BIOOPTICS COMMERCIALIZATION: EPIC-EOS workshop explores idea-to-product practices
The workshop on biophotonics, presented by the European Photonics Industry Consortium (EPIC) European Optical Society (EOC) during the annual meeting of the European Optical Society (Oct. 1; Paris, France), was the first of its kind in this field. It focused the 35 participants on the apparent difficulty of transforming innovative ideas from the laboratory to industrially manufactured and commercially successful products. Because biophotonics covers a vast area of technologies and applications, the organizing committee decided to use development of lab-on-a-chip products as an example.
The workshop deliberations were prepared by four presentations: two from small companies working to “productize” university technologies, one giving an overview of the market issues, and one from Leica, a large company that has successfully transformed numerous concepts into biotechnology products.
The participants then divided into working groups to debate four topics:
Building partnerships between innovators and manufacturing. Partnership between a small organization and a large company with manufacturing, marketing, and distribution capacity as a way to shorten time to market.
Financial resources for growth. How resource needs and sources change as the innovation process moves from idea to prototype to product, and where and how to find resources.
Technology needs. Where to find components (sensors, optics, electronics, displays, software) that you need to bring a product idea into being, how to decide what to make vs. buy, whether to partner or subcontract, and how real small enterprises deal with these challenges.
User-friendly products. Moving from the working prototype to a product that can be used effectively by non-scientists, deciding the kinds of interfaces needed, and using the KISS (keep it simple, stupid!) approach.
The working-group debates generated a number of outcomes.
Building partnerships
Two key requirements for partnership building are the ability to invest in resources, and exploitable intellectual property.
Partnering optimizes time-to-market in two ways: it opens a route to comprehensive product engineering from idea to commercial volumes, and it provides established product marketing, inventory management, and product distribution. Considering that we are dealing with photonics technologies for bio customers and not the reverse, it is helpful to keep in mind that bio customers are conservative prefer to buy from established names–so this marketing-distribution link is a important.
Heading the list of partnership challenges that the group created is a return on investment for partners: the development arrangement has to work to maximize ROI for both partners. Another important point is to manage the conflicts of interest that protect existing products and markets affecting the industrial partner.
Financial resources
Most of the financial resources discussion concerned the choice between debt and equity financing. The group concluded that grants and subsidies are useful for the pre-start-up phase, but that the time scale is inconsistent with product development. And it was noted that R&D tax credits have shorter time scale. Conclusion: it is not usually wise to finance product development on grants and subsidies.
With equity financing you lose some management control, but gain management advice. You need to pay attention to the venture capital team because different investors have different goals in terms of time and money, and they all need to work together in your company. Conclusion: Equity financing may be the only resource available in the start-up phase. While getting the money is important, it is even more important to carefully select the funding parties.
The discussion of debt financing acknowledged the need for both sales and assets. Because interest payments are involved, cash-flow management is key. In the advantage column, though, the start-up company gets to keep control and is not subject to unwelcome advice. Conclusion: debt financing will be possible only in later-stage development after products are already on the market.
Technology needs
Biophotonics products are complex systems, and the innovator usually brings to the table expertise in one or two technologies. The breakout group emphasized the importance of focusing primarily on the application–not the technology–and agreed that the secondary focus should be overall budget. Technology issues follow third in importance.
The group identified 13 major components areas. Among these, temperature control, packaging, user interface, and software are examples of components that are neither photonic or biologic in nature.
User-friendly products
The group explored the idea of how to fit the technology into the value chain of the customer. Building an effective user interface is a big part of the solution, they concluded.
For a biophotonics product to succeed it must offer more than good biology and good photonics–and the user should not have to understand the technology to use it. The challenge is to transform technology into a system that nonscientists will find helpful. That requires design of friendly input interfaces, data-processing software to produce intelligible output, and logical output interfaces. But that’s not enough. In addition, your product needs to be perceived as a “must-have” item. It must have an attractive design, and you need appropriate marketing and customer support.
Outcomes and action items
The workshop content and debate have been captured and edited on a CD-ROM which is available at no charge to workshop participants and members of EPIC. In addition, the principal recommendations and action items will be presented to “Photonics 4 Life,” an FP-7 Network of Excellence (FP-7 is the European Union’s chief instrument for funding research) and also to the Life-Sciences Working Group of the Photonics-21 European Technology Platform. Further details are available from EPIC, www.epic-assoc.org.
–Thomas P. Pearsall