Seminar on innovation, valorization &

technology venturing
Session 3: “Start-ups creation & acceleration (I)”
UC3M (Madrid), 7 of February, 2014
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3.3
SESSION 3: START-UP CREATION AND
ACCELERATION: PRESENTATION AND OBJECTIVES
 Objectives and agenda
 Content:
• Discussion of previous session’s assignments
• L3.1: Start-up creation basics
• L3.2: Valorization and benchmarking
 Conclusions

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3.3
OJECTIVES AND AGENDA

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 Specific Objectives

• Understand what is a start-up and the need of new

management paradigms.
• Get into the principles that support the model "lean start-up”: a
reference for the launch of new products in highly uncertain
environments.
• Learn some techniques and practical models, such as the
"Lean Cycle" , “MVP” (Minimum Viable Product) or the
"Product Pivot".

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 Agenda Agenda

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3.3
SESSION 3
L3.1: START-UP CREATION BASICS

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 The start-up nation

“Life is too short to keep building something nobody

wants”
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 What is a start-up?

An organization designed to create a new product or

service under conditions of extreme uncertainty
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 Market approaches lead to different start-ups’ types

1) New entrant into an 2) Creators of a new

existing market market

3) New segmentation of 4) New segmentation of

an existing market as a an existing market as a
“low cost” player “niche” player
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 The need for new managerial approaches

Uncertainty Risk
“lack of certainty, there is more than “uncertainty where some
one possibility or suitable action to a possibilities lead to a highly
specific problem” undesirable scenario”
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 Some famous scheme: lean models

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 The equation for a successful venture

MV = C x Mng x O x Ecm x Ecp,

“C”: economic context.
“Mng”: managerial skills.
“O”: opportunity size (upside).
“Ecm”: team’s commitment.
“Ecp”: team’s capabilities, knowledge.

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 What abut the funding?

Valuation—what you need to know (NATURE BIOTECHNOLOGY VOLUME 22

NUMBER 8 AUGUST 2004)

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 So… What is the main risk of a start-up?

Weird Useless Wrong strategy

To create or design a product/service/solution that

nobody wants
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 How can we deal with “start-ups” risks?

 The mitigation of the risks

associated with a new
product requires early-
stage interaction with the
prospective customers.
 The way to do that is
through prototyping: MVP
(Minimum Viable
Products) to obtain
“validated knowledge”.

An start-up is a suitable vehicle to learn about a certain

product/market in a fast and reliable way
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 A well-known MVP

“Version of a new product which allows a team to collect

the maximum amount of validated learning about
customers with the least effort” Eric Ries
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 Putting all together

Problem/solution Product/market
Fund
Development
Fit Fit raising
Am I solving a real Does anyone want my How can I make my
problem? product? business grow?

Before P/M Fit After P/M Fit

Objective: LEARN Objective: GROW
Develop “experiments” to validate our Optimize model’s
solution/product and related hypothesis hypothesis to speed up
growth

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Assignment 4: Prob./Solution Fit  a “cloud” security solution
Objective: Define an strategy to assess the hypotheses of “cloud” security solution

Brief description of the technology:

• There are many Cloud applications in which service
providers must process clients’ personal, private or
confidential data.
• Apply privacy-preserving techniques to these data for
operating on them through “Signal Processing in the
Encrypted Domain(SPED)”.
• The client obtains the processing results, assuring
that the server cannot get his private data
• Additionally, server's privacy is also kept.
• The technology is based on (fully) “Homomorphic
Encryption”.

Work in groups:
(1) Identify the actual problems that the customers really have. That is, which are their current
concerns regarding cloud and IT security technologies.
(2) Outline the different actions you will execute to gather such ―customer’s knowledge‖.
(3) Create an action plan (if needed) to bridge the gap between the solution and the customer’s
needs (problems).

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 Key ideas Key ideas

Specific managerial
approaches must be
considered when dealing
An start-up is the most with start-ups: from
suitable vehicle to obtain uncertainty to risk
validated market management
knowledge about a certain
product

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3.3
SESSION 3
L3.2: VALORIZATION AND
BENCHMARKING

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 Markets mean interaction

The product/market fit is the way to assess the real

potential of one specific solution
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 Remember the global process…

Problem/solution Product/market
Fund
Development
Fit Fit raising
Am I solving a real Does anyone want my How can I make my
problem? product? business grow?

