University Spinoffs and Wealth Creation
- New Horizons in Entrepreneurship series
Chapter 10: The Process of Spinoff Development
Once spinoff firms have been established and have licensed university inventions, they often undertake efforts to further develop the inventions and identify markets for them. This chapter discusses these two activities. The first section of the chapter discusses the additional technical development that spinoffs typically undertake. Because spinoff companies are often established at ‘minus two stage’, the founders of these companies often need to establish proof of principle and then prototypes for their technologies. Even if the spinoffs are established to exploit relatively more mature technologies, the founders of the spinoffs still have to undertake additional development to make the technologies appropriate for the commercial environment. As a result, the founders must often make major changes to the performance, robustness, supporting infrastructure, scale, ease of use, mechanisms and architecture of their technologies to make them appropriate for commercial customers. The second section of the chapter discusses the process by which spinoffs develop a market for products and services that exploit their technologies. University spinoffs must overcome significant market uncertainty because the technologies that they are founded to exploit are invented as a byproduct of academic research and often are not the result of efforts to meet specific customer needs. The founders of the spinoffs need to gather information about customer needs and how they might satisfy them, as well as to obtain and incorporate customer feedback about the products and services that make use of their technologies. Because the technologies that spinoffs exploit are often early stage, general-purpose technologies, the...
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