Entrepreneurship 101: Building a business model

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Part of the MaRS Entrepreneurship 101 Event Series
Building a business model
Thinking carefully about economics and business strategy can make the difference between having great technology versus having a great company. While MBAs can be famously dim-witted, scientists and engineers can be famously stubborn and insensitive to market forces. We’ll discuss the most common commercialization traps that befall otherwise “way smart” inventors.
Speaker: Ajay Agrawal
Ajay is the Peter Munk Professor of Entrepreneurship at the Rotman School of Management.
Download the audio presentation and post questions on the MaRS blog:
http://blog.marsdd.com/2006/11/22/entrepreneurship-101-creating-value-capturing-value/

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Entrepreneurship 101: Building a business model

  1. 1. Technology Entrepreneurship: Creating Versus Capturing Value Presentation to “Entrepreneurship 101” MaRS, November 21, 2006 Ajay Agrawal Rotman School of Management
  2. 2. Why NOT raise venture capital?
  3. 3. Why NOT file for patent protection?
  4. 4. Why NOT build and sell your product?
  5. 5. Examples <ul><li>AGI International (Seattle) </li></ul><ul><ul><li>Underwater, non-destructive testing equipment </li></ul></ul><ul><li>Motion Metrics (Vancouver) </li></ul><ul><ul><li>Missing tooth detection system </li></ul></ul><ul><li>Xerox (Stamford) </li></ul><ul><ul><li>Photocopiers </li></ul></ul><ul><li>Google (Mountain View) </li></ul><ul><ul><li>Online search </li></ul></ul><ul><li>Ajanta Pharma (Mumbai) </li></ul><ul><ul><li>Pharmaceutical products </li></ul></ul><ul><li>YouTube (San Bruno) </li></ul><ul><ul><li>Share video content online </li></ul></ul>
  6. 6. The Case of D-Wave <ul><li>“D-Wave's mission is to make available the vast power and speed of quantum computers to government and industrial customers” </li></ul>
  7. 7. Company History <ul><li>D-Wave was spun-out of the University of British Columbia (UBC) in 1999. The company's mission since inception has been to commercialize superconductor-based quantum computer processors. Building a commercial scale quantum computer processor is an extremely difficult task. In the early days of the company, the D-Wave strategy was to enter into collaborative partnerships with world-leading researchers with access to significant capital infrastructure, while retaining all intellectual property developed. Each institution in this research network was responsible for delivering some critical part of a future commercial processor. Partners included theoretical physicists, chemists, electrical engineers, cryogenics experts, applied physicists, mathematicians and computer scientists. These partnerships were managed and led by D-Wave. All results were systematically reviewed, catalogued and placed in the context of state-of-the-art developments both internal and external to the company's effort. The objective of this work was to design a quantum computer processor architecture for commercial use. Only designs that could be built with limited resources, in the short term, and where a significant market opportunity could clearly be elucidated, were considered. In November of 2004, a design was proposed that met these constraints. Today, D-Wave is exclusively focused on the development and commercialization of supercomputing systems built around this processor. </li></ul>
  8. 9. Factors to Consider <ul><li>Revenue model: sell product, license product, sell service using product, other? </li></ul><ul><li>Intellectual property: patent, secrecy, publicly disseminate? </li></ul><ul><li>Industry structure: concentration of buyers, concentration of sellers? </li></ul><ul><li>Competition: existing, future, substitutes? </li></ul><ul><li>Complementary products/services? </li></ul><ul><li>Government regulation? </li></ul>
  9. 10. <ul><li>Wednesday, March 7, Rotman School </li></ul><ul><ul><li>Founder – Dr. Geordie Rose </li></ul></ul><ul><ul><li>Chairman – Haig Farris </li></ul></ul><ul><li>[email_address] </li></ul>

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