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Overview• Research-based innovation and Disruptive technologies• Commercialization of research-based innovation
– Process– Organization– Initial funding– Patents– Sell your prototypes!
• Sales integrated with development• R&D funding
– National innovation capital– National R&D capital– European research framework programs– US-based research funding– Venture capital
• Use-case 1: Birdstep Technology• Use-case 2: Nunatak AS and how we work to commercialize research-
based innovation
Background and experience
• Master of Science (Siv.ing), Telecom systems, NTNU 1992• Research Assistant, FFI 1992-93• Guest Researcher, Apple Computer, California, 1994-95• PhD Computer Science (Dr. scient), University of Oslo, 1993-98• CEO, Advanced Communication Technology AS, 1998-2000• Associate Professor, University of Oslo, Informatics, 1998+• Partner, Nunatak AS 2000+• CTO, Birdstep Technology ASA, 2000+
• Commercial experience – Established 8 IT companies over the last 15 years
– Roles as CEO, CTO, consultant, advisor, board member and seed capital investor.
Research-based innovation should look for Disruptive technologies
• Research looks ahead – easier to identify a technology shift• Significant time/technology advantage is needed to establish new
markets with new technology• Research-based innovation is not traditional academic research
– New skills are required (sales, marketing, VC, ...)– Patenting before with IPR sharing– Prototyping– Product packaging– Companies as the nucleus for innovation
• Examples of Distruptive technologies in the ICT sector:– HyperText Transfer Protocol (web)– Peer-to-peer technology (e.g. Napster ...)– IP as Telecom core technology– WLAN and other unlicenced radio technologies– Mobility– Security– Open Standards (e.g IETF, Java, ...)– Open Source (e.g. Linux)
Business idea development
1. Select area
2. Study the customers
3. How to create value for the customer
4. Constrain the market / get focus
5. Understand competition
6. Business plan
Classical error 1 – Too high focus on own technology / ideas – forget customer requirements and needs
Business idea requirements
Start with comparative advantage
E.g. Business, market or technology knowledge
Spend time understandng the
customers and their business
StudiesWork experiencePrototypes=> Ideas
Meet potential customersDemoTargeted seminarsUndersand customer business processUnderstanding of value for customer, your ”Value Proposition”
Establishment and understanding of
comparative advantages
Better performanceLower costSimplerOwn IPR=> Good understanding of your position
What is a good business idea?
• A new technology is not a business idea • The word “business idea” contains nothing about
technology or product.• An idea about a business, a market
• Example: – To deliver a better method for securing data to customers that
need security, and agrees that the new method gives a substantial improvement to same cost without replacing existing infrastructure is a business idea.
Process for realizing business idea
1. Business plan2. Financing3. Focused development4. IPR protection5. Sale of prototype6. Improvements7. Sell projects with product8. Improve product9. Sell standard product
Classical error 4 –Wait for the breakthrough
Clasiscal error 3 -IPR not protected
Classical error 2 -Spend all resourcesto raise funding
The startup enterprise as foundation for research based innovation
IdeaProducts and
RevenuePatent
Commercialization
Market studies
Prototype
Firstsales
Markeds-føring
Projects
Improvements
Competition analysis
SupportingResearch
Productpackaging
Repeatedsales
Financing
Customerinstallation
The startup enterprise astool for research-based innovation
University educationIPR ownership, supporting R&D,Knowledge ”production”, students
Partners
NationalR&D funding National
Startup Funding
Patent
EUR&D funding
Startup funding environment
Customere.g. 4G operator
R&D
EU
Startup company
University
VentureCapital
DisseminationJournals,
Conferences
NationalStartup capital
SND IFU/OFU, Etablererstipend, SkatteFUNN, etc.
End usersPartners
Comp-etitors
R&Dunits
National Research funding
Partners
Comp-etitors
R&Dunits
Startup funding environment
Customere.g. 4G operator
R&D
EU
Startup company
University
VentureCapital
DisseminationJournals,
Conferences
NationalStartup capital
SND IFU/OFU, Etablererstipend, SkatteFUNN, etc.
CostSqueeze
+ R&D support- Low income potential
- IPR sharing+ Supporting research
- No income- IPR sharing
End usersPartners
Comp-etitors
R&Dunits
+ Capital+ International network- Anti-dillution clauses
- Options- Controlling position
National Research funding
Partners
Comp-etitors
R&Dunits
+ Supporting research+ International network
- Admin overhead- IPR sharing
”Friends&Family”
”Industry Angels”or national startup capital
Venture Capital Round 1
Venture Capital Round 2
The long run to steady state
Challenge
TimeYear 1 Year 2 Year 3
Motivation
Solution approved, customer delays purchaseSales cycle is
longer than expected
Startup euphoria
First contract
Customer see sufficient demand for the solution, places volume order
Expensive sales
The entrepreneur should be in focus
• Many actors would like control and influence national startup capital– Research parks (Real Estate, FORNY, SIVA)– Universities (base funding, NFR, EU)– Venture Capitalists (EFFEKT, Argentum, ...)– Research institutions (NFR, EU, consultant business)– Existing industries (Existing cashflow, SkatteFUNN, ..)– Political goals (e.g. SkatteFUNN to reach OECD targets)
• Critical check: Is the entrepreneur commercially oriented?• Protect and support the entrepreneur
– Knowledge (Entrepreneurship as an academic study)– Grants (e.g. Commercial post-doc grant)– IPR (patents, designs, source code, prototypes, documentation)– Startup services (office, administration, legal, etc)– Supporting research from University and R&D institutions– National startup funding projects– National and EU research funding– Use people in the network as advisors, but never attach people that also control the
national startup funding, to avoid double hatting• Commercial focus from day one:
– Sell your own services and products– Sell your prototypes– Commercialization competency within the company, cannot be outsourced!
