Contents
Foreword
Acknowledgments
1. ESTABLISHING PERSPECTIVE
1.1 ORGANIZATION OF THE BOOK
1.2 THE IMPORTANCE OF VIEWPOINT
1.3 THE IMPORTANCE OF FLEXIBILITY
1.4 CAN ENTREPRENEURSHIP BE TAUGHT?
1.5 KEY POINTS
2. OUR PERSPECTIVE
2.1 STRATEGY DEVELOPMENT
2.2 TECHNOLOGY ASSESSMENT
2.3 TECHNOLOGY DEVELOPMENT
2.4 TECHNOLOGY MANAGEMENT
2.5 KEY POINTS
3. DEVELOPING AN ENDGAME
3.1 ALTERNATIVE ENDGAMES
3.2 USING ACQUISITION TO FILL IN HOLES
3.3 SHOWSTOPPERS
3.4 ENDGAME OBJECTIVE REALIZED—SORT OF
3.5 WHAT’S A WIDGET
3.6 MAKING IT WORK
3.7 KEY POINTS
4. FINDING IDEAS
4.1 IF YOU HAVE MONEY, IDEAS FIND YOU
4.2 IDEAS MUST BE CONSISTENT WITH THE OVERALL PLAN
4.3 INVENTORS/INNOVATORS MUST BE PREPARED TO GIVE UP EQUITY
4.4 KEY POINTS
5. INVESTING IN IDEAS
5.1 BEWARE OF EYE-POPPING PROJECTIONS
5.2 REMEMBER THIS IS RISK CAPITAL; ONLY A PERCENTAGE OF IDEAS PAY OFF
5.3 STRUCTURE THE PAYOFF WHEN THE SHIP DOCKS, NOT WHEN IT SAILS
5.4 BET ON PEOPLE WITH PROVEN TRACK RECORDS
5.5 TAKE CARE IN ASSEMBLING THE INVESTMENT GROUP
5.6 KEY POINTS
6. ASSESSING IDEAS
6.1 THE ASSESSMENT PROCESS
6.2 THE NEED FOR EXCLUSIVE RIGHTS
6.3 TECHNOLOGICAL ASSESSMENTS ARE EASY; MARKETING AND BUSINESS ASSESSMENTS ARE DIFFICULT
6.4 IDEAS THAT ARE 10 PERCENT BETTER AREN’T GOOD ENOUGH
6.5 NOT SKIMPING ON TIME OR MONEY WHEN A GREAT IDEA SHOWS UP
6.6 TAPPING THE FULL RESOURCES OF THE TEAM BEFORE MOVING AHEAD
6.7 MOVING AHEAD WITH DEVELOPMENT, THEN REVISING THE PLAN
6.8 KEY POINTS
7. PAYING FOR AND CONTROLLING IDEAS
7.1 BUYER AND SELLER WISH LISTS
7.2 USING WISH LISTS TO REACH AGREEMENT
7.3 IS BUYING THE COMPANY A GOOD THING?
7.4 INTELLECTUAL PROPERTY: THE MOST VALUABLE ASSET
7.5 PAYING WITH FUTURE PROFITS WHENEVER POSSIBLE
7.6 KEY POINTS
8. DEVELOPING IDEAS
8.1 REMEMBER: THIS IS BUSINESS, NOT RESEARCH
8.2 MAINTAINING CONTROL OF DEVELOPMENT EFFORTS
8.3 THE GOAL OF DEVELOPMENT IS THE BASIS OF DESIGN
8.4 THE IMPORTANCE OF FEASIBILITY STUDIES
8.5 THE VALUE AND MEANING OF ESTIMATES
8.6 KNOWING WHEN TO CELEBRATE AND WHEN TO CRY
8.7 KEY POINTS
9. DESIGNING AND BUILDING TECHNOLOGY
9.1 THIS IS WHERE THE SPENDING OF REAL MONEY BEGINS
9.2 SIMPLE DESIGNS ARE THE MOST ELEGANT
9.3 THE DESIGN TECHNOLOGY SHOULD BE AS GOOD AS THE TECHNOLOGY DESIGNED
9.4 THE MANUFACTURING SYSTEM SHOULD BE BUILT TO BE FLEXIBLE
9.5 KEY POINTS
10. DEMONSTRATING TECHNOLOGY
10.1 NOBODY WANTS TO BE THE FIRST TO USE A NEW TECHNOLOGY
10.2 EVERYBODY WANTS ALL THE DETAILS ON HOW OUR SYSTEM WORKS (FREE OF CHARGE)
10.3 A DEMONSTRATION DESERVES SOMETHING IN RETURN
10.4 WHEN A SHOWCASE DEMONSTRATION WORKS, INVITE EVERYBODY IN THE WORLD TO COME AND SEE IT (AND NOT BEFORE)
10.5 HOW MANY DEMONSTRATIONS ARE ENOUGH?
10.6 KEY POINTS
11. STANDARDIZING TECHNOLOGY
11.1 CUSTOM SUITS TAKE LONGER TO MAKE AND ARE MORE EXPENSIVE
11.2 STANDARD DESIGNS ARE CHEAPER AND EASIER TO OPERATE (AND FIX)
11.3 MODULARIZE WHERE POSSIBLE
11.4 COOPERATE WITH SUPPLIERS AND PARTNERS
11.5 KEY POINTS
12. PACKAGING TECHNOLOGY
12.1 OVERCOME THE STIGMA OF BEING FIRST
12.2 DETERMINE WHAT NEEDS TO BE DONE TO MAKE TECHNOLOGY APPEALING
12.3 THE ART OF BEING COOL
12.4 PROTECT OUR PROPRIETARY RIGHTS AGGRESSIVELY
12.5 KEY POINTS
13. APPLYING TECHNOLOGY
13.1 OFF-THE-RACK SUITS REQUIRE ALTERATIONS
13.2 ALTERATIONS AND OPTIONS ALWAYS COST MONEY
