Innovative business plan overview

Innovative Business Planning Overview
Technology Commercialization Perspectives
Technology-based Business Context
Ratchakrit Klongpayabal

Overview for Innovation Business
Invention Innovation
Intellectual property
+
Product or Service
Prototype
Intellectual Property
New Idea
Science-based
Technology-based
+
Technology proof
Novelty proof
Invention
+
Commercialization
Business management
Inventor
Entrepreneur
Business firm
Individual
Researcher, Inventor
Ratchakrit Klongpayabal, 2015

Science, Technology, Engineering, and Design
Science
The study of nature and natural phenomena
Technology
Systematic knowledge and action, usually of industrial processes but
applicable to any recurrent activity.
Engineering
the art of directing the great sources of power in nature for the use
and the convenience of humans. In its modern form engineering
involves people, money, materials, machines, and energy. It is
differentiated from science because it is primarily concerned with how
to direct to useful and economical ends the natural phenomena
which scientists discover and formulate into acceptable theories.
Design
Realization of a concept or idea into a configuration, drawing, model,
mold, pattern, plan or specification (on which the actual or
commercial production of an item is based) and which helps achieve
the item's designated objective(s).
Know why
Know how
Do how
Do to use and feel
Source: McGraw-Hill Encyclopedia of Science and Technology, 2007
http://www.businessdictionary.com/definition/design.htmlRatchakrit Klongpayabal, 2015

Roadmap of a Product Commercialization Plan
Adapt from: Shreefal S. Metha, Commercializing successful biomedical technologies, 2008
Business Plan
Business Model
+
Financial Plan
Commercialization Plan
Product Development
Invention Idea
Budget
Development
strategy

Components of a Product Commercialization Plan
Plan
Industry
context
Position Patent Product Pass Production Profits
Market
research
Intellectual
property
rights
New product
development -
NPD
Regulatory
plan
Manufacture Reimbursement
Adapt from: Shreefal S. Metha, Commercializing successful biomedical technologies, 2008Ratchakrit Klongpayabal, 2015

Steps of Commercialization Processes (Academic-based)
Science
Marketing
Design
Engineering
Technology
Research question
Hypothesis testing
Experiment
Discovery
Publishing
Etc.
Technology development
Technology proofing
Laboratory prototype
Field prototype
IP Protection
Etc.
Product design
Packaging design
Interface design
Usability design
Etc.
IP licensing
Technology transfer
Production prototype
Production integration
Up-scale production
Standard testing
Etc.
Product manufacturing
Business model
Marketing strategies
Product launching
Etc.
Research
Development
Value Creation
(Hard side)
Value Creation
(Soft side)
Value Proposition

New product
Business opportunities
Competitive advantage
Marketing strategy
Etc.
Performance increasing
Quality Improvement
Production efficiency
Etc.
Production time decreasing
Time to market
Etc.
Material substitution
Process substitution
Labor substitution
Waste utilization
Defect decreasing
Etc.
Basic Rationale to Exploit External R&D
Opportunity Performance Time Cost

Value Creation Framework from R&D
Research
Development
Technology
Key features and their benefits
Deployment experience
Usage experience
Maintenance experience
Service experience
Functional Value
Emotional Value Economic Value
What this product does
How it makes you feel What that means in time and money
Time saving
Cost saving
Quality improvement
Flexibility enhancement
Value of ownership
Value of affiliation
Value of relationship
Emotional significance
Adapt from: Panachit Kittipanyangam, From research to market, 2015Ratchakrit Klongpayabal, 2015

From Research to Solution
STI Research Effect Required Action Solution
Physics Chemistry Geometry

Sample of Solution
Dry Your Hair
Cleaning Teeth
Hair Dryer
Teeth Brushing
Tooth Paste
+
Brushing
Heat blow
evaporate
Source from: Panachit Kittipanyangam, From research to market, 2015

