getting to revenue

Phyl Speser, J.D., Ph.D,, CEOForesight Science & Technology

www.foresightst.com 401,273.4844, ext. 35,

[email protected]

1 Foresight Science & Technology www.ForesightST.com

http://www.foresightst.com/

mailto:[email protected]

Finding the CustomerDetermining the 4P’s (Product, Price, Promote, Place)Selling

First SalesLong Term Sales

Technology

End-User Needs

Substitutes

Buyers

Market Orientation

Competitive Advantage

Launch Tactics (4Ps)


Competitive Openings and Competitive Advantage


$

Time

Revenuesfrom Sales

Saving from Operations

(Life or death needs such as health, environment, or military requirements and

aesthetics/taste for consumer items are the exception. )Foresight Science & Technology

www.ForesightST.com4

Foresight Science & Technology www.ForesightST.com

5

Developer Producers/Distributors

End-UsersOpinionLeaders

create awareness andstimulate demand

seek product and/or servicecreate awareness and support

legitimizeand stimulatedemand

legitimize and enhance desirability

Seektechnology

5 W’s

Who is doing it?What is being done?Where are they doing itWhy is it being done?When are they doing it?

Technology is a Tool for Doing Something


6

Searching the WebFocus on Performance or Functionality Add Term

ProblemNeedRequirement

Check for Fit with Other RequirementsConfirm by Calling Experts and End-Users

Star Trek Gap Analysis

Think Where it Gets Used

Look for Contemporary AnalogueConfirm by Calling Experts and End-Users


7

http://www.google.com/imgres?imgurl=http://snarkerati.com/movie-news/files/2007/11/star-trek-enterprise.JPG&imgrefurl=http://snarkerati.com/movie-news/jj-abrams-claims-star-trek-movie-complicated-by-writers-guild-strike/&h=270&w=490&sz=10&tbnid=vJ8lrwXUSOLVBM:&tbnh=72&tbnw=130&prev=/images?q=star+trek+enterprise+picture&usg=__sgKmdB1_myel2q_R0BiJJKNsDfw=&ei=Wa2iSpyICoOc8QaN7qXtDw&sa=X&oi=image_result&resnum=2&ct=image

http://images.google.com/imgres?imgurl=http://www.travisairmuseum.org/assets/images/StarTrek-exhibit.jpg&imgrefurl=http://www.travisairmuseum.org/html/space_exploration.html&usg=__GTDtpMLyyewtX1GX9j1wp7wK0Xg=&h=324&w=432&sz=20&hl=en&start=44&sig2=gbg3-0tAzI_849E333IFIg&um=1&tbnid=8HWPH5XRrzFEiM:&tbnh=95&tbnw=126&prev=/images?q=star+trek+enterprise+picture&ndsp=20&hl=en&rls=com.microsoft:en-us&sa=N&start=40&um=1&ei=zq2iStrlEZTGlAeTspT1CA

http://images.google.com/imgres?imgurl=http://1.bp.blogspot.com/_J8GbSABq9ek/ShUSP9wOxxI/AAAAAAAABWs/KThCFJl51_w/s400/Star+Trek+TNG+-+Enterprise+Wall+Panel+still+3.jpg&imgrefurl=http://mondoprop.blogspot.com/&usg=__JuJ6-v9oU2AVT9adNmthG5YV6k0=&h=305&w=400&sz=21&hl=en&start=120&sig2=aaRESi2Jzc5PFszk27T61w&um=1&tbnid=dkeTAXyNPz-n9M:&tbnh=95&tbnw=124&prev=/images?q=star+trek+enterprise+picture+medical&ndsp=20&hl=en&rls=com.microsoft:en-us&sa=N&start=100&um=1&ei=5a6iStj1NsHdlAfuo4X1CA

