The rapidly changing biotechnology environment, influenced by globalization, competition, financial pressures and the advancement of new technologies has impacted on the small to medium biotechnology firm. Entrepreneurship and innovation, in addition to collaboration, are the key factors that are needed to ensure emerging and small to medium biotechnology firms survive the discontinuous change.
Commercialization is broadly defined as the process of taking an idea to a successful outcome in the market, whether it is a product, service, process or organisational system. Commercialization should also include knowledge diffusion, consulting services and contract research rather than just the linear transfer of technology or intellectual property (IP).
The following five strategies for successful commercialization are founded on the three key factors of success: entrepreneurship, innovation and collaboration.
Create an Entrepreneurial Culture
The small biotechnology firm is exposed to a number of challenges impacting on its survival and sustainability. Therefore, an entrepreneurial culture must be implemented to ensure the effective leadership and management of the limited expertise, resources and funding that may be available to successfully commercialize opportunities. Many small biotechnology firms are dominated by a research or academic culture that must quickly evolve to become entrepreneurial and commercially focused. Establishing an advisory board with the required business expertise will ensure access to a balanced resource pool. Furthermore, the small to medium biotechnology companies, at an early stage, need to start defining the products and services that will address a market need, rather than focusing on the technology itself. Companies that quickly develop the products and services that customers need or want will have a greater chance of success.
Undertake Early Stage Market Research
Biotechnology companies need to carry out market research early to identify the specific market needs in order to drive their product and service development strategy. Firms need to identify a differentiated market niche to ensure that a demand exists for the specific type of product or service. Market research therefore informs a market driven strategy that allows biotechnology firms to commercialize more effectively and rapidly. Speed to market of a first generation product for a defined market allows the biotechnology firm to leverage success in an initial market to further fund and develop core technology to migrate into secondary markets with similar customer needs.
Embed Innovation across the Organization
In today’s environment, to achieve success, embedding innovation across the whole organisation is required, not just within the R&D functions. Innovation should include process innovation, organizational innovation, business model innovation and marketing innovation, in addition to product and service innovation. Biotechnology entrepreneurs need to better understand the business aspects of biotechnology and what is required to ensure successful commercialization. They also need to think creatively in order to solve complex problems and to differentiate their business model from their competitors. The ability to leverage the intellectual capital of employees through idea capture and encouraging team participation will impact on the firm’s future success.
Establish Strong Alliances and Networks
Biotechnology firms also need to establish strong alliances, research collaborations and commercial relationships, if they are to be a significant player in the biotechnology industry. One of the impediments to converting biotechnology opportunities into tangible outcomes is the “commercialization chasm” that divides the early stage “proof of concept” from the latter stage translation of the technology to a product or service. To overcome this chasm small biotechnology firms need to adopt an open innovation mindset that facilitates networking and collaboration in order to access expertise, channels to market and novel funding options; not just continue to rely on government support and funding.
Identify Novel Funding and Resources
A novel approach to accessing expertise, resources and funding that has successfully been used in biotechnology is the “stepping stone” approach to commercialization. The approach involves the small biotechnology firm establishing a collaborative strategic alliance with another larger, established organisation or institution to co-develop the technology. The technology is essentially “incubated” in the other organization where expertise, resources and funding can be applied to fast-track the development of the product or service. The small biotechnology firm will need to offer the other organization either an equity contribution or a percentage share (royalty) of the revenue generated by the product or service. The terms of the arrangement will need to be established during the preparation of the collaborative agreement prior to forming the strategic alliance.
In conclusion, in order for a commercialization strategy to be successful it must be effective, efficient and focus on outcomes as soon as possible. A biotechnology commercialization strategy, specifically, should focus on creating an entrepreneurial culture in the firm, founded on early stage market research, leverage innovation and creativity across the firm, integrate strong alliances and networks, and incorporate novel funding and resources where possible.
Dr John Kapeleris