yet2.com Inc, 2009 Page 1
Food & Drink Innovation Network
Creating an Intrinsically Innovative Company
Emma Hughes
Managing Director, yet2.com Europe Ltd
yet2.com Inc, 2009 Page 2
yet2.com – open innovation, technology transfer and patent trading company.
10 years of experience in supporting companies develop their business through Technology Transfer and IP transactions.
Yet2.com bridges the gap between industry needs and sources of innovative technology. Trusted advisors and experts.
Global cross industry and relationship based network. Yet2.com offices in US (Boston), Europe (UK, Liverpool) & Asia (Japan, Tokyo)
Expert Hands on Professional Services & Proven Experience in :-
– Technology and Technology Needs Identification / Prioritization
– Technology Scouting, Acquisition & Open Innovation Strategy
– Technology Licensing
– Patent Trading
yet2.com Inc, 2009 Page 3
Example Members
Advisory Board inc: AGFA, Avery Dennison, Bayer, DSM, DuPont, Philips, P&G, Takeda
Open Innovation - Internal & External ActivitiesChesborough - well known but what does it actually
mean for your company?
yet2.com Inc, 2009 Page 5
Implementing an Innovative Culture: Getting Started
Define what innovation means for your company. Question perceptions of “open” innovation internally
• Various organization structures & funding, internal v external, central scouts v integrated within BU. Inherent tension
• Creating an intrinsically innovative culture needs to be strategic across all levels (top management, project and individual)
• Requires mid and long term innovation initiatives - Review IP strategy
• Requires committed finances and resources
• Look at internal, existing processes AND external scouting activities
Open Innovation Company Challenges
Trying to change company culture is an ongoing & common problem
The right resource and a budget is required– Reallocation of budget for external collaborations– Easier to spend internal resource than cash outside– Who evaluates?
IP issues –contamination, NDA’s
Lack of modern communication media – next generation has different view to openness (its not everything!)
Defining the real needs of the company – needs clarity– What solutions are internal, – When in the process do you look externally– How do you articulate the real problem
What tools and when!
Open Innovation Requirements
COMPANIES’ UNMET NEEDS
Missing feature / performance issue / legislation change
Improve an existing product
Improve price Reduce cost / identify
manufacturing efficiencies
Step function change in
performance
Monitor next generation
technology curves
Wholly unmet need Expand into new “white space”
External Technology Acquisition Program
External Innovation - building on existing capabilities & competencies within the company.
WFGM Practice:-
Identifying Needs/Articulating/Prioritizing
Tools, Sourcing & Marketing
Screening / Engaging/ Closing deals
Implementing / Integrating
Process Example- Techneed Identification
Guided Techneed discussion session – Involve R&D and Marketing/Business professionals.– In house OI or technology leaders eg Dupont or external consultants
Data Collection:– Need-Prioritizing Tool produces a collection of technology needs in template format,
create tangible inventory. – Build corporate innovation support network and illustrate potential of external tech
acquisition internally
Acquisition Option Recommendations:– Place technology needs into action-oriented groups through Triage process, using
proprietary methodology. – Understand what should be solved internally, sourced externally, needs partnering
Prioritization– Small-group ‘Triage’ to set priorities that will most impact key business drivers– Team consensus to BU leadership decision makers– Ensure strategic direction – what links to company competency and strategy,
understand business strategy
Considerations for Technology Needs
Financial Impact– Benefit of solving the need
– Size of affected revenue streams
Cost/Effort to Implement– Internal Capabilities available to
develop v implement
Urgency– Current Status of impacted
products
– Risks of not solving
External Development Factors– Known solutions
– Known IP Positions
– Uniqueness of solution(s)
Technology Needs Prioritized
BU2BU3
BU4BU5
BU1
0
5
10
15
20
25
30
35
40
45
50
0 10 20 30 40 50
Financial
Urg
ency
Need#1
Dispose
Best
Formed
Eliminate
ReplaceAlternative
Radiate
Improved
Natural
Dev
Eliminate
Replacement
PackagingNeed#16Need#24Need#33
Best(other)
Highest rated Needs for both Urgency and
Financial Impact, across 4
BUs.
‘Apples to apples’ comparison – enabling prioritizing across the company
Internal v External
New technology or existing solution in another area, start up business or established partner.
Research Tools
Patent mining, publications, company news, research papers etc
Internal Sourcing Tools
Customers, suppliers, business partners, lab networks, internal experts
External Sourcing Tools
Brokers, consultants, technical experts, online networks
Why use an innovation broker?
Unique insight in to cross industry open innovation best practices– How are other companies organising for Open Innovation– What is required internally before working externally– What skills & resources are required– What processes and tools are available (ID, prioritizing, articulating)
Experienced practitioners with diverse cultural and industrial sector collaboration experience– Network beyond your own– Real Market Knowledge of who has what– Deal experience – what works what doesn’t
How an innovation broker can help.