Product Innovation Stage

Bundle of FeaturesStandard User Interface

Process Innovation Stage

Eliminate StepsImprove ReliabilityImprove Efficiency of Resource Use


9

Extension

Extension

Extension

CoreEnabling

EnablingCompeting

Time

Strategic

Bohn Knowledge LevelSkills/Know-how

Utility ≈ ValueUMPF


10 10

Ease‐of‐Use


11


12

ButtonManufacturer

ClothingManufacturer

ButtonManufacturer

ClothingManufacturer

MarketForce

HEV Batteries


13


14

Li-ion Battery Functional Decomposition

(B) Product Risks

B-1.0 Lithium Ion Battery

B-001 Available Energy

B-002 Calendar Life

B-003 Cold Cranking Power

B-004 Cost

B-005 Cycle Life

B-006 Efficiency

B-007 Equivalent Electric Range

B-008 Max. System Weight

B-009 Operating Temperature Range

B-010 Peak Pulse Discharge Power

B-011 Production Price

B-012 Regenerative Pulse Power

B-013 Self Discharge

B-175 Safety

B-014 System Recharge Rate

B-015 System Volume

B-016 Thermal Runaway

B-1.1 Cathode

B-017 Cost

B-018 Electrochemical Capacity

B-019 Ionic Conductivity

Red indicates a risk or common design hurdle

Green indicates a goal with specific numerical values

Yellow indicates a goal or a characteristic without a specific value


15

Foresight Advanced Energy Storage Portal

http://batteries.foresightst.com

http://batteries.foresightst.com/


16

Ease of Use

Time

Yield

Requirement

S1a

Trajectory

Technology 1 S1c

Requirement

S1b

S2c

S2b

S2a

Trajectory

Technology 2


17

Lead Acid Battery

Lithium Ion Battery

new

mod

ified

exis

ting

exis

ting

mod

ified ne

w

Market Product

Market Entry Riskfrom Bacon & Bulter, Planned Innovation


18


19

Variety\Rate of \ Change

Slow or “One Time”

Rapid or “Faster- Paced “

Many Segment-Driven Needs (Screwdrivers)Renewable Clean Energy

Dynamic or Changing Needs(Financial Instruments)Hybrid and Electric Vehicles

Few Infrastructure- Driven Needs (Hoes)Smart Grid

Network-Driven Needs(Cell Phones)Electronic Health Records

Based on Sanderson and Uzumeri, Managing Product Families, (Iwin, 1997)


20

Distribution without Market Forceor Barrier

Distribution withMarket Force

and BarrierMarket Force


21

Trade-offs and

Concerns affecting Metrics Matrix

Technology’s Yields on Metrics

Needs Relationship Matrix

Importance of Needs


22


23

Referred Literature

Patentsand Applications Trade Press

CompanyWebsites

T‐n T0time

Referred Literature

Patentsand Applications

Trade PressCompanyWebsites

To T+5timeT+1


24

COMPARING YOUR TECHNOLOGY WITH OTHERSYOURS

Customer Requirements Rela

tive

Wei

ghti

ng

Total Weight 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Feat

ures

and

Func

tiona

lity

of T

chno

logy

3 Strong2 Medium1 Weak

Ease

-of-U

sePe

rfor

man

cePr

ice

Oth

er


25

Is it in a Golden Triangle of Competitive Advantage Sustainability? If so file a Provisional and test market.


26

Is There a Competitive

Opening?


27

Six Degrees of SeparationStart with People Likely to Know or Know Someone to Talk With

Federal, State, and Local Program ManagersChairs and Members of Trade Association and Professional Society CommitteesEditors and AuthorsCenter Directors and Professors who Consult

Network Through to the Right People

Make it Clear Up Front You are NOT SELLINGAlways Ask if You can Use their Name


28


29

STAKEHOLDER ANALYSISLevel of Commitment People or Group

Supply Chain, incl. Targets Regulators Opinion

Leaders Customers Funders NGOs Industry Assoc.

