Presented at ETECH Entrepreneurship Elective for the MBAs this Easter term on Monday 22nd April and Wednesday 1st May 2013. Centre for Entrepreneurial Learning Judge Business School – University of Cambridge

1. Albion
Demand Driven Product Innovation
Ward Hills
Entrepreneur in Residence
Centre for Entrepreneurial Learning
Judge Business School – University of Cambridge
22 April 2013

2. Albion
21/04/2013 © 2013 Albion Innovations 2

3. Albion
Outline
• Stages of product commercialisation
• Structures supporting product development and delivery
• Information exchanges
• Information capture
• Questions in product development diligence
• Evaluation of potential products
• Bottom line
21/04/2013 © 2013 Albion Innovations 3

4. Albion
Stages of Commercialisation
21/04/2013
Albion
Innovati
ons
TRL1 2 3 4 5 6 7 8 9
KeyHurdles
•Design
requirements
•Market
identification
•Productisation
•Business
model
•Partner
•Beta test
•Cash control
•Manufacturing
•Distribution
•Communications
•Value
perception
Operations&
TeamRequired
•Technologist
•R&D facilities
•IP rights
“Freedom to
Operate”
•Managers
•Programmers
/Designers
•Regulations/
QA/QC
•Marketing
•Manufacturing
•Legal
•Financial
•Customer service
•Human resources
•Distribution
•Investor relations
•External market
experts
•Public
Communications
Funding
Required
“Seed”
•<£50-200K
•Grants
“Angel”
•£250-500K
•Angel / VC
“Early VC”
•£500K-5M
•Small –Mid VC
“Late VC”
•£3-20M
•Large/Focused
VC
“Exit
Investment”
•£20-50++M
•IPO/ PE/ Trade
sale
Research Conceive Prove Demonstrate Validate Beta Regulatory Qualify Shipping
4

5. Albion
Commercial
Product
Departments
Commercial
• Customers
• Distribution
• MarComms
• Orders
Product
• Product definition
• Regulatory affairs
• Clinical trials
• Product support
Development
• Novel capability
• Clinical feasibility
• Meeting Customer
needs
Development
21/04/2013 © 2013 Albion Innovations 5

6. Albion
Commercial
ProductDevelopment
Specifications
Requirements
Information
Development and
Commercial
• Functionality
requirements
• Potential capability
Product and
Development
• End user
requirements
• Delivering product
specifications.
Commercial and
Product
• Service
requests/support
• Orders /
Manufacturing
relationships.
21/04/2013 © 2013 Albion Innovations 6

7. Albion
Information
Repositories
Orders & Service
• Manufacturing
orders
• Service requests
and histories
Technical File
• Regulatory
• QA/QC
• Performance
standards
• Manufacturing
standards
• Design History
Feature Backlog
• Visibility of
potential needs
• Populated by
anyone with
market contact
Commercial
ProductDevelopment
Technical
File
21/04/2013 © 2013 Albion Innovations 7

8. Albion
Product
Development
Diligence
Should we do this?
Can we do this?
Could we do this?
Outcomes:
• Product update
• New product
• No further action
Each department has
a veto.
Commercial
ProductDevelopment
Should?
Can?
Could?
21/04/2013 © 2013 Albion Innovations 8

9. Albion
Commercial
ProductDevelopment
New Product
Evaluation
Demand & Price
• Potential market
• Route to market?
Cost & Support
• COGS?
• Infrastructure?
• Regulatory
requirements?
Development Cost
• Resources ?
• Time?
Risk
• Competitors?
• Uncertainty?
• Strategic fit?
What is the
demand?
At what
price?
Production
cost?
Support
requirements?
Development
cost?
Risk?
21/04/2013 © 2013 Albion Innovations 9

10. Albion
Commercial
ProductDevelopment
Profit and
Loss
Top line Revenue
• Demand & Price
• Important to acquirer
Margin
• Production Cost &
Support Requirements
• Is this a sustainable
business?
• Contribution to
growth?
Return on Investment
• Development Cost &
Risk
• Capital requirements
• Payback period
• Possible loss
Revenue
Margin
ROI
What is the
demand?
At what
price?
Production
cost?
Support
requirements?
Development
cost?
Risk?
21/04/2013 © 2013 Albion Innovations 10

11. Albion
Summary
Departments
• Focus
• Responsibility
Information
• Document
• Review
Questions
• Should?
• Can?
• Could?
Process and veto
Bottom line result
Ward Hills
ward@albion-innovations.com
wardhills
21/04/2013 © 2013 Albion Innovations 11
Commercial
ProductDevelopment
Revenue
Margin
ROI
What is the
demand?
At what
price?
Production
cost?
Support
requirements?
Development
cost?
Risk?