NPTEL

COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 3 – LECTURES 11, 12, 13, 14 and 15

Course Modules 3 and 4 (Part)

Ideation and Prototyping (Part), and

Testing and Validation

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
 NPTEL
COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 3 – LECTURE 11
Course Module 3 (Part)

Ideation and Prototyping

Part-4

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Ideation Workshop
Ideation Workshop is a special and specific methodology to enable firms, especially start-up and
entrepreneurial firms, discover and resolve problems to establish successful businesses

Workshop is a place or facility in which things are made or repaired using materials, tools, machines, techniques
and processes

Idea Workshop is a platform that enables an organisational team It is a collaborative effort that transcends formal organisational
develop workable ideas based on inputs boundaries to generate ideas

Ideation Workshop significantly differs from any other formal organisational meeting, process or platform

Formal meetings and workshops are structure-driven, typically with Ideation Workshop, on the other hand, is run with the participation of
predetermined goals and objectives all stakeholders from the ecosystem for creative problem solving

Ideation Workshop is the foundation of start-up development

Discovers problems that are unknown and unexpressed or inadequately Develops creative solutions that could be successful and sustainable in
and insufficiently solved solving the problems

Ideation Workshop requires certain methodologies and techniques to provide the desired results
Components of Ideation Workshop
For an Ideation Workshop to be effective, certain components need to be in place…

Analytics

Processes Stakeholders

Ideation
Workshop

Tools Facilitator

Facility

Each of the components provides its own unique contribution to the effectiveness of an Ideation Workshop
Explaining the Components
The components need to be carefully chosen and skilfully leveraged…

• Should cover both internal and external

stakeholders • Visual work aids such as flip charts, post-
its, and drawing kits
• Employees, customers, vendors, service
Stakeholders providers etc., Tools • Stock design tools, models etc.,

• Could be internal or external expert • Creative thinking and open expression

• Should be well-versed in the nuances of • Unbiased and non-judgemental
Facilitator ideation Processes discussions

• Diligent capture of all expressions and

• Should be reasonably expansive ideas
• Should facilitate individual and • Filtering of potentially successful and
Facility collaborative workstations Analytics sustainable ideas

The stakeholders and facilitator should possess a reasonable understanding of current and potential technological
and usage parameters
Stakeholder Differences Between Formal and Ideation Workshops

In Formal Workshops In Ideation Workshops

▪ Departments are represented as per formal ▪ Stakeholders connected with the
organisational structures marketplace are represented
▪ Departmental views are expressed in line ▪ Views are spontaneously generated based
with departmental capabilities on problem experiences
▪ Goals are pre-defined as per business ▪ Goals are more in terms of discovering
strategy unknown and unserved problems
▪ Strategies accordingly are developed to ▪ Strategies accordingly are developed on
meet pre-defined goals the fly to meet evolving goals
▪ Goals are usually non-linear
▪ Goals are usually linear
▪ Goals are usually in terms of developing
▪ Goals are in terms of scale, revenue, profits
creative products and services (initially
etc.
abstract)
▪ Outcomes are expected to merge with ▪ Outcomes are expected to create new
ongoing business and corporate plans businesses and business models
▪ Risk-reward relationships are defined ▪ Workshops are considered inconclusive
based on data analytics until creative solutions are developed

Ideation Workshops typically have stakeholders

from different parts of the broader customer
ecosystem, besides the company’s
Facilitator Differences Between Formal and Ideation Workshops

In Formal Workshops In Ideation Workshops

▪ Usually a departmental leader or even a
CXO
▪ The sponsor of the workshop usually
assumes the facilitator role
▪ Skilled in articulating company strategy and
goals, with a quantitative focus
▪ Focused on achieving workshop results
that add to topline and/or bottom line
▪ More of functional knowledge and
attributes
▪ Outreach and understanding limited to the
company value chain
▪ Independent of formal leadership or
allegiance
▪ Selection based on prior experience in
similar ideation roles
▪ Skilled in navigating the abstract and
identifying the ‘unknown unknowns’
▪ Focused on bringing out the creative
elements in each participant
▪ More of empathetic and collaborative
attributes
▪ Outreach and understanding extends to the
external ecosystem

▪ Unwilling to challenge the established ▪ Willing to explore the less travelled paths
systems, strategies and goals and accept the new
▪ Result-oriented leadership style ▪ Inclusive and participative leadership style

Ideation Facilitators need not necessarily be the

entrepreneurs themselves; but need to be
creative and empathetic thinkers
 Facilitating Young Thinkers

Courtesy: DoMS, IIT Madras

Facility for Ideation Workshop

Beyond a conference room;

could even be the marketplace
Designed to hold
Spacious for walkthroughs and walk-
flip charts, post-its,
arounds; physical activities as well as
display charts and
brainstorming
drawing boards

Well-designed for Enhanced by visual

Supported with
individualisation as design and AR/VR
good hospitality
well as clustering facilities
Individual Ideas Getting Clustered