Enthusiastic

Helpful

Compliant

Hesitant

Indifferent

Uncooperative

Opposed

Hostile

Key: O - Level Necessary for SuccessX - Current Level

Get 7 to 15 potential customersSit them in a room with a recording deviceAsk questions and encourage them to “freewheel” about their needsFocus and facilitate the discussion by asking about needs you have identified in literature reviews or earlier discussionsConfirm the Substitutes and their PricesConfirm who your Competitors areDo Gap AnalysisIdentify the Value Network


30

Ask Experts who are the ExpertsFive to Seven ExpertsSame QuestionsCycle Answers to Gain Consensus


31

32

Email everyone, ask the questions and offer to chat, but do not rely solely on emailCall early and then around the end of the dayLook for common ground and leverage pointsBe a poor working stiffAsk who else to call when you reach someone



33

End User AdviceEnd User Testing

Target Advice

TargetTesting

Idea – Design –

Proof – Brass – Prototype – Product – Production – Sales – Distribution – Customer of of Board

Engineering

Marketing SupportConcept Feasibility


34

OffensiveEmerging PacingSpare

DefensiveHedgingImitativeSpare


35

Lead all Competitors

Be in Top 5% of all Competitors

Lead all Direct Competitors

Be in Top Half of all Competitors

Crucial for Future Growth

Crucial for Take-off

DefensiveOffensive

Impactfrom Use ofProduct,Service, orTechnology

Function


36

http://en.wikipedia.org/wiki/File:NASA_TRL_Meter.jpg


37



38



39



40


41

Past Present Future

Strength of Intellectual Asset Portfolio

Staff Capacities of to Realize Plan

©

Foresight Science and Technology

High

LowRevenue From Entry Market Application

Long-Term Sustainable Competitive Advantage

Short and Mid-Term Competitive Advantage

Idea BasicResearch

AppliedResearch

ProductDevelopment

MarketIntroduction

ProcessEngineering

0$

CUM

ULA

TIV

E RE

VEN

UES

TIME


42


43

3%

14%

34% 34%

16%

Innovators Early Adopters Early Majority Late Majority Laggards

3%

14%

34% 34%

16%

Innovators Early Adopters Early Majority Late Majority Laggards

Foresight Science & Technology www.ForesightST.com44

StabilityOf

Dominant Design

Barriers to Entry

Rate ofChange

Concentra-tion

Rivalry


45

1) Product2) Price3) Promote4) Place


46

Perfor

mance

Ease-of-Use

Skills

Capacities

Goals

Inputs - Outputs

Time 1

Time 2

Attracti

veness

of Tech

nology

Price

MarketForce

MarketForce

MarketForce


47

CORE

Technology Familiarity

Mar

ket F

amili

arity

Control

Partner

Divest orMonitor

STRATEGY

Control:InternalDevelopment

AcquisitionsIn-License

Partner:Joint VenturesAlliancesInternal VenturesOut-License

Divest:AssignmentsSales

Monitor:Venture CapitalEducationalAcquisitions

Market Development

TechnologyDevelopment

Adapted from Roberts and Berry, SMR 1988.

Minimize

Maximize


48

Most Feasible

Customer/Target


49 49

Market Fit

Product/MaturityFit

CapabilityFit

50

\\YouYou\\

Them Them \\

You Do DealYou Do Deal You Walk AwayYou Walk Away

They Do DealThey Do Deal $10m, $0.5m$10m, $0.5m --$0.05m, $0.05m, --$0.01m$0.01m

They Walk They Walk AwayAway

$0.1m, $0.1m, --$0.05m$0.05m

--$0.01m, $0.01m, --$0.01m$0.01m


50

Google, Bing, etc. On-Line Papers and Magazines

Wall Street Journal, New York Times, etc.Business Week, Fortune, etc.Thomasnet, Globalspec, etc.Sector or Technology Specific Websites

Cooperate InformationYahoo FinanceHooversCompany SitesSEC Edgar


5151

Frost and SullivanFreedoniaGartnerForesight T2+2™Entrepreneur


5252

Let’s try an expert, shall we?