Required Action from Physical Effects
• Measure temperature
• Reduce temperature
• Increase temperature
• Stabilize temperature
• Locate an object
• Move an object
• Move a liquid or gas
• Move an aerosol (dust particles, mist, smoke, etc.)
• Separate mixtures
• Stabilize an object’s position
• Generation and/or manipulation force
• Change friction
• Destroy object
• Accumulate a mechanical and/or thermal energy
• Transfer energy (mechanical, thermal, radiation, energy transfer)
• Influence on a moving object
• Measure a dimension
• Change a dimension
• Detect surface properties and/or conditions
• Vary surface properties
• Detect volume properties and/or conditions
• Vary volume properties
• Develop certain structures, structure stabilization
• Detect electrical and/or magnetic fields
• Detect radiation
• Generate electromagnetic radiation
• Control electromagnetic field
• Control light, light modulation
• Initiate and/or intensify chemical reactions
Physical Effect
Adapt from: Semyon D. Savransky, Engineering
of Creativity (Introduction to TRIZ Methodology of
Inventive Problem Solving), 2000

Required Action from Chemical Effects
Transformation of substance
• Carry in space
• Change of mass
• Change of concentration
• Change of specific weight
• Change of volume
• The changed forms
• Change of electrical properties
• Change of optical properties
• Change of magnetic properties
• Change of biological properties
• Change of chemical properties
• Change of a phase condition
• Disposal (destruction)
• Stabilization (temporary reduction of activity)
• Transformation of two and more substances into one
• Protection of one substance from penetration by another
• Drawing one substance on a surface of another
• Connection of diverse substances (condensation, congestion)
• Division of substances (allocation of one from another)
• Destruction of substance
• Accommodation of one substance in the friend
• Reception of new substances (synthesis)
• Organization of a closed cycle on substance (absorption-allocation)
• Assembly of substance from atoms
• Reception of substances with well organized structure (reception of pure
• substances)
• Transport of one substance through other
Chemical Effects

Required Action from Chemical Effects (cont.)
Transformation of some forms of energy
• Reception of heat (input of thermal energy in system)
• Reception of cold (conclusion of thermal energy from system)
• Reception of mechanical pressure
• Generation of light radiation
• Storage of heat
• Storage of cold
• Storage of light energy
• Transport of thermal energy.
• Transport (drain) static electricity
• Regulation of light energy
• Power influence on substance
Chemical Effects

Required Action from Geometrical Effects
• Reduce or increase the volume of a body at constant weight
• Reduce or increase the area or length of a body at same weight
• Transform one kind of a movement into another
• Concentrate energy/particles flow
• Intensify process
• Decrease loss of energy or substance
• Increase process
• Increase control
• Decrease control
• Increase lifetime, service reliability
• Decrease expenses
Geometrical Effects

Samples of Required Action and Effects
Geometrical Effects
Inventive Problem Solving), 2000Ratchakrit Klongpayabal, 2015
Chemical EffectsPhysical Effect
Increase temperature
• Electromagnetic induction
• Eddy current
• Surface effect
• Dielectric heating
• Electronic heating
• Electrical discharge
• Absorption of radiation by substance
• Thermal-electrical phenomena
Change of concentration
• transport reactions, translation
in chemically connected
• species and allocation,
translation in hydrate/hydride
condition, in
• compressed gases,
displacement of chemical
balance, adsorption-desorption,
• semitight membranes,
complexons, liquid membranes.
Reduce or increase the area or
length of a body at same weight
• Multistory configuration.
Gaufres. Use figures with
variable
• section. Mobius strip. Use the
surrounding areas.

From STI Research to Commercialization Opportunities
New
Technology
P1
P2
P3
Knowledge / Solution to Other Domain / IndustryKnowledge to Existing Domain
R3n R2n R1n A1n A2n A3n
Solution to Customer A P1.1
P2.1
P3.1
P1.2
P2.2
P3.2
P1.3
P2.3
P3.3
R3 R2 R1 A1 A2 A3
Research
Process
Idea from Researcher
Solution to Customer B
Solution to Customer C

