Unlock More Value in Your Tech Transfers

Unlock More Value in Your Tech Transfers

By Drew Boyd

Image © The Telegraph

Boost the value of your tech transfer portfolio by applying a systematic innovation method to the technology before making the investment.  This will tell you what else is possible with the technology and that could affect your valuation of the transfer.

An innovation method called Systematic Inventive Thinking (SIT) is particularly useful for this purpose. For thousands of years, inventors have used five simple patterns into their inventions, usually without realizing it. These patterns are embedded into the products and services you see around you, almost like the DNA of a product or service. SIT allows you to extract those patterns and reapply them to create new-to-the-world products and services.

Applying S.I.T. during the evaluation process will yield one of three outcomes:

  1. The innovation effort is a success.  You conceptualize exciting innovations for the technology that could increase its value.  By identifying these new sources of value before the deal, you widen your negotiating envelope.
  2. The innovation effort fails – no new opportunities are identified.  Given that, the full valuation of the deal should be based on the current technology only.  This helps you avoid being overly optimistic about the technology’s prospects for growth.  Any increases in value will come from efficiency gains or other sources.
  3. The innovation effort is a success, but you decide to walk away from the deal for other reasons.  You now own innovative concepts that you could sell to another firm, to one of its competitors, or to a private equity investor considering that technology.

Regardless of the outcome above, you are in a better situation as you consider negotiating the transfer.

For example, imagine you are considering a new sensor that tells consumers when they have had too much sun exposure. The skin patch is made of UV-sensitive film bonded to a special tape that changes color with exposure to the sun.

Let’s apply one of the five SIT techniques called Attribute Dependency. The technique works by creating correlations between a characteristic of the product and other characteristics of a product or its environment. Using this technique, we identify novel concepts based on this general platform: a sun detection skin patch. For example:

  • A series of sun patches that allow the consumer to select different levels of tanning
  • A sun patch that interacts with sunscreens and adjusts its detection capability based on the SPF of the sunscreen
  • A sun patch that is cumulative in how it detects sun exposure
  • A sun patch that changes to reveal QR codes that to take you to websites about skin damage and protection methods
  • A sun patch that adjusts its detection capability based on skin type of the consumer

Based on the quality and content of the ideas generated, you would adjust your valuation of the target technology and act accordingly.

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