5353

HooversForesight T2+2™ Entrepreneur


5454

MailersNon-Proprietary

Fact Sheet, Quad Chart, Specifications Sheet, BrochureWhite PaperPatents/ Published Patent Applications

ProprietaryTest Protocols and ResultsUnpublished Patent Applications

DemonstrationsWorking, Tested PrototypePresentation SlidesFollow-Along Manual and/or Check List

Legal DocumentsStandard Contract or LicenseOne-Way and/or Two-Way Non-Disclosure AgreementsMaterials Transfer Agreement where Relevant


55


56

The substantive process drives the cost calculationThe cost calculation, together with the revenue projections, drives the net value

56

Net Operating Income/Loss and Cummulated Cashflows with Breakeven

-50000000

0

50000000

100000000

150000000

200000000

250000000

300000000

350000000

400000000

3652

5

3725

6

3798

6

3871

7

3944

7

4017

8

4090

8

4163

9

4236

9

4310

0

4383

0

4456

1

Net Operating Income/(Losses)

Net Difference of Cummulated Cashflows

Process Contribution to Total Project Cost(excl. Investments)

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

Res

earc

h

Fina

ncin

g

Des

ign

Impl

& E

ng

Test

Mgt

Mfg

Pl &

Ctrl

Prc

& Eq

uip

Log

& Di

sp

Man

agem

ent

Dist

& S

rvc

Cos

t in

% o

f Tot

al

57Foresight Science & Technology www.ForesightST.com

57

Technical and firm specific risk are the basis for the discount rate.

Market risk is a probability distribution for outcomes.

Cost vs. Delays for all Risks along Value Chain

0%

5%

10%

15%

20%

25%

30%

0% 5% 10% 15% 20%

Resulting DelaysR

esul

ting

Cos

t Inc

reas

es

58

Risk Level Approximate DR(%) DescriptionRisk Free 10-18 Existing product, high demand,

building more of the same

Very Low Risk 15-20 New well understood technology for an existing product

Low Risk 20-30 New features, well understood technology into an existing market

Moderate Risk 25-35 New product, well understood technology into market with competition

High Risk 30-40 New product, not well understood technology into an existing market.

Very High Risk 35-45 New product, new technology, new market

Extremely High Risk 50-70 New company, unproven technology, new market

Source: Richard Razgaitis, Early Stage Technology


58


59

Focus on the Significant Risks

59


60

Targets and Means MatrixObjectives Action Plan

Obj

ectiv

e 1

(Red

uce/

Incr

ease

)

Obj

ectiv

e 2

Obj

ectiv

e 3

Obj

ectiv

e 4

Obj

ectiv

e 5

Resources Required Who? M

easu

re

J F M A M J J A S O N D Task 1

Task 2

Task 3

Task 4

Task 5

Progress

Time Line

60


61

Any numbers in green found in the following fields can be changed and will be reflected in the tables below

