Tuesday, July 29, 2008/
Supply-push? Demand-pull? There’s got to be a smarter way. BRENDAN LEWIS
By Brendan Lewis
I’m feeling a bit feisty, so I thought I might bring up the topic of commercialisation.
I have just finished up directing an interesting all day forum for the InnovationXchange on the intersection of food and pharmaceuticals. During the conference, I found out that we (Australian scientists) now have the capability to treat a number of diseases by delivering pharmaceuticals in food.
A specific example given was the clear opportunity to alter the proteins in some cereal crops so that we can have “non-toxic gluten” cereal crops (easily do-able). People suffering from celiac disease can then have a sausage in bread and a beer at your BBQ, without paying for it a couple of hours later. People on gluten-free diets currently spend around an extra $1000 a year on their diet and there are 600,000 of them in Australia alone. Nice opportunity for the guys with the IP.
Anyway, while talking to a huge variety of people as I was putting together the forum, I found I ran into a large number of commercialisation experts.
Most of them weren’t coming though as they were off to a biotech function in the US. I wasn’t really stressed by this (other than from a revenue point of view) as commercialisation people tend to make me feel quite uncomfortable.
Commercialisation is a reasonably new word and every research institution now has some “commercialisation people” as employees. The commercialisation people are thought to be more business focused than their research colleagues. The plan is that the commercialisation people will licence their institutions intellectual property to a multinational, or sell it direct to customers. Apparently millions will be made.
As I mentioned though, these people tend to make me feel quite uncomfortable, and here’s five reasons why.
1. People who deal in commercialisation almost always deal in what I call “supply push” innovation. Basically trying to create a revenue stream from new intellectual property that has been created. The problem here that I see is that although supply push type innovations may have potential to generate extraordinary returns, they are unlikely to. They are a solution looking for a problem. The converse of this is “demand pull” innovation, new intellectual property created to solve existing customer needs. This type of innovation is guaranteed to generate revenues. Note that commercialisation experts don’t bring these solutions to market, its marketers and salespeople. Which brings me to………….
2. I feel that the concept of “commercialisation” is an abstraction from real business. Although we don’t like to talk about it, every business has the same model, we all generate and harvest customers; just our specific executions are different. So at the end of the day if you’re not talking about customers and selling, then you’re not in business. Doesn’t matter whether you’re using fancy multisyllabic words, spending a small fortune on IP lawyers, travelling the world and meeting complex KPIs. You’re not in business.
3. People involved in commercialisation appear to have a very limited world view. They tend to disregard businesses that don’t have unique IP that’s being managed. They appear to have no gut feel on the importance of brand, business models, distribution networks and unique selling propositions. Every successful business that doesn’t have unique IP is seen as an aberration (note to car and petrol companies, you’ve apparently got it wrong!) Having a science degree and an MBA simply means you have a science degree and an MBA. It doesn’t mean you are hungry or can negotiate worth a cracker. Which brings me to………….
4. I have yet to meet one that has serious revenues under their belt. They always seem to be in current negotiations with a major multinational, or have closed a deal but revenues haven’t actually started to fall.
5. It’s usually my taxes paying for these people. (I don’t think I need to expand on this further).
So next time a public servant with an MBA tells you he is a commercialisation expert, smile and move on quietly. Or if you’re looking for some action, ask him or her, how much revenue they have booked this year.
And for those of you I have pissed of by this blog, the solution is simple. Get an entrepreneur to review your opportunities and some real salespeople to sell your IP!
Brendan Lewis is a serial technology entrepreneur having founded : Ideas Lighting, Carradale Media, Edion, Verve IT, The Churchill Club, Flinders Pacific and L2i Technology Advisory. He has set up businesses for others in Romania, Indonesia and Vietnam. Qualified in IT and Accounting, he has also spent time running an Advertising agency and as a Cavalry Officer with the Australian Army Reserve.
To read more Brendan Lewis blogs, click here.
Walter Adamson writes: Brendan, you’ve struck on a number of sensitive topics because you’re prepared to say that the emperor has no clothes. Innovation has become an “industry” frequented by people who want to make you believe it is something akin to creativity and being street performers within your organisation – which it is not – your point 2. Business innovation is 99% about continuous improvement and is always 100% about wealth creation. It’s not invention and businesses that think that have got themselves confused and gone bust – there is a history of wealth destruction because these businesses were enchanted by the innovation industry snake charmers.
Commercialisation is a very valuable process, but the people feeding off your tax dollars generally have woefully inadequate processes and almost always have the wrong people in the wrong jobs – your points 1, 3 and 5. Because they have processes which fail to address you points 1 and 3 in the proper order they by definition cannot recruit the right people because they have no job definitions for the right people.
But best to ignore it all and just get on because people have been trying for a decade with no result!!
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