How to create high-tech startups with 100% success rate?

Steven F. Tan MSc MBA RTTP

19-10-2018

Introduction • Nascent Ventures is a Seed Fund focused on Advanced Instrumentation (incl. Nanotech)

Founding

Funding

Managing

• Team:

Hans Brouwer serial entrepreneur in high-tech

Steven Tan technology transfer and investment professional

• We focus on platform technologies originating from physics research in The Netherlands.

• We Partner with TTOs of Dutch universities and research institutes.

• We work closely with the researcher(s) and see the startup as complementary to their science career. We do not expect a large time involvement or career change.

2

Academic Startups

• Linear innovation model

• Innovation funnel

• Design thinking

• Lean startup

• BMC

3

“Orthodoxy of Innovation”

All models are based on an idea of an endpoint

But what if you have no idea about an endpoint?

Platform technologies typically have no obvious endpoint

• Platform technologies have:

Unique functionality

“MOOM” effect

Many conceivable applications (known opportunities)

Many inconceivable applications (unknown opportunities)

Potential to disrupt and/or create new applications and new markets

How to find and endpoint? Methodology is lacking.

N.B. This dilemma also applies for most Nanotechnologies

4

Dilemma of Platform Technology

• An “approach” to identify and validate new applications and new markets

• Pioneered by Hans Brouwer and Steven Tan

• Tested and validated in 4 cases with 100% success rate (so far)

• Steps:

1. Initial focus on research market, only

2. Develop “MVP”

3. Sell MVP to many researchers for any application

4. Generate early revenue

5. Harvest use-cases and ideas

6. Select launching application for the research market (preferably new appl.)

7. Develop product

8. Develop and execute b-plan (=regular innovation)

5

“Market Exploration”

Platform

technology

6

First Explore, then Innovate

Validated use-

case

Application

Application

Application

Application

Application

Application

Exploration Innovation

• Semi-unstructured

• Non-linear

• Co-creative

• Requires sharp observation

• Why initial focus on researchers?

Are eager to try something new (publication drive)

High tolerance to products with teething problems

High level self-reliance

Easy to approach

Willing to share information and ideas

Smart and creative people > new ideas for application

Access to knowledgeable employees (PhDs and PostDocs)

• Why focus research market?

Large dynamic market

Often not taken seriously by VCs

Excellent step stone to develop industrial market

Willing to buy first release products

Willing to pay in advance (up to 50% > cash flow)

7

Research Market

The benefits of early revenue Early revenue is critical for a high-tech startup because:

1. Revenue is the best source of funding

2. Early customers provide valuable feedback for product development and improvements

3. Early customers (and their colleagues) provide valuable ideas for new application of the technology

4. Focus on revenue and customer is build into the DNA of the startup right from the start

5. Actual customers and revenue is highly appreciated by investors

Revenue makes you a real company

8

Founding

Startup Seed funding

Market

Exploration VC Round

Marketable product Validated application & market Go-to-market strategy Management team

1 2 3 4

Building startup ready for VC funding

Investment proposition

9 100% success rate (so far…)

Thank you

+31 6 493 200 99

s.tan@nascentventures.nl

Author: Prof. Davide Iannuzzi

Available in e-book and print at Amazon.com and other stores

Investment Criteria 1. Unique functionality:

A. MOOM principle (Multiple Order of Magnitude better)

And/or

B. New functionality

2. Ability to generate early revenues Explicit early interest from fellow researchers or R&D departments

3. Platform technology with broad application space Many conceivable applications

“Gut feeling”

4. Explicit intention to buy from fellow researchers

5. Within the comfort zone of HB & ST Good understanding of product development process

Excellent fit to network of (co-)developers and suppliers

6. Quality and depth of the Technology & IP

7. Quality, size and reputation of the research group

8. Fundability of the exploration phase

MOOM Principle

Early Revenue Potential

Broad Application

space

11

Added Value to Startup 1. Hands-on expertise in relevant domains

Hardware development

Optics

High precision engineering

Electronics

Semiconductor development and integration

(Embedded) software

Design for manufacturing

2. Startup expertise Direct involvement in launch of 20+ startups

Dealing with university and academics

IP & licensing

Collaboration agreements with universities

Fiscal and legal issues

Application of grants and subsidies

Access to Informals and VCs

Building the company from scratch

Prepare startup for VC funding

Prepare startup for scale-up

12

Some of the startups that Steven and/or Hans launched in the physics domain:

• Optics11 B.V. (fiber optical sensors)

• Lumicks B.V. (single-molecule analysis instrumentation)

• OPNT B.V. (precision timing solutions)

• Innoseis B.V. (MEMS based geo-exploration systems)

• Omniradar B.V. (radar on a chip)

• Tritos Diagnostics B.V. (3rd harmonics imaging)

Portfolio of Nascent Ventures (operational since Q4 2017):

• Amsterdam Scientific Instruments B.V. (hybrid pixel detectors)

• Onnes Labs B.V. (nano-positioner for milliK conditions)

• Several new startups lined up

Relevant startups

13