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  • September48,2016WaikikiBeachMarriottHonolulu,Hawaii,USA

    TechnologyReadiness,MarketReadinessandtheTripleBottomLine:

    AnEmpiricalAnalysisofInnovatingStartupsinanIncubator

    RainerHasenauer,HiTechCenter,Vienna,AustriaAndreasGschpf, INITS,ViennaBiocenter (VBC),Austria

    CharlesWeber, PortlandStateUniversity,USA

    PICMET 16

    Abstract ThispapersharestheexperiencesofINITS,abusinessincubatorlocated

    inVienna,Austria,whichconsultstostartupfirmsinAustriaand(withpartners)inEurope.INITShasinvestigatedthetechnologyreadinesslevelsandmarketreadinesslevelsof57startupfirmsinavarietyofindustries,whoareengagedinsocialorenvironmentalentrepreneurship,wheretheimpactmotiveprevailsovertheprofitmotive.Thus,INITSprovides57longitudinalcasestudiesofsocialandenvironmentalinnovationinstartupfirmsthathavegonethroughthecompleteincubationprocess.ThirteenofthesecasesunderwentanopenincubationprocessdevelopedbyINITS.

    INITShaslearnedafewimportantlessonsfromtheseendeavors.Theopenincubationmethodismorefocusedandstreamlinedthantraditionalmethods.AformalizedWebbasedapplicationprocess,aswellasprolongedinteractionwithfellowstartupfirmsandexternalexperts,identifyerrorsearly,whichacceleratesincubation.Openincubationalsoachieveshighertechnologyreadinesslevelsanddeliverslowertechnologyrisk,especiallyinthelifesciences.Finally,openincubationisnotrestrictedtostartupsthatfollowthetriplebottomline.Applicationsforstartupsinmultipledomainsarepossible.

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 2

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  • Acknowledgements

    TheauthorswouldliketothanktheHiTechCenterinVienna,AustriaandINITSforsharingdatathatcontributedtothispaper

    TheHiTechCenter isamultinational,multiregionalindustryuniversitypartnership. fundedbytheEuropeanUnionsfundforregionaldevelopmentandby

    variouslocalgovernmentagencies. MembersincludetheTechnicalUniversityofVienna;theEconomics

    UniversityofBratislavaandViennaUniversityofEconomicsandBusiness. TheauthorswouldalsoliketoexpresstheirgratitudetoDr.Thomas

    Rusch andtheCompetenceCenterforEmpiricalResearchMethodsatWU(ViennaUniversityofEconomicsandBusiness)forconductingtheMannWhitneyTestinAppendixF.

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 3

    Outline SingleversusTripleBottomLine Whatistheimpactoninnovationinstartupfirms? ResearchApproach

    TechnologyReadinessversusMarketReadiness Comparingincubationprocessesandindustries

    EvidencefromINITS Datafrom57companies actaslongitudinalminicases.

    LessonsLearned FutureApplications

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 4

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    2016 Proceedings of PICMET '16: Technology Management for Social Innovation

  • TheEconomicsofHighTechStartups

    Singlebottomline MaximizeReturnonInvestment

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 5

    2

    0

    2

    4

    6

    8

    10

    12

    0 0.2 0.4 0.6 0.8 1 1.2

    t/t*

    NetPresentValueandCumulativeReturnonCumulativeInvestment

    NPV(t/t*) CRoCI(t/t*)

    AngelInvestors

    LiquidityEvent

    VentureCa

    pital

    ValleyofDeath

    PleaseseeAppendixAforcalculations.

    TheTripleBottomLine

    Tradeoffsbetweeneconomicdrivers,environmentalimpactandsocialimpact

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 6

    EconomicDrivers

    StartupFirm

    EnvironmentalImpact

    SocialImpact

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  • KeyQuestion

    Whichincubationprocessisbestsuitedforstartupfirmsthataresubjectedtothetriplebottomline?

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 7

    Approach WesharetheexperiencesofINITS,

    auniversitybusinessincubatorinVienna,Austria, whichconsultstostartupfirms inAustriaand(withpartners)inEurope.

    INITS hasincubated170startupfirms, including57startupfirms

    engagedinsocialorenvironmentalentrepreneurship, whereimpactmotiveprevailsoverprofitmotive.

    Ranked3rd inEurope(7th worldwide) amonguniversitybusinessincubators inUniversityBusinessIncubators(UBI)index[1]

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 8

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  • DataSource

    57longitudinalcasestudies ofsocialandenvironmentalinnovation instartupfirmsthathavegonethroughthecompleteincubationprocess.

    Sampleincludes CurrentlyactiveandboughtoutstartupsMergedstartupsanddissolvedstartups Startupsusemanydifferenttechnologies.

