Sunday, April 3, 2016

Commercializing a Platform Technology

Disciplined Entrepreneurship by William Aulet

  • A gene technology that prevents genetically modified organisms from reproducing with their wild counterparts.  Could work in crops, insects, fish and other organisms.
  • A bearingless engine that can run reliably at high speeds for extended periods without wearing down.  Could work in many industrial settings.
  • A diagnostic test that can recognize the phenotype of a bacterium in an hour, so that the right antibiotic is prescribed quickly, rather than guessing for the first 48 hours.  Could work on multiple types of infections in both primary care clinics and hospitals.

These are just a few examples of the platform technologies under development at the University of Minnesota.  What makes them all platforms?  According to Technopedia, “A platform is a group of technologies that are used as a base upon which other applications, processes or technologies are developed.”  Platforms often come out of Research 1 universities, because they tend to emerge from basic research, which seeks to address fundamental scientific questions about the mechanisms that underlie many natural phenomena. As a result, those innovations may be applied to multiple real-world problems.

From a commercialization perspective, platforms’ very flexibility is both their power and their challenge.  Where to start? 

Despite the temptations of multiple market opportunities, a new product initiative or startup has limited resources, so must choose a first customer segment.  Bill Aulet at MIT’s entrepreneurship center refers to the first application as the “beachhead market.” (He’s building on initial thinking by Geoffrey Moore of Crossing the Chasm fame.) While the battle allusion is unfortunate (a beachhead is defined as the area that is the first objective of a military force landing on an enemy shore), the basic idea is to find a practical starting point from which a new product or new venture can establish and grow.

As described in Bill’s book, Disciplined Entrepreneurship, the characteristics of a beachhead market are:

  • It’s the easiest market segment to capture (not necessarily the biggest)
  • It’s big enough to generate positive cash flow in order to help fund continued growth
  • It sets you up to enter additional (usually adjacent) market segments

Bill goes into significantly more detail in his book and videos.   

At the University of Minnesota, our teams combine the Lean LaunchPad customer discovery process with secondary research to determine their beachhead markets.  Most of the time, the initial market they decide to enter is quite different from the one that they originally expected to pursue.