Developing a

Commercialization
Roadmap
Strategy and Trajectory:
A Technology to Product Plan
Gregory P. Pogue, Ph.D.
2012 IC2 Institute at the University of Texas at
Austin

Workshop Topics
1. Designing a Technology to Market Plan
2. Commercialization Roadmapping with
Case Studies
Execution Risk
Co-Innovation Risk
Adoption Chain Risk

3. Developing a Commercialization Roadmap

4. Conclusions

2012 IC2 Institute at the University of Texas at

Austin

Model Product
Our Previous Learning Tool
A device that will enhance the solubility of sugar in coffee.
Some examples:

2012 IC2 Institute at the University of Texas at

Austin

NO MORE SPOONS!!!!
Take out your IR homework for your
team technology
Get into your teams
Time to get to work!!!!

2012 IC2 Institute at the University of Texas at

Austin

Executional Risks

2012 IC2 Institute at the University of Texas at

Austin

Product Realization
According to the Big Bang
Theory
Leonard: Ph.D.

Sheldon:

physicist in love
with Penny;
roommate of
Sheldon

Theoretical Ph.D.
physicist who is
highly socially
inept

Penny: Aspiring
actress who works
at the Cheese
Cake Factory

Howard: M.S.
Engineer who
desires women,
but cant interest
one

Raj: Indian Ph.D.

physicist who
cannot speak to
women

2012 IC2 Institute at the University of Texas at

Austin

Technology to Market
Risk Reducing
Developmental
Milestones

Early Stage
Technology

Risk Reducing
Go-to-Market
Milestones

Market-Fitted
Product

Profit

Team
2012 IC2 Institute at the University of Texas at
Austin

Exercise: Development Step

Analysis
Market-Ready
Attribute

Existing
Attribute

Developmental Steps

Each Team should list key market-ready attributes and compare with the
existing attributes in the product prototype. Using the differential, list the key
developmental steps required.
2012 IC2 Institute at the University of Texas at
Austin
Adapted from Cliff Zintgraff.
IC2 Institute July, 2011

Exercise: Development Step

Analysis
Developmental Approxim
Step
ate Cost

Approxim Responsi IP
ate Time ble Group Involvem
ent (Y/N)

Each Team should list developmental steps required from previous table
and approximate the cost and time required to accomplish each.

2012 IC2 Institute at the University of Texas at

Austin
Adapted from Cliff Zintgraff.
IC2 Institute July, 2011

Developmental Step
Dependency and Time
Requirements
Time (months)
Stop/Start

Task 1

Dual Stop/Start

Task 2
Task 3

Task 4

Dual Stop/Start

Task 6
Task 7

Commercial
Prototype

Task 5
Each Team should list developmental steps from previous table (represent
each as an arrow) and use approximate time requirements and assemble in
sequential order noting dependencies between events.
2012 IC2 Institute at the University of Texas at
Austin

10

Team
What team expertise is required to
accomplish the developmental tasks?
Which do you have on-board now?
Which do you need to recruit?
When do you need each new individual?
Which individuals need to be full-time
employees? Which ones can be
consultants?

2012 IC2 Institute at the University of Texas at

Austin

11

Focus
Most companies focus attention on
executional strategy:
Technology enablement completing risk
reducing developmental milestones

Some companies stop here, others move

to:
Market realization completing risk reducing
Go-to-Market milestones

But, is this enough?

2012 IC2 Institute at the University of Texas at

Austin

12

External Risks
Co-Innovation Risk
Adoption Chain Risk

2012 IC2 Institute at the University of Texas at

Austin

13

Michelins PAX System

Need: solution for flat tires
60 of US drivers experience a flat tire every 5 years
250,000 accidents/year due to low tire pressure

Inferior competition
Self supporting, run-flat tires of Goodyear, Bridgestone,
etc. were too heavy, stiff ride, poor MPG
These occupied <1% of market

PAX System
Run-flat tire with support ring clamped to alloy wheel with
pressure monitoring device
Most radical and functional change since the radial tire

2012 IC2 Institute at the University of Texas at

Slide adapted from The
Wide Lens by Ron Adner 2012
Austin

14

The PAX System

2012 IC2 Institute at the University of Texas at

Austin

15

Expectations and Reality

Michelin and Goodyear collaboration lauches
product in 2001
Rapid adoption on high end cars
In 2004, JD Powers predicts 80% of cars will
have run-flat tires by 2010
2005, Link with Honda, PAX on Oddessy and
extended 2-year warranty
In 2007, the PAX system was discontinued
with huge corporate loss

2012 IC2 Institute at the University of Texas at

Slide adapted from The
Wide Lens by Ron Adner
Austin

16

What Happened?
Michelins Normal Business Practice:
Michelin Tires

Vehicle Manufacturer

Driver/Customer

Michelin Tires

Tire Dealer

Driver/Customer

What Was Required for Successful PAX Business Practice:

