Commercialization Tool

Topics: Harvard Business School, Entrepreneurship, Innovation Pages: 7 (1843 words) Published: May 11, 2013
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Prepare the right plan to commercialize your technology company’s innovation Introduction Technology entrepreneurs such as you need to prepare a commercialization plan. The commercialization plan describes how you will transform a promising technology into economic benefits for your company’s stakeholders (i.e., customers, collaborators, founders, investors, employees). For many technology entrepreneurs the preparation of a commercialization plan is a challenge for at least five reasons. First, the entrepreneur does not know what makes a commercialization plan the right plan. Preparing the right commercialization plan is much more difficult than just preparing a plan. Second, this is the first time that the entrepreneur must truly define the value the innovation will deliver the company’s stakeholders as well as the reasons why the company will win in the marketplace. Third, the entrepreneur needs to decide whether to compete or collaborate with incumbents. Incumbents are established companies operating in the market the entrepreneur wishes to enter. Fourth, the entrepreneur needs to decide with whom to partner to enter the market and how the resulting profits from such a partnership will be distributed. A partner is an individual or organization (e.g., another new technology company, customer) that helps get your company commercialize your innovation. A partner does not include incumbents or suppliers. Fifth, the entrepreneur needs to decide whether to raise external capital or grow organically. The lack of venture capital may limit the entrepreneur’s growth options. 1

Objective The objective of the tool is to help you: • decide whether to compete or collaborate with incumbents • identify what an entrant needs to do to successfully commercialize an innovation in a market where incumbents operate

Tool highlights The tool is designed to help define the right commercialization strategy for an entrant. The entrant is comprised of your new technology company and your company’s partners, if any.


Company’s innovation is a product, process, service or solution that embodies an incremental and emergent or radical and revolutionary change in thinking.


Draft: Please send comments to

This tool assumes that two key conditions will shape your company’s commercialization plan: 2 3 4 1. Your commercialization plan’s dependence on resources , processes and relationships owned, controlled or influenced by incumbents 2. Your company’s ability to prevent incumbents from imitating your innovation Table A identifies the expected outcomes of commercialization strategies organized in terms of the two conditions identified above. Table B identifies the key factors that drive commercialization strategies of new technology companies. In Tables A and B, incumbents’ assets, processes and relationships are organized into upstream and downstream. Upstream includes assets, processes and relationships related to technology and product development as well as the production of working prototypes. Downstream includes assets, processes and relationships related to production, distribution, and service. This tool does not define: • how profits generated from commercialization will be distributed among your company and your company’s partners 5 • the mode your company uses to collaborate with others Steps 1. Answer two questions in Table A and identify the expected outcome. The two questions are: Question 1: Does commercializing your company’s innovation depend on assets, processes and relationships that incumbents own, control or influence? Question 2: Can your company prevent incumbents imitating your innovation?

2. If satisfied with the outcome, prepare a plan that incorporates the key elements shown in Table B for the strategy selected. If not comfortable with expected outcome, first change answers to questions in Table A by modifying your...
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