First, congratulations! You have been awarded an SBIR grant for your innovation. It is truly an achievement, as the demand for SBIR grants has never been higher for funding early-stage concepts and innovations.
Have you considered what elements most contributed toward your award success, and what elements are most crucial for future SBIR funding success? It is an important exercise if you want to apply for grants in the future.
Receiving a Phase I award is generally the easiest hurdle to clear in the SBIR lifecycle. From Phase I and beyond, the complexity and challenges surmount. As the demands of commercialization increase, so does the need for having extensive, reliable, and established resources. Research has identified one crucial element to commercialization success that stands above everything else: Your network.
Your Network, Key to Success – Use of TABA Funds
What you need the most is access to a network of potential customers, investors, partners, foundations, and experts coming together to provide you with feedback. They’ll provide advice on your strategy, ideas for execution, access to capital, leads and to engage with prospects and generate revenue, that is repeatable, scalable, and sustainable. SBIR’s Technical and Business Assistance (TABA) funds can help with this and allow you to choose the right partner for your commercialization support needs.
If you are currently applying for NIST or NSF Phase II, for example, the time to make this choice is now as requests for TABA funding must be included with your Phase II application submission.
The TABA Checklist – Find a “Smart Partner”
The evolving SBIR and TABA landscape is relatively new territory for many SBIR awardees. We have put together a checklist that will help you plan for securing TABA funding –
- Talk to a Commercialization Partner experienced in SBIR Commercialization. Look for a “Smart Partner” just as you would select smart money for a capital raise. They should bring access to a meaningful network for your commercialization needs.
- Identify the specific actionable commercialization support you need and the goals you want to achieve, in working with your Smart Partner.
- Ask your Smart Partner for a scope of work “Qualification Statement” for your TABA application. This will demonstrate your plan to allocate TABA funding toward your commercialization needs.
- Post- Award (Phase II), follow-up immediately with the Smart Partner. Update the plan if your needs have changed since drafting the Qualification Statement.
Preparing for Phase II – Your Commercialization Plan
So, when is a good time to prepare for commercialization. If you are in Phase I now, you should be building your “commercialization plan” (CP) and overall commercialization strategy, and this must include –
- Customer and Markets – You need to identify the problem and who is willing to pay to address this problem. Quantifying the “value proposition” you deliver, by customer persona (i.e. a defined customer segment) is important. Define the size of the market, the barriers to entry and segment your customers.
- Team – Identify the gaps in skills, resources and build a time-based hiring plan to onboard technical and commercialization team members and to build a board of directors and advisors.
- Revenue Stream and Financing – You need to build a revenue model, either disruptive or competitive, develop a pro forma P&L. Create a sales forecast and CAPEX/OPEX, identifying funding needs through future grants, self-funding, loans, or venture capital.
- IP and Competition – Conduct a competitive analysis comparing technical and commercial attributes to develop a differentiation of your technology. Conduct patentability and “Freedom To “ (FTO)
- Go-To-Market – Build a strategy to enter the market – either using direct sales or channel/partner or licensing- based approaches, with a broad level plan for creating sales opportunities, acquire customer deals and manage customer relationships.
Working Toward Execution: Commercialization Plan, Business Plan, and a Commercialization Partner
If developing a business plan takes time, building a plan of execution is even more time-consuming. It requires that you address specific questions that will be asked by your prospects, customers, investors, and partners. You need to know where to spend your precious time and money, how to prioritize, and know what workflow you will engage for all key operational tasks, tied to strategic outcomes. If you fail to do this, the outcome will also likely be negative. Consider what impact or benefit a commercialization partner can provide by evaluating their:
- Commitment to commercializing your technology (bringing it into “use”),
- Openness to exploring what you offer and why,
- Options and flexibility of the services best suited to your commercialization prospects,
- Being laser-focused on your outcomes first and then your education,
- Approach as discerning and clear about your prospects and outcomes,
- Ability to guide you in demonstrating your investment potential with strategic and traditional investors.
Is this enough to make you a successful entrepreneur?
Larta’s 17-year SBIR Commercialization data indicate that the success rate tends to favor those with access to a network as described above. Also favored are those with previous experience or those that have had business experts helping them turn ideas into scalable ventures. Most often, SBIR companies get mired into Phase II, finding commercialization challenging and find a big learning curve due to a lack of existing skills. An unbiased objective view is vital: this will not only enhance your strategy but guide you through the execution of your business plan.
A great commercialization expert will break down the work to be done based on the problems to be solved, whether in (narrowly) defining customer segments, developing assumptions of your revenue model, conducting customer discovery, primary market research, IP assessment and filing, regulatory support or developing your marketing and sales plan.
You need a team that has commercialization expertise to provide the depth and breadth of expertise to meet the needs of your industry vertical. You also need operational support, whether to develop your website or file your patent. Do you hire individual consultants and try to orchestrate their efforts as a conductor, managing budgets, milestones, timelines, and goals, or would you rather have someone bring all these skills to you? And since you are using TABA funds, the reporting and documentation needs are important. Having the right commercialization support partner is the cornerstone to your Phase II success. And don’t forget, you need a network that only a Smart Partner can deliver.