Courtesy: DoMS, IIT Madras, University of Nottingham, IITM Research Park

Tools for Ideation Workshop

All possible product samples - own as well

as competitors’; related and unrelated

Current and
Videos of inspirational ideas which
emerging
became successful prototypes and
technology
commercial products or services
platforms

Computer
Models of Industrial
models and IT
proposed designers for
specialists for
products final shaping
enhanced play
Processes for Ideation Workshop
Problem Identification

Consumer
Pathway to Research Solution Platforms
Prototyping
Technology
Product Plan
Forecasting

Problem-Solution
Review
Cost-Price Viability
Gemba Walks
Analysis Analysis Repeat Create

Refine Initial Solution

Initial Solution
Make or Buy Manufacturing Sketching Idea
Solution

Freezing Design Challenging

Solution
Finalising a design Pressure Testing
Technology Ideation

Courtesy: DoMS, IIT Madras, University of Nottingham, IITM Research Park

Stakeholders for an Electric Vehicle Ideation Workshop

Marketing Consumer

Business Business
Design Dealer
Planning Entrepreneur

Departmental Ideation
Participants Stakeholders

Finance Manufacturing Financier Designer

Battery
Supply Chain Maker

Conventional Workshop Ideation Workshop

Idea Options for an Electric Vehicle Ideation Workshop

Phase-in
and Phase- Retro-fit or
out Native EV

Market
Market Power-pack Making or Power or
Share Substitution Market Range
Substitution

Departmental Ideation
Options Stakeholders

Top line and Production Customer

Elegance or
Bottom line Line Value
Utility
Proposition
impact Suitability
New Warranty or
Component Serviceability
Supplies

Conventional Workshop Ideation Workshop

 Even Complex Projects can be Ideated

Courtesy: DoMS, IIT Madras, University of Nottingham, IITM Research Park

Stakeholders for a New Drug Formulation

Marketing Patient

Business Medico-
R&D Doctor
Planning marketer

Departmental Ideation
Participants Stakeholders

Finance Manufacturing Distributor Medical Rep

Supply Chain Pharmacy

Conventional Workshop Ideation Workshop

Idea Options for a New Combination Drug Formulation

No Prescription Drug Usage

Cannibalisation Patterns

Incremental Easy to
Blockbuster
Medical
Sales Formulate Drug
Rationale
Potential

Departmental Ideation
Participants Stakeholders

Therapeutic
High Gross Easy Availability Unique Value
Efficacy and
Margins of APIs Proposition
Safety

Local Sourcing Clinical Trials

Conventional Workshop Ideation Workshop

Ideation Workshop in Action

Courtesy: DoMS, IIT Madras, University of Nottingham, IITM Research Park

 NPTEL
COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 3 – LECTURE 12
Course Module 3 (Part)

Ideation and Prototyping

Part-5

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Prototyping Essentials
Prototyping is a proven and essential methodology to convert workable ideas into commercial products

Prototyping can take place only after ideation phase is substantially and sustainably completed

While a dimensioned or metricised precision design is very helpful, even sketches and drawings can trigger
prototype activity

Similar to ideation activity, prototype activity benefits immensely from collaborative effort

Unlike the ideation phase which covers the entire internal and external ecosystem, the prototype phase involves
majorly the internal design, manufacturing and quality ecosystem

Prototype development is a long term technical activity

Unlike ideation which could be a short burst of intense activity of a few weeks, capped by an Ideation Workshop,
prototype development would be a long term activity of several months

While ideation benefits from a relatively boundary-less, open-ended creative approach, prototyping requires a
structured and disciplined approach of product development and manufacturing
Essentials for Effective Prototyping
For a prototyping activity to be effective, certain infrastructure and people need to be in place…

Design Lab

Users Proto Lab

Prototyping
Essentials

Assemblers Test Rigs

Component
Sources

Ingenuity lies in creating a microcosm of a factory manufacturing operation in a simple experimental setting
Four Types of Prototype Building

Four Characteristics
Native Native Prototype is a novel
product developed on a zero-
Prototype
Four Types

base approach

Retrofitted Retrofitted Prototype is an

improved product that is a hybrid
Prototype of new and existing innards

Experimental Experimental Prototype is usually

designed to culminate in a
Prototype Minimum Viable Product (MVP)

Commercial Commercial Prototype is

invariably a replica of the
Prototype Ultimate Desirable Product (UDP)
Reverse Engineering Prior to Prototyping

Whether or not the proposed product is an

improvement or novel product, it pays to
reverse engineer the closest established rival

Reverse engineering
Product strip-down provides valuable clues
is particularly useful
to the components that can be carried over,
for retrofitted
refined, substituted or eliminated
products

A complete bill of
Reverse engineering Temptation to materials that can be
needs to be watchful rediscover the wheel radically improved is
of patent restrictions needs to be avoided the start-point for
fresh prototyping
Prototyping of Smart Wearables

Smart Watches

Smart Pens Smart Glasses

Smart
Communicators Smart Meters

Smart
Wearables

Smart
Smart Viewers Diagnostics

Smart Trackers Smart Clothing

Prototyping Stages for a Smart Wearable

Circuit •Tests the performance and

Engineering integrity of the electronic
Prototype circuits

Functional •Integrates the PCB as

the operative
Prototype motherboard

• Tests the
communication of
Communication proposed circuitry
Prototype with other persons
and things

