Many great innovations began in the garage, using a technology centric approach. Historically, that is where energy sector entrepreneurs start turning their idea into a business. The benefits of this approach are clear – they are close to home and have no overhead costs. But when starting before speaking to potential customers, that entrepreneur may find that they have solved a problem that is irrelevant to their end user.
This technology-centric approach tends to be time consuming and expensive. How then, does an entrepreneur know if their innovation will be valuable to potential clients?
Kinetica Ventures was established to help energy entrepreneurs apply new approaches when bringing innovation to the energy sector. Kinetica’s mission is to help energy technology developers bring transformative solutions to the world’s most pressing challenges in oil and gas, power and carbon.
The dilemma facing entrepreneurs is a real one: almost half of the resources dedicated to innovation development results in failed products and offerings, and nine out of 10 products fail in every sector.
According to innovation and startup gurus Robert Cooper and Steve Blank, the biggest cause of failure is poor market understanding and validation. The question is, how can we avoid these costly and time-consuming mistakes?
Kinetica Ventures uses best practices from global innovation and business model experts. Kinetica supports startups to adopt these best practices and commercialization methods to ensure they produce the right solution for a key problem facing the industry.
The methods involve rapid design-test-improve cycles that rely on customer input and feedback to ensure that the solution being developed will be valued by the customers. Each iteration of the cycle helps tweak the solution to ensure it is solving an identified problem.
If the innovation can’t meet or be altered to meet the customer’s needs, it needs to be abandoned quickly and the process started again. This is all done before spending capital on building expensive equipment.
This method has proven successful for Kinetica’s entrepreneur clients.
Interface Fluidics, a startup specializing in microfluidic reservoir and fluid characterization for the upstream oil and gas industry, went from an idea in a university laboratory in November 2015 to a growing business with contracts in multiple countries by 2017. The company attribute its success to focusing on the commercial aspects of its business from inception rather than focusing on the technical development.
Stuart Kinnear, chief executive officer of Interface Fluidics, explains that the commercialization method and program was instrumental in helping management understand the fundamentals of how to build their business. “I would recommend it to anyone that needs the tools to understand how to think about building a sales and marketing process,” says Kinnear.
CrossingsCloud, another Kinetica Ventures client, has been successful using a commercial and customer-focused approach developing their solution to improve the crossings approval process. It has digitized the management of right-of-way crossings to improve cost-effectiveness and efficiency, which adds value to all parties involved, from survey to construction.
Joel Edwards, founder and president of CrossingsCloud, spent a considerable amount of time early in the company’s development discussing with customers and stakeholders their needs and concerns with status quo methods. From this information, Edwards created a solution that aims to cut approval times down substantially by making it easy for stakeholders.
“We do so by streamlining the workflow for requesting and receiving parties. Our auto-generating requests and agreements features are reducing project timelines and creating cost savings through the value chain,” explains Edwards. “We share a vision to develop unique approaches to advance industry, create greater efficiencies, reduce waste and enhance accident prevention methods.”
As a result of this approach, CrossingsCloud’s development work has been shortened dramatically, allowing it to access the market faster.
Many organizations and entrepreneurs follow a Technology Readiness Level (TRL) scale to gauge the state of development of their technology. This is useful to plot where the solution is on its maturity path, but it provides insufficient information to navigate the commercial barriers and hurdles that get in the way.
A novel tool, the Commercialization Readiness Level (CRL) scale, has been developed by Kinetica and others to help the entrepreneur identify the key focus areas for building the business around the technology. It works iteratively with the TRL to ensure that all critical aspects of bringing a solution to market are addressed. This translates to higher success rates for market adoption, and less time spent developing technology that doesn’t solve key problems.
The CRL focuses on de-risking the nascent business in four key areas: people, strategy, implementation and finance. Within these areas are several key topics:
- Team and Structure
- Strategic Partnerships
- Value Proposition
- Supply Chain
- Marketing and Sales
- Business Processes
- Technology Development
- Operating financials
The TRL development stages live within the “implementation” portion of the CRL scale. This is where research and testing, product development plans, component and subassembly testing, lab piloting, field piloting and commercial-scale demonstration activities take place. All of these are done within the context of the business itself, including ensuring that customer input is used to target the product towards a desired solution.
The opportunity for entrepreneurs to get their solution to market faster and for the energy sector to shorten the innovation cycle is worth the initial effort. Navigating the CRL and TRL advancement pathways using innovation best practices will help build more successful businesses to solve industry’s challenges and fuel the local economy. Kinetica can help entrepreneurs navigate this journey.
For more information, contact David Van Den Assem, client services manager at (403) 284-6421 or email@example.com.