1. CIT TESLA Actions 18th and 19 th May 2012

2. CIT Actions Work Package 1 (led by EBN) Action 2: New product design and development Ronan Coleman – Commercialisation Specialist Work Package 2 (led by CIT) Action 4: Internationalisation Paul Healy – Rubicon Centre Manager Kieran Moynihan – Entrepreneur-in-Residence Action 5: Transnational Placements Carole O’Leary – Industry Liaison Manager Work Package 3 (led by Bangor University) Action 8: Spin ins Ronan Coleman – Commercialisation Specialist

3. TESLA WP1 Action 2 – New Product Design & Development Ronan Coleman CIT Commercialisation Specialist

4. WP1 Action 2 – NPD&D A number of gaps has been identified in the partner regions business incubators which limit the commercial performance of their client high technology start-up companies Gaps: 1.New product design & development (NPD&D) skills. 2.New product design & development (NPD&D) process design & implementation.

5. New Product Design & Development – Teams in Established Companies Customers Finance Sales Legal/IP CEM1 CEM2 CEM3 PM Admin Manu Eng Buyer Software Eng Mech Eng Marketing Elec Eng Ind. Design Ind. Design Test Eng

6. New Product Design & Development – Start-up Companies Finance Legal/IP Sales/ Marketing /Admin /Buyer Sales/ Marketing /Admin /Buyer CEO CTO Elec Eng? CEM1 CEM2 CEM3 Customers Manu Eng Software Eng Mech Eng Ind. Design Ind. Design

7. NPD&D Expert Services – Example 1 Finance Legal/IP CEO CTO CEM1 CEM2 Customers Manu Eng Software Eng Mech Eng Ind. Design Ind. Design NPD&D Expert Expert sets up and manages the Sub-contract manufacturers

8. NPD&D Expert Services – Example 2 Finance Legal/IP CEO CTO CEM1 CEM2 CEM3 Customers Manu Eng Elec Eng Mech Eng Ind. Design Ind. Design NPD&D Expert Expert works with the CEO, CTO & their customers to define the product and manages the sub-contract technical specialists

9. A secondary role of the NPD Specialist will be to: Assist young, inexperienced start-up companies to design a NPD process that fits their company profile. Carry out a NPD skills gap analysis on the designed NPD process. Assist the company in filling in these gaps by identifying the necessary internal and external resources that will allow them to carry out their NPD functions. In general the company will initially use mainly external NPD resources but over time it will add its own internal NPD capabilities and expertise. NPD&D Expert Supports

10. NPD StageGate Process Pioneered and developed by Dr. Robert G. Cooper – MacMaster University, Canada and Penn State University, US. Conceptual and operational roadmap for moving a new-product project from idea to launch Distinct stages separated by management decision gates – hence StageGate Stages/Gate processes vary by business sector and the degree of uncertainty in the project The model below can be easily modified to fit most NPD project types

11. Output Targets OutputCITBangorLMTTotal No. of participating incubators 1113 No. of participating client companies 20 1555 No. of NPD&D expert days provided 80 60220

12. Next Steps Each participating partner: Carries out a gap analysis with participating partners business incubator client companies to ascertain the required skill set of the NPD&D specialist. Creates a job specification for the NPD&D specialist for each partner Decides on appropriate service offering for client companies, e.g. Number of client companies to be serviced – from proposal NPD&D specialist onsite availability - X days per week for Y weeks Number of contact hours per client per week/month Advertises, assigns or recruits a NPD&D specialist All partners jointly develop a work programme

13. TESLA WP2 Action 4 - Internationalisation Paul Healy Rubicon Centre Manager Kieran Moynihan CIT Entrepreneur-in-Residence

14. Challenges for HPSUs in Internationalising their business Practically every HPSU in each partner region has a key focus on export markets to help drive growth in their business A large number of HPSUs struggle in this area due to Lack of understanding of the new market, its drivers and mechanisms Insufficient investment & business planning to enter the market effectively Inability to breakthrough to achieve first sales in the market Inability to effectively support customers and partners in the new export markets

15. Best Practice for HPSUs in Internationalising their Business Market Assessment ( Opportunity, competitive landscape, customer drivers, pricing, etc) Market Assessment ( Opportunity, competitive landscape, customer drivers, pricing, etc) Business strategy, planning and investment ( Integrating new market drive into overall business plan) Business strategy, planning and investment ( Integrating new market drive into overall business plan) Sales & Marketing strategy ( go-to-market model(partner/direct), partner selection, target sectors) Sales & Marketing strategy ( go-to-market model(partner/direct), partner selection, target sectors) Product & Support preparations ( regulatory approval, localisation support, support model) Product & Support preparations ( regulatory approval, localisation support, support model) Sales & Marketing execution – Customer support (trials, tender processes, sales wins, support, in-country team) Sales & Marketing execution – Customer support (trials, tender processes, sales wins, support, in-country team)

16. Market Assessment Ability to Assess the Opportunity -Lack of Market Research skills -Ability to talk directly to Potential Customers -Lack of Local Supports Presence of Competitors/Alternatives Regulation Sales Channel - Direct vs. Third Party

17. Business Planning, Strategy & Investment Require for Investment to support market entry Lack of Strategy to support Market Entry Requirement for Detailed Business Plan with focus on Resources needed to support International Market Entry

18. Sales & Marketing strategy Need to Look at Partner or Local Office Partner Selection, Training and Recruitment Back up to Support Customers in new Market Pricing Models (Allowing for Partners) Sales Support for Channel selected

19. Product & Support Preparations Regulatory Compliance Localisation Installation and After Sales Support

20. Output Targets Output CITLionraEBNLMTINI- NOV Total No. of firms engaging with the internationalisation experts 1015209 74 No. of firms taking part in the pilot internationalisation course 68109 43 No. of internationalisation expert days provided to companies 8090602760317

21. Next Steps Documentation of Needs Analysis of HPSU’s by each participating partner Access to International Sales Mentors for 1:1 Sessions Master Classes (Key Elements)

22. TESLA WP2 Action 5 - Transnational Placements Carole O’Leary CIT Industry Liaison Manager

23. Transnational Placements Aims: To provide partners opportunity to develop skills, knowledge & expertise through study visits in partner organisations (up to 1 week duration) To see best practice in other incubators To provide networking opportunities To enhance business linkages in NWE region Target Audience: Incubation Centre Managers Commercialisation Specialists Business Development Staff Technology Transfer Team

24. Process Proposal Form designed & circulated to all partners Partners complete proposal form Steering Group evaluate proposalsStudy VisitsBest Practice Seminars in home region

25. Output Targets Output CITBangorEBNIni-NovLionraTotal No. of Study Visits completed 3822722 No. of Best Practice Seminars Delivered 4433822

26. Next Steps - Proposed Action detail designed by participating partners September 2012: Design proposal form & evaluation criteria October 2012: Publish call for proposals to all partners January 2013: First study visit completed

27. TESLA WP3 Action 8 – Spin Ins Ronan Coleman CIT Commercialisation Specialist

28. WP3 Action 8 – Spin Ins Each of the partner regions have a significant number of large indigenous companies, MNC’s and large public administrations located in the region which are a potential source of new entrepreneurial ideas and ventures. This action will: Design & deliver programmes to these organisations to: Highlight the potential for entrepreneurship and innovation in their organisations Create an entrepreneurial culture in the organisation Provide opportunities for staff from these organisations to “Spin In” new ventures into partner regions incubators Examine potential ownership and management and exit strategies for these “Spin In” companies

29. Rationale for “Spin In” Action Usual R&D growth strategies for large commercial organisations include: M&A – acquire a business or product line in the strategic area that you want to move into Internal R&D – invest in existing product and processes. Corporate venturing or “Intreprenuership” - develop a separate business within the corporate entity This is the source of the potential “Spin In” companies!

30. Block and Subbanarashima Survey on Corporate Venturing Reasons for VenturingUS Companies (%) Japanese Companies (%) Maturity of the business base7057 To meet strategic goals7673 To provide challenges to managers 4615 To develop future managers3017 To survive3528 To provide employment324 49 US companies and 149 Japanese companies were surveyed in 1989 – from Corporate Venturing by Block & MacMillan

31. What is a Corporate Venture or “Spin In”? The project is a venture when it: Involves an activity new to the organisation Is initiated or conducted internally Involves significantly higher risk of failure or large losses than the organisations core business Is characterised by far greater uncertainty than the organisations core business Will be managed separately at some point during its life Is undertaken for the purpose of increasing sales profit, productivity, or quality

32. Examples Toys R Us – created Kids R Us New product line into existing market Royal Dutch/Shell Group’s - GameChanger Provided seed funding to new ideas in the exploration division swiftly, without going through the traditional layers of hierarchy Lucent - Lucent’s New Ventures Group Generates cash from selling or licensing unused corporate resources Thermo Electron Corporation 12 separate spin-out companies in which TEC had a majority shareholding but each traded separately 100 managers have options in excess of $1 million

33. Issues for Large Organisations Large organisations management structures are designed to manage ongoing processes to produce products/services in the most efficient way possible Significant cultural differences between large organisations and ventures which must be managed Talent, Roles, Risk, Rules, Performance, Cannibalisation, Brand, Failure, Finance, Staffing, Strategy and Operations These are all issues that must be considered by the larger organisation as these are managed and viewed very differently in a new venture Must protect the new venture from the larger organisations culture!

34. Rewards for Parent Organisation Opens up new strategic markets Shields parent from failures and damage to brand Adds new technologies and product lines Generates income from unused IP and ideas High € return if successful Huge learning process for parent Enhances chance of long term survival - Innovate or die!

35. Models Venture Harvesting Set up a separate unit to spin-out new business e.g. BT had 14k patents Spin Ins for partner incubators! Ecosystem venturing Invest in complementary businesses e.g. Intel Capital Venture Innovation Promote entrepreneurial activity in all business function, e.g. Google invest 10% of technical budget for non-traditional ideas Corporate Private Equity Establish company to act as a private VC e.g. Nokia Growth Partners invest in mobile technology, services and media. More failure when no clear Model has been selected

36. Location of Ventures Spin In action’s main focus should be on ventures that will be at arms length from the parent organisation Partners will encourage companies considering corporate venturing to locate their new ventures as “Spin Ins” into the partners incubators These Spin Ins will need numerous business supports from partner regions incubators Incubators could also design programmes to assist corporate ventures that are located within the parent organisation These tend to have a lower chance of success due to interference and cultural differences between the parent and the new venture.

37. Output Targets OutputCITLionraTilburgLMTTotal No. of industry seminars delivered 542112 No. of participating organisations 20 10 60 No. of potential “Spin Ins” identified 465318

38. Next Steps Each partner: Identifies organisations in their region that they plan to target to participate in the action. Designs a high level summary description of what the proposed “Spin In” programme will look like. This may need to be modified to target different organisation types (e.g. by business sector, public, indigenous/MNC, etc.) Makes contact with each of their target organisations and generates interest and support for the programme Obtains feedback from interested organisations and uses this to tailor the programme description where appropriate. Uses this description to develop a detailed work programme with participating partners