• Combines the
Initial Design mechanical and
digital parts of the
Prototype product

• Corresponds
Final Design to the
Prototype Minimum
Viable Product
(MVP)
Prototyping Capabilities Have Evolved Over Time

• Enables quick • Helps rapid

assembly of PCBs prototyping

Development
3D Printers
Kits

Design-driven Hand
Prototyping Moulders

• Deploys everything • Helps make a few

from CNC hundreds of sample
machining to prototypes
precision assembly
Software Prototyping Follows a Similar pathway

Engineering • Supports fundamental

Software circuit operation

Functional • Enables integrated

Software digital integration

Development • Expands into

Internet of Things
Software (IoT) software

• Provides seamless
Design integration of
hardware and
Software software, and the
product and the user

• Wireframe
Final App design, User
Design Interface(UI)
and User
Experience
(UX) design
Prototyping is Iterative with Testing until the Final MVP is Frozen

Prototype Testing
Mark Proto Mark
1, 2, 3 etc. 1, 2, 3 etc.

Refining for the

next level Proto
Prototype Sophistication in Visual Design and Software Development

Low-fidelity Prototype

• Just the very basic functionality

Mid-fidelity Prototype

• Connected with the user and environment

High-fidelity Prototype

• Fully functional product replica

Prototype Networking Essential in Industrial Transformations

New-Gen Electricals
New-Gen Drives
(Batteries, Charging (Motors, Controllers,
Stations) Chargers, Resistors, Cables
etc.,)

Electric
Vehicles

New-Gen All Other

New-Gen Thermal
Mechanical Components
Management Systems
and Accessories
Formulation Prototyping

Pharmaco-
dynamic profile

Pharmaco-
kinetic profile

APIs of different Excipients of Formulations of

particle size different different Drug efficacy

distribution binding release

profiles characteristics characteristics
(immediate,
sustained,
extended
release)
1 2

Multiple
Multiple
Multiple APIs Matrix
Excipients
Formulations

Selection Process
Prototyping is Impacted by…

Design Materials

Manufacturing
Prototyping Needs to be Driven by…

CEO

Chief Strategy
Officer

Chief
Chief Scientific Chief Technical
Commercial
Officer Officer
Officer

Ideation Prototyping Testing

An Integrated Model of Prototype Development

Concurrent Design and Manufacture

Manufacture and Delivery

End- Perfection
Perfection as Materials Components Sub-systems Systems as the
the goal Product
result

Design and Development

Design Thinking

▪ Prototype development is, in a sense, mini-manufacturing

▪ If a start-up has time and resources on its side, manufacturing integrity can be simulated on a
pilot scale

▪ Technology plays a major role in prototype development, be it materials, subtractive

manufacturing and/or additive manufacturing
35
Prototypes Help Generate Consumer and Investor Interest

Images Courtesy CES 2020, Las Vegas

Successful Prototyping Could Accelerate Monetisation too…

Licensing or Investments by
Acquisition of Tech Giants for
Product Further Product
Technology Development

Backing by
Joint Ventures and
Venture Capital
Partnerships for
Firms for Solo
Commercialisation
Development
 NPTEL
COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 3 – LECTURE 13
Course Module 3 (Part)

Ideation and Prototyping

Part-6

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Patenting Essentials
A patent is a form of legal protection by the governments provided to the owner to exclude others
from making, using, selling, and importing an invention for a limited period of years

Patenting helps any firm, more so start-ups, protect their innovations and achieve competitive advantage

Patenting is usually based on prescribed criteria such as novelty, usefulness, and non-obviousness

National governments have their patent offices to examine, grant and publish patents based on fulfilment of the
prescribed criteria

Under the World Trade Organization’s (WTO) TRIPS Agreement, patents granted in one state should be available and
respected in the member states

There do exist variations on patentability and exemptions across member-nations, especially relating to domains
of public health and social good
Patenting creates monopolies in certain industries, especially in pharmaceutical and biotechnology as well as
electronics industries, and is, therefore, a major driver of intense start-up activity in such domains

Start-ups would do well to focus on patenting from the very early stages of their ideation and prototyping activities
 Patenting Steps
Decisions by the applicant on the
patentability and the type of patent
Preparation required

of Patent
Application
Grant of the
Granted patent needs Filing with Choice of the Patent
Patent by Office and patenting
to be maintained the Patent
the Patent route
Office
Office

Patenting
Process

Defence by Formal
Working with the
the Examination Initial maintainability
and admission
Patent Office Applicant as by the
Required Patent Office
Publishing of
the Patent
by the
Patent Office Publication for
objections, if any
Patenting Search – A Critical Step

Brianstorm key terms

for patent search

In the event of doubt, Search the

engage the legal International Patent
attorney to undertake Databases to list
an in-depth and potential relevant
comprehensive review patents and prior part

