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Optical Design & Engineering

Commercializing Research II: the business side of technology

From OE Reports Number 148 - April 1996
31 April 1996, SPIE Newsroom. DOI: 10.1117/2.6199604.0001

Topics important to successful technology businesses were discussed in an open forum during lunch-time panel discussions on the exhibit floor at Photonics West, 27 Jan. - 2 Feb. The Commercializing Research II program was the second installment in market-oriented educational activities at Photonics West. The current fast pace of business, along with shortened product cycles, produced strong interest in the expert speakers' messages.

Packaging New Technologies For Funding and Profit

The moderator and chair for Wednesday's program was Larry Udell, Executive Director of the Center for New Venture Alliance at the School of Business & Economics (California State University Hayward), and Adjunct Professor at U.C. Berkeley focusing on Technology Transfer and Commercialization.

Larry and I chose the topic for Wednesday's panel because of the common challenges faced by photonics companies as they try to build businesses around technologies. There is money available, there are many viable technologies, and there are important market opportunities. The key is putting together an effective package of these ingredients.

The first speaker was Art Chait, Corporate Vice President of SRI (Menlo Park, CA), and a leader of their activities in commercial research and development. SRI has successfully converted a research group into a profitable commercialization group. Art described market research as necessary but not sufficient for a market strategy. Often the research is not even done, or is not balanced with other elements.

Market research must be blended with market feedback and tempered with technical and cost factors. Beta site customers are key because companies need the bleeding-edge feedback as they develop products. The model placing technologists in one box and marketing personnel in another is obsolete; effective organizations form a continuum from the various groups within a company.

Stephen Massey, Director of the Consulting Group at Raychem (Menlo Park, CA) and author of The Transtion Equation: A Proven Strategy for Organization Change talked about creating a vision or mission statement. Strategic business questions illustrated the process. The first question was "What business should we be in?" He pointed out that this is not nearly as obvious as you might think, and there are many examples of companies that allowed themselves to become obsolete by not thinking this through.

Another key question involves defining what is unique or distinctive about the organization. This needs to be determined for marketing purposes as well as for giving direction and focus to the entire organization. Other questions involved customer identification, style of business, financial concerns, and philosophical issues. Going through this type of focused self evaluation results in a clear vision for the company.

Steven Massey, retired executive from Lawrence Livermore National Labs and EG&G, and current president of MUGWUMP (Livermore, CA) discussed a roadmap for technology and marketing feasibility studies. This type of formal study is particularly important when you're seeking funding, and asks the questions that must be addressed if you want your business to be profitable. Important contents of the study include a succinct executive summary (no more than two pages), patent and copyright issues, potential bureaucratic delays, and an analysis of the competition. Positive and negative issues must be included and supported by data and analysis.

Closing the Wednesday panel discussion was David Schulhof, Entrepreneur, who built and sold three high tech companies by his 30th birthday. They included Complete Computer Services that sold to Logitech, and Envisions Solutions Technology which is the largest direct marketer of scanners in the United States.

David's message was one of continuous problem solving and creativity, and market savvy. Packaging technical products and services in an effective market shell ensures sales volume and funds further development, he explained. He emphasized looking for creative solutions and new approaches.

Funding Commercialization: SBIRs and Alternatives

Thursday's panel was moderated by Gus Zuso, Manager of Technology Commercialization at Optical Shields, Inc. (Menlo Park, CA). Gus has also served on SBIR committees and prepared reports for government agencies on technology transfer. The panel discussed contemporary funding issues.

Gus talked about incorporating SBIR funding into your business plan. This is essential if your business is going to benefit from the funding over the long term. He explained how selection of proposals should fit well with the development needs of your company, and, in fact, companies that find a good match write better proposals.

Gus also spoke about venture capital, which has been increasing. Over 25 percent of this funding went into the Silicon Valley area. The increasing trend in initial public offerings of technology companies has brought even more attention to industries like those at Photonics West.

Carl Nelson, Director SBIR Program, Ballistic Missile Defense Organization (Washington, D.C.) discussed the SBIR and related programs. Carl recommended that interested applicants study the various funding agencies and develop relationships with those writing solicitations, so their proposals can be well positioned.

Denise Beeson, Consultant, Technology Funding Alternatives (Santa Rosa, CA), talked about the various alternative funding sources including industrial partnerships and university grants. Often companies become overly focused on SBIRs and miss the other funding opportunities that are available, she explained.

For further discussion of the Commercializing Research program, watch this column in future issues.

Michael Brownell
Michael Brownell is a technical marketing manager and contributing author for SPIE.