As I’ve noted in my earlier post about Symbiotic Innovation and illustrated here, spin-out and spin-in are interdependent activities. Therefore, they are best pursued in concert.
Since so many organizations view these as separate activities (sometimes led by completely separate departments) I think it’s worth talking more about how spin-out and spin-in impact each other.
First, let’s quickly recap some terms:
- Spin-Out: Making technologies, capabilities, or expertise available to external users via commercialization, licensing, donation, or creation of a start-up
- Spin-In: Leveraging an external organization’s competencies when an R&D or product gap/need cannot be addressed as efficiently or as effectively by internal technologies, capabilities, or expertise
So suppose your organization focuses heavily on commercialization of the technologies in your intellectual property (IP) portfolio. You are already doing several things that benefit R&D, product development, and spin-in efforts. For example:
- Gathering competitive intelligence about market need: One of the very first steps in assessing whether a technology should be marketed as a spin-out opportunity is to figure out who (if anyone) needs your IP. The answer to this question can inform future R&D and product development efforts, ensuring that they are driven by market needs and preventing you from reinventing the wheel (or a wheel no one wants). This, in turn, makes the commercialization of those future R&D outcomes even easier and more likely to be successful. (More on this later.)
- Identifying “carrots” to offer potential spin-in partners: If you are trying to solve a technical challenge through collaborative R&D partnerships (as opposed to via traditional procurement), sometimes convincing the external organization to work with you is challenging. But your IP portfolio is a way to encourage these organizations to collaborate with you. When they see you have something in your IP portfolio to offer that is of value to them, they are much more likely to consider a partnership. For more on how to do IP portfolio analysis, see Chapter 19, “Extracting Value from Your Patent Portfolio,” published in The PDMA Handbook of New Product Development, 2nd Edition (2004) or the article “Getting to the Best First: Proactive, Efficient, and Effective IP Screening,” published in the June 2004 edition of les Nouvelles.
- Gaining your innovators’ trust: Some innovators (and their managers) bristle at the thought of bringing in external technologies to solve their technical challenges. In addition to providing innovator training, you can introduce the naysayers to the spin-out realm of technology transfer first. Spin-out offers financial benefits (depending on how your organization handles royalty distribution), has a relatively short time to success, and allows innovators to see the fruits of their labors in action. This can be an effective way to overcome the “Not Invented Here” syndrome. Seeing an external organization benefiting from their technology helps innovators see the light when it comes to spin-in. (Remember: Your spin-out is someone else’s spin-in.)
These are just a few of the reasons why it makes sense to bring the technology commercialization and licensing activities of spin-out together with the collaborative R&D activities of spin-in. Frankly, to do otherwise is shooting yourself in the foot.
And for those of you focusing heavily on spinning in technologies from the outside, tomorrow we’ll consider how these activities can positively impact spin-out.