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Technology Commercialization through Start-Ups
New
disruptive
technologies often require new
business models. Because
start-up companies
are free to chose or develop a new business model, in this regard start-ups
have an advantage over more established firms. In addition to the risk
incurred in the technological and the economic domains, and the need for
intensive
experimentation, an unproven
business model adds additional risk, and
entrepreneurial
ventures usually are more prepared to accept this risk that would be a
large, well-established firm.
The
business model
itself is an important determinant of profits to be made from a
technological innovation. A mediocre innovation with a great business model
is often more profitable that a great innovation with a mediocre
business model.2
Alternatives to Licensing
Excerpts from the
Strategic Licensing for the New Economy,
by
Dennis Fernandez with Sarah Stahnke, Rebecca
Sheehan and Mary Chow
In deciding how to most profitably
mobilize intellectual property, a company
should consider a wide range of options.
New Venture – If the product and the supporting business-structure
exist in the company, though the risks are high, beginning a new venture of
developing, creative marketing, and
selling
a product promises the highest reward for the intellectual property.
Venture Acquisition – Buying a
new company is less risky than beginning a New Venture because much of the
costly development has been completed and the infrastructure for a
successful production line is in place.
Strategic Alliance – If two
companies share mutual interests, it may behoove both to consider forming a
synergistic
alliance that would enable profit-sharing. Through an alliance, firms may
either use each other’s manufacturing skills to take complete advantage of a
market, or one company may agree to market and
sell products manufactured by another company.
Joint Venture – When two companies have more than a few ideas in
common, they may wish to consider forming a third company as a joint
venture. If the skills and resources of the participants are particularly
complimentary and both sides are willing to diplomatically deal with the
risks, rewards and operation of the company, then this is certainly an
appealing option.
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