Problem identification Product / Service

Product / Service Go-to-market

Value Chain Analysis

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 The “Value Chain”
ORGANIZATION’S INFRASTRUCTURES
Support activities

HUMAN
Make RESOURCES
Source Deliver Source MANAGEMENT
Make Deliver Source Make Deliver Source

Return Return Return Return

Return
Return Return
TECHNOLOGY / PRODUCT DEVELOPMENT Customer’s
Your Company Customer
Customer
PROCUREMENT
Internal or External Internal or External

Inbound Outbound Maintenance

Operations / logistics Sales & Customer
logistics Manufacturing Service

Supply chain processes Primary activities

“A value chain is a chain of activities that a firm operating in a specific
industry performs in order to deliver a valuable product or service for the
market”. Porter, ―Competitive advantage‖ (1985)
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 iVM: a specific “value chain” for technology products
PROJECT MANAGEMENT & SUPPORT (AD HOC ASSISTANCE –
MEETINGS, CONSULTANCY, …-)

INDUSTRIAL PROPERTY & PATENTING SUPPORT

EXPLOITATION BUSINESS
RISK ANALYSIS &
STRATEGY PLAN
TECHNOLOGY VALORISATION TECHNOLOGY
DEFINITION DEFINITION
EXPLOITATION &
TECHNOLOGY STANDARDIZATION & MARKET COMMER.
DEVELOPMENT READINESS

Support activities path Final customer to whom the

technology is finally sold yielding a
Business activities path Core margin to the whole technology
Technology development path activities development and exploitation process

The i-deals’ “valorization and market-readiness evaluation model” (iVM) has

been developed to maker easier the launching of innovative technology
products
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 In the end.. The market will give you the answer

1. Try to differentiate from competitors.

2. If possible, go for a “costs leadership”.

3. And do not forget: always find your

niche.

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Case 3: Product/Market fit  Molecular dynamics solution
Objective: Determine the product/market fit of a molecular dynamics solution to be
applied in drug discovery processes
Brief description of the technology:
• It is a molecular dynamics solution that combines the use of GPUs in parallel with a
proprietary owned algorithm. This combination allows to both carry out simulations
(in silico testing) up to 20 times faster than their competitors and simulate
interactions between protein-protein, antibody-protein, peptide-protein, etc. up to 1
million of atoms.
Brief description of the market:
• Pharmaceutical market is a huge market. Some market needs:
• The process to develop a new product from drug discovery to FDA approval takes Time and costs reduction,
approximately 10-15 years and from $ 1 to 2 bn. selection of the best candidate
• The technology focuses on the first 1-2 years and allows a cost reduction of 20% in from a proprietary library,
the whole process. confidentiality, safe bets on new
• The market is using in silico tools with limited scope (docking). technologies, etc.

Work in groups:
(1) Determine the necessary elements that the technology should have in order to reach the pharmaceutical market:
 Does the product answer the basic questions? Review business model “canvas”

 Analyze the market context. What are the market demands? What are the most valuable characteristics
of your technology? What is its price?
 Analyze the possible market barriers. Analyze the alternative products, the possible market barriers
regarding a new entry competitor, define your strategy to negotiate
with the client.
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Case 3: P/M fit  Molecular dynamics solution (discussion)
1) The product was successfully designed and presents a balanced ―canvas‖.
2) Market context:
 The product is able to achieve time and costs reduction regarding drug discovery
processes (reduction of the number of the necessary in vitro tests): It improves the results
obtained from current in silico tools at half.
 The alternative products (docking) cannot compete and other molecular dynamics
solutions are from academia (they are not business orientated).
 The initial product focuses on testing the candidates (molecules) behavior. However, some
additional developments were “required” by the prospective customers:
 A) Design a integral SaaS solution and
 B) Cover the whole process: Library screening & Optimization of drug candidates &
drug repositioning
3) However… Pharmaceutical companies have established long-term strategic partnerships
to develop their candidates where two strong barriers exist: Confidentiality and No risk-
taking behavior regarding new technologies.

Focus on a specific market segment, find a pharmaceutical partner and develop a

candidate by a collaborative project. It will provide you with a proof of concept and
a reference. This is the start point to be ―leader on molecular dynamics‖ within
this market segment
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 Key ideas Key ideas

Specific managerial
approaches must be
considered when dealing
An start-up is the most with start-ups: from The go-to-market requires
suitable vehicle to obtain uncertainty to risk the creation of a
validated market management sustainable competitive
knowledge about a certain advantage: costs &
product differentiation in the
A customized use of the appropriate niche
well-known Porter’s tools
(i.e. “value chain”) is a
good way of performing a
product / market fit

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¡¡Muchas gracias!!

Ángel Sánchez (@asanchezd)

Director
angel.sanchez@everis.com
i-deals.es
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