innovative business plan overview

Innovative Business Planning OverviewTechnology Commercialization Perspectives

Technology-based Business Context

Ratchakrit Klongpayabal

Overview for Innovation Business

Invention Innovation

Intellectual property

+

Product or ServicePrototype

Intellectual Property

New IdeaScience-based

Technology-based

+

Technology proofNovelty proof

Invention

+

CommercializationBusiness management

InventorEntrepreneurBusiness firm

IndividualResearcher, Inventor

Ratchakrit Klongpayabal, 2015

Science, Technology, Engineering, and Design

ScienceThe study of nature and natural phenomena

TechnologySystematic knowledge and action, usually of industrial processes but applicable to any recurrent activity.

Engineeringthe 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.

DesignRealization 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, 2007http://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 PlanProduct Development

Invention Idea

BudgetDevelopment

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 questionHypothesis testingExperiment DiscoveryPublishingEtc.

Technology developmentTechnology proofingLaboratory prototypeField prototypeIP ProtectionEtc.

Product designPackaging designInterface designUsability designEtc.

IP licensingTechnology transferProduction prototype Production integrationUp-scale productionStandard testingEtc.

Product manufacturingBusiness modelMarketing strategiesProduct launchingEtc.

Research

Development

Value Creation(Hard side)

Value Creation(Soft side)

Value Proposition


New productBusiness opportunitiesCompetitive advantageMarketing strategyEtc.

Performance increasingQuality ImprovementProduction efficiencyEtc.

Production time decreasingTime to marketEtc.

Material substitutionProcess substitutionLabor substitutionWaste utilizationDefect decreasingEtc.

Basic Rationale to Exploit External R&D

Opportunity Performance Time Cost


Value Creation Framework from R&D

ResearchDevelopmentTechnology

Key features and their benefitsDeployment experienceUsage experienceMaintenance experienceService experience

Functional Value

Emotional Value Economic Value

What this product does

How it makes you feel What that means in time and money

Time savingCost savingQuality improvementFlexibility enhancement

Value of ownershipValue of affiliationValue of relationshipEmotional 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 BrushingTooth 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

Adapt from: Semyon D. Savransky, Engineering of Creativity (Introduction to TRIZ Methodology of 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 orlength 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 A3ResearchProcess

Idea from Researcher

Solution to Customer B

Solution to Customer C


Transformation Processes from R&D to Business Plan

BusinessIdea

ResearchFinding

NewTechnology

ProductIdea

BusinessModel

BusinessPlan

IP Management – Patent, Petty patent, Design patentLicensing – Exclusive, Non-exclusive, Sole, PartiallyAssign, Joint venture

Value chain Analysis / Supply chain AnalysisNew product development – NPDProduct design, Product testing

Market or Industry environmentBusiness opportunitiesCustomer problem solution

Value creation, Value capturing,Business model canvas-BMC, Market researchValue proposition, Revenue stream, Cost structure, IRR,PB

Research processTechnology proof and technology feasibleAcademic journals publishing

Prior feasibility studyBusiness start-up, Industry and market analysisProduction plan, Marketing plan,Operation plan, Financial plan, Risk management plan

ResearcherUniversity

Research supporting agency

ResearcherUniversity, TLO

Research supporting agency

ResearcherTLO

Entrepreneur

ResearcherEntrepreneur

Designer, Engineer, Accredited lab

Researcher and/or EntrepreneurBusiness angel, Venture capital, Crowdfunding

Government funding support agency

Researcher or EntrepreneurBusiness angel, Venture capital, Crowdfunding

Government funding support agencyLender


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

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

Level Summary

1Basic 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.

2Technology 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.

3Analytical 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.

4Component/subsystem validation in laboratory environment: Standalone prototyping implementation and test. Integration of technology elements. Experiments with full-scale problems or data sets.

5System/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.

6System/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.

7System 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.

8Actual 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.

