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FITT Toolbox: Market Assessment


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In assessing the market opportunities of a particular technology, it is important to consider whether the technology should be patented or not, and whether the technology should be licensed or put in a spin-off. Commercial Services is a group of three people at Imperial Innovations that investigates the market potential of new incoming projects and idea proposals. They give advice with respect to commercialization based upon thorough market research which they perform in close collaboration with industry.

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FITT Toolbox: Market Assessment

  1. 1. Market Assessment FITT– Fostering Interregional Exchange in ICT Technology Transfer – www.FITT-for-Innovation.euExcept where otherwise noted, this work is licensed under a Creative Commons Attribution 3.0 License.
  2. 2. Market Assessment Every idea that comes in the technology transfer office needs to be assessed from a technological, a legal and a business point of view TTOs are usually well positioned to do the scientific evaluation Patent officers check whether the technology is truly unique and whether it doesn’t infringe with any existing patents The market assessment is crucial, but can be very complex: a technology might seem fantastic from a technical perspective with lots of interesting features and possibilities, but with no market value Therefore, TTOs need to investigate the market potential of new incoming project proposals, conduct thorough market research and give advice with respect to commercialization. Marketing is ‘an integrated process through which companies create value for customers and build strong customer relationships in order to capture value from customers in return’ (<Wikipedia). To make this work, keeping close links with the industry is crucial.2 | 03.2011 Market Assessment
  3. 3. Marketing_IP Pipeline Rejection No Go Technological Analysis 90% of ideasIdea Technology Transfer Team Potential Market Analysis Go Commercial Services On Hold 10% of ideas Licensing Spin-Off Company Formation Investment Decision New Ventures Team Investment Team 3 | 03.2011 Market Assessment
  4. 4. IP Pipeline Every idea goes to the Technology Transfer Team Tech Transfer Team judges technical value & decides: 1. Patent or not? 2. Licensing or Spin-out? 2.1. Licensing? 2.2. Spin-out?4 | 03.2011 Market Assessment
  5. 5. 1. Patent or not? “The really fantastic ideas stand out as being really fantastic, the bloody stupid ones as being bloody stupid. 90% is stuck in the middle, in the grey zone.” “The strategy of what particular form of IP we use is entirely informed by commercially what we think we can get away with.” White versus Black: Clear go/no go decision. Grey Zone: Market related advice < Commercial Services. → ‘First Iteration’5 | 03.2011 Market Assessment
  6. 6. 2. Licensing or Spin-out? Commercial Services do market research, as well as marketing. The guys in the first group discuss about the following: “Does this look like a licence or a spin out?” Market Research: Find appropriate potential customers. Engage with those customers. ‘Catch 22’: Difficult to go and talk to someone to validate a new technology, because you disclose the information Identify whether it should be a licence or a spin out. → ‘Second Iteration’6 | 03.2011 Market Assessment
  7. 7. Second Iteration Evaluation criteria How strong is the IP? Have similar technologies been patented? How many similar technologies are on the market? → Technology Transfer Team Competitive advantages? Fit with the emerging trends? → Commercial Services7 | 03.2011 Market Assessment
  8. 8. Example: Electro Wetting Effect (EWF) Technology: If you apply a voltage to a liquid, the surface meniscus changes. Applications: Display technologies Lenses in mobile phones Market analysis: 1 competitor in display technologies 1 competitor in lenses for mobile phones Looks promising – only 2 competitors – BUT they own +/- 50 patents… Advise: No head-to-head competition Licensing!8 | 03.2011 Market Assessment
  9. 9. 2.1. Licensing If it’s licence, Commercial Services will find potential ‘customers’ to negotiate with.Output: 1-page summary of technology with non-confidential descriptions of the technology: Introduction to the technology, Technical advantages; Value proposition; Benefits for the end user; Possible applications; Stage of development. Top ten list of potential customers Find a personal contact into these companies9 | 03.2011 Market Assessment
  10. 10. 2.2. Spin-out If it looks like being a spin out, it moves to the new ventures team, and their role is to work this up into an investable proposition. File goes to ‘New Ventures Team’ New Ventures Team + Technology Transfer Team write proposal Interaction with Commercial Services: Strategy of competitors Evolutions in competitive landscape → ‘Third Iteration’10 | 03.2011 Market Assessment
  11. 11. Marketing_When? Commercial Services is an integrated part of the technology transfer process at Imperial Innovations Input = required on a continuous basis in every stage Clear feedback loop between Commercial Services and the ideator(s), via the Technology Transfer Team Feedback loop = ongoing backwards and forwards conversation No fixed timing issues11 | 03.2011 Market Assessment
  12. 12. Marketing_Who? Tech Transfer Team (7 people): Technology transfer team members are assigned on a departmental basis Commercial Services (3 people) New Ventures Team (5 people) The researchers are crucial stakeholders Finally, the industry benefits from Commercial Services as well12 | 03.2011 Market Assessment
  13. 13. Marketing_Where? Commercial Services is located at the premises of Imperial Innovations Their work area is not limited to the South Kensington region As they keep close contacts with companies all over the UK, and even abroad, they operate worldwide13 | 03.2011 Market Assessment
  14. 14. Marketing_Pros and Cons Pros Opens up opportunities for a true market-led approach: Keeping the link between the ‘artificial’ world of the labs and the real-life industrial environment Tackle ‘the not-invented-here’ syndrome Cons Problem when personalities of different technology transfer team officers don’t match, because close integration is crucial for the success of the initiative14 | 03.2011 Market Assessment
  15. 15. Marketing_Outcome The crucial success factor for the market integration = close integration between the technology transfer team and commercial services on the one hand and commercial services and industrial partners on the other hand All the parties involved – researchers, Imperial Innovations, the industry – seem to be pleased with this method Facts: Imperial Innovations has established equity holdings in more than 75 technology businesses and is managing over 130 commercial agreements15 | 03.2011 Market Assessment
  16. 16. Lessons Learned It pays off to use a market led approach: If one takes a look at the output of Imperial Innovations, it is obvious that a close connection with the industry brings along a large inflow of ideas16 | 03.2011 Market Assessment
  17. 17. Suggested Readings Link to bibliography Link to code book Market assessment Market-led approach Market research Link to related websites | 03.2011 Market Assessment
  18. 18. Market assessment by Digiteo Digiteo runs a programme supporting proof-of-concept and Call for projects technology transfer (so-called OMTE programme).The final goal is to foster the transfer of selected promising technologies into commercial exploitation via a start-up or licensing to industrial partners. For this, Digiteo supports: technological development targeting a prototype IPR: analysis of the freedom to operate marketing analysis to identify potential applications & markets Based on their results, they advise the research teams with respect to commercialization.18 | 03.2011 Market Assessment
  19. 19. Lessons learned To investigate the potential commercial value of a technology, we strive to follow a methodology based on 2 steps: abundance - list all applications possible where the technology can be used market segmentation - identify and quantify the corresponding markets, and select applications that are the most promising, based on the market size and facility to take parts of it. Identifying potential applications and customers for a technology is a challenge, given the very early nature of innovations. The objective is more about asking the right questions and establish good reflexes than stick to a fixed framework. A lot still relies on the experience of the TT officers and its network of contacts in the industry. A way to approach the abundance phase is to organise a brainstorming session at the beginning of the market study with the researchers, TT officer and engineers from various scientific fields. Goal: triggering creativity and not limit the listing of possible applications to the custom or the obvious.19 | 03.2011 Market Assessment