Hardly a week goes by that I don’t hear about an entrepreneur’s new service or product. If you’re one of those innovators toying with such a technology right now, then you must deal with some very critical realities. In fact, I would boil those realities down to five basic elements.
The “golden road to commercialization” is littered with jagged rocks, menacing pot holes, and unexpected crossroads. Learning about and applying these five basic elements is like a having a well-travelled guide shine some light on your path as you travel down that road.
These Five Assessments for Commercializing Technology (the FACT™ Method), are based on my business experiences over two decades of working with inventors, startup companies, investors, patent counsel, universities, researchers and more.
1: Intellectual Property. The ramifications of patenting your invention must be addressed very early in the innovation process. Your novel device, system or service can best reach customers in need if it's supported by strong intellectual property. But what does “strong” mean in this context? If you have a freshly issued patent in the United States, does that mean you are on the golden road to commercialization and helping patients everywhere?
2: Compelling Need & Competitive Advantage. Inventor’s syndrome is a common pitfall. Inventors believe everyone will love and need his or her innovation just like he or she does. But having others appreciate that innovation to the same degree is often the exception, not the rule. In this second element we ask this critical question: What is so compelling about your technology that people will give up their current solutions and suddenly adopt yours? How do we assess the real market need? How do we analyze your sustainable competitive advantage vis-à-vis all the present solutions to the problem you are attempting to address? And how do we express it so that it is compelling to the market and investors?
3: Market Size. If the market is not large enough to entice investors how will you raise the money necessary for development and commercialization? What is “large enough”? And how do we know we are thinking about the correct market or users? What details do we need?
4: Task, Timeline & Budget. This is a big one and might very well consume most of your analysis time. How long should it take to commercialize this innovation? What needs to be done? And how much will this cost? Who should be helpful in figuring all this out? Given the size of the market, is the effort worthwhile? How will investors view this development timeline is of significant importance.
5: Product or Unit Manufacturing Cost. At this point in the FACT Method, you’ll determine whether or not this innovation can be produced at a price that would be acceptable to the market and yet highly profitable for the business. Manufacturers need a plan. From where does that plan arise? How do both future customers and engineers fit into this process?