Michelin PAX
Tire System

Vehicle
Manufacturer

Tire
Dealer

Service Garage
2012 IC2 Institute at the University of Texas at
Slide adapted from The
Wide Lens by Ron Adner
Austin

Driver/Customer

17

Learnings
For successful products to produce revenue,
you must manage more than your internal
ecosystem (innovation, marketing and
execution), you must manage your external
ecosystem as well!
Michelin learned and found an ecosystem for
the PAX System the US Military:
Michelin PAX
Tire System

Defense
Department

Defense Service
Garage

Vehicle Manufacturer
2012 IC2 Institute at the University of Texas at
Slide adapted from The
Wide Lens by Ron Adner
Austin

18

Risks to Realizing Innovation

Value
Co-Innovation Risk

Innovation/
Product Plan

Execution Risk

Data-Based
Strategy and
Return

Adoption Chain Risk

Co-Innovation Risk: requirement of other innovations for
successful commercialization
Execution Risk: requirements for your company to bring
forth your product with required specifications on time/budget
Adoption Chain Risk: requirement of partners to adopt your
product before end customers can assess the full value
proposition
2012 IC2 Institute at the University of Texas at
Slide adapted from The
Wide Lens by Ron Adner
Austin

19

Begin with the End in Mind

Traditional Marketing training focuses on
the internal company ecosystem:
Innovation management
Customer definition and engagement
Execution of advertising, sales, distribution,
legal HR and finance

However, the broader external ecosystem

is often ignored or addressed in too little
detail

2012 IC2 Institute at the University of Texas at

Austin

20

Co-Innovation Risk
Component 1
Component 2

Nokia
2G Phone

Operator

Operator

Component 3

2012 IC2 Institute at the University of Texas at

Slide adapted from The
Wide Lens by Ron Adner
Austin

21

Co-Innovation Risk
Collaboration = Dependence
The joint probability that all
innovations are successful will
determine when and if your
product will be!
Alignment is required:
Resources
Profits
Strategy
Relationship

2012 IC2 Institute at the University of Texas at

Slide adapted from The
Wide Lens by Ron Adner
Austin

22

Who Are Your CoInnovators?

Co-Innovators

Importance to Your Product

(-3 to +3 with 0=average
importance)

Each Team should use its technology/product description to identify at least

two co-innovators important to your product and rate these according to
your understanding of their importance to your success.
2012 IC2 Institute at the University of Texas at
Austin

23

Adoption Chain Risk

Customer benefits are perceived as NOT ABSOLUTE,
but RELATIVE to:

Present products (Office 2003 vs Office 2007)

Competition
Current activities or operating procedures
Cost of change
Revenue upside
Operational streamlining offered

Thus market uptake and price agreement is dependent

on the CUSTOMERS PERSPECTIVE and your ability to
work in the ecosystem to get them to adopt (pay for
and use) your product

2012 IC2 Institute at the University of Texas at

Austin

24

Digital Film
Innovations: Digital film
processing and
projection
DVD form, rapid
distribution, less piracy,
improved picture resolution,
cheap reproduction, 3D
Huge benefits to film
industry and film goers
1996 DLP projector
1999 T3 lines
All in order but no adoption

What about the theaters

who show the films?
$70-100,000 to purchase the
projector
Switching costs too high
No regulation or incentive of
increased customer value
could create adoption

2012 IC2 Institute at the University of Texas at

Slide adapted from The
Wide Lens by Ron Adner
Austin

25

New Adoption Chain

Enter the Virtual Print
Fee (VPF) program in
2005
Rent-to-Own program
for theaters to obtain
digital projectors
VPF offered first
through film industry,
then theater
coalitions

Digital Projector
++
Studio
+++++

Theater
---

Viewer
++

Bank +
Digital
Projector
++
(VPF)

Digital Theater
Integrator +

Studio
+++++

Theater
+

2012 IC2 Institute at the University of Texas at

Slide adapted from The
Wide Lens by Ron Adner
Austin

Viewer
++
26

What Are Your Adoption

Chain Risks?
Suppliers,
Intermediaries and
Facilitating Factors

Importance to Your Product

(-3 to +3 with 0=average
importance)

Each Team should use its technology/product description to identify at least

three suppliers, intermediaries and facilitating factors important to your
product and rate these according to your understanding of their importance
to your success.
2012 IC2 Institute at the University of Texas at
Austin

27

Commercialization Roadmap

Identify your customers need(s)

Identify your part, your product, what you will deliver
Identify your financial and executional risks
Identify your suppliers and negotiate deal structures
Identify intermediaries and channels, those who stand between you and your
customer
Identify the facilitating factors (what aligns the suppliers and intermediaries to
collaborate)
Identify external ecosystem risks
Co-invention risks
Adoption chain risks

Use Green Light, Yellow Light, and Red Light to identify alignment,
agreement and incentive to participate with you
All Yellow and Red Lights work to find an alternative, viable solution WITH
them
Update Roadmap quarterly

2012 IC2 Institute at the University of Texas at

Slide adapted from The
Wide Lens by Ron Adner
Austin

28

What Do the Colors Mean?

