Most companies make extensive use of technology in the delivery of their products and services, regardless of the technology intensity of those products and services Many companies develop technology of their own because those products and services Many companies develop technology of their own because suitable technology is not available commercially. Such technology can have significant value. For example, a paper mill might develop a software package for maintenance scheduling that has applications outside the paper industry.
A past review of twelve sectors of Canada’s resource industries by Doyletech Corporation indicated that their combined intramural spending on research and development (R&D) amounted to $1.1 billion. By making certain assumptions about how much of this spending was related to the development of their own proprietary technology (sometimes referred to as their “secret sauce”) versus the development of technology that could be shared with other companies and other sectors, it was estimated that $228 million of the $1.1 billion (at the time) was spent on the latter.
The pool of technology created by these expenditures represents an unusual opportunity for the delivery of technology-based products and services either by these industrial sectors or others. The major challenge is to identify individual opportunities and put in place the appropriate commercialization vehicles.
The first step is to compile an inventory of such technology in an individual company and translate it into business opportunities that can be evaluated by senior management. We have developed a tool that is useful in establishing the dialogue necessary for such evaluation. Referred to as a Business Opportunity Document (BOD), it identifies the most likely business opportunities, the products and services involved, their target markets, their potential sales, and the commercialization processes. In effect, it is a highly condensed new venture business plan and is usually limited to less than four pages in length. BODs have been explained elsewhere on the Doyletech website.
Work is required to identify the opportunities with the most potential and should include an inventory of BODs. In either case, detailed discussions are required with the technical personnel who are most knowledgeable about the technology. Our experience has shown that such people are also helpful in identifying the target markets for the products and services.
In instances where the company that develops such technology also wishes to be involved in its commercialization, possibly in partnership with another company, we can help in the development of the appropriate corporate structure.
Neil Knudsen is Doyletech’s Entrepreneur-in-Residence (EIR) and plays a major role in our Entrepreneurial Services & Board Development (ES) practice area.