Google Patent Search

US Patent Database
Other International
Databases

Download the relevant

Take independent legal patents and examine
opinion on the them in detail to
patentability determine any
infringement

Determine the
patentability of the
invention
Patenting Search – A Critical Step

Patents may be searched using the following resources:

•USPTO Patent Full-Text and Image Database (PatFT)

•USPTO Patent Application Full-Text and Image Database (AppFT)
•Global Dossier
•Patent Application Information Retrieval (PAIR)
•Public Search Facility
•Patent and Trademark Resource Centers (PTRCs)
•Patent Official Gazette
•Common Citation Document (CCD)
•Search International Patent Offices
•Search Published Sequences
•Patent Assignment Search
•Patent Examination Data System (PEDS)
United States, the largest single market, is a focus of global inventors

Four Characteristics
Article of Novel products with new uses
produced for the first time
Manufacture
Four Types

Intermixture of two or more products

Composition of creating a new material with
properties not possessed by the base
Matter materials

A device that is not a mere

aggregation of known components
Machine and devices and delivers a novel
function

Method (or A series of novel steps to manufacture

a product, novel or established
Process)
Patent Cooperation Treaty (PCT) Process - 1

The Patent Cooperation Treaty, or the PCT as it is typically referred to, came into
existence in 1970

It is open to States that are party to the Paris Convention for the Protection of Industrial Property (1883)

PCT streamlines the initial filing process, making it easier and initially cheaper to file a
patent application in a large number of countries

PCT provides a path to seek patent protection for an invention simultaneously in every country that is a member to
the Treaty

An international patent application under the PCT route may be filed by anyone who is a
national or resident of a Member Country
The appeal of the PCT process is that it enables patent applicants to file a single patent application and have that
single, uniform patent application be treated as an initial application for patent in any Member Country
Patent Cooperation Treaty (PCT) Process - 2

Filing an international patent application under the PCT route to start the patent process can frequently be
a wise move if the inventor is contemplating securing patent rights in multiple countries

Obtaining international patent protection is not cheap. It is also important to understand that the international
patent application will not mature into an international patent

Fundamentally, a common international patent does not exist legally, which is one of the factors that
causes international protection to be quite costly

PCT process enables a “national stage” for filing a patent application claiming the benefit of the international
patent application directly in a particular country within 12 months of filing the international patent application

It is necessary to seek patent protection in each country because individual countries issue their own
national patents
The international PCT process is just a convenient, uniform process that allows applicants to start down the road
toward patent protection in any number of jurisdictions without the need to make a unique application filing in
multiple countries
PCT Vs National Filings

PCT is cheaper to initiate PCT allows up to 30 months to

compared to filing in every actually decide the countries
Member Country, which where the inventor wants to
would be highly expensive receive the patent

General
popularity of PCT

Yet, if the inventor is sure

PCT route allows the inventor
about the target market, it
to decide later after the
would be worthwhile to target
invention and the market has
only that market for the
developed and matured.
patenting
PCT Information Sources

For more information about the International Patent Process please see:

•Obtaining Patent Rights Around the World (IPWatchdog.com)

•Patent Advantage: Laying the Groundwork for International
Rights (IPWatchdog.com)
•PCT Resources from the World Intellectual Property Organization
•PCT Legal Administration from the USPTO
•Chapter 1800 of the MPEP, titled Patent Cooperation Treaty
•Patent Cooperation Treaty Article Archive on IPWatchdog.com

Search Intellectual Property databases

Patents: PATENTSCOPE
Trademarks: Global Brand Database
Designs: Global Design Database
Laws and Treaties: WIPO Lex The PCT now has 153
Statistics: WIPO IP Statistics Data Center Contracting States or
Member Countries
Patenting Process in India

In India, the patent application can be filed with the Indian Patent Office in any of the
branches i.e., Delhi, Mumbai, Chennai or Kolkata

The patent application can be filed as a provisional application or as a non-provisional application with the Indian
Patent Office

Patent filing and grant procedures are broadly the same as those followed
internationally

India is a Member Country of PCT, and therefore is also a Receiving Office for international patent applications
under the PCT route

If a provisional patent application is filed in India, within 12 months of its filing the
complete specification has to be filed
There are 6 different kinds of filing filed in the Indian Patent Office. These are: (a) Ordinary application, (b) PCT
National phase application, (c) PCT International application, (d) Convention application, (e) Divisional application,
and (f) Patent of addition application
Start-ups Need Patenting

Patents help a start-up protect its

intellectual property and create a monopoly

Patents enable
Patents protect start-ups against theft
R&D and Joint
of inventions and poaching by
Venture
established and emerging rivals
partnerships

Patents enable Patents are a Patents help

valuation and powerful reason start-ups
venture capital for high-value undertake a
investments acquisitions robust IPO
Instructive Cases of Patent Importance - Amazon

Amazon obtained a patent in 1999 for

its “one-click” online purchase system
The judge granted an
injunction ordering B&N
Within 23 days, Amazon filed a patent infringement suit
to stop using Amazon’s
against its then-larger competitor Barnes & Noble over
one-click, giving Amazon
the latter’s use of a similar system
the edge in online book
retailing.