13.3 MAKE TECHNICAL SUPPORT EASY AND ACCESSIBLE
13.4 GOOD SERVICE GENERATES MORE BUSINESS
13.5 KEY POINTS
14. MARKETING AND SELLING TECHNOLOGY
14.1 THE DIFFERENCE BETWEEN MARKETING AND SELLING
14.2 SELLING VALUE, NOT COST
14.3 DON’ T WASTE TIME WITH PEOPLE WHO AREN’ T SERIOUS
14.4 THE IMPORTANCE OF MARKET SHARE
14.5 MARKETING TOOLS
14.6 MEASURING PERFORMANCE
14.7 TECHNOLOGY QUOTAS AND RETENTION REQUIREMENTS ARE A MUST!
14.8 KEY POINTS
15. TRACKING TECHNOLOGY
15.1 MAKE CERTAIN THE BUYER IS APPLYING THE TECHNOLOGY CORRECTLY
15.2 HOW ABOUT IT IF WE OPERATE YOUR SYSTEM FOR YOU?
15.3 PUBLICIZE SUCCESS
15.4 KNOW WHEN TO MOVE ON
15.5 KEY POINTS
16. MONITORING TECHNOLOGY
16.1 MAKE SURE WE ARE COLLECTING ALL REVENUE THAT IS DUE TO US, AND DEVISE A SYSTEM TO MAKE IT HAPPEN
16.2 ARRANGE FOR VISITORS TO HAVE FREE ACCESS TO CUSTOMER SITES
16.3 OBTAIN ACCESS TO OPERATING DATA
16.4 KEY POINTS
17. IMPROVING TECHNOLOGY
17.1 FIGURE OUT WAYS TO MAKE THE INNOVATION BETTER
17.2 STRING TECHNOLOGIES TOGETHER TO FORM INTEGRATED SYSTEMS
17.3 USING TECHNOLOGY TO INNOVATIVELY TRANSFORM THE BATTLEFIELD: RIPRNET1
17.4 CLOSE AIR SUPPORT A PHONE CALL AWAY
17.5 REMEMBER THAT THE MOST EFFICIENT SALE IS TO A REPEAT CUSTOMER
17.6 OFTEN IT IS MUCH EASIER TO INCREASE PROFIT MARGINS ON EXISTING TECHNOLOGY THAN TO START FROM SCRATCH
17.7 KEY POINTS
18. BUILDING ON SUCCESS AND LEARNING FROM FAILURE
18.1 “CHASE THEM TO THE RIVER ”
18.2 INVESTING IN IMPROVEMENTS
18.3 IDENTIFYING NEW OPPORTUNITIES
18.4 EVERYBODY MAKES MISTAKES, BUT THE BIGGEST ONE IS NOT LEARNING FROM THEM
18.5 KEY POINTS
Bibliography
Index
With regard to errors in general, either falling under the denomination of mental, typographical, or accidental, we are conscious of being able to point out a greater number than any critic whatever.
Encyclopaedia Britannica, 1771 edition
Copyright © 2008 by John Wiley & Sons, Inc. All rights reserved.
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Library of Congress Cataloging-in-Publication Data:
Touhill, C. J., 1938–
Commercialization of innovative technologies : bringing good ideas to the marketplace / C. Joseph Touhill, Gregory J. Touhill, Thomas A. O ‘ Riordan.
p. cm.
ISBN 978-0-470-23007-7 (cloth)
1. Technological innovations. I. Touhill, Gregory J. II. O ‘ Riordan, Thomas A. III. Title. T173.8.T68 2008 658.5'77—dc22
2007030013
To our wives and children
FOREWORD
I have known Joe Touhill since we were college classmates in the class of 1960 at Rensselaer Polytechnic Institute. The characteristics that impressed me most about Joe were his eagerness to take on a challenge, his common sense, and his ability to size up an issue and then lay out a logical plan for resolution. Most important, then and now, is his ability to follow through to a conclusion. Joe and coauthors, Greg Touhill and Tom O’Riordan, have produced a book that is focused on one of the most exciting and rewarding challenges of our time: commercialization of innovative technologies. Economists pretty much agree that innovation on a commercially attractive basis is one of the key economic drivers of our capitalist system. This means having an atmosphere that promotes innovation, with appropriate rewards and incentives flourishing freely. Our system is based on the premise that incentives really do work!
