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Crossing the Death Valley

Posted on April 25 2012 | Author: Tom Dowler


A previous blog by John Pickard gave a great summary of options, or lack thereof at times, for public funding into the Commercialization phase of development. That is the phase at the end of R&D, “Phase C”, which is traditionally known as the death valley many companies must cross prior to bringing their products to market.

At this time it may not be easy to find public funding programs to share some cost with you and your partners in the de-risking of your business. However, there are some steps during R&D before Commercialization (“C”) that are absolutely critical to give your company a good shot at achieving funding for pilot, demonstration, or market test phases. These are generally the phases which prove to investors, funders or customers that your product does in fact work in a commercial setting, and that it can generate revenues. The steps that you can take now should be directed towards being able to demonstrate the following:

1. Is the product unique or does it work equal to, or better than, current competitive products?

This seems like an obvious question but it is one that often is not contemplated soon enough. What targets in terms of efficacy, properties, or specifications are paramount in the industry you are entering with your product? These targets need to be achieved for the product to succeed. There are times when it is easy to get caught up in the excitement of a new technology and lose sight of the specifications that are essential to entering the market.

2. Price/Cost - Can the product be sold at a final price point that is competitive with existing products and/or the perceived advantage generated by your product?

If you are not able to demonstrate the ability to eventually produce at a reasonable cost and earn a margin, it will be challenging to reach the end of the “death valley” stage to the point where you can attract investors. If you can’t sell the product, you can’t generate an ROI for potential investors, and we all know where that leaves you - another great idea orphaned.

Contract pilot plants across Canada with expertise working with agricultural feedstocks can help you identify production issues, scale up risks, and help predict future costs. Some of these centres include:

Foodtech Canada (member locations across Canada including POS, FDC, BioFoodTech and GFTC)
Composites Innovation Centre (Winnipeg)
• Agriculture and Agrifood Canada sites including Laval, Qc, and Leduc, Alberta
• Local universities and colleges

3. Will you be able to protect the market you achieve once you have commercialized?

This includes protection of intellectual property, control of an important feedstock required to produce your product, or the strength of your brand. From the idea phase, all the way through to the commercialization phase, it is important that you understand how you will protect the market advantage you have created with your product. Appropriate timing for protection is also an important concept to understand over the course of your company’s R&D&C cycle. Demonstrating the ability to maintain the market advantage you have carved out will quell the concerns of public funders, and eventually investors, who are considering backing a small entity with limited resources. Sometimes, partnering with a large industry player you may currently view as a threat, may be the best way to protect your market, brand and IP.

Ag-oriented public funding programs are becoming increasingly competitive, as the number of programs has recently been shrinking, despite the growing number of innovative new companies entering this space. It will be important that you have considered and can explain the numerous risks involved in “Phase C” to funders, and how your R&D plan has mitigated these risks from day one.

Here at Bioenterprise, we can help you with identifying and addressing many of these areas. Why not give us a call?

Tom Dowler
Senior Business Analyst


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Guelph- The City that Makes a Difference

Posted on April 13 2012 | Author: Admin

Guelph has consistently been ranked as one of Canada's Top 10 Most Desirable Places to live, and with its constant engagement in sustainability throughout the community it is no wonder why!

In a profile of the city, covered by Terry Bradshaw, Guelph is deservingly classified as a city that truly makes a difference. Bioenterprise is very proud to be a Guelph-based business, contributing to its overall economic and sustainable development.

Watch the video to learn more.

The Agri-Technology Commercialization Centre receives funding under the Growing Forward suite of programming, a federal-provincial-territorial initiative. However, the comments or opinions expressed on this blog are solely those of their respective contributors and do not necessarily represent the views of the Government of Canada or the Province of Ontario.

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Posted on 2012.06.03 | Author: Gary

This forum needed shaking up and you've just done that. Great post!




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