Global Commercialization of Technology

From the Mind to the Market

Richard Kivel

• Chairman: Rhapsody Biologics

• Executive Chairman: ViS Research

• Former Chairman & President: MIT Enterprise Forum Global

• kivel@mit.edu / Twitter: @Kivel1

Goals of this Seminar

•Discuss the Foundations of Entrepreneurship

•Develop a general understanding of Global Technology Sales

•Discuss various Business Models and Customer Segments

•Review actual Case Studies of Technology companies applying Four Important Rules

History:

Wealth and jobs created by Control of Physical Wealth

•Steel•Oil•Land

•Railway•Shipping•Textiles

Future: Wealth and jobs created byControl and Creation of Knowledge• Systems• Methods• Process• Intellectual Property

Entrepreneurship Continues to Change

The EntrepreneurWhat does the successful high tech entrepreneur look like?

• Integrity

• Leadership

• Impatient; bias toward action

• Modest ego. Seeks and accepts coaching. Recognizes, and hires to overcome weaknesses.

• Pragmatic; willing to compromise Rejoices in others’ victories

• Driven to solve a valuable problem for customers

• Able to attract world class talent.

The Entrepreneurial Ecosystem

Success

Entrepreneurship

Innovation Commercialization

• Focus on entire entrepreneurial ecosystem Innovation as both a catalyst and

consequence of entrepreneurship

• Iterating at all times

• All three activities are critical

in order to succeed

Quality of technology Strong patent(s) Supports several new products Large market potential

Quality of management Focused strategy Thorough market understanding Realistic product development

plan

Success Factors – Commercializing of Technology

Quality investorsTrack record building successful businessesNetwork of connections with partners/customersPersonal involvement with businessAccess to money over long term

PassionTechnologistsManagementInvestors

The Business Model

def: A method by which a firm uses its resources (cash, technology and people) to offer its customers better value than its competitors and make money doing so.

It tells who pays, how much and how often.

Components of the Business Model

1. Value Proposition 2. Market Segment 3. Value Chain Structure 4. Position in the Value Network 5. Revenue Generation and Margins 6. Competitive Strategy 7. Stage of Development

Different Models to Evaluate

Direct Mass Media

Retail Telemarketing/ Phone

Sales

Channels, Distributors and Partners

Trade Shows and Conferences

OEM Channels Internet - Web

Different types of Customer Segments

What Business Model and Why?

• Apple - Dell

• Citibank - American Express

• SouthWest - Virgin Air

• Patek Philippe - Swatch

• Cuisinart – Nespresso

• Bentley – Cadillac

• Vertu – Nokia

• AT&T vs. SKYPE

Direct SalesConsumer or Business

Positives:• High Contact• Customer relations• More Control• Multi-Purpose • Experts in the field

Negatives:• Free Consulting• May not like rep or rep

leaves firm• High Cost• Retention

Distributors & Channel Partners

Positives:

• Cost of Sale is Low

• Hands-off Sales

• Exposure in new markets

• Credibility

• Competitive Edge

Negatives:• Up-front fees• No control• Distant clients• Performance• Technical Pressure• Require lots of

attention and training

OEM Channels(Original Equipment Manufacturer)

Positives:

• Prestige and Publicity

• List Sharing

• Royalties / steady revenue stream

• Increase Market Presence

• Technical Control

Negatives• Competitor envy• Technical pressure• Channel Conflict• Your reputations are

linked

Other Examples

• Retail

• Internet

• Service Providers…….

The 4-P’s

FOUR RULES TO FOLLOW

Rule 1: Succeed Close to HomeCase Study: Baufest

(If you don’t know where you’re going you’ll probably wind up somewhere else)

• Anyone can go Global: Doing it Profitably is the real challenge

• Commitment from Management (without “support” your plan is a dream)

• Establish a base of success • Enter new Markets carefully

– Language– Business Models– Employment Laws & Regulations – Market– Competitors

Rule 2: Leverage PartnersCase Study: MolecularWare

• Understand core competency • Choose Partners who give multiple points of

entry to the market• Manage those partnerships carefully• Hire and attract the best people• Raise money when it is available

Rule 3: Think Globally Case Study: ViS Research

• Global distribution of talent and resources• Meaningful (not necessarily profitable)

partnerships are critical in the early days• Close the big names at (almost) any cost• Quality Quality Quality

Rule 4: Create MagicCase Study: DEKA

Collaboration is key for success in early stage ventures External support can play an important role Measure success – continuously: assess, evaluate and adapt Take risks early, but leverage partners Look towards the future and identify trends Act Boldly & Change the World

Summary / Key Takeaways

Global Commercialization of Technology

From the Mind to the Market

Thank you

Richard Kivel

Twitter: @kivel1