Intellectual property Patenting should be based

protection through on two criteria:
Amazon became an
patenting coupled with
undisputed leader in Should be the first to
innovative business model
online book retailing pre-empt, and the best to
leads to business
dominance build a business model

Source: https://www.forbes.com/sites/forbesleadershipforum/2015/08/18/the-top-10-reasons-why-your-startup-needs-
patents/#4c5fe44722c7
Instructive Cases of Patent Importance - Google

In 1998, Google deemed its seminal PageRank patent

No. 6,285,999 so vital that it filed for it before it had a
business plan, venture funding, or even a domain name

Without that patent, said one

analyst, “Google would have
been trampled by copycat
Google paid Stanford University, to which the patent had been
search engine offerings from
assigned, $336 million in shares to exclusively license it
Yahoo, Microsoft, and other big
players who once dominated
the market”

Patenting should be based on

Google’s dominance in search, That said, as a start-up becomes two criteria:
and its consequent emergence the dominant leader, it could be
as a tech-giant is now history prone to innovative challenges Foundational patent, and an
expanding patent estate

Source: https://www.forbes.com/sites/forbesleadershipforum/2015/08/18/the-top-10-reasons-why-your-startup-needs-
patents/#4c5fe44722c7
Instructive Cases of Patent Importance – Fractus S.A.

Carles Puente, a 2014 finalist in the European Inventor

Awards, invented a mobile phone antenna based on
principles of fractal geometry, which allowed the mobile
phone to be much smaller

Thanks to its patents,

But his Spanish startup, Fractus S.A., couldn’t possibly however, Fractus was able
manufacture enough fractal-based antennas for the 1.5 to license its technology
billion smartphones sold each year to 90% of the world’s
smartphone makers.

A win-win by which the inventor

“Patents were very important to
us,” Puente says “not only in
protecting our innovative
technology but also in expanding
our market share.”
Fractus patenting is a case of
patenting helping in R&D
partnerships and licensing
maximized its revenues without
huge additional investments and
the industry benefitted without
painstaking time and efforts to
discover new patentable
hardware

Source: https://www.forbes.com/sites/forbesleadershipforum/2015/08/18/the-top-10-reasons-why-your-startup-needs-
patents/#4c5fe44722c7
Instructive Cases of Patent Importance – Honeywell, Nest, Google

Shortly after intelligent home products startup Nest

introduced its first product, a smart thermostat, it was hit by
a patent infringement suit from the industry giant Honeywell

Nest also acquired 60 third-

party patents relating to its
Nest begun patenting its innovative products (and eventually would product line from the patent
own several hundred patents and patent applications) to defend aggregator Intellectual
itself Ventures, which helped
buttress its intellectual property
position

If Honeywell’s goal was to Patenting helps firms not only

Nest’s patents were also a key
litigate its upstart rival Nest out defend themselves and grow
attraction in the company’s
of business, Nest’s patents have but also allow themselves to be
eventual acquisition by Google
made that impossible acquired on their terms

Source: https://www.forbes.com/sites/forbesleadershipforum/2015/08/18/the-top-10-reasons-why-your-startup-needs-
patents/#4c5fe44722c7
Instructive Cases of Patent Importance – Support to IPOs

Even the tech giant Facebook felt the need, when preparing for its
initial public offering, in April 2012, to shell out $550 million to buy
650 former AOL patents owned by Microsoft. That was in addition to
750 patents Facebook had bought a month earlier from IBM.

One was to reduce

The purchases were partly a response to a then-
investor concerns
pending Yahoo patent suit against Facebook. But
over Facebook’s legal
experts say Facebook's larger objective was
risk in advance of its
manifold.
IPO

The other was to protect

itself against further
Twitter made a similar Patent portfolio has a
litigation down the road,
patent purchase from IBM significant impact on IPO
given that patents are
shortly after its IPO. performance
increasingly the weapons of
tech company competition
Source: https://www.forbes.com/sites/forbesleadershipforum/2015/08/18/the-top-10-reasons-why-your-startup-needs-
patents/#4c5fe44722c7
Instructive Cases of Patent Importance – Boosting Business Growth

Patents can help a start-up launch a billion-dollar empire. As

IPfolio chief executive Rupert Mayer observed, patents have
helped at least 10 major start-ups launch multibillion dollar
empires. Some examples are:

Zynga’s
Dropbox’s network folder asynchronous
synchronization patent challenge gaming
patent

Square’s patented GoPro’s patented Google’s

system and method harness system for breathtakingly
for decoding swipe attaching a camera valuable original
card signals to a user PageRank patent
Source: https://www.forbes.com/sites/forbesleadershipforum/2015/08/18/the-top-10-reasons-why-your-startup-needs-
patents/#4c5fe44722c7
Instructive Cases of Patent Importance – Some Findings

The 2008 Berkeley research project Patenting by Entrepreneurs: An Empirical Study found that 67% of venture-
backed startups reported that patents had been vital for them in securing investment.

While 40% of all startups held patents, 80% of those receiving venture capital investment owned patents.

