You have an idea for a nifty new technology and you want money to develop it. You will need to persuade some person, company, foundation, bank, or agency to give you money. First, you will need to convince this “investor” that you really do have a “nifty” idea and you have the technical know-how to make it happen, but just as importantly, if not more, they want to know if anyone