Implementing a strategy and process (review best practice)
Gathering & understanding of what you need - external perspective & tools
Articulating that need to the outside world - confidential description
Marketing to a broad network –networks beyond your own
Scouting & evaluating external solutions – key questions
Increasing speed to engagement - existing relationships
Understanding expectations and differences across diverse companies
Flexible & entrepreneurial deal facilitators – understands nuances
Technology Need – Retain anonymity
Why use other networks & brokers?
YOUR NETWORK:
-Suppliers
-Select university relationships
-Conferences/trade shows
-Industry journals
OTHER NETWORKs:
-Regional and subject expertise beyond comfort zone
-Geographically broad
-Solutions from other industries
-Direct access to a large population of SMEs
-Broad reach to universities/research institutions
-Connect through private equity
-Network of affiliated brokers
Quality & Diversity of the networks that is important. A constant stream of good ideas relies on forming great external connections
Key value add of Innovation BrokersConnectivity
Deep reach into corporate technical staffs – not just size of network but diversity and relationships
Access to key gatekeepers (tech transfer & tech acquisition)
Relationships with venture capital and SMEs
Confidentiality
Opportunity screening and initial discussions
Protect client name and application
Expertise
Support best practice and upfront preparation
Evaluation and communication methods
Market and buy-side knowledge
Business formation and commercialization skills
External perspective
Unbiased evaluation and critical thinking
Understand nuances between different types organisations
Flexible in what a deal looks like
Company Best Practices – intrinsically innovative
Look at defensive use of Open Innovation – don’t get to end of a project and find you’re already in competition with someone else
Change IP strategy to support open innovation
Peer reviews – integrate alumni of the company
Not just about looking outside – develop existing suppliers and educate sourcing resource
Implement a process to identify and review (WFGM)
Incorporate internal and externally sourced technology within projects – reward both
Use new innovative and varied communication media to engage all the organisation
yet2.com Inc, 2009 Page 20
Appendix
Yet2.com….Experts in Bringing all the Pieces Together
Technology/IP
Global Market
Knowledge
CapitalPeople
& Experience
Yet2.com
yet2.com Inc, 2009 Page 22
yet2.com links Ganeden BioTech to DSM
Ganeden BioTech
Developer of a highly efficacious probiotic (microbial digestional aid), which is sold through retail drug stores and supermarkets and can be incorporated into foods and beverages
DSM
Holds leading positions in the Nutrition sector, particularly the markets for ingredients for human and animal nutrition and health and personal care
PurposeMay enable many new probiotic applications in both food and feed that DSM wants to follow closely as an area of potential future business
Deal SizeDSM joined a private equity partner in a $12 million financing round
Date November 2007
HIGHLIGHTS SINCE TRANSACTION
• Ganeden products were featured on Oprah Winfrey’s syndicated radio program in November (as a result of an introduction from rede4).
• DSM evaluating possible future partnering with Ganeden for the development of specific applications
HIGHLIGHTS SINCE TRANSACTION
yet2.com Inc, 2008 Page 23 yet2.com Inc, 2009 Page 23
ElectroPetroleum (EPI) developed a technology to extract heavy oil. 2/3 of the world’s oil supplies are heavy oil, so this technology has broad implications. The technology uses 1,000 watts of DC electricity to heat the oil and ‘cold crack’ it. The technology competes favorably with steam and an AC technology. Field tests showed a 10 times improvement in oil output per well at a cost of $4 per barrel.
October 2007 - EPI retained yet2.com to find partners and capital.
July 2008 - Yet2.com got 3 term sheets for investment and closed a $10 million round from DFJ Element. Yet2.com also sourced the first customer, Deloro, who gave EPI 10% of a 63 million barrel field.
Yet2.com links ElectroPetroleum to Customers and Raises $10 Million
yet2.com Inc, 2009 Page 24
IP-based Spin-out: NaturNorth auction
NaturNorthSubsidiary of Potlatch – maker of IP-protected bioactive birch bark-derived materials for pharma, ag, cosmetics, paints. Derived from birch bark
BuyerSmall Pharma company in clinical trials for a new formulation with a NaturNorth derivative as a key ingredient
PurposeCouldn’t afford to switch/re-qualify supplier in the midst of Phase III trials, and greatly strengthened their monopoly through acquisition of 30-patent portfolio
Deal SizeWinning auction bid was [7-figures], with several other bidders lined up ot buy non-critical patent families for [6-7 figures]
Date February 2008
R1
R2
R3
R4
And, a Library of ~1000 DerivativesOuter bark +
unique chemistries yield pure Betulin
yet2.com Inc, 2009 Page 25
January 11, 2006 – Axela Biosensors has completed a significant exclusive in-licensing agreement with Kimberly-Clark. The agreement includes exclusive rights to approximately 150 world-wide patents and applications, as well as transfer of significant immunodiagnostics assay technology. As part of the agreement, K-C will be acquiring an equity interest in Axela. “These technologies are are a significant contribution towards our execution of product offerings in the diagnostic market, including our Diffractive Optics Technology (DOT™) products planned for product launch in 2006” said Rocky Ganske, CEO, Axela Biosensors.
Yet2.com links Axela Biosensors Inc. and Kimberly-Clark on biosensors deal
August 2006: Axela launches new real-time analytical device (8 months from deal).
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