According to a 2014 National Science Foundation-backed study, 49% of manufacturing and service firms have
used inventions obtained from external sources to develop their most important new products and services

In 14% of these cases, the source was a startup. In many cases, the patents on those startups’ inventions served as the
legal scaffolding around which joint ventures and research-and-development partnerships were constructed.

In their 2015 study Patents, Innovation, and Performance of Venture-Capital-Backed IPOs, Cao, Jiang, and Ritter
found that “patents strongly and positively predict the long-run performance of VC-backed IPOs.”
Indeed, “VC-backed IPOs with patents substantially outperform other VC-backed IPOs. The same holds true even for non-
VC-backed IPOs.” Or as Cockburn and Wagner simply put it in their 2007 study Patents and the Survival of Internet-Related
IPOs, “Firms without patent protection are much less likely to survive.”

Source: https://www.forbes.com/sites/forbesleadershipforum/2015/08/18/the-top-10-reasons-why-your-startup-needs-
patents/#4c5fe44722c7
Patentability and Marketability

Patentability

Successful
and
Sustainable
Business
Growth
Marketability

Ideation Prototyping Testing Patenting

Support from Incubators for Ideation, Prototyping and Patenting

• Plug and Play Facilities

Ideation • Mentoring Support

• Academic Laboratory Support

Prototyping • Prototype Vendor Ecosystem

• Common Testing Facilities

Testing • Specialised Testing Facilities

Patentability Patent Patent Filing and

Opinion Databases Prosecution
Incubator Centres at IITs – Some Examples
Society for Innovation and
Entrepreneurship (SINE), is
an umbrella organisation at
IIT Bombay for fostering
entrepreneurship and
nurturing tech start-ups. It
administers a business
incubator which provides
‘Start to Scale’ support for
technology based
entrepreneurship and
facilitates the conversion of
research activity into
entrepreneurial ventures.
The Technology Business
Incubator (TBI) has been in
active operation at IIT Delhi
since the year 2000. The TBI is
conceived, programmed and
implemented by the
Foundation for Innovative and
Technology Transfer (FITT).
The objective of the TBIU is
primarily to promote
partnership with new
technology entrepreneurs and
start-up companies. Within
the existing policy guidelines
of the Institute.
TBI or Technology Business
Incubators, along with Science
& Technology Entrepreneurs
Parks (STEP) is a facility that
promotes, nurtures and
incubates innovative
indigenous technologies
through their Startup phase
and encourages them to be
market ready.
The support provided
primarily entails early stage
funding for indigenous ideas
and technologies requiring up-
scaling and related work.
IITM Incubation
Cell nurtures technology ven
tures through their start-up
phase by providing all the
support necessary to help
entrepreneurs establish
themselves before they scale
up their ventures. IITMIC
seeks to support
entrepreneurs translating
innovations into products
and services that
are commercially viable.
 NPTEL
COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 3 – LECTURE 14
Course Module 4 (Part)

Testing and Validation

Part-1

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Broad Stages of Product Development (A Recap)

Commercialisation

Validation

Testing

Prototyping

Ideation

61
Value Proposition for the Customer
➢ Every new product has to demonstrate its value proposition to the customers and the
broader society; more so, for an entrepreneurial product

➢ Value proposition is the set of gains and benefits from the product for the customer,
both in the short-term and long-term

➢ The gains could be in terms of time saved, money saved, revenue and profit increased, superior
experience achieved, better esteem accrued, better safety assured etc.

➢ An entrepreneurial product must solve the top-level or high-level problems that the
customer faces

➢ Ready-to-eat food makers such as Nestle, MTR, and ITC have solved the problem of busy
working couples by meeting their and their children’s food needs

➢ Delivery services such as Swiggy and Zomato have provided economic solutions to both
restaurants and diners of reach and choice, respectively

62
A Typical Product Benefit Envelope

Benefits to Society
▪ Environment-friendly
manufacture
▪ Reusable, re-cyclable
▪ Global competitiveness
▪ Employment generation

Benefits to Customer
Technical Benefits
▪ Better usage
▪ Better materials ▪ Higher quality
▪ Better manufacture
NEW
▪ Lower cost
▪ Speedier delivery PRODUCT ▪ Longer life
▪ Superior product lifecycle ▪ Superior esteem
▪ Digital support

Benefits to Start-up
▪ Better market share
▪ Higher revenues
▪ Higher profits
▪ Higher customer loyalty
▪ Assured brand building

63
 The Interlocked Circle of Testing and Validation

Inputs from the Ideation

and Prototyping Stages

TESTING

• Receptive ▪ Validates the basic product

▪ Performance against specifications
• Perceptive premise
▪ Essentially quantitative analysis
• Mega Trends ▪ Both quantitative and
▪ Requires simulated and actual test
• Big Data qualitative in assessment
conditions

VALIDATION

Inputs from the Iterative

Testing and Validation Cycles

64
Testing and Validation Must Occur at Two Levels, in Each Case

Commercialisation

Validation of business
concept

Validation of product
concept

Testing of product

Testing of
product concept

65
Principles of Testing
➢ Specifications must be laid down at the design stage itself, optimised at the prototyping
stage

