From Research To Business Concept
Assessing commercial potential and develop the business proposition
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Purpose of the material
The purpose of this training material is to provide research staff with hands-on
advice, good examples, tools (e.g. check-lists and templates) and the typical tips and
tricks, which are useful when determining the market value of a research project and
when approaching investors or business partners.
The ambition is not to go into detail, there is a multitude of books that already do this
better, but to provide a first introduction.
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Demystifying the market
Solvency
Reports
Balance
Vertrieb
Production
Research
Tools
Taxes
Capital
PR
Software
Technology
Team
Investors
Financing
Development
Potential
Business plan
Venture
capital
Soft funding
Product
USP
Partner
Idea
Cash-flow
Deal
Share
Communication
Assets
Management
IT
Networks
Cooperation
Negotiations
Service
Market
Demand
Support
Guidelines
Business development
Marketing
Licensing
Customers
Statutes
4P
IPR
Top-down vs.
bottom-up
Patents
Intellectual
property
PLC
Due Diligence
Human capital
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Liabilities
Typical misconceptions
„The technology will sell itself!“
„First product development, the rest will come later“
„My technology is the best!...“
„…there are no competitors!“
„Venture capital investors are all criminals, who want to take over my company!“
Citations matter, the rest can come later!
„Small and slow means low risk!“
„It‘s not ready yet!“
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„Scale-up“
The two topics of the presentation
Assessing the commercial potential
Creating a business proposal
1. Key markets
1. What is a business plan?
2. Commercialisation strategy
2. How to write a business plan?
3. Internal valorisation
3. Who are potential investors?
4. Tools and methods
4. What will I be asked?
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Part 1
Commercial potential
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Part 1: Key markets
 Objective: Assess all potential market applications for your technology. There
will be more than you think!
 Advantages:
 Save costs and time in the R&D process
 Maximise sources for funding
 Maximise the success of the actual business
 Prevents:
 Development of the “wrong” product
 Unattractive IPR
 Unattractive business case
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Part 1: How to identify potential markets
Colleagues, experts,
professionals
(e.g. scientific experts,
intermediaries,
technology transfer
specialists, industry
professionals)
?
Market
Creativity techniques
(e.g. brainstorming, 6-3-5
method, analogies)
Market studies
(e.g. non-public & public sources, primary & secondary sources, Google, commercial
databases and market studies, interviews and questionnaires)
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Example 1: The story of The Microwave
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It all started with the Magnetron..
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And melting chocolate..
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And ended up with..
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And maybe some less commercial products..
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Example: The patent
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Example 2: SmartFreshTM
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Example 3: Splenda® Sweetener
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Part 1: Evaluation and selection criteria
 Evaluate the market applications you have identified
Current situation






Competitors
Current status of the market? 
Geographical markets?
Actors and market share?
Products?
Market segment

 Their strengths/weaknesses? 
 Market share and prices?

 What is your USP?

Who are they?
Size?
Growth?
Match product – demand?
Differentiation?
Niches?
Sales?
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Always be
prepared to
rethink your
proposal!
Part 1: Selecting a commercial strategy
 Many options
 Select the one you are most comfortable with
 Risk vs. reward
Different strategies
Low risk –
low gain
Medium risk –
medium gain
High risk –
high gain
e.g. contract research,
fee-for-service and
patenting & licensing
e.g. joint venture, startup company
e.g. EU projects
(Further development
and research through a
public funded
programme)
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Part 1: Increase value thr. internal valorisation
 Value (in Euro) is determined by market knowledge and market maturity
 The more information about the market and the actual value of your product you
have, allows you to better put a value on your product
 The closer you are to a proof-of-concept, the higher the value of your product
(idea stage: high uncertainty and risk = lower value; first sales: lower uncertainty
and risk = higher value)
 Increase value through
 Market knowledge (incl. business case/plan)
 Professional IP strategy
 Validation studies / publications
 Prototype
 Demonstrators available to customers
 Pilot customers / first sales
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Questions?