Factor Rate Weight ImpactIndustry Norm 0.0% 0.0 0%

Significance (Breakthrough add 5-10%, Major add 0-5%%, Minor subtract 0-3% 0.0% 3.0 0%Refinement/Maturity of Technology (High add, Low subtract) 0.0% 2.0 0%Breadth and Strength of IP Protection (Yes add, No subtract) 0.0% 2.0 0%Portfolio, Not Single Patent Being Licensed (Yes add, No subtract) 0.0% 2.0 0%Exclusive Market Position in Field of Use Gained (Yes add, No subtract) 0.0% 3.0 0%Immediate Utility in Market (Yes add, No subtract) 0.0% 2.0 0%Commercially Successful (Already Successful in Market add, Not Yet Proven in Market subtract) 0.0% 3.0 0%Competition Exists which Will Inhibit Ability to Exploit (Yes subtract, No add) 0.0% 1.0 0%Foreign Rights (Yes add, No subtract) 0.0% 3.0 0%Sales Conveyed or Highly Likely (Yes add, No subtract) 0.0% 2.0 0%Duration (Over Ten Years add, Under Three Years subtract) 0.0% 1.0 0%Upfront Payment Required (Yes subtract, No or Conditional add, Standard neutral) 0.0% 2.0 0%Minimum Royalties (Yes subtract, no add, Standard neutral) 0.0% 2.0 0%Know-How Included in Deal (Yes add, No subtract, Standard neutral) 0.0% 3.0 0%Support/Training Provided After Initial Transfer (Yes add, No subtract, Standard neutral) 0.0% 2.0 0%Maintenance and Enforcement Burden (Licensee subtract, Licensor add, Standard neutral) 0.0% 2.0 0%Exposure to Liability (Yes subtract, No add, Standard neutral) 0.0% 2.0 0%Total 0%Add to Industry Norm 0.00%RATE 0.000%


62

There is always a reason for NO

Understand itRespond to it

Follow-up, Follow-up, Follow-up

Make a listMust HavesNo WaysNice to Have

Be Fair and ReasonableUse Your Nice to Haves to Negotiate for the OthersWhen you have:

Your Must HavesNone of Your No Ways

Sign


63

Start at the Top and Work Down

“Profit & Loss”ResponsibilityGatekeepers

Always have a NameAsk for the Secretary/Assistant

Practice Your Elevator Speech

Why Calling ThemValue Proposition


64

http://www.arcticphoto.co.uk/gallery2/arctic/peoples/inuitcan/ba0909-10.htm


65

There is a MarketThey Sell (or Want to Sell) to this Customer SegmentAddressable Market SizePull-Through Likely with Customer Segment

Voice of Customer HeardStakeholder Support

Your Good(s) can Capture a Hefty Market ShareA “PEPPY” Value Proposition: Performance, Ease-of-Use, Price, (PEP) and UMPFConcurrent Engineering Underway

Lead Customers ParticipatingDesigned for Price Flexibility


66


67

Poor Richard: “Pride is as loud a beggar as need and a good deal more saucy”

Everyone always Three Options:

Buy Wait/Stall Walk Away

Ask for the DealIF THEY DO NOT BUY …

ASK WHY!Do not be a “true believer”Do not assume they are stupidUnderstand their needs, requirements, and constraints


68

Do you correctly understand why the technology is attractive?What is the decision process and who else is involved in what roles or functions? How long does the decision process take?What criteria will be important and why? What information will they want?What kind of deals have they signed in the past and what do they prefer? Who is (are) the decision maker(s)?Is there other insights they want to pass along to make the process smoother and quicker

69

End User

Project Leader

Sponsor

Gatekeeper

Champion

TechnicalExpert


Poor Richard: “The second vice is lying, the first is running in debt. …It is hard for an empty bag to stand upright”

The deal has to made sound business sense or it is a nightmare to enforceGood Deals are:

Win/Win: Net Positive Cash Flow for All PartiesFair: Allocation of Cash Flow Proportional to Value ContributedSelf-Enforcing


70

Poor Richard: “Always taking out of the pot and never putting in one soon comes to the bottom”

Cash Flow is the Lifeblood of Business

The more risk a party bears, the more upside cash flow potential it deservesCash today is worth less than cash tomorrowThe likelihood of cash tomorrow decreases as total risk increasesAllocate risk to the party able to control it or bear it. Use side payment(s) to make the deal “fair.”


71

Poor Richard: “Those who will not be counselled cannot be helped”

Legal clauses must be taken seriouslyIf you have not been there before, work with someone who has

Not getting your cashGetting the wrong amountGetting Sued

Get Financial folks to confirm the cash flow after taxes & interestGet a lawyer to confirm exposure to liability and difficulty of enforcing


72

Poor Richard: “Fair commerce is where equal values are exchanged for equal, the expense of transport included.”

