirement, incremental improvement) • Timeline to market / Technology Readiness (TRL) – Readiness to acquire • Project funding & staffing • Technical competence to evaluate, and/or budget to employ external evaluators • Willingness to complete development
  26. 26. Need Qualification Learning broad narrowSearch scope:Background knowledge High (already searched, have candidates) No knowledgeabout the problem/specs:Project Trigger (IP situation, competitors, Has to find a solution Would like to have a solutionregulatory change…)/motivation:Deadlines/product launch in: 6 months 10 years or moreMaturity level of Fully developed Early stagepreferred solution:Internal project to Ongoing, funded nonesolve the Need:Willingness to complete Unwilling, unable High capability, availability, budgeteddevelopment:
  27. 27. TechNeed TitleSearch ScopeBackground KnowledgeUrgency- Project Trigger- DeadlinesProject Status- Existing / new- Need OwnershipSolution evaluation- Technical competence- AvailabilityDevelopment status - Desired technology readiness- Willingness to complete developmentASSESSMENT: Conducive to Search Business Impact / Readiness to Acquire Urgency(H/M/L) H/M/L H/M/L H/M/L
  28. 28. NASA JSC Open Innovation Pilot SummaryNeeds Conducive Business Minimum maturity Search Evaluation to Search impact/ level of a successful owner process Urgency solutionBone Density M H Working prototype yes -Water and H M/H Proof of principle, yes yesBiocides testableRadioprotect M/L M/H Early research n/a – broad No (dataants project based)Exoterrestrial L L/M Concept yes n/aLifePortable M/H M/H Proof of principle yes YesImagingFood M/H M/H Fully commercial yes yesProtection
  29. 29. High Value Cases Methodology • Define strategic • Respond as • Review and • Participate in • Engage in full objectives questions arise Evaluation initial discussions discussions, Client evaluations, • Define partner • Evaluate • Refine criteria negotiations criteria preliminary info • Confirm next • Confirm • Prioritize steps involvement Understand Find Filter Engage Partner • Understand • Promote using • Interview • Engage key • Perform due- client‟s objectives companies and targets with in- diligence on marketplace, filter results depth discussions management, • Understand the TMR, direct e-mail against criteria technology, market and • Clarify mutual finances, business available • Search the • Gather additional contributions and model, technologies network (VCs, information per benefits; position Our Services competitive universities, client‟s evaluation relative value-add • Understand advantage entrepreneurs, criteria partnering innovators) and • Structure requirements • Update market public data partnership and technology • Document proposals • Find companies understanding TechNeed and and technologies • Participate in objectives for the • Refine target fitting initial criteria negotiations project (for criteria and external & internal continue search use) Months 1-3
  30. 30. JSC01 - Bone Density Measurement Background – Seeking: Accurate measurement techniques for deep-bone density and structure – In order to achieve the goal, NASA JSC would like to find solution providers with bone imaging technology that is clinically proven and close to commercialization Project Objective – The main objective for is to provide an initial assessment of the solution landscape and introduce potential solution providers to NASA JSC.
  31. 31. JSC01 - Description of the Technology NeedSeeking:A clinically-useful technology with enough sensitivity toassess the microstructure of "spongy" bone that is found inthe marrow cavities of whole bones. This technology must befor skeletal sites surrounded by layers of soft tissues, such asthe spine and the hip. Soft tissue interferes with conventionalimaging and using a more accessible area -- for example, thewrist or the ankle of limbs-- as a proxy for the less accessibleskeletal regions, will not be accurate. A non-radioactivetechnology is strongly preferred.
  32. 32. TechNeed since January 11, 2010JSC01 –TechNeedTM 9964
  33. 33. JSC01 - TechNeed Challenge (front page on website)
  34. 34. JSC01- ResultsOnline activity overview (as of 09/08/2010)TechNeed 9964Seeking: Accurate measurement techniques for deep-bonedensity and structureLogged-in Views 121Total Views 793Views per Month 99.1 Screening Results: Total leads: 51 Rejected by 14 Rejected by NASA: 19 Finalists: 18 (5 most interesting)
  35. 35. JSC01 - Results: 5 most promising1. OsteoTronix Ltd - Peter Taylor, BusDev.Manager (TRL 6-7)Structural Spectroscopy™ is a new technique for characterizing anatomicalstructures using magnetic resonance data. contacted2. University of California, San Francisco – Sharmila Majumdar (TRL 4)High field and high resolution magnetic resonance imaging for quantitativecharacterization of the morphology and function of the musculoskeletalsystem will keep in mind3. Steady State Imaging, LLC - Danny Cunagin, CEO (TRL 7-8)Imaging of the Ultrastructure of Bone Using SWIFT (Sweep Imaging withFourier Transformation) technology. SWIFT advances existing MRtechniques with the ability to image structures and tissues that are invisibleto conventional MRI. contacted4. ImaTx: Imaging Therapeutics Inc – Daniel Steines, VP R&D (TRL 6-7)OsDx™ Hip Bone Mineral Density (BMD) system. X-ray based -5. Mayo Clinic - Richard Ehman, Prof. Radiology (TRL 1-3) too low -contactedMagnetic Resonance Elastography in Trabecular Bone - Work demonstratedthe feasibility of using MRE to measure the stiffness of trabecular bone
  36. 36. JSC01 – Geo Summary of Data/ Responses Germany 6 Austria 1 Japan 7 Canada 1 France 6 Israel 1 Australia 3 Belgium 1 UK 5 Switzerland 4 Sweden 1 USA 15 Total 51 Page 37
  37. 37. JSC01 - Solution Space  structural spectroscopy  magnetic resonance elastography  SWIFT  image processing System  image analysis software  acoustic emission monitoring  fuzzy logic  high resolution pQCT  MRI Page 38
  38. 38. What is Important for Success – Organizational Groundwork Client Role – Ownership – direct involvement of business leader who can “green light” – Involvement – team bi-weekly calls (with preparation) to screen candidates – Engagement w/ external cos. – legal hurdles minimized; sample evaluation – Momentum – maintaining drive throughout process; willing to “close”
  39. 39. Contact Eugene Buff, MD, PhD Certified Licensing Professional (CLP) Registered Technology Transfer Practitioner (RTTP) Vice President, Consulting ~ Inc. +1 781-972-0604