Green

Alignment of interests and goals

Incentive plan with acceptable mutual benefit
Plan defined, with responsibilities, consequences and timeline
Agreement signed

Yellow

Alignment partial
Incentive not pleasing to both parties
Plan and responsibilities or timeline unclear
Term Sheet or less

Red
Lack of alignment, incentives, plan and agreement

2012 IC2 Institute at the University of Texas at

Austin

29

Navigating a Changing Road

Relocate
Are there elements that are
currently bundled in one location
that could be more productively
bundled in a different location?
Separate
Are there elements that
are currently combined
that could be
productively separated?

New
Commercialization
Old Commercialization
Roadmap
WITHOUT
Roadmap
With
Roadblocks

Add
Are there elements that are
currently absent whose addition
would facilitate productive new
connections or increased
efficiency?

Combine
Are there elements that
are currently separated
that could be
productively combined?

Subtract
Are there elements whose
elimination would add more viability,
or ultimate ease of operation, than
would be taken away from value
creation?

2012 IC2 Institute at the University of Texas at

Slide adapted from The
Wide Lens by Ron Adner
Austin

30

Sony Reader vs Amazon

Kindle
E Ink Screen
Other
Components

Sony
Reader

Retailers

End Customer

Sony DRM
Authors

Publishers

Sony Connect.com

Wireless
Connectivity
Amazon DRM
And Other
Components
Authors

Amazon
Kindle

Amazon.com

End Customer

Publishers
2012 IC2 Institute at the University of Texas at
Slide adapted from The
Wide Lens by Ron Adner
Austin

31

To Move First, Or Not To

Move First? That is the
Complementor
Co-Innovation Challenge
Question
Lower
Higher
Lower

Innova
tor
Executi
on
Challen
ge
Higher

Quadrant 1:
Quadrant 3:
First in Gets
Hurry Up and
the Win:
Wait: Reduced
Baseline level of level of earlyearly-mover
mover
advantage
advantage
Quadrant 2:
Winner Takes
More:
Increased level
of early-mover
advantage

Quadrant 4:
Depends: Level
of early-mover
advantage
depends on
which challenge
is resolved first

First-mover matrix for determining relative advantage from early entry as a function of the
level of innovator execution challenge and complementor co-innovation contribution and
challenge. (Adapted from Adner and Kapoor, 2010).
2012 IC2 Institute at the University of Texas at
Austin

32

The iPhone Example

iPhone

Single Network
Operator

iOS

Carryover:
iTunes

(Carryover):
End Customer

Carryover:
iTunes Software
Expansion Stage 1
Developers

Expansion Stage 1
App Store
Expansion Stage 2
Multi-Carriers
Expansion Stage 2
Wireless Synch

2012 IC2 Institute at the University of Texas at

Slide adapted from The
Wide Lens by Ron Adner
Austin

33

Now it is Pure Competition

2012 IC2 Institute at the University of Texas at

Austin

34

Developing Your Own

Commercialization Roadmap
Develop an Outline of the following as it addresses YOUR
PRODUCT:
Chief customers need(s)
What part will you will deliver?
Your key financial and executional risks
Your key suppliers, intermediaries and channels
The key facilitating factors for each
Identify external ecosystem risks
Co-invention risks
Adoption chain risks

Use Green Light, Yellow Light, and Red Light to identify

alignment, agreement and incentive to participate with you
All Yellow and Red Lights know that you must work to find an
alternative, viable solution WITH them

2012 IC2 Institute at the University of Texas at

Austin

35

Map It!!!!
Co-innovation Partner
Co-Innovation Partner
Supplier 1
Supplier 2
Supplier 3

Your
Product

Market Ready
Product

User

Delivery Intermediary
Delivery Intermediary
Co-Adoption Partner
Co-Adoption Partner

2012 IC2 Institute at the University of Texas at

Austin

36

Conclusions
What are the key executional risks facing your
technology?
What are the key co-innovation risks for your
technology? Who can supply these innovations
partnerships, product development partners,
others?
What are the key adoption chain risks? Who
must you partner with to allow rapid and deep
adoption of your technology/product?
What is your most important NEXT STEP?

2012 IC2 Institute at the University of Texas at

Austin

37

Contact
Gregory P. Pogue, Ph.D.
IC2 Institute
The University of Texas at Austin
gpogue@ic2.utexas.edu
(512) 560-3717 (cell)
(512) 475-8961 (office)
Skype ID: pogo5708
www.ic2.utexas.edu

2012 IC2 Institute at the University of Texas at

Austin

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