Transformation Processes from R&D to Business Plan
Business
Idea
Research
Finding
New
Technology
Product
Idea
Business
Model
Business
Plan
IP Management – Patent, Petty patent, Design patent
Licensing – Exclusive, Non-exclusive, Sole, Partially
Assign, Joint venture
Value chain Analysis / Supply chain Analysis
New product development – NPD
Product design, Product testing
Market or Industry environment
Business opportunities
Customer problem solution
Value creation, Value capturing,
Business model canvas-BMC, Market research
Value proposition, Revenue stream, Cost structure, IRR,
PB
Research process
Technology proof and technology feasible
Academic journals publishing
Prior feasibility study
Business start-up, Industry and market analysis
Production plan, Marketing plan,
Operation plan, Financial plan, Risk management plan
Researcher
University
Research supporting agency
Researcher
University, TLO
Research supporting agency
Researcher
TLO
Entrepreneur
Researcher
Entrepreneur
Designer, Engineer, Accredited lab
Researcher and/or Entrepreneur
Business angel, Venture capital, Crowdfunding
Government funding support agency
Researcher or Entrepreneur
Business angel, Venture capital, Crowdfunding
Government funding support agency
Lender

Technology Readiness and Commercial Readiness
Source: Australian Renewable Energy Sector, Commercial Readiness Index for Renewable Energy Sectors,
http://arena.gov.au/resources/readiness-tools/Ratchakrit Klongpayabal, 2015

Summary of Technology Readiness Level
http://arena.gov.au/resources/readiness-tools/
Level Summary
1
Basic principles observed and reported: Transition from scientific research to applied research. Essential
characteristics and behaviors of systems and architectures. Descriptive tools are mathematical formulations or
algorithms.
2
Technology concept and/or application formulated: Applied research. Theory and scientific principles are focused
on a specific application area to define the concept. Characteristics of the application are described. Analytical
tools are developed for simulation or analysis of the application.
3
Analytical and experimental critical function and/or characteristic proof of concept: Proof of concept validation.
Active research and development is initiated with analytical and laboratory studies. Demonstration of technical
feasibility using breadboard or brassboard implementations that are exercised with representative data.
4
Component/subsystem validation in laboratory environment: Standalone prototyping implementation and test.
Integration of technology elements. Experiments with full-scale problems or data sets.
5
System/subsystem/component validation in relevant environment: Thorough testing of prototyping in
representative environment. Basic technology elements integrated with reasonably realistic supporting elements.
Prototyping implementations conform to target environment and interfaces.
6
System/subsystem model or prototyping demonstration in a relevant end-to-end environment: Prototyping
implementations on full-scale realistic problems. Partially integrated with existing systems. Limited documentation
available. Engineering feasibility fully demonstrated in actual system application.
7
System prototyping demonstration in an operational environment: System prototyping demonstration in
operational environment. System is at or near scale of the operational system with most functions available for
demonstration and test. Well integrated with collateral and ancillary systems. Limited documentation available.
8
Actual system completed and qualified through test and demonstration in an operational environment: End of
system development. Fully integrated with operational hardware and software systems. Most user documentation,
training documentation, and maintenance documentation completed. All functionality tested in simulated and
operational scenarios. Verification and Validation (V&V) completed.
9
Actual system proven through successful operations: Fully integrated with operational hardware/software
systems. Actual system has been thoroughly demonstrated and tested in its operational environment. All
documentation completed. Successful operational experience. Sustaining engineering support in place.

Summary of Commercial Readiness Status
http://arena.gov.au/resources/readiness-tools/
Status
Summary
Level
Descriptions
6
"Bankable" grade asset class driven by same criteria as other mature energy technologies. Considered as a "Bankable”
grade asset class with known standards and performance expectations. Market and technology risks not driving
investment decisions. Proponent capability, pricing and other typical market forces driving uptake.
5 Market competition driving widespread deployment in context of long-term policy settings. Competition emerging
across all areas of supply chain with commoditisation of key components and financial products occurring.
4
Multiple commercial applications becoming evident locally although still subsidised. Verifiable data on technical and
financial performance in the public domain driving interest from variety of debt and equity sources however still
requiring government support. Regulatory challenges being addressed in multiple jurisdictions.
3
Commercial scale up occurring driven by specific policy and emerging debt finance.
Commercial proposition being driven by technology proponents and market segment participants – publically
discoverable data driving emerging interest from finance and regulatory sectors.
2 Commercial trial: Small scale, first of a kind project funded by equity and government project support. Commercial
proposition backed by evidence of verifiable data typically not in the public domain.
1
Hypothetical commercial proposition: Technically ready – commercially untested and unproven. Commercial
proposition driven by technology advocates with little or no evidence of verifiable technical or financial data to
substantiate claims.

