From Idea to Product

From Idea to ProductFrom Idea to Product

Dr Ian McKayDr Ian McKay

We help SMEs to harness the benefits of european We help SMEs to harness the benefits of european research funding through:research funding through:

concept developmentconcept development

consortium generationconsortium generation

writing and evaluation of applications for grant writing and evaluation of applications for grant funding from regional and national bodies, and the funding from regional and national bodies, and the ECEC

development of intellectual property management development of intellectual property management and exploitation strategiesand exploitation strategies

This presentationThis presentation

Classic product life cycleClassic product life cycle

Sales

Time

Development Introduction Growth Maturity Saturation Decline

Why innovate?Why innovate?

Sales

Time

Effects of ExtensionStrategies

Key steps ‘From Idea to Key steps ‘From Idea to Product’Product’

Idea generationIdea generation

Product screeningProduct screening

Concept testingConcept testing

Business and financial analysisBusiness and financial analysis

Product developmentProduct development

Test marketingTest marketing

CommercializationCommercialization

Idea generationIdea generation

Where do ideas come from?Where do ideas come from?Market research – identifies gaps in the marketMarket research – identifies gaps in the marketMonitoring competitorsMonitoring competitorsPlanned research and development (R&D)Planned research and development (R&D)Luck or intuition – stumbling across ideasLuck or intuition – stumbling across ideasCreative thinking – brain storming, scenario Creative thinking – brain storming, scenario analysisanalysisHorizon scanning – what will people be Horizon scanning – what will people be using/wanting/needing 5,10, 20 years hence?using/wanting/needing 5,10, 20 years hence?

Idea generationIdea generation

Product screeningProduct screening

FABU analysisFABU analysis

FeaturesFeatures

AdvantagesAdvantages

BenefitsBenefits

U-AppealU-Appeal

Pick the winners...Pick the winners...

...but remember the rest just in case!...but remember the rest just in case!

Concept testingConcept testing

Get people together to test their response to the new Get people together to test their response to the new product or service concept:product or service concept:

Focus groupsFocus groups

ExhibitionsExhibitions

Trade fairsTrade fairs

Internet - webinars, blogs, etc.Internet - webinars, blogs, etc.

but remember – protect the intellectual property first!but remember – protect the intellectual property first!

Product developmentProduct development

Development of a new product involves:Development of a new product involves:

Design (for manufacture)Design (for manufacture)

Prototype development and testingPrototype development and testing

Packaging and brandingPackaging and branding

PositioningPositioning

Usage testing and feedbackUsage testing and feedback

Marketing and advertisingMarketing and advertising

and ultimately (and this is very important) SALES!and ultimately (and this is very important) SALES!

Management of product Management of product developmentdevelopment

All elements of product development must be All elements of product development must be managed carefully:managed carefully:

Designs – version controlDesigns – version control

Intellectual property – protection and maintenanceIntellectual property – protection and maintenance

Prototype development – in house or...?Prototype development – in house or...?

Marketing, advertising and salesMarketing, advertising and sales

and most important of all for SMEs:and most important of all for SMEs:

Cash flow!Cash flow!

Case studiesCase studies

Piezotag – the high performance, low Piezotag – the high performance, low cost cost

Tyre Pressure Monitoring System Tyre Pressure Monitoring System (TPMS) (TPMS)

Piezotag ideaPiezotag idea

A device that measures tyre pressure and A device that measures tyre pressure and temperature for:temperature for:

Passenger and commercial vehicles: Passenger and commercial vehicles: two wheelers, cars, buses, vans, truckstwo wheelers, cars, buses, vans, trucks

aeroplanesaeroplanes

and provides the following benefits:and provides the following benefits:

Health and safety – reduced accidentsHealth and safety – reduced accidents

Increased energy efficiencyIncreased energy efficiency

Improved vehicle performanceImproved vehicle performance

Piezotag advantagesPiezotag advantages

Generates it’s own power – piezoelectric effectGenerates it’s own power – piezoelectric effect

RF transmits from wheel to single aerial every 6s RF transmits from wheel to single aerial every 6s

System has lower component count than current System has lower component count than current devicesdevices

Piezotag LtdPiezotag Ltd

Started life as an EU-funded CRAFT project in Jan Started life as an EU-funded CRAFT project in Jan 20002000

UK patent application filed in Oct 2001UK patent application filed in Oct 2001

Grant Thornton engaged in 2003 toGrant Thornton engaged in 2003 to

assist with fund-raising processassist with fund-raising process

Balance of funding supplied by:Balance of funding supplied by:Advantage Early Growth Fund (regional funding)Advantage Early Growth Fund (regional funding)

Business AngelsBusiness Angels

Company incorporated in 2004Company incorporated in 2004

The market for PiezotagThe market for Piezotag

Passenger vehicles 120 million units p.a.Passenger vehicles 120 million units p.a.

Commercial vehicles 40 million units p.a.Commercial vehicles 40 million units p.a.

10% market share for Piezotag 10% market share for Piezotag

= 16 million unit p.a. = 16 million unit p.a.

At €10 per unit = €160 million p.a.At €10 per unit = €160 million p.a.

The business modelThe business model

Piezotag Ltd will NOT produce the units. Instead Piezotag Ltd will NOT produce the units. Instead manufacture will be licensed either:manufacture will be licensed either:

by non-exclusive licences at by non-exclusive licences at

€€1 million per licence1 million per licence

oror

by non-exclusive licenses attractingby non-exclusive licenses attracting

€€1 per unit manufactured in royalties1 per unit manufactured in royalties

Piezotag Ltd – current Piezotag Ltd – current positionposition

Three patents granted in EuropeThree patents granted in Europe

One patent granted in USAOne patent granted in USA

Patenting progressing in Patenting progressing in

seven other countries outside the EUseven other countries outside the EU

Licensing deal currently being Licensing deal currently being

negotiated with VW-AUDInegotiated with VW-AUDI

Diesel Do Nicely Diesel Do Nicely (DDN)(DDN)

A timely solution to an expensive A timely solution to an expensive problemproblem

MisfuellingMisfuelling

Putting petrol into a car that should take dieselPutting petrol into a car that should take diesel

UK alone 120,000 reported incidents p.a.UK alone 120,000 reported incidents p.a.

Cost of repair between €200- €4Cost of repair between €200- €4..500 per vehicle500 per vehicle

Expensive for individuals and corporatelyExpensive for individuals and corporately

Solutions:Solutions:

AudibleAudible

MechanicalMechanical

The DDN ideaThe DDN idea

A barrier to misfuelling :A barrier to misfuelling :

Easy to implementEasy to implement

Retro-fitRetro-fit

More effectiveMore effective

No moving partsNo moving parts

No electronicsNo electronics

A A simplesimple barrier... barrier...

...the petrol nozzle ...the petrol nozzle simplysimply won’t fit! won’t fit!

PrototypePrototype

History of DDN History of DDN ‘From Idea to Product’‘From Idea to Product’

Project started with personal funds in 2005Project started with personal funds in 2005

DDN Ltd incorporated in 2006DDN Ltd incorporated in 2006

First prototypes created late 2006First prototypes created late 2006

First substantial funding (€75k) from friends and First substantial funding (€75k) from friends and business associates in Jan 2007business associates in Jan 2007

Testing commences with fleets e.g. Testing commences with fleets e.g. UKUK police police

Second tranche from business angels (€375k) in Second tranche from business angels (€375k) in Aug 2007 Aug 2007

The market - diesel cars & The market - diesel cars & light commercial vehicleslight commercial vehicles

€m

Installed Base (vehicles that could benefit - millions)

Europe Cars 55Light Commercial Vehicles (LCV) 22

RoW Cars 5LCV 60

Penetration in Y1 - Y3 - per annum 2007 2008 20099 months

Europe 3% 9.5 13.9 15.0RoW 1% 2.9 3.3

Profit 9.5 16.8 18.3

NB These markets are self replenishing as the total share of the car andLCV market continues to grow (See Annex 1)

DDN Ltd – current statusDDN Ltd – current status

Unlike Piezotag – DDN will probably not license Unlike Piezotag – DDN will probably not license the manufacture in Western Europe but will sub-the manufacture in Western Europe but will sub-contract it therecontract it there

First patent application made in Feb 2006 – grant First patent application made in Feb 2006 – grant anticipated in Jan 2008anticipated in Jan 2008

A further five applications have been madeA further five applications have been made

The first, relatively modest orders have been The first, relatively modest orders have been receivedreceived

Three major fleet purchasers are interested nowThree major fleet purchasers are interested now

Conclusions ‘From Idea to Conclusions ‘From Idea to Product’Product’

Having ideas is the easy partHaving ideas is the easy part

New product development takes a lot of time - New product development takes a lot of time - even a simple idea like DDN’s has taken nearly even a simple idea like DDN’s has taken nearly two years to get close to market, Piezotag has two years to get close to market, Piezotag has taken nearly eighttaken nearly eight

It is very important to protect intellectual property It is very important to protect intellectual property as early as possibleas early as possible

Be nice to your friends and family – you may need Be nice to your friends and family – you may need their money!their money!

Thank you for your attentionThank you for your attention

[email protected]@eurexcel.eu