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Part 2
Attracting investors
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Part 2: Who can finance my idea?
 Out of my own pocket
 My employer (e.g. many universities/PRO have internal
funding programmes and can help to finance smaller amounts
or through the use of equipment/personal)
Early stage/
smaller
investments
 Public financiers (e.g. regional, national and international
bodies all have programmes to support technology
development, early stage companies and SME)
 Banks (e.g. through loans)
 Business angels (individuals/benefactors, steady increase
over the last 10 years, usually contributing with cash,
expertise and networks)
 Venture capital (private companies focusing on creating
revenues through early stage investments in high potential,
high risk ventures, contributing with cash, expertise and
networks)
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Later stage/
larger
investments
Part 2: How do I present my idea?
 Usually through a business plan
 Why do I need a business plan?
 Point of departure for your company
 A living document combining current status with future vision
 Forces you to constantly rethink and reassess your business idea
 Marketing material for your business idea
 Gives investors insight into your concept
 Can be evaluated
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Part 2: What is the aim of the business plan?
 The business plan shall convincingly show:
 How the idea will be developed and successfully exploited
 The capabilities and experience of the team responsible
 How the associated costs will be financed (incl. future rounds)
 Proposed exit mechanisms and timing
 Key questions that shall be addressed:
 What is unique about the idea?
 How is it protected (IPR)?
 Who will buy it and why?
 What price will it sell at and what will it cost to deliver?
 Who will be the competition and how will it be resisted?
 When will the company start having income and will break-even be reached?
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Part 2: Instructions for writing a business plan
 Keep it short (no more than 30 pages)
 Adapt the content towards the relevant target group (i.e. several versions okay!)
 Supporting data is best presented in the appendix
 Aim for an easily understandable language (not too technical)
 Mesmerise the reader
 Use sources for backing up facts and figures
 The information should be sufficiently concrete to base decisions on
 Ask colleagues and experts for feedback
 There is never a final version of a business plan, only a latest version!
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Part 2: Components of a business plan (1 of 3)
 Executive summary
 Capture the interest of a reader
 Summarise the most important details
 Keep it short (1-2 pages)
 Business concept
 Describe in a clear and understandable way how your business idea solves a problem
 Focus on the USP
 Cover IPR
 Go easy on technical detail and use graphics to illustrate your product
 Management team
 General rule: The people behind the idea are just as important as the idea itself!
 Present the members and their distinguishing features
 Do not be afraid to point out which competencies you lack
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Example: Executive Summary
Type of Business
CatchMabs will be a specialist biotechnology company with a focus on agroindustrial applications
for designer affinity proteins.
Company Summary
CatchMabs will apply specially constructed protein molecules to capture valuable or harmful
compounds from bulk industrial waste flows, using affinity chromatography columns. These
molecules, called industrial molecular affinity bodies (iMab), have the ability to bind with specific
organic compounds, much like antibodies do in blood. The proprietary, stable molecule design
allows for application in bulk scale industrial process flows. We will supply complete purification
solutions with immobilized affinity bodies at unprecedented low prices bringing together two
separate worlds: molecular protein engineering and agro-industrial processing industries.
Etc…
Source:
Kubr, T., Marchesi, H., Ilar, D., Kienhuis, H., Starting up - Achieving success with professional business planning, McKinsey & Company, 2003
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Example: Management Team
The start-up team combines decades of experience in molecular and processing technology in
agro industry and is complemented with commercial business and financial backgrounds.
Dr. Peter C. Sijmons (founder, technology acquisition and strategy) has a long track record in
plant biotechnology. After a PhD in plant physiology, he was one of the first science employees of
Mogen in Leiden, now a Zeneca Subsidiary…
Henk-Jan de Ruiter MSc (co-founder, early stage development / finance) is involved in start-up
and financing of innovative companies and public-private (real-estate) projects. He was manager
of a seed-capital fund…
Sijmons will be the CEO during the start-up phase, but when the growth of CatchMabs requires
additional expertise, a CEO with a strong business background will be attracted to strengthen the
management team and Sijmons will transfer to another management position in CatchMabs.
