By Tom Ballard, Chief Alliance Officer, Pershing Yoakley & Associates, P.C.
More than 50 people turned-out for the inaugural “Opportunity Now” workshop hosted yesterday by the University of Tennessee (UT) Research Foundation.
It was clearly a diverse crowd demographically with about a third of the attendees being women and the overall group ranging in age from college students to people approaching, but not surpassing my senior status.
The attendees were also diverse in terms of the breakdown of backgrounds with about 10 being UT faculty, 10 being students, and somewhere between five and 10 self-identifying as entrepreneurs. There were even corporate R&D attendees and at least one private attorney.
“We are delighted by the turnout of potential entrepreneurs, UT faculty, and students, and other interested area business people,” said Stacey Patterson, Vice President of the UT Research Foundation. “We look forward to working with many of the participants to help take their ideas to the marketplace.”
To put an exclamation mark on that pledge, she announced an application process for a six-week guided program. (See separate article for details.) Patterson also had praise for the educational team that conducted the program session.
“Tech 2020’s Shawn Carson and Kevin Kragenbrink shared valuable information about pathways to commercialization and what it takes to commercialize early stage technologies,” Patterson said.
During their sessions, Kragenbrink Shawn Carson brought to life the event’s subtitle – “Idea to Market Analysis.”
“We want to help researchers and entrepreneurs understand how we go through the process of idea to product and turn that into a way to make money,” Kragenbrink explained. “How does all of that happen?”
He described it as a linear process and proceeded to outline each step from idea to commercial success.
Two of the early questions from the attendees related to access to capital, specifically the role of crowdfunding and Small Business Innovation Research (SBIR) awards. The former is a relative new way to fund start-up activity, while the latter is a long-standing mechanism to fund research to further advance a technology.
On the topic of venture funding, Kragenbrink reminded the audience that “team matters.” We were reminded of the old adage that venture capitalists are more likely to invest in a B or B+ technology if the start-up team is A grade, whereas they will frequently pass on an A technology with a B-rated team.
Carson’s presentation focused on understanding the customer and the market.
“Whenever I meet an entrepreneur the first time, I ask these questions,” he said. They were focused on the customer – who would buy the product, why they would buy it, and what they would pay.
“It comes down to value,” Carson explained.
Using a hand drill to illustrate his point, Carson asked, “Are you buying a drill or the ability to do something?” The answer to the question will drive a customer’s buying behavior.
“All buying decisions are emotional,” he added.
Carson also discussed the importance of understanding value chains and used the automotive sector, from parts suppliers to original equipment manufacturers to dealers selling the cars, to illustrate the complexity of this issue at each stage of the value chain.
“We have to understand who our customers are, why they buy the product, and where we fit in the value chain,” Carson said in introducing the next topic: market segmentation.
“You can’t sell to 100 different markets at the same time,” he explained. “Which customers do I serve and which do I ignore?”
Other topics that Carson covered include customer types (there are many and they vary), customer profiles (many elements such as demographics, lifestyle and budget), competitive landscape (how are prospective customers dealing with challenges and is there an appetite for something new), obvious competitors and those who are less obvious, scalability, and last, but certainly not least, the all-important matter of profitability.