Same ideas, new markets – using IP as a driver for diversification
By Dan Ahearn – Head of Engineering Technology at 42 Technology
Game-changing innovation is inspired by the context surrounding it. Typically, this means either a spark of realisation that you can solve a frustration shared by many people, or that a new breakthrough technology enables a new product – the standard market pull and technology push models.
For most companies this means developing innovations in their own market; investing in R&D and keeping an eye out for new opportunities as the context around them changes slowly. However, this misses the opportunity to force a change in context – taking an innovation that you’ve already invested in, and parachuting it into a new market.
The big question this raises is "How?" (and Where? and What?)
In this article we outline a three-stage approach that we’ve found helpful in answering these questions at 42 Technology – taking a step back to review the IP portfolio objectively, identifying opportunities for those innovations, and assessing those market opportunities.
1. Reviewing the IP
First things first: IP doesn’t just mean patents. IP includes anything where you’ve invested in knowledge in a way that makes it difficult for a competitor to follow. This could be anything from trade secrets (what’s the Coca-Cola recipe?), to specialist manufacturing knowledge (what are the right process conditions for vulcanising rubber?), to patents.
Many of our clients already have this information at hand, but with a focus on how the IP protects their current product range. There’s also often a difference of opinion as to what is and should be protected, between the IP team and technical team.
We’ve found it critically important to strip the IP back to its core parts to identify what’s truly innovative, and where the functionality couldn’t be easily replicated another way. These can then be grouped and considered together to define the scope of protection in an easily digestible way. (N.B. This is also useful when considering how a competitor might enter your market!).
Overall, the question we’re trying to answer is ‘What are the one or two big innovations here that someone else couldn’t just copy?’
2. Finding the opportunities
This is the creative part, but it’s not completely blue-sky. We know what the innovation is and we’re looking for the killer application. We’ve found that the best place to start is within your own supply chain, as this is where you’re most likely to understand the frustrations, and where your brand carries the most weight.
Let’s say you have specialist IP around precise control of aerosol generation. Which of your suppliers and customers use spray systems? Which use coatings? Which have drying processes or need to control moisture levels? Once you’ve considered the markets close to you, you can cast the net wider. What about fuel injectors? Home humidifiers? Sanitising sprays for healthcare applications?
This broader investigation is where an external viewpoint can be invaluable. A set of varied experiences across a range of industries can bring insights that an internal team can miss. This is often where our clients find our experience across a range of sectors really brings out new opportunities.
3. Assessing the market
Once a long list of plausible opportunities has been compiled, the next step is to think through what the offering would be in each case and how it would compare to the incumbents. In the case of our precision aerosol fuel injectors, it may be that the improved dispersal gives better combustion, but that we just can’t match the lifetime of piezo actuated injectors, and product life is critical in the automotive industry.
This understanding can come from independent research but also from discussions with people in those industries (which is much easier if you’re looking within your supply chain). The aim here is to slim down the list to opportunities where there’s a clear advantage over the incumbents.
Finally, the important question: is it worthwhile to enter the market? Commercialising innovations is a well-studied and complex topic, but three important issues can often yield to some initial research: how much of an advantage would the IP confer, how large is the market opportunity, and how challenging will it be to amass the required 'complementary assets' - everything else that you need to enter this new space, from manufacturing to accreditation to a distribution channel?
Moving into a new field may not always require large amounts of investment: strong IP opens up the potential for licensing and partnerships, which can greatly reduce both the sum required and the time to market.
New business areas
Organic growth isn’t always enough for shareholders, and many large businesses challenge themselves constantly to find new domains that can eventually become the next business unit. In almost every case, these ventures build on an existing capability or intellectual property. We’ve outlined a three-stage approach to uncover the strengths of your IP, work outwards to adjacent applications, and then screen these to find promising new business areas. The journey from here may be long, but it’s a strong beginning.
If you would like to find out more please contact Dan:
answers@42T.com | +44 (0)1480 302700
Dan has extensive experience working in the early stages of product and process innovation, taking client aspirations and turning them into tangible, workable solutions. He works across industries within 42 Technology’s innovation team to apply a toolbox of structured innovation tools to problems ranging from food manufacture to diagnosing TB.
Over the last 5 years Dan has looked to apply these innovation tools to IP analysis to develop a service to help clients better understand and make the most of their IP.
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