9Actual 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

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

Status Summary

LevelDescriptions

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.

4Multiple 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.

3Commercial 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.

1Hypothetical 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 technologyComplexity 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

Ratchakrit Klongpayabal, 2015Adapt 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 AnalysisPEST FrameworkPorter’s Five ForcesBCG’s Growth / Share MatrixGE/McKinsey MatrixBusiness SystemsValue Chain AnalysisEtc.


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 processview of organisations, the idea of seeing a manufacturing (orservice) organisation as a system, made up of subsystems eachwith inputs, transformation processes and outputs. Inputs,transformation processes, and outputs involve the acquisitionand consumption of resources - money, labour, materials,equipment, buildings, land, administration and management.How value chain activities are carried out determines costs andaffects 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 TriggerA 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 ProductivityMainstream 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 stageNo clear marketHigh risk of failureMinimum investment

Low costLow returnLow risk

Licensing

Partial developSeemly clear marketHigh risk of failureHigh cost of investment

Low costMedium returnLow riskSpread riskReach critical mass

Joint Ventures / Collaboration

Complete or almost completeClear marketNo expertise in marketLow-medium risk of failureHigh cost of investment

High costHigh returnHigh riskBusiness / Market intelligence

Spin-offs /Spin-outs

Mature stageClear marketHigh risk of failureReady infrastructureGood connections

High costHigh returnHigh riskPrestige


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 orpartially exclusivelicenses

• 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 TechnologyNew/Related Technology

New/Non-Related Technology

Existing MarketJoint venture & alliance Internal venturing

Venture capital & equity participation Educational Acquisition

Spin off Technology sales

New/Related MarketIn-house R&D Acquisition of possessing firm

In-house R&D Licensing Acquisition of possessing firm

Venture capital & equity participationEducationalAcquisition

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 orTechnologyExploitation

Profits Profits

BeforeCommercialize

Revenue Cost & Expenditures




AfterCommercialize


Stakeholders of Technology Commercialization

BuyerUser Decision MakerTarget customerProspect customer


5Fs by 4Ps + 4Cs + 4Es

Product

Price

Place

Promotion

CustomerSolution

CustomerCost

CustomerConvenience

CustomerCommunication

ConsumerExpectations

ConsumerEvaluation

ConsumerExperience

ConsumerEmotional

Needs of Customer

Features

Finance

Freedom

Feeling

Future

PriceProduct Place Promotion

PriceProduct People PlaceProcessPhysicalEvidence

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

P1P2

High Quality

P2

P1

High Price

Low Price

Low Quality

P3 P3P4

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 ofMarkup Profit

Cost of Goods Sold+

Sales and Administration Expenditure+

Profit

743

Industrial Scale

Entrepreneur FinalDistribution Channel

30% 30% 30%

RetailPrice

Laboratory Cost

30%


Technology Value Chain

DevelopmentProduct or Process

Applied Science

Basic Science

Market / ManufacturerConsult & 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

CostStructure

RevenueStreams

CustomerSegments

ValueProposition

CustomerRelationship

Channels

KeyActivities

KeyResources

Key Partners

Source: Alexander Osterwalder & Yves Pigneur, 2009Ratchakrit Klongpayabal, 2015

Business Model Canvas - BMC

CostStructure

RevenueStreams

CustomerSegments

ValueProposition

CustomerRelationship

Channels

KeyActivities

KeyResources

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

. or

Ind

ustr

ial A

naly

sis

Ris

k A

sses

smen

t

Business Idea or Business Overview

Appendix or Exhibit

BusinessModel

BusinessModel


Judging Criteria for Innovative Business Plan

Innovation and intellectual property managementCreative thinking from business modelCompetitive advantage Commercial viability and potential Product or service process Marketing management Financial results or return to businessCommunication and presentation skills

Source: Ratchakrit Klongpayabal, Business Plan for Innovation Business, 2007Ratchakrit Klongpayabal, 2015