Value is defined by the product of:

(1) The contribution to the utility for the end-user (a percent)The number of units sold The gross profit per unit

Adjusted by the other costs for the buyer when creating that utilityAdjusted by the risk of realizing the value (discounting)


73

Poor Richard: “We can give advice, but we cannot give conduct”

The decision is management’sDecide on sound business reasons (personalities change as people change)Don’t get greedy

Go back to your three columns: Must Have and No WayCross off items on Must Have and No Way If no No Ways and all Must Haves, sign


74


75

Allocate tasking to the most competent and cost-efficient partyAllocate liability to the party best able to mitigate itStructure hand-offs for success

Clear Deliverables MilestonesProgress PaymentsPenalties

Use transfer payments to make fair



77


78

Develop a straw man Float it then try itAdapt it to reflect comments and reactionsContinue to no adaptation is needed

Clarify Exit StrategySet Goals and Make and Evaluate PlansBuild Brand Name Loyalty and Goodwill

Listen to Your Customers and RespondObtain Advocates Among StakeholdersAlways Set the Quality Bar Higher

Run as Long as First Mover Advantage Lasts, then Consolidate GainsSit on Standards BodiesGet on Industry Panels with CustomersIncrease Intellectual Assets

Drive Absolute Cost AdvantagesEconomiesControl Over InputsCreate Barriers to Entry


79

Revisit Exit StrategyHit Take-Off in Entry Niche then Expand NichesGo Where: Clear Expressions of NeedOpinion Leaders Cross OverCommunication Channels Already Carrying Your MessagesLeverage Scalability and Producability


80


81


82

Market Orientation Launch Tactics

Product Advantage

New Product Performance Organizational Performance


83

Fundamental/ Exploratory Research

Applied Research and Development

Concurrent Engineering

Manufacturing-Sales, Supports

Post-Introduction Improvement

PRODUCTLIFE CYCLE

Expected Results

Demonstrable Steps and/ or Benefits

Relevant Stakeholders

Develop a distinct new technology connected to a market need

Establish technology’s practicability, market potential, and plans for development

Embody thetechnology in production engineered products and/or processes

Get the product or process quickly accepted in the market

Create long-term value by expanding applications of the technology

Technical proof of the ideas, patent, develop vision for the technology

Patent if relevant or not done; ready plans for com-mercialization;prototype, test with key targets

Beta test with key customers, unveil commercial version of the technology, animal trials

Hit take-off (5% -20% penetration)

Obtain substantial financial returns and establish the infrastructure for supporting a product family

Research partners, technical experts in the field

Technical experts, potential investors and other funding sources, targets, end users, opinion leaders in key entry niches

End-users, lead customers, sup-pliers of platform or complementary technologies and products, targets, opinion leaders

Targets, end-users, customers, opinion leaders, others in value network

Company management, others in value network, customers, opinion leaders, R&D partners

Pre-Phase I Phase I Phase II Phase III (and new Pre-Phase I)

Phase III (and new Phase I)

SBIR PHASE

Expanding upon V. Jolly, Commercializing New Technologies, Harvard Business School Press, 1997


84


85Value

Proposition

Phone &

Email

Com

petit

ive

Land

scap

e

Sem

i-C

usto

miz

edM

ater

ial

Non

-Pro

p.D

escr

iptio

n

Asks for More

Info and

Gives

Feedback


86

Ease‐of‐Use


87

•

Nothing happens without a sale.

David Speser

•

If opportunity doesn’t knock, build a door.

Milton Berle

•

A well-defined imagination is the source of great deeds. Chinese Fortune Cookie

getting to revenue

Technology

comforesight science

death needs

enduser needs

pssubstitutes product

product families

test market

market entry risk

competitive openings