So you've got a genius idea - now what?

Intellectual assets can be commercialised but the road from idea to marketplace success can be fraught. Frequently those with the original genius idea are not by nature entrepreneurial or commercially savvy - this is especially true with those from a research or academic background and turning an intellectual asset into something tradable is not a simple, straightforward process.

There is a ‘commercialisation chasm’ that divides the early-stage ‘proof of concept’ from the latter-stage translation of the technology to a product or service. You will need funds, time and staying power to bridge this chasm. No matter how smart you are, this is the time to call in some experts.

The six steps to commercialisation

1. Know what your product or service is and have a working prototype.
2. Assess the idea both technically and commercially.
3. Protect your intellectual property (IP).
4. Have a business plan and a commercialisation strategy.
5. Understand the business side and assess your skills to develop your product/service.
6. Have funding and explore the possibility of grants and assistance.

What is your product or service?

Firstly, you need to define exactly what it is you want to commercialise. Ideally, you need to be able to explain the idea to a stranger in one paragraph. Have a working prototype.

Is the idea commercially viable?

For your idea to be commercialised there must be enough customers willing to pay your asking price and this price, multiplied by the number of purchases, must cover your costs and make a profit for you. So before you start the commercialisation process you need to be sure that the market for your idea exists and that it will bear the cost of your idea.

It is no good thinking you can educate potential customers into wanting what you think they should desire. The most successful commercialisation projects address a market need.

Protect your IP

Are you the first one with this idea?  Have you conducted patent, literature or other searches? Once you are sure your ‘asset’ is yours alone you need to protect it.

Your intellectual property is your asset and you need to protect it rigorously. Even in the early days as your idea is germinating and you are seeking feedback from colleagues and associations you need to protect your idea. Before you discuss the idea with anyone have them sign a non-disclosure agreement.

Once the idea has crystallised there are four main types of IP protection:

• Patent - Patents prevent anyone else using your specific idea/innovation without your consent but they are time and country specific. To be patentable your idea must be new and not have been done before or must bring an existing item to a new stage of development and have industrial/commercial applicability.
• Trade mark - A trade mark (TM) protects your ‘brand’ or ‘name’ from being used by anyone else - again seek expert advice.
• Design - This protects the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colour, shape, texture or materials of the product itself or its ornamentation.
• Copyright -The rights given to authors/creators of original literary, dramatic, musical or artistic works; sound recordings, films, broadcasts, cable programs; the typographical arrangement of published editions; computer programs; and original databases. There is no formal registration process for a copyright.

In Australia, the organisation IP Australia administers the IP rights system - specifically patents, trademarks, designs and plant breeders’ rights. However, be aware, IP protection is not an area for amateurs. Why risk getting this wrong - your whole business will depend on owning your asset - seek expert advice from professionals in this area.

Have a business plan and a commercialisation strategy

After you have established that your idea is technically and commercially viable and you have protected your IP you will need to determine your commercialisation pathway and develop a business plan. You have several options - you can:

• Start your own business venture to exploit IP.
• License the protected IP to larger players for a fee.
• Establish a joint venture.
• Sell the protected IP.

Understand the business side and assess your skills to develop your product/service

If you choose to start your own business you will have to be aware that clients are not going to knock on your door asking for your product - you are going to have to market it. And along with your marketing program you will have to be able to produce the product in a reasonable time frame and then deliver it. At the same time your fledgling business will have to meet accounting, tax, safety, local, state and federal government requirements. Your business plan will have to cover areas such as market research, a pricing and distribution strategy, financial projections, and a market entry and exit strategy.

You really can’t do all of this in isolation - you need to establish strong alliances, research collaborations and commercial relationships if you want to be successful.

Just having a great idea doesn’t mean that you can run a business. Be honest in assessing your own skills and be prepared to pay for assistance when and where needed.

Funding , grants and assistance

Most venture capital-funded enterprises are around three years old when they receive their first round of funding. You are going to need seed capital before this.

There might be opportunities to seek funding and assistance from various sources:

• ATP Innovations Pty Ltd is a commercialisation hub that supports emerging businesses in the life sciences, internet, ICT and electronics sectors.
• AusBiotech is Australia’s industry organisation, working on behalf of members to provide representation and services to promote the global growth of Australian biotechnology.
• AusIndustry is the Australian Government’s principal business program delivery division in the Department of Innovation, Industry, Science and Research.
• Austrade helps Australian businesses of all sizes, across all sectors, to succeed in international trade and investment.
• Australia Technology Showcase is the program, supported by the NSW and Qld Governments, which identifies innovative, market-ready Australian technologies and provides support to expand them to local and international markets.
• Australian Department of Innovation, Industry, Science and Research facilitates the sustainable growth of Australian industries by developing a national innovation system.
• Australian Private Equity and Venture Capital Association Ltd works to ensure a favourable environment for growth in sustainable equity investment and entrepreneurship. It also provides research and facilitates networking throughout Australia.
• Department of Science, Information Technology, Innovation and the Arts (DSITIA) brings together specialist knowledge, networks and services to work with significant businesses and industry sectors in Queensland.
• GrantsLINK is a directory that has information about federal, state and local government funding programs for individuals, businesses and communities.
• IP Australia is an organisation which administers Australia’s IP rights system, specifically patents, trademarks, designs and plant breeders’ rights.
• LESANZ is an Australian and New Zealand chapter of Licensing Executive Society, an international community of innovation and commercialisation professionals.
• NSW Department of State and Regional Development is a division of the NSW Department of Industry & Investment. The division assists in building a diversified NSW state economy that creates jobs.
• Queensland Wide Innovation Network (QWIN) provides Queensland small to medium enterprises (SMEs) with the opportunity to connect with other like-minded businesses and with government and private sector support providers to assist with their business growth.
• South Australian Department of Trade and Economic Development is the South Australian Government’s key economic development agency.
• Tasmanian Department of Economic Development, Tourism and Arts has a range of diverse portfolios, with broader purpose to work together to make Tasmania a prosperous, vibrant and healthy community.
• Victorian Department of State Development, Business & Innovation is the Victorian Government’s lead agency for economic and regional development, and is instrumental in building an innovative state.
• Western Australian Department of Commerce works with the community to ensure high standards of safety and protection for workers and consumers, and promotes and fosters innovative industries, science and enterprise.

Conclusion

While the whole business of commercialisation sounds daunting, you should not let this put you off. Most of Australia’s most successful companies started with an idea.