Tournois and De Ruiter are actively involved in the establishment of CatchMabs but will
eventually transfer to a board position. A start-up team of scientists and technicians with relevant
hands-on experience is already selected and will be available for CatchMabs on short notice…
Source:
Kubr, T., Marchesi, H., Ilar, D., Kienhuis, H., Starting up - Achieving success with professional business planning, McKinsey & Company, 2003
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Part 2: Components of a business plan (2 of 3)
 Marketing
 Who are your customers (segmentation)?
 Who are your competitors and which substitutes exist?
 How will you position your product?
 How large is the market and what will be your market share?
 Business system and organisation
 The business system described the activities that need to be performed to deliver
your product to the customers
 Organisation: How are the responsibilities allocated? What characterises how you
work together in your organisation (corporate culture)?
 Realisation structure
 How will you realise your business idea? Use work packages and milestones to
visualise and to reduce risk.
 How will the work packages and milestones change as the company grows?
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Example: Business System
CatchMabs will focus on R&D and the development of applications for the iMabs
technology. Within the agro-industry it will be active in product development, marketing
and sales. For other sectors these activities will be organized in spin-offs, joint-ventures
or licensed partner companies.
CatchMabs will generate three forms of revenue:
• Bulk sales of iMabs for industrial applications kg quantities, production outsourced to
third party manufacturers)
• Royalties related to the value of recovered products (depending on
quality and stability of our iMabs, market price of the target product, etc)
• Licenses to sectors outside our core-business (pharma, chemical, etc.)
Source:
Kubr, T., Marchesi, H., Ilar, D., Kienhuis, H., Starting up - Achieving success with professional business planning, McKinsey & Company, 2001
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Example: Business System
Source:
Kubr, T., Marchesi, H., Ilar, D., Kienhuis, H., Starting up - Achieving success with professional business planning, McKinsey & Company, 2001
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Example: Realization Structure
Source:
Kubr, T., Marchesi, H., Ilar, D., Kienhuis, H., Starting up - Achieving success with professional business planning, McKinsey & Company, 2003
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Part 2: Components of a business plan (3 of 3)
 Risks
 Be open about the risks you see.
 What risks can threaten the success of your company?
 How will you mitigate these risks?
 Base case vs. best case scenarios
 How will you survive and tackle a worst case scenario?
 Financing
 Cash-flow, profit/loss statements, balance sheets are a requirement.
 Forecasts for the next 3-5 years
 What is the financial requirement until break-even?
 Where will this capital come from?
 What does the deal for potential investors look like and how will investors realise
their profits?
 Appendices
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Example: Financing
Our growth forecasts predict a break-even in the 4th operational year, with sales volume
(excluding subsidies) reaching €2.4 million in year 4 and €13.8 million in year 5. Sales and
gross margin can grow at a high rate as a result of royalty income on industrial
applications and license fee income.
Net income is expected to reach €7.5 million in year 5. The founders have provided start-up
equity of €140,000. An initial investment of €250,000 in equity and debt is planned from a
launching customer, matched by the Biopartner investment fund. Combined with
subsidies, this will suffice for the proof-of-concept for industrial applications that is based
on our proprietary technology.
Once the technology is validated, venture capital will be attracted for product development
and marketing activities into different industrial sectors. Already at this stage, the valuation
of the company can be substantial, as is illustrated by comparable technology platforms,
yielding a high ROI for the first investors.
Source:
Kubr, T., Marchesi, H., Ilar, D., Kienhuis, H., Starting up - Achieving success with professional business planning, McKinsey & Company, 2003
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Part 2: Check-lists and templates
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Questions?
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Thanks for listening!
XX Person, Company
www.xxxxxx.com; xxx@.abccom
+xx xxxx (office); + xx xxxx (cell)
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