➢ Prior to the release of prototype to the testing and validation phases, the specifications
must be frozen

➢ Testing can be undertaken additionally against competitive external benchmarks, as a measure

of additional assurance

➢ For industrial products such as trucks, testing needs to be by both internal experts and
external regulators

➢ For consumer products, an additional layer of testing at the hands of users is very
much desirable

➢ The key to insightful testing is creation/ simulation of actual user conditions as faithfully as
possible; that said, testing under extreme conditions provides additional assurance

66
Torture Test Track Prototype Testing
Principles of Validation
➢ Validation interlinks empathy, ideation, prototyping and testing phases, in terms of
product functionality, customer experience, and business potential

➢ Even if testing is not done at the actual hands of users, validation must be carried out
with actual users

➢ Additionally, a panel of experts may be formed to bring additional sharpness to the validation
process

➢ As contrasted with testing, which is focused on performance versus specifications,

validation establishes the nexus between product and business. For industrial products
such as trucks, a comprehensive process of homologation serves as a good validation
programme.

➢ Testing is more in the Quality domain while validation is more in the marketing domain,
in fact in the entire design thinking team’s domain. For consumer products, an
additional layer of testing at the hands of users is very much desirable

67
Three Types of Products

Repetitive Experience
Products. For example, a Variable Experience Products.
smartphone or a smart For example,
television Music or Music Streaming
Testing and
Validation Services
Protocols Vary
Based on
Product Types

Consumer Perception
Products. For example, a
fashion accessory

68
Characteristics of Start-up Products

Start-ups do not have

resources for full-fledged Products tend to be fuzzy
product development ideas despite best design
thinking
Product Plan
tends to be a
dynamic
development

Technology could behave

differently in the real world

69
 NPTEL
COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 3 – LECTURE 15
Course Module 4 (Part)

Testing and Validation

Part-2

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Minimum Viable Product from, ‘The Lean Start up”

MVP
A Minimum Viable Product is that version of a
new product which allows a team to collect the
maximum amount of validated learning about
customers with the least effort

71
Characteristics of Lean Start-up

Six Process Parameters of Lean Start-ups

Business philosophy Learning while validating the vision

Product Developing the product while testing the minimum viable product

Leadership Omnipresent co-founders with multi-tasking

Key approach Smart outsourcing, early testing and accelerated validation

Anchoring Addressing core believers and key customers early on

Funding Clear funding pathway until at least Proof of Concept (PoC)

72
Two Types of Products for Testing and Validation

UDP gains immensely from an

integration of all the previous phases of
empathy, ideation, and prototyping

▪ An Ultimate Desirable Product (UDP) ▪ A Minimum Viable Product

is a full-specification prototype that is (MVP) a stripped down version
UDP
as close to the final commercial of the proposed prototype that
model as possible tests the essential new features
▪ In the case of an electric 3-wheeler a of the product
UDP would be a completely native ▪ In the case of an electric 3-
electric 3-wheeler with the full set of wheeler, an MVP could just be
features, including a redesigned light- any 3-wheeler chassis with the
weight chassis intended electric powerpack

MVP

MVP requires a very rigorous testing

and validation cycle based on core
technology

73
Smart Analogue-Digital Watch MVP and UDP Characteristics

Time-
keeping

Advanced Long Battery

Health App Life

Multiple Basic Health

Dials App

Payment
Gaming App
App

74
Optimising Development Through MVP and UDP

• An MVP usually answers only the core design or technical questions

• The minimum viable product concept is key to a successful go-to-market strategy because, in
order to move rapidly and definitively, the experiments would include only those features that
help the founder test the basics of the problem and the solution

• For a smart watch, in the fundamental stage of MVP, other than the core smartness everything
else (like the shape of the device, brightness of the display or the colour scheme) is a waste of
time and money

• Directly testing UDP at the very initial stage could cloud the results on the basic functionality
itself

• Once an MVP establishes the core functionalities, a UDP provides an appreciation of how
customers interact with the product.

Pi Beam Electric Three Wheeler Mahindra Treo

75
The Linkage Between MVP and UDP

• The “viable” concept is the key, too, in that MVPs produce test results one can learn from,
which means it has to work on some meaningful level for customers

• A classic example is that if the start-up is considering an on-demand marketplace, the MVP is
one which has the minimum required landing pages to bring together the demand and supply
parameters

• By the same token, if the start-up is considering an electric vehicle, the MVP should be one
which tests the battery life, vehicle traction, and vehicle safety ahead of anything else

• In both cases, the extent to which the Ultimate Desirable Product can be developed is a
function of the relative success of the MVP, and the time and resources which the start-up has
at its disposal for the UDP

• Early on, it would be important for the start-up firm to decide on the Minimum Viable Product
(MVP) that needs to be tested and evaluated initially, prior to developing the Ultimate
Desirable Product (UDP) and testing it and evaluating it

