Few, if any revolutionary products are the result of a random flash of insight leading to a multimillion dollar company in a year or two. More likely, inventions are the culmination of years of research, testing and process development ultimately leading to patentable intellectual property. Inventors often must focus all of their energies for years before such discoveries and processes become practical. The goal – the development of new technology – is well matched to the environment in research facilities that are funded and managed to enable this process as efficiently as is practical.
Establishing a business to commercialize inventions has a radically different goal – to build a profitable entity. The measure of success is actually more precise and observable than any set of parameters associated with the invention itself – the businesses’ profit. The invention itself is essentially a part of the businesses’ toolkit to build and sustain a profitable entity. It is one element of a complex human structure that delivers value to others in society, joined by other skillsets that manufacture, market, finance, sell, and manage the process. Successful companies use their initial IP to get started, but learn quickly how to build on that early success to provide a rich set of offerings far beyond the initial conceptions.
Implications – prioritization of development over research
Since the measure of success and survival in a business is so absolute, all other concerns take a secondary role. If one is lucky, perhaps this fact is never seen explicitly, but given the levels of risk in starting new companies, one should never forget that fact. In practice, this means that there is nothing sacred – the product, the customer base, the personnel, the business model itself. All focus by the entire company will be on financial survival using all of the tools at their disposal. As the level of uncertainty for an activity is inherently risky, a key success factor of new companies is in minimizing risk – using 99% known technology with experienced people to “encapsulate” the risky, but essential, key innovation. For that reason, only under the rarest of circumstances can a company afford to spend energy on basic research that carries risk.
To the extent that inventors can dedicate themselves to these very different, but equally difficult challenges in creating an operational human organization that creates this value, the business is more likely to succeed, since without their know-how, it is rare that a business can be born. On the other hand, it is also rare that inventors, who have dedicated a significant portion of their lives to focusing on a particular area of technology, are prepared to let those skills dissipate as they focus on the complexities of business creation and the very different measures of success.
The Impact of Time
Further, in business, time is a truly precious commodity – best measured in hours, days, and weeks rather than months and years. A small 10-person startup burns through enough cash to buy and destroy a new BMW each week. Learning to manage time to that level of resolution is radically different than typical research cycles of 1-2 years. Markets change, requirements change, regulation changes. As the cost of change rises exponentially as products come closer to market, the need to set a target and execute on it quickly is absolutely essential. Startups typically get only one chance to produce a profitable product. If they miss their window of opportunity, they will be closed.
The most precious asset – the team
Finally, businesses are team efforts. The concept of a business itself must be understood to be nothing more than a group of people focused on a common goal. The level of efficiency and productivity that a great team can obtain is far beyond that of its members individually. Ensuring that the team is balanced, resources are allocated appropriately, that the right culture is developed to ensure high effectiveness is in itself a critical requirement for business success. Great teams are made of individuals who are leaders in their own right, and have the experience to create structure and organizations where there has been none before. These skills are not necessarily taught in corporate or academic settings, so developing teams with these skills is both difficult and essential.
Building a new company can be one of the most thrilling and terrifying thing a person can do, as there is no feedback to you actions other than the immutable measures of profitability and growth. Being clear from the beginning about ones’ goals and being realistic about one’s desires for participating in this process is essential for the Inventor, as it is for all who choose to dedicate themselves to this kind of effort.
Innovations Commercialization is committed to ensuring that companies get started on the right foot, since with clear goals, a cohesive team and a revolutionary concept, great companies are formed