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 9

    ResearchMethod: DocumentAnalysis

    Welookatalldocumentspertainingtoincubationofeverystartupfirm. Introductiondocuments Incubationapplicationreport Recordsofstartupcamp Recordsofteamchallenge Recordsofimplementationplan Auditorsreports Milestonereports Incubationexitreports Alumnistatusreport

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 10

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  • Variables Criteria: Ateachincubationmilestone,welookat

    TechnologyReadinessLevel(TRL)MarketReadinessLevel(MRL)

    Factors:Wecompare Twodifferentincubationprocesses:A andB Four industrytypes

    6milestones,18monthsofincubation SeeappendixE

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 11

    Criteria[2][10] TRL TechnologyReadinessLevel (appendixesB&C)

    expressesthedegreeofatechnology tobeusedsafely byintendedandeducatedusers intheenvisagedcommercial(market) ornoncommercialuserenvironment.

    MRL MarketReadinesslevel(appendixesB&C) measuresthematurityofagivenneed inthemarketconsidering thepotentialobstacles.

    12PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine

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  • Criteria(continued)

    WetestforalignmentbetweenTRLandMRLduringincubationprocess

    Measurementofreadinesslevelisdonebycheckingifthecriteriausedtodescribethelevelarefulfilled.

    Criteriahavebeenmodifiedtoreflectsocialandenvironmentalcontext

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 13

    MeasuringTRL/MRL [3][5]

    Checkifthecriteriausedtodescribetherespectivelevelarefulfilled.

    Scorereflectsactivitythathasbeencompleted.

    DefinitionsofTRLandMRLadaptedtofitsocialandenvironmental(S/E)context. (Fordetails,pleaseseeAppendixD)

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 14

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  • TechnologyReadinessLevels[3][7]MoredetailsinappendixD

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 15

    Level1

    2

    3

    45

    6

    7

    8

    910

    Researchtoprovesocial/environmentalfeasibility

    Social/environmentallivinglabdemonstrationSTechnologydevelopment

    Wholesystemfielddemonstration

    Socially&environmentallycompliantprototype

    Societal&environmentaltechnologyacceptance

    Market/salescertificationBusinessmodeldefinedcoherently

    Fundamentalresearchinsocial/environmentalcontext

    Appliedresearchinsocial&environmentalcontext

    SocialEnvironmentalTechnologyReadinessLevel

    MarketReadinessLevels[8],[9]MoredetailsinAppendixD

    *AddedbyKICInnoEnergy(see[10],p.20)PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 16

    Level SocialEnvironmentalMarketReadinessLevel

    1 Unsatisfiedneedshavebeenidentified

    2 Identificationofpotentialsocialbusinessopportunities

    3 Systemanalysisandsocialenvironmentimpactanalyzed

    4 Marketresearch5 Targetdefined

    6 Industryanalysiswithrespecttosocialandenvironmentalimpact

    7 Competitorsanalysisandpositioning

    8 Valuepropositiondefined

    9 Product/servicedefined10 Businessmodeldefinedcoherently*

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  • SystemRationality Compriseseconomic&social&environmentalrationality

    Documentanalysisanddiscussionswithpersonnelatstartupfirmsdeterminerationality.

    Startupincludedinsample,if Interdependencebetweeneconomic,ecologicalandsocialfactorsisobserved;

    Startupshapesitsstrategyforlongtermsurvivalofthesystem.

    Startupisnotoutforfastprofit! SeeAppendixD.5

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 17

    Focused,StreamlinedIncubation:StayontheDiagonal! [3]

    Concurrent,stepbystepmarketandtechnologydevelopmentplacestherightproductintotherightmarketwindowattherighttime.

    PICMET:Aug.26,2015 Hasenauer,etal.,ManagingTechnologyPush 18

    2 4 6 8

    2

    10

    4

    6

    8

    MarketR

    eadine

    ssLe

    vel(MRL)

    TechnologyReadinessLevel(TRL)

    Theywillcome,butwewontmakeit!

    Wewillmakeit,buttheywontcome!

    Wewillmakeit,andtheywillcome!

    10

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  • RiskFields

    TechnologyRisk focusontechnologydevelopmentMarketRisk focusonmarketdevelopment

    MISALIGNMENTBETWEENMARKETANDTECHNOLOGY

    PICMET:Sept.48,2016 Hasenauer,etal.,TripleBottomLine 19

    TRL5

    MRL>5 Marketavailable,notechnology=>MARKETRISK

    Market&Technologycoherentlymature

    MRL

  • GroupA: OpenIncubation IncubationprocessdevelopedatINITS

    frompubliclyavailableinformation Digitalintroduction

    Applicationforacceptancetoincubatorbywebsite. Highlyfocusedquestions Thisallowsareliableandvalidselectionofstartupapplicants.

    StartupCamp Exchangeofinformationbetweenfirms,externalandinternal

    experts Firmsgivefeedbacktoeachother,exchangeexperiences Educatio

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