Class_5_Presentation - A Garage and an Idea Garage...

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Unformatted text preview: A Garage and an Idea Garage Developing science-based Developing ventures ventures What more does an entrepreneur need? need? 1. A hefty rolodex helps Early stage funding Scientific, technical capabilities Managerial capabilities Clients Complementors/alliance partners 1. So does earlier experience from the industry Technical, market knowledge (+ connections) Most successful “garage-entrepreneurs” have both What are the issues in starting a science-based venture? science-based (1) From idea to prototype Proof of principle: make sure the tech make works in a specific application works What is the most likely application? What Rarely Rarely determined based on extensive market research… research… May take several years Need information inputs from potential Need clients, technical experts clients, (2) “Productization” of the technology technology Often easier to sell a product than a license development is different from research More proven, more explicit Very different in terms of finance, risk, rewards Product Making Making things work rather than elegant ideas Less creative, more hard work Might need specialized expertise in this Or, if univ. inventor is not on board, need to figure Or, out the science out On On average 4 years & $4 million to get a product (if successful); little revenue until year 8-9 after licensing! 8-9 Technical uncertainty & Technical development investments also in terms of Performance Robustness Robustness Supporting/enabling Scaling Usability Usability improvements technologies up Market uncertainty Market No buyers before product During product development, market may During have shifted have Engineering fascination with ‘cool’ Engineering technology technology ‘Technology push’ vs. ‘market pull’ Best technology vs. something people will pay Best for for Need feedback from potential users difficult to assess before product… Feasibility Conceptualization of innovation Coupling Linear model: science/technology push Science Demand/market pull Idea generation FIR M R&D Manufacture Marketing Customers Technology suppliers To get user feedback To Quick prototyping (recall IDEO) Quick launch with an imperfect product, Quick then iteration based on feedback then Scientists, engineers hate this! Howard Morgan on starting new companies Howard (3) Selecting a market (3) Simultaneous or sequential search? Large vs. small market? How much can the technology improve client’s How bottom line? bottom Can we serve the market? Time to market Needed development Manufacturing requirements Scalability Scalability Location: most proximal clients Competition Competition (4) Marketing! (4) How How to convince outsiders this tech is the coolest thing in the world… coolest A123Systems A123Systems The team Prof. Chiang (MIT; scientific advisor), (MIT; Prof. Ric Fulop (young serial tech entrepreneur; CEO), (young Ric Bart Riley (materials scientist, industry & R&D experience; VP R&D), (materials Bart Richard Holman (materials PhD; technical manager) technical Richard “self-assembling” particles for batteries (to make the battery self-assembling” stack even thinner) stack Exclusive license to key patents from MIT The technology Date: Feb 2002, 1 year after launch Funding: $8.3 + 4 million from 5 VC funds + Motorola, $8.3 Qualcomm Qualcomm Killacycle! Killacycle! http://www.tgdaily.com/content/view/33853/113/ The decision The (1) To continue on the original self-assembly To concept concept Incorporate the new electrode material Incorporate (Lithium Iron) into conventional lithium(Lithium ion batteries (1) Pros for (1), (2)? Pros Cons for (1), (2)? Cons What are the risks? What Self-assembly doesn’t work Somebody else gets there first The alternative (Li-Fe phosphate) doesn’t work/scale up The doesn’t IPR space gets too crowded or controlled by big IPR players players Market uncertainty? Medium Medium for (1) – unproven radically new technology, but potential users already on board potential Low for (2) – pot. clients are already calling up Summary Developing Developing science-based products takes typically much more time, money & effort than expected (even more so than in regular R&D) regular Connections are key to success: funding; Connections managerial, scientific, technical talent; clients clients “Coupling” is MUCH less risky than Coupling” “science/technology-push” “science/technology-push” Epilogue Epilogue http://www.a123systems.com/#/company/ ...
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This note was uploaded on 02/19/2009 for the course AEM 4370 taught by Professor Leiponen,a. during the Spring '08 term at Cornell University (Engineering School).

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