Technology Assessment
Technology Factors
Feasible or proofing
Novelty to industry
Uniqueness aspects
Non-similarity to existing technology
Complexity to imitation
Skill-based required
Complimentary technology need
Performance benchmarking
Strong IP protection
Level of investment
Technology factors include the
relevant factors of new technology.
These factors may have positive or
negative affects for utilization
depend to recipient or licensee
firm.
Up-scale constraints
Environmental impact
Resource allocation

Technology Assessment (cont.)
Technical Factors
Technical factors include the quality of
products delivered by the technology,
the reliability of the technology, and the
volume of products that can be
manufactured by the technology.
Quality
Reliability
Flexibility
Repeatability
Volume
Adoption Factors
Integratability
Usability
Supplier suitability
Strategy alignment
Risk
Compatibility, Impact
Usefulness, Utilization
Service, Integrity, Partnership
Support, Compatibility
Operation, Technological, Commercial
Adapt from: Noordin Shehabuddeen*, David Probert, Robert Phaal:
From theory to practice: challenges in operationalizing a technology selection framework, Technovation 26 (2006) 324–335

Market Assessment
Market Factors
Market size
Demand for applications
Customer behavior
Potential to buy
Willing to pay
Five-forces
Competitive rivalry
Supplier power
Buyer power
Threat of substitution
Threat of new rivalry

Industry Environment Assessment
PEST++
Framework
Policy and political
Economic
Social
Technological environment
Legal / Regulation / Standard
Environmental impact
Logistic Management
Supply Chain Management
Value Chain Management

Internal and External Analysis Tools
SWOT Analysis
PEST Framework
Porter’s Five Forces
BCG’s Growth / Share Matrix
GE/McKinsey Matrix
Business Systems
Value Chain Analysis
Etc.

Basic Analysis Tools - SWOT Analysis
Strengths Weaknesses
Opportunities Threats
Internal Factors
External Factors
Positive Effects Negative Effects
Controllable
Uncontrollable

Value Chain Assessment
The idea of the value chain is based on the process
view of organisations, the idea of seeing a manufacturing (or
service) organisation as a system, made up of subsystems each
with inputs, transformation processes and outputs. Inputs,
transformation processes, and outputs involve the acquisition
and consumption of resources - money, labour, materials,
equipment, buildings, land, administration and management.
How value chain activities are carried out determines costs and
affects profits.
http://www.ifm.eng.cam.ac.uk/research/dstools/value-chain-/
Porter's Value Chain

Value Chain Assessment (cont.)
Image source: http://logisticsglobal.blogspot.com/2011/08/analysis-value-chain-porter-model.htmlRatchakrit Klongpayabal, 2015

Hype Cycle
Ratchakrit Klongpayabal, 2015 Source: https://en.wikipedia.org/wiki/Hype_cycle#/media/File:Hype-Cycle-General.png

Hype Cycle
Ratchakrit Klongpayabal, 2015 Source: https://en.wikipedia.org/wiki/Hype_cycle#/media/File:Hype-Cycle-General.png
No. Phase Description
1 Technology Trigger
A potential technology breakthrough kicks things off. Early proof-of-concept
stories and media interest trigger significant publicity. Often no usable
products exist and commercial viability is unproven
2 Peak of Inflated
Expectations
Early publicity produces a number of success stories—often accompanied
by scores of failures. Some companies take action; most don't.
3 Trough of
Disillusionment
Interest wanes as experiments and implementations fail to deliver. Producers
of the technology shake out or fail. Investments continue only if the surviving
providers improve their products to the satisfaction of early adopters.
4 Slope of
Enlightenment
More instances of how the technology can benefit the enterprise start to
crystallize and become more widely understood. Second- and third-
generation products appear from technology providers. More enterprises
fund pilots; conservative companies remain cautious.
5 Plateau of Productivity
Mainstream adoption starts to take off. Criteria for assessing provider viability
are more clearly defined. The technology’s broad market applicability and
relevance are clearly paying off.

