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Option #2: Venturing

Some technology entrepreneurs choose to take the more adventuresome commercialization path of venturing, or building a business around their technology. With the adventure comes a great deal more risk, but if pursued properly, there could also be the opportunity to realize greater rewards.

"Venturing" can cover a broad range of activities and may include scenarios such as:

  • contracting out for the complete production of the technology and retaining just the sales and marketing activities to perform in-house;
  • contracting out for one or more parts of the finished product to be produced elsewhere and then assembling these components in-house. In this case, the sales and marketing could also be performed in-house or contracted out to another party.
  • performing all the production, sales, and marketing in-house.

There are definitely some advantages and disadvantages to consider before choosing the venturing path to commercialization:

Advantages

  • Participation in an exciting, challenging endeavor
  • Greater control over how the technology is commercialized and eventually managed
  • Potential for far greater rewards, both financially and in a sense of achievement

Disadvantages

  • Historically low level of success for new business start-ups (though this history does not have to apply to your venture if you plan and prepare properly)
  • Need for appropriate equipment and facilities
  • Need for much more capital than would be required for licensing
  • The investment of time and effort required to start and operate the business, secure and manage needed resources, etc.
  • The challenge of overcoming barriers to market entry, often in industries that do not welcome new entrants
  • Likelihood that you, the technology developer, will have little time for additional new technology R&D.

By numbers alone, the disadvantages of venturing tend to outweigh the advantages. But venturing is not about the number of hurdles you'll have to overcome. Instead, it is about your desire—and more importantly, your commitment—to successfully building a business around your technology. The challenges are significant, but with the right approach—which involves thorough research and planning and being open to learning from the experience of others—success is definitely achievable.

Getting Started with Venturing

The choice to follow the venturing path to commercialization should be made only after careful consideration and planning. Specifically, you must think through the details of:

  1. a commercialization plan—i.e., what specifically needs to be done to move the technology from its current level of development to the marketplace?; and
  2. a business plan—i.e., what specifically needs to be done to start and successfully operate the business behind the technology?

Business plans and commercialization plans are not the same! They will be similar in many respects if the business is based on commercializing a single technology, but in fact, each technology should have its own commercialization plan within the broader context of the overall business.

Answering the two questions above is really just the beginning of the venturing process. For each of these questions, you'll also have to decide:

  • who will be responsible for completing each needed activity;
  • when these activities need to be completed;
  • what resources—financial; personnel; facilities and equipment—are currently available to support each activity;
  • what additional resources will be needed, when they will be needed, and how they will be obtained.

Be honest with yourself

Perhaps more than anything else, successful venturing begins with an honest, objective assessment of your own skills and resources relative to the tasks you know must be completed. The Advanced Technology Development Center, a technology-business incubator associated with the Georgia Institute of Technology, has developed a useful self-screening process.

This self-assessment exercise is critical, because it identifies areas in which you'll need help. If you're like most independent technology entrepreneurs, you'll find you can use help in all areas—technical; business start-up, operation, and management; financing; personnel.

If there's one thing experienced business people and entrepreneurs agree on, it is that few individuals—especially those whose backgrounds have long been focused in the technical arena—possess all the skills and talents and time and energy needed to successfully start and manage a new technology business. Indeed, many would argue that no one possesses all these capabilities, and that those who claim to be able to do everything are simply not being realistic.

Technology entrepreneurs can help themselves immensely by realizing early on what their strengths and weaknesses are, and then taking steps to address the weak areas. This approach makes more efficient use of your own time and resources, and also gives others the perception that you are being realistic about your new venture. This positive perception is crucial when you approach someone for financial or other help.