76
Balanced MVP-UDP Development for Optimal Business Impact

Giving up on the UDP

and going forward with
only an MVP for quick
business impact

Planning ingenuity required

to execute a two-tier MVP-
UDP strategy

Fine balance needed between robust MVP-UDP

development and timely business impact

77
An Enabling Framework for Leadership Development

Pitfalls and Solutions in Prototype Testing

Early bias on good and bad The firm should prepare a comprehensive note based on the full gamut of
ideas empathy, ideation, design and prototyping

Lack of internal expertise to Identify an appropriate external expert agency to ensure appropriate testing
test and validation

Instead of assuming external expertise, the entrepreneur should detail the

Naïve external evaluators
do’s and don’ts, and set expectations

The firm should be willing to leave it open to evaluators to add additional

Openness
relevant criteria, both specifications and standards

Reliance on friends, family Potentially erroneous favourable bias due to prior relationships must be
for evaluation countered through counselling and education

Indecisiveness on killing a
project
Prototypes must be developed with backup plans for failure

78
Four Steps of Graded Testing

Validation

Final Testing

Holistic Testing

Pilot Testing

Visibles Testing

Graded testing has the advantage of coming up

with unforeseen but important facets of design
and performance of the prototype

79
Bootstrapping to MVP Success

• Bootstrapping and MVP have a logical correlation

• Bootstrapping is the process by which a start-up is progressed with the least

amount of resources, and with minimal or external funding

• The concept of MVP and the concept of bootstrapping go hand in hand

• Bootstrapping is one of the most effective and inexpensive ways to ensure a

start-up business’ positive cash flow

• The tasks that can be carried out in bootstrapping phase are ideation,
prototype design, establishment of vendor base, low level assembly of MVP,
laboratory testing etc.

• Indian start-ups are not generally eager for bootstrapping strategy, preferring
instead multiple funding rounds based on early product scale-up with higher
valuations.

80
Bootstrapping to MVP Success

• Bootstrapping enables (or forces) start-ups to focus on frugal innovation,

start earning money through multiple MVPs, and develop their firms on their
terms without answering multiple queries from multiple investors

• At the same time, founders should be clear when bootstrapping has started
to become a constraint (forcing excessive expense control, for example) and
when they need to switch to a more classic funding style

• One option adopted by a bootstrapping company has been to license out its
MVP to another start-up having angel investors in exchange for cash or
equity, and continue with another product in the bootstrapping mode

• Serial bootstrapping is a special subset of the start-up community

81
Successful Minimum Viable Products
Company What did they do?
Drop box The team made an explainer video before investing to see how people reacted

Airbnb Even before starting, when the founders heard of a design conference coming
in town, they decided to open up their loft as cheap accommodation and put
up pictures on website. This close interaction with customers gave the
founders an insight on customer needs.

Groupon When their website didn’t do well, using the same domain, they created
Wordpress blog posting deals manually. Instead of investing in a new website,
they used what they already had to check customers interest

Buffer Buffer’s first MVP was just a simple landing page. When the founder received
sign-ups, he used the email addresses to communicate with potential
customers getting their feedbacks and insights

Zappos Before investing, the co-founder wanted to identify the demand for his online
store. He purchased shoes from local stores and put up pictures on website.
When he received an order, he purchased it from the local store and shipped it
across to the customer. This helped him to understand market hypothesis

Twitter The first prototype was released as an internal service giving text messages to
Odeo employees. When the employees became so obsessed with it, that’s
when the team got the push to release it to the public.

Foursquare Foursquare, a location based social network was launched with a single-
feature MVP that did not slow them down with unnecessary design and
features. They only focused on improving user-experience using customer
feedbacks

82
Source:https://speckyboy.com/successful-minimum-viable-products/
User Acceptance Testing
• User acceptance testing is an evolved process, and requires appropriate
deployment

• For patent-protected products, an established testing agency complying with non-

disclosure standards should be deployed

• While technical acceptance testing should be done by internal or external experts,

user acceptance testing should be only through users

• The entrepreneur could also make the users interact with the competitors’
products, to uncover gaps and deficiencies in their products that the new product
will smartly fill

• The developer may have to iterate through a number of prototypes before he can
end up with a validated prototype at the end of the exercise

• Validation would have to be done for the designs and, eventually, the end product.

83
Post-launch Validation

User feedback Service feedback

Validation is a
continuous
improvement
process

Competitive benchmarks

The validation story does not end with the launch of the product – it goes on at
every step of the product lifecycle in the marketplace, through continuous user
and service feedback and product improvements
84
A Typical Holistic Product Testing Paradigm

1 Comprehensive Product Note

- Specification
- Customer profile
- Usage profile
- Benefit profile
- Total value proposition

2 Evaluator Panel

- Alignment with customer needs

- Comprehensive testing schedule
- Alignment with start-up expectations
- Guidance for recording of test results, observations, and conclusions

3 Field Testing

- Simulated user conditions

- Comparison of actual results with expected results
- Trouble shooting
- Corrective plan for next prototype

85
Value Validation Vector

Customer Problem as Defined Product Solution as Developed

PROBLEM SOLUTION

Is the Value Proposition Valid?

86
Thank you!

87