Potential Types of Technology Strategy in Value Chain
Market for Technologies A company produces the technology and try to sell it
as disembodied good to firms that develop it.
Market for Embedded
Technologies
A company embodies the technological content in
more complex technological systems.
Market for Products The technology is embodied further into product
market.
Mixed Strategies The mix of previous strategies.
Source: Chatchawan Chaisuekul, Value Chain/Commercialization Process, 2015Ratchakrit Klongpayabal, 2015

Exploitation Approach of Technology
Source: Chatchawan Chaisuekul, Value Chain/Commercialization Process, 2015
Strategy Technology Result of Action
Sell (Assign)
Early stage
No clear market
High risk of failure
Minimum investment
Low cost
Low return
Low risk
Licensing
Partial develop
Seemly clear market
High cost of investment
Low cost
Medium return
Low risk
Spread risk
Reach critical mass
Joint Ventures /
Collaboration
Complete or almost complete
Clear market
No expertise in market
Low-medium risk of failure
High cost of investment
High cost
High return
High risk
Business / Market intelligence
Spin-offs /
Spin-outs
Mature stage
Clear market
Ready infrastructure
Good connections
High cost
High return
High risk
Prestige

Opportunities for Technology Marketing
How Concept
In-licensing I can use it, but it not my own.
Out-licensing I still own, but you can work on it.
Strategic marketing
alliances
We sell together.
Co-promotion Two companies, one brand, collaborative relationship.
Co-marketing Two companies, two brands, competitive relationship.
Bio-alliances I’ll discover it, you develop, market and sell it; maybe
we’ll even do it together.
Partnerships We do some things together.
Joint venture Let’s start our own company.
Product divestment You can have it all.
Merges and acquisitions We are one. “or” I own you now.

Exclusivity of Rights
Exclusive license Only licensee and no one else (including licensor) can
commercialize patent
Non-exclusive license Licensee can commercialize but so can any other
licensee or the licensor
Sole license Licensor and licensee can both commercialize but
licensor will not grant rights to anyone else
Partially exclusive
license
Partially exclusive license (Usually limited by territory or
field of use) Licensee may have rights to commercialize
only in certain applications

Territory and Geographic Distribution of Rights
All-inclusive
(world-wide)
Licensee has rights in any geographic region (country) in
which the patent has issued. This is typically the case for
exclusive licenses
Conditional or
geographically limited
Licensee has rights to commercialize or practice the
patent in a defined, limited set of countries. Partially
exclusive or non-exclusive licenses can use this as one
criterion to better control and distribute their patent
rights

Pros and Cons of Various Types of License
Exclusive license • Greater commitment from
Licensee
• Higher fees
• Higher royalties
• Closer monitoring of
development
Adapt from: Shreefal S. Metha, Commercializing successful biomedical technologies, 2008
• Higher risk of failure of product
commercialization
• May be wrong partner or strategy
• Licensee will typically have single
focused market approach, thus not
reaching maximum potential of
technology before patent runs out
• Licensee can use exclusivity to block
other potentially ‘‘goodfor-humanity’’
type development work – the typical
goal of the inventor
Non-exclusive or
partially exclusive
licenses
• Several paths to market
• Several markets addressed
simultaneously
• Increased chances of final
commercialization
• Multiple market carve-out may raise
problems down the road
• Managing licensees and multiple
partnerships may be a challenge
• Usage is difficult if encumbered by
other licensees’ efforts, data, or
liabilities
• Lower fees and royalties
Type of license Pros Cons

Technology Acquiring Relationship
Market/Technology Existing Technology
New/Related
Technology
New/Non-Related
Technology
Existing Market
Joint venture & alliance
Internal venturing
Venture capital &
equity participation
Educational
Acquisition
Spin off
Technology sales
New/Related Market
In-house R&D
Acquisition of
possessing firm
In-house R&D
Licensing
Acquisition of
possessing firm
Venture capital &
equity participation
Educational
Acquisition
New/Non-Related
Market
In-house R&D
In-house R&D
Licensing
Acquisition of
possessing firm
Joint venture
Internal venturing

Key Success Factors of New-technology Entrepreneurs
Market research Sales and marketing
Ability to seek and
accept help
Execution of
sound business
strategies
Analysis,
judgement,
foresight, and
adaptability
Financing
management
Ability to set and
achieve important
goals
People skills Persistence Great
technology is
the start!
Adapt from: Steven Overholt, Mastering Technology Commercialization, 2012Ratchakrit Klongpayabal, 2015

Profit Concept from Technology Exploitation
Research or
Technology
Exploitation
Profits Profits
Before
Commercialize
Revenue Cost & Expenditures
After
Commercialize

Stakeholders of Technology Commercialization
BuyerUser Decision MakerTarget customerProspect customer

5Fs by 4Ps + 4Cs + 4Es
Product
Price
Place
Promotion
Customer
Solution
Customer
Cost
Customer
Convenience
Customer
Communication
Consumer
Expectations
Consumer
Evaluation
Consumer
Experience
Consumer
Emotional
Needs of Customer
Features
Finance
Freedom
Feeling
Future

PriceProduct Place Promotion
PriceProduct People PlaceProcess
Physical
Evidence
Promotion
Planning Sequences of Marketing Strategies for Product
Planning Sequences of Marketing Strategies for Service
Sequences of Mkt. Strategies for Product and Service

Relationship between Price and Quality of New Product
P1
P2
High Quality
P2
P1
High Price
Low Price
Low Quality
P3 P3
P4
P4

Design Thinking and Research Commercialization
Business People
Technology
Design Thinking

Pricing Chain Concept
University Manufacturer Retailer
D-1 D-2 D-3
Research
Pricing Chain
Lab Scale
100 200 260 338 439 571
30%
Assumption of
Markup Profit
Cost of Goods Sold
+
Sales and Administration Expenditure
+
Profit
743
Industrial Scale
Entrepreneur Final
Distribution Channel
30% 30% 30%
Retail
Price
Laboratory Cost
30%

Technology Value Chain
Development
Product or Process
Applied
Science
Basic
Science
Market / Manufacturer
Consult & HireTransfer & LicenseLicensing
IP IP + Products Products
Industry problem5+++ Years 3-5 Years 1-3 Years
Adapt from: Panachit Kittipanyangam, From research to market, 2015Ratchakrit Klongpayabal, 2015

Business Model Canvas - BMC
Cost
Structure
Revenue
Streams
Customer
Segments
Value
Proposition
Customer
Relationship
Channels
Key
Activities
Key
Resources
Key
Partners
Source: Alexander Osterwalder & Yves Pigneur, 2009Ratchakrit Klongpayabal, 2015

Business Model Canvas - BMC
Cost
Structure
Revenue
Streams
Customer
Segments
Value
Proposition
Customer
Relationship
Channels
Key
Activities
Key
Resources
Key
Partners
Source: Alexander Osterwalder & Yves Pigneur, 2009Ratchakrit Klongpayabal, 2015
Efficiency Value
Product Market

Basic Processes to Develop a Business Plan
Marketing
Operating
Financial
Production
Mkt.orIndustrialAnalysis
RiskAssessment
Business Idea or Business Overview
Appendix or Exhibit
Business
Model
Business
Model

Judging Criteria for Innovative Business Plan
Innovation and intellectual property
management
Creative thinking from business model
Competitive advantage
Commercial viability and potential
Product or service process
Marketing management
Financial results or return to business
Communication and presentation skills
Source: Ratchakrit Klongpayabal, Business Plan for Innovation Business, 2007Ratchakrit Klongpayabal, 2015

Innovative business plan overview

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