Entrepreneurship is a popular and growing topic in the business world today. There is a buzz about it. The topic is red hot and is a rapidly emerging course of study on most technology and business school campuses. You cannot pick up a business magazine without finding an article on innovation. Furthermore, it is one of the key metrics that analysts look at in rating an organization. How efficient organizations—research, business, government, military and educational—are in utilizing resources to develop innovation is a crucial question. The authors have educational backgrounds in engineering and the sciences with subsequent business training and experience. They have had genuine exposure and responsibility in the world of development on a results-oriented and profitable basis.
The book hammers on the concept of the innovation team and its importance to a consistent and repetitive commercialization process. It identifies the players, their characteristics, how to deal with their idiosyncrasies and what to expect as the commercialization process moves ahead. The book brings all the touchy topics into play: compensation and incentives as well as recognition, rewards, and celebration. The maestro (entrepreneur) inevitably is leading an orchestra of highly strung talented individuals. Embarking on a development process without a realistic understanding of these points is foolishness and costly.
The Wall Street Journal suggests that the overwhelming number of innovative ideas since the end of World War II have been commercialized by U.S. citizens. The book suggests that this is changing. Intuitively, we know that creativity is not the sole province of the USA. Because of improvements in global communications, we are seeing global teams put together for the development of ideas. Much of this team building is to take advantage of lower costs in different parts of the world. The innovation team of the future will be looking for the best ideas no matter where they come from. Global teams that we are beginning to see develop is a perfect lead into the topic that this book features uniquely—the innovation team—and understanding how important this concept is.
The book will not turn a poor idea into a profitable one. But it will ensure that attentive readers get a good commonsense strategy in place for identifying, funding, and developing truly good ideas. Of equal if not greater importance, the book will lead you to set up a screening system so that you can quickly identify ideas that do not fit into your strategy and goal profile. If you come away from reading the book with only one idea—the concept that early elimination of time-wasters is crucial to success on a consistent basis—reading it will have been worthwhile. Time really is precious, and things are moving at an ever-accelerating pace. The book takes you through all the steps in sufficient and understandable detail for ease of implementation. It will help you to avoid wasting time and bring discipline to the creative process. Although this may seem like a contradiction in terms, what is business really, if not the application of discipline? The tension between creativity and discipline is discussed candidly. Healthy solutions can only come about with awareness and knowledge. Good things do not happen by accident.
The book does not shy away from difficult questions such as “Can entrepreneurship be taught”? Addressing difficult questions is a hallmark of this book. Anyone who has been through the commercialization process will recognize immediately that the authors have been there. There is considerable benefit to be derived from their experience. The book is proactive about looking at things that did not go well. How else do we learn if not from our mistakes?
The book is recommended for both students and practitioners (investors, inventors, entrepreneurs, and managers). It will serve as a text for students and as a comprehensive resource for practitioners: those trying to bring innovative ideas to market on a commercially sound basis. The table of contents will serve nicely to direct you to those parts of the process in which you have the most interest.
ROBERT B. SHEH
Managing Partner
Alta Group, LLC
Redondo Beach, CA
ACKNOWLEDGMENTS
Many people and career experiences helped us in writing this book, and it would be a very long acknowledgment indeed if we attempted to identify them all. Thus, at the risk of missing those who truly were influential in guiding our effort, we will thank only a few for their direct intervention and contributions to this endeavor.
Dr. Herbert M. Clark, professor emeritus of physical and nuclear chemistry at Rensselaer Polytechnic Institute, encouraged us in writing this book, challenged us to make it thoughtful and insightful, dispensed considerable wisdom in the process, and as the author of several books, provided us with sound advice on the mechanics of publication.
Dr. Gary F. Bennett, professor emeritus of biochemical engineering at the University of Toledo, wisely guided us to appropriate people at the American Institute of Chemical Engineers (AIChE) who helped us to get the book published.
Dr. Richard D. Siegel, environmental consultant, also a friend and colleague from AIChE, gave us important insights that were valuable in getting ready for publication.
Dr. Kenneth L. Mulholland, president of Kenneth Mulholland & Associates, Inc., and author of Identification of Cleaner Production Improvement Opportunities, provided beneficial information related to his favorable experience in publishing his book through the AIChE-Wiley affiliation.
Stephen M. Touhill, vice president of Clearspring Technologies, Inc., was especially helpful in his review of Chapter 3, and in providing insights into the evolution of emerging high-technology startups.
The U.S. Central Command Air Forces (USCENTAF) team, which was awarded the 2006 U.S. Air Force Science and Engineering Achievement Award for the work cited in Chapter 17, is recognized for its outstanding efforts under very trying conditions. We would like to single out the following officers for their special contributions: Colonel Marty Edmonds, Squadron Leader Patrick Del Guidice, and Major Robert Sylvester.
Disclaimers
The views in this book expressed by coauthor Gregory J. Touhill are his alone and are neither endorsed by nor necessarily reflect those of the U.S. Department of Defense or the U.S. Air Force. Similarly, the views of coauthor Thomas A. O’Riordan are his alone and are neither endorsed by nor necessarily reflect those of the Raytheon Company.