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The IDEAGORA – an emerging innovation trend Presenting three leading examples June 2008.

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Presentation on theme: "The IDEAGORA – an emerging innovation trend Presenting three leading examples June 2008."— Presentation transcript:

1 The IDEAGORA – an emerging innovation trend Presenting three leading examples June 2008

2 Why are Ideagoras growing Update on 3 leading Ideagoras: Summary Opportunities for the IAS Agenda

3 On-line Ideagoras provide a fast and easy way for large organisations to connect with external sources of innovation e.g. Proctor and Gamble question for individual/small business contributors "Do you have a game-changing product, technology, business model, method, trademark, package or design that can help deliver new products and/or services that improve the lives of the worlds consumers? Do you have commercial opportunities for existing P&G products/brands? Large organisations are increasingly looking outside of their own walls for sources of ideas and innovation Why are the Ideagoras growing?

4 Background Founded in 2000 They source innovative solutions for their clients by using a global network of Solution Providers First 100+ Request for Proposal (RFP) documents were on behalf of Proctor and Gamble 500 RFPs posted up to end 2006, 400 RFPs posted in 2007 Network has grown to 1.5 million+ solution providers; 100+ registered Affiliates - hundreds more in the pipeline Reachable network size is 575K+ innovators; growing exponentially More than 75 countries represented Broad range of technical disciplines…chemistry, materials, electrical/electronics, packaging, food, formulation, consumer preferences, health/life sciences, renewable energy and more Many large organizations are registered as Solution Providers as well as Innovation Seekers What they do – Proprietary Process, project managed by PhDs Client typically pays an up-front fee of $15K* per RFP with risk sharing success commission based on paying Nine Sigma a percentage of the final contract value. RFPs are sent by e-mail notification each week to registered Solution Providers and Affiliates Solution Providers are offered a prize for the best solution(s) generally ranging from $5K to $50K Working collaboratively on needs definition for your RFP Dedicated, expert program managers Simultaneously stimulating internal resources Broadest sources of solution providers in government, private industry, academia and individuals Via our unique innovation network We find un- obvious solutions, cost-effectively Manage confidentiality Reach new partners and you go forward through best options * 2007 price figures


6 3 key take outs – Rapid rate of growth of solver base, primarily through Affiliates. Nine Sigma are actively seeking innovation hubs (Innovation Alliance Program) – Large client organisations have had some big successes through Nine Sigma and are expanding their agreements, increasing the number of RFPs – Many of the transactions are between large companies with complementary capabilities and strong IP awareness

7 Background InnoCentive was started by Eli Lily, in 2001. InnoCentive connects companies, academic institutions, and non-profit organizations with a global network of more than 145,000 of the world's brightest minds. Aims to Become the Google of the innovation search Solutions have come from more than 30 countries Over 550 postings for innovation challenges since starting, 192 awards to date. Recognition is given to successful solvers on the InnoCentive website InnoCentive is also innovating the way it markets itself e.g. use of Youtube What they do Innovation challenges are now segmented into 4 categories; Ideation, Theoretical, Reduction to Practice (RTP), and electronic Request for Partnership (eRFP), the cash awards for solving challenges are in the range $5,000 to $100,000 (but can be as high as $1m). InnoCentive have so far paid out over $13m in prizes As with Nine Sigma, there is an initial posting fee which varies according to the type of challenge but is in the range of $6,000 to $15,000. There is also a success fee based on the value of follow-on contract or award value Innovation Challenges are sent by e-mail to Solvers once a week


9 3 key take outs – Extremely rapid growth (45% per month) of solver base, number of challenges and value of awards – Emphasis on marketing to solvers at least as great as to seekers – InnoCentive are keen to expand their base and are aware that to do this some solvers will need IP support

10 Background Founded in 1999 To help technology companies realise value from their Intellectual Property Privately held, worldwide organization - Offices in USA, Europe & Asia. Operate largest Global online marketplace for technology transfer. internet presence is a unique resource to facilitate deals – – 120,000+ registered users, 40,000 companies, Network of 12,000+ smaller companies ($10- 500m) – 500,000 data points of known solutions In-licensing and out-licensing IP for large companies and SMEs has a network of subject specific consultants around the world and is working with government related organisations e.g. European Technology Network closed 20+ deals last year and completed transactions for 10 F500 companies in Q4 2007. 71% of deals have been between companies from different industries What they do Buy-side (Technology Acquisition) – Sourced innovation – Patent acquisition Sell-side (Licensing / Technology Commercialization) – Technology platforms for non-strategic applications – Leading edge innovations from SMEs – Patent selling Strategy, Portfolio Analysis, Benchmarking, Deal Facilitation provides consulting support throughout a project and stays engaged in the deal-making process. is very well placed to help companies acquire technology because it also helps clients exploit technology Typical client rates: Membership fee $4,000 to $30,000 Consulting service fee $30,000 to $40,000 Success fee: % of value to the deal but capped


12 3 key take outs – are already a lot bigger than I thought and growing fast – The service is predominantly leading to cross-industry deals – Once again, as with Innocentive and Nine Sigma are looking for hubs

13 Comparison chart Network Size1.5m+ 575,000 individuals 100+ Affiliates +145,000 Solvers, 175 Countries, 40 Disciplines 120,000 registered users, 70+ brokers, 200+ consultants How they make money Posting Fee $15,000 Success fee = % of final contract (Retainer) Posting Fee $6,000 to $15,000 posting fee* Success fee = % of contract or award Membership fee $4,000 to $30,000 Consulting service fee $30,000 to $40,000 Success fee = % of value of the deal Solver/Solution Provider awards $5,000 to $50,000 plus follow-on contract value $5,000 to $1mContract or licensing value ($1.5m average) Growth500 RFPs to end 2006 400 RFPs in 2007 2007 postings nearly double 2006 postings 20+ deals in 2007, 10 F500 deals in Q4, 2007 * 2007 price figures

14 Summary This is a globally distributed marketplace which is growing very quickly and delivering results – Until recently, the size of the marketplace itself was a limiting factor, putting off many organisations from engaging in it. – Seems to be approaching a tipping point for many large organisations as the success stories spread All three Ideagoras are actively looking for hubs to connect with SMEs and individuals There is a large amount of innovation within the business model and offer from each organisation, so expect a lot more change in this area over the next few years

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