Open Innovation in Chemicals

Sébastien GourdonOpen Innovation Director at [email protected]

Vinny SastriPresident, Winovia [email protected]

Open Innovation in Chemicals:How to Speed Up Your

R&D Efforts with OI

Open Innovation: A Step-change in innovation• Open Innovation: what is it exactly?

• Open Innovation in practice

Open Innovation in Chemicals & Materials: The Goose that Laid Gold

Eggs?• Chemicals & Materials at the heart of Open Innovation

• Opportunity to make business

SpecialChem Open Innovation Offer• Offer presentation

• Case-study

Open Innovation - Key Factors of Success

Agenda

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Open Innovation

A Step-change in innovation

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Historically, Innovation has been closedInnovation Made Within the Walls of Companies

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Closed Innovation: Only based on internal R&D capabilitiesof a company

Internal technology base

Open Innovation DefinitionSolve R&D Problems and Buy / Sell technologies

Our current market

Our new market

Other firm´s market

External technology to solve R&D problems

Internal technology base

External technology base

Internal/external venture handling

Licence, spin out, divest

C 2002 Henry Chesbrough EIRMA SIG III, 2005-10-20

Open Innovation DefinitionA Seeker, External Contacts, Respondents

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A Seeker Looking for:

- Technologies / Solutions- Partners- Concepts / Ideas- Processes / Methods- Suppliers- Customers to buy

techno- …

Accesses the outer world

- Submitting a RFP(Request For Proposal)- Could be to a structured

network of relevant people / Companies

- On-line networks

And get proposals from Respondents

- Solvers- Partners

69% of the European companies are already using open innovation

methods (Survey WU Vienna, 2009. 1018 companies - including Top 500

companies in Europe - in 24 European countries were contacted)

• From R&D to C&D (Connect & Develop)• Procter & Gamble claims having 50% of its innovation coming to

some extent from external sources (A.G Lafley, P&G CEO, 2006)

Open Innovation DefinitionThey use it to innovate faster and reduce cost of innovation

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Where are you in OI?

Open Innovation in Chemicals & Materials

The Goose that Laid Gold Eggs?

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Chemicals at the Heart of Open InnovationOpen Innovation in Chemicals & Materials: A Huge Opportunity!

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YOU?

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Chemicals are used in almost all end-user markets…

… AND almost all along the value chains

55% of Open Innovation RFPs are related to

Chemicals & materials!• Survey done by SpecialChem, end of 2010

• On approximately 200 RFPs published on OI Platforms

Open Innovation: A Business Opportunity for YouYou can play on both sides!

As a Seeker• Monetize your dormant R&D

- Resuscitate dead R&D projects by involving

external resources (sell techno, partner in JV…)

• Solve R&D problems- Find solutions to technological problems with

the support of people having already searched

the same thing

• Scout innovative technologies- Access suppliers out of your network and save

time

• Market your technologies- Find partners who could turn your techno in new

products or penetrate new markets

As a Respondent• Make business with corporations

out of your network ( i.e. large

brand owners)

• Detect companies needing your

help now

• License your technologies to

organizations in new market for

you

• Co-develop technologies /

products in collaboration with

large corporations

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SpecialChem Open Innovation Offer

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AN INTERACTIVE MARKETING

AND

BUSINESS DEVELOPMENT COMPANY

FOR CHEMICALS & MATERIALS

ACCELERATING GROWTH

Company founded in 2000

Headquartered in Paris, FranceLocations in US / China / India

>65 engineers & marketersExperience FROM the chemicals & client industries

SpecialChem is:+450,000 Members Registered on SpecialChem / Omnexus Websites

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SpecialChem is managing the largest Network in the world

It is a Business Network, not academia

SpecialChem Network is Chemicals & Materials only, all along the value

chains

It is a truly global Network, made of professionals from 5 continents

We support your search of Solvers and Partners only

We focus on Connectivity

We offer very Competitive Pricing

SpecialChem Open Innovation OfferOpen Innovation Finally Simple & Effective

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> 5,000,000 professionals visit our Chemicals & Materials websites every year

> 450,000 registered and fully profiled chemicals & materials professionals: The

world’s largest Network in chemicals and materials (January 2011)

The Largest Network in Chemicals & MaterialsA Global Network, Covering a Wide Range of Chemicals Technologies

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Uniqueness of SpecialChem’s Network: 94% of Business Members

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A Network To Find Solvers & Partners

Members who could buy your

chemicals

Members who could co-develop

chemicals with you

Members who could market your chemicals for you

A 4-Week Streamlined Process

Fill out your request into a ready to use

RFP template

SpecialChem forwards you all proposals received

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SpecialChem Open Innovation Process Description

A SpecialChem expert reviews it and gives green light for publication when

framed correctly

Your RFP is communicated to the largest business Network in Chemicals and Materials

Case Study

How SpecialChem Open Innovation Service Accelerated the Search of New Natural Fibers

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Background:• SpecialChem client is a multiple billions dollar specialty chemicals company (HQ in the US)

• Client has identified a growth opportunity to replace fiberglass-reinforced composites by

natural fiber-reinforced composites

• Client does not master the technology allowing him to propose such natural fibers

Objectives:• Client wants to source natural fiber technology that can be used to fabricate composites

• Client needs a ready-to-use solution

• Client wants to introduce the first products within the next year.

Challenges:• Client is using Open Innovation Intermediaries for a long time to enrich its portfolio of

technologies, but:- Proposals are lab-scale solutions, too far from the market

- Cost per square yard and batch-to-batch consistency limits the proposals fitting client expectations

- Some proposals submitted have already been investigated by client and do not correspond

Client’s Background, Objectives & ChallengesBusiness Objectives Incompatible with Academia Networks

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The efficiency of Open Innovation depends on: 1. The quality of the Request for Proposal (RFP) framing

2. The quality of the network receiving the RFP.

Our innovation experts have designed a proprietary template for an RFP

that forces Seekers to “get to the point” and give clear guidelines to

potential Solvers or Partners.

The process is simple and effective: • Client completes the SpecialChem RFP template

• RFP is reviewed by SpecialChem experts – senior engineers with industrial

background

• If client needs support to frame its RFP, an expert would assist.

The Request For Proposal (RFP)Absolutely critical to success!

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The Request For Proposal (RFP)From a Template to a well framed RFP (1)

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He described why this search was important, why the opportunity

behind was attractive

The Request For Proposal (RFP)From a Template to a well framed RFP (2)

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Client was as specific as possible

he indicated what could be explored…

…and wrote black on white what he was not interested in receiving

He highlighted priorities

Client needs a ready to use solution (not an idea, not a concept)

Publication Towards SpecialChem’s NetworkClient’s RFP Communicated To Potential Solvers

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Submitted ProposalsNon-Confidential Responses Are Sent To SpecialChem

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Submitted ProposalsNon-Confidential Responses Gathered Through a Template

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Business card to identify and contact the Respondent

General description to understand what is the

solution about

Uniqueness description to differentiate the solution from others

Maturity description: is the solution far to the market?

What kind of business is the respondent ready to consider?

Submitted ProposalsExample of Responses – enough information to contact, or not.

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Results Delivered by SpecialChemBusiness Proposals

RFP Published 3 weeks

+1,000 Readers

17 Proposals• Canada / USA

• India / Korea

• New Zealand

• South Africa

• UK / Netherlands

Client in advanced

discussion mode with 7 of them

A Fast and Streamlined Process

A unique Access to the largest

network in Chemicals and Materials

A Truly Global Network

A Business Network, providing

ready-to-use solutions

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Comments from client:- “With Other OIA, I received proposals from US only”- “Responses are very business-oriented”- “Proposals are mostly ready-to-be-used solutions”- “The SpecialChem process is very fast”

Key Factors of Success

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Have access to the right network• Use specialized networks instead of general network

• Network to be used depends on your search

Privilege Business Network• Academia does not work with the same time frame and motivation

• For short term needs and ready to use solutions, use business networks

Plan time and resources• Open Innovation is not a magic process!

• Without time and dedicated persons, it won’t work

• You need time to frame the RFP, to screen the proposals, to contact the respondents

Adopt an open mind• Be prepared to fight the Not Invented Here Syndrome

• Always look for win-win situations

• There are efficient ways to protect IP

Key Factors of SuccessTo Be Successfull with your Open Innovation Process, you must:

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Goal:

Obtain qualified responses to Request For Proposals (RFPs) that will align

with the Seeker’s requirements detailed in the RFP

Focus on Effective RFP FramingTips and best practices for an effective RFP

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Identified Need

Effective Request for

Proposal

Qualified respondents

Qualified respondents

Qualified respondents

The competitive

edge

Seekers

Respondents

Provide enough specifics. Disclose non-confidential information only.

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What is the right level of information in an RFP?

Too Little

Too much

The right balance• Very general• Lack of any

detail

Qualified responses that meet your needs !

• Giving away proprietary information and strategy

• Tease but do not unveil !!• Provide enough detail• Non-confidential information only• You are not giving away your intellectual property

Typical Product Development ProcessRequirements flow-down from market to product and to process

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Market / Customer

Requirements

Product Specifications

Component / part / additive Specifications

Manufacturing methods

To

To

To

Market

Product

Components / Parts/

Formulation

Production

• In a typical product development process, the flow of information is:

• Market requirements, to• Product performance, to• Product Design, and finally to• Production Processes

The RFP Flow-up processSeekers need a material or process that meet predefined market needs

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Market / Customer

Requirements

Product Specifications

Component / part / additive Specifications

Manufacturing methods

To

To

To

Market

Product

Components / Parts/

Formulation

Production

In the RFP process, the flow is reversed. Seekers are looking for:• A technology,• A material, and/or • A process that will meet predefined market requirements.

Clearly define the business relationship between the parties

Seeker’s role / responsibility?

• Licensee / User?

• Buyer / Owner?

• Co-developer?

• Other?

Respondent’s role / responsibility?

• Provide already-developed existing technology?

• Develop new concepts/ technologies?

• Provide already-developed materials, additives, parts or components?

• Manufacture the seeker’s proprietary technology / product?

• Provide ideas or develop a new manufacturing method?

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Roles and responsibilities between the two parties

The more novel or complex the need - the longer the time & higher the budget

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Be realistic with respect to timing of deliverables

Existing product / technologyExisting manufacturing process

Existing product / technologyNew manufacturing process

New product / technologyExisting manufacturing process

New product / technologyNew manufacturing process

Time

Mo

ne

y

WANTS: Seek RFP from company that can provide:

• Market analysis and penetration

• Novel coating material

• Must be able to adhere to all surfaces including metals, ceramics, composites, plastics and wood

• Has proprietary coating technology

• Provides distribution channels

Laundry list of generic “wants” – no detail

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Example of a Bad RFP

Poorly written RFPs will generate poor responses

NEEDS:Seek RFP from company that can provide a material that:

• Can be coated on to polystyrene (powder coating methods only)

• Adheres to polystyrene (peel strength of 1.5 to 2.0 kN/m))

• Has a gloss of 100 – 120 GU

• Is conductive with a surface resistivity of 104 – 105 ohm/sq

• Can be sterilized by γ-radiation up to 7.5 MRads and retains 95% of its adhesion, gloss and conductivity

• Should not contain any heavy metals

• Must have the ability to be used on standard powder coating equipment

More specifics on actual “needs”. TEASE BUT DO NOT UNVEIL !!

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Example of a Good RFP

Excellent chance to obtain qualified respondents that meet your expectations detailed in the RFP

Example of Good RFP

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Example of a Good RFP

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Summary

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Higher chance of success• Largest Network

• Chemicals & Materials only

• Global Network

Speed• Simple on-line Process

• Size of the Network

Business• Business Network, not academia

Cost effective• Streamlined process

• Focus on connectivity

• Other source of revenue

No risk• We commit on results

SummaryOpen Innovation Finally Simple & Effective

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Thank You!

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1. Sébastien Gourdon2. Open Innovation Director at SpecialChem

3. [email protected]

4. Vinny Sastri5. President, Winovia LLC6. [email protected]