Narayan THE INNOVATION CHAIN (PROCESS) IDEA/CONCEPT TECHNOLOGY DEVELOPMENT Invention -- patents, trade secrets, Intellectual Property (IP) TECHNOLOGY TRANSFER Investment Grade -- license, joint venture, start company TECHNOLOGY COMMERCIALIZATION Business Plan, Strategic Plan, financing/internal funding

Narayan Stages in Innovation/Concept to Commercialization -- THE PUZZLE

Narayan New Ideas/Inventions R&D project initiated Intellectual property creation University Faculty Entrepreneurs Students Graduate & undergraduate Technology Assessment Business & market potential COST! Business development infrastructure Commercialization expertise ? Technology Development Engineering Economics! Product specifications, process parameters, pilot scale-up operations Market analysis, demonstration & evaluation TECHNOLOGY POTENTIAL HIGH LOW Modify, refine, change or drop project BUSINESS/COMMERCIALIZATION POTENTIAL Establish Business Business Plan, Financing, Management HIGH LOW Need more work NEW BUSINESSJOINT VENTUREOUT-LICENSING Technology Commercialization Process Model Institutes, National labs ? STEP1 STEP 2 STEP 3 STEP 4

Narayan

Life Cycle of Science & Technology Commercialization Basic Research Applied Research Start-up Company Roll-out Product Working Capital Infusion Successful Commercial Venture Fundamental Science Strategic Research Project Innovation Seed Capital Venture Capital Mezzanine Capital Market Risk Management Risk Growth Risk Management Risk Growth Risk Idea Conceptual Risk Proof Concept Technical Feasibility Development Risk Market Risk Management Risk Growth Risk $ $

Narayan

United States is in a significant era of entrepreneurship Over 700,00 companies began last year, compared to 50,000 per year in the 1950’s Research has shown that all new net job creation comes from new and growing companies A 1994 national Gallup poll showed that 70% of high school students want to start their own companies one day At the same time, colleges and universities throughout the country have reported tremendous growth in their students interest in learning about entrepreunership and ultimately becoming entrepreneurs This dramatic growth in entrepreneurial interest and activity is reinforced by a counter trend – large companies are downsizing, reengineering, and eliminating traditional job opportunities WHY ENTREPREUNERSHIP?

Narayan “E ntrepreneurial thinking is the ability to see what is there, to see what might be there, and to take the actions necessary to ensure that vision and create the change ”

Narayan initiative imagination flexibility creativity a willingness to take risks the ability to think conceptually the capacity to see change as an opportunity. Entrepreneurial Thinking “ These qualities can be applied in any business venture, large or small, public or private, corporate or not-for-profit, local or global ”

Narayan Engineering students are ideal candidates for entrepreneurship Engineers are very practical, have sound analytical skills, good problem solving skills -- all the basic skills necessary to start and run a high technology enterprise Builds on their basic skills and opens up their minds to the possibilities of business creation and new product development Even if you do not start-up a new business and go to work for an existing business, the knowledge and training in the field would make you more valuable to the company and more sought after by companies Entrepreneurial thinking gives students the ability to see what is there, to see what might be there, and to take the actions necessary to ensure the vision and create the change. THE ENGINEER ENTREPREUNER!

Narayan The business cycle from the invention or discovery of a product or service, through assessing the business opportunity, into building the market and delivery systems, and on to further product development and the financial plans associated with it. BUSINESS CYCLE

Narayan ELEMENTS OF A BUSNIESS PLAN Vision & Mission Statement Goals & Objectives Company Overview Legal business Description Management Team Board of Directors Strategic Alliances Product Strategy Current Product Research & Development Production & Delivery Market analysis Market Definition Customer Profile Competition Risk

Narayan ELEMENTS OF A BUSNIESS PLAN (Contd) Marketing Plan Sales Strategy Distribution Channels Advertising & Promotion Public Relations Financial Plan Assumptions Financial Statements Balance Sheets Income Statements Cash Flow Statements Capital Requirements Exit/pay back strategy

Narayan CONCEPT OF VISION/MISSION/GOALS/OBJECTIVES STATEMENTS Where business is headed How business will be conducted Necessary levels of achievement Specific actions to be taken VISION MISSION GOALS OBJECTIVES = = = =

Narayan STRATEGIC PLANNING medium to large companies GOALS CAPABILITIES BUSINESS ENVIRONMENT

Narayan STRATEGIC PLANNING (Contd) GOALS Values -- defines what the organization stands for Products & Services -- Target Market -- satisfies a customer need, Market share Financial Goals -- Key financial measures/indicators for the company like Sales, Profits, Sustainable rate of growth CAPABILITIES Engineering, Manufacturing, R&D, Marketing, Customer services, others BUSINESS ENVIRONMENT Threat of new entrants Threat of substitute product or services Bargaining power of buyers and suppliers Competition among existing firms

Narayan GENERIC STRATEGIES COST LEADERSHIP Requires high relative market share Aggressive use of economies of scale Learning curve to reduce cost DIFFERENTIATION Unique -- can be achieved by technology, performance, customer service, brand loyalty FOCUS Applicable for small organizations -- market niche can obtain cost leadership and or differentiation.

Narayan BUSINESS AS A DYNAMIC SYSTEM PriceVolume Variable costs Fixed Costs OPERATIONS Operating Concerns Target Market Deployment of assets Cost effectiveness Pricing strategy Operating leverage Key Measures Current Ratio Return on assets Profit Margins Operating Profit Dividends Equity New Investments Retained Earnings Interest Long Term Debt Investment Concerns Dividends to owners Interest to lenders Reinvest Profit Financial leverage INVESTMENT Debt to equity ratio Return on equity Sustainable rate of growth Return on investment