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September, 2017 - Ten years after Gary Pasano wrote about the importance of manufacturing in U.S. innovation, manufacturing still isn’t addressed in early stage tech transfer conversations. Here’s how technology transfer goes today: a brilliant person confirms a breakthrough in the lab, commercialization partnerships are formed, and excitement builds. Questions about manufacturing arise periodically, but the quick response is “we can put those details together later” or “we will just find an outside resource to handle it”.
A vast number of books, early venture capital meetings, business and marketing curriculum, and well-meaning directors warn the team: don’t fall into the trap of believing ‘if you build it, they will come’. It’s a good bit of advice because worthless technologies do exist, but most entrepreneurs take the advice too far. To avoid foolishly developing something that doesn’t have confirmed marketability, the team spends thousands of dollars, time, and labor finding the market size or validating the problem.
When the team doesn’t have a solid manufacturing partner to restrict the design based on the economics of production, the design is just a general idea. The marketing evaluation processes for the general idea include general marketing pitches to potential customers. The results are fraught with confirmation bias and include all conceivable markets. That’s why every market evaluation you have ever seen from a startup is an enormous number such as at least $500 M. Right? By the end of market evaluation phase, the commercialization team spends its first year of steam reaching a meaningless market size estimate. If the team is savvy, it achieves contact with fortune 500 customers who might say ‘if you could save us 12.79%, we would buy’. Several additional months or years are spent to raise funding. At that point the team identifies a manufacturer who says the technology either can’t be made or it is going to cost 10 times more than the money raised.
I am working on a project that assesses the return on investment for carbon fiber technology from a small manufacturer’s perspective. The University of Tennessee’s Center for Industrial Services has great relationships that allow insight into manufacturability, economics and markets for carbon fiber technology. For me, starting with manufacturing is a fresh and high potential approach. I hope this approach displaces the fear of building something that nobody wants and replaces it with an urgency that says “if you don’t build it, they won’t come.”
Advanced Composites Technical Consultant