Past TidesHai Truong

Tri-Tech Series - Selling Your Innovation in a Challenging Market

Past TidesHai Truong
Tri-Tech Series - Selling Your Innovation in a Challenging Market

A mix of entrepreneurs, researchers, faculty, and Experts in Residence attended TriTech’s event titled, “Selling Your Innovation in a Challenging Market." According to Mark Mitchell, Director of Tritech SBDC, TriTech is an organization providing consulting to businesses at no charge to create economic impact. With seven part-time consultants ranging from angel investors to serial entrepreneurs, they are a high performing small business center in Southern California. The presentation was lead by Martin Kleckner, a successful entrepreneur who has raised capital for five start-ups, and whose ventures have been awarded over $30 Million in federal agency funds. Kleckner also teaches the highly regarded Innovation Corps (I-Corps) program at universities nationwide for the National Science Foundation and National Institutes of Health. He has also served in strategic roles advising organizations such as GE, Roche, and Toshiba.

The presentation began with an overview of how startups should present themselves to investors and organizations issuing grants. Kleckner explained that since investors may have experienced financial losses in the early 2000's, they are more careful with what startups will receive their investment. Similarly, when soliciting for government grants, the term disruptor may connote the idea of a threat rather than innovation if presented in the wrong context. Instead, Kleckner suggested that startups frame their proposals with a focus on commercialization coupled with incremental change instead of the novelty of a given technology or innovation. He advised that this approach had a higher likelihood of funding success. Furthermore, emphasizing the importance of commercialization-focused innovation, Kleckner cited a Fortune magazine report from 2014 indicating the two common reasons for startups failing were a lack of product market fit and no market need.

Regarding grants, Kleckner explained that federal agencies, such as the National Institute of Health, Department of Defense, National Science Foundation, and Department of Energy all have a need to pitch to Congress for increases in funding. However, he clarified that Congress does not fund research for its own sake. Rather, they fund research that is commercially viable and can generate a return on investment. The impetus for this research focus is to help stimulate the economy with new jobs and provide the unemployed more opportunities in emerging industries.

As a response to the focus on commercialization, I-Corps was developed by the National Science Foundation to help IP coming out of Universities move from the bench to the marketplace. For eight weeks, participants take a deep dive to understand their customer segment and value proposition. I-Corps participants achieve this goal by thoroughly testing the validation of their innovation through learning and discovery of customer needs. Aside from programs such as I-Corps, funds have been set aside to promote commercially viable research from small businesses such as the Small Business Innovation Research Grant or Small Business Technology Transfer Research Grant for small businesses working in tandem with a university.

Kleckner concluded his presentation by explaining the movement toward the business model canvas instead of business plans for startups. He suggested that validating assumptions about their proposed innovation with a target audience through conversations rather than surveys would provide the crucial feedback needed to make decisions on how to proceed with the intended solution. Kleckner shared that "through discovery, we engage so we can develop an understanding of their needs, desires, behaviors, characteristics, beliefs, influences, motivations, and dimensions. Don’t do this with a product or as a company. Don't use business cards. The purpose is only discovery and learning--not selling. If you do any of the things I've advised against so far, you will pollute the results." Concerning what kinds of questions to ask, Kleckner stated, "the best questions come from those based on what customers tell you. You can just ask one or two questions and see where it leads. Make sure you are not mishearing something and don’t filter out negative or constructive criticisms."

When asked about what he wanted attendees to take away from the evening, Kleckner shared "I would like the attendees to understand that it is not just about the engineering wow factor, the scientific merits, or the clinical perspective outcomes. Instead, it is whether the market is going to embrace what they have. Our focus is to go beyond the novel aspects of a proposed innovation and help connect them to the end user."

Hai contributes to the Cove as a content writer for both the Currents newsletter and blog. As an alumnus of UCI with a degree in English and a co-founder of a local creative agency, Hai's focus is centered on spotlighting events, stories, and startups within the Orange County community. He is passionate about entrepreneurship and has participated in fast-pitch competitions through the UCI Antrepreneur Center and has co-organized local business and startup groups such as 1 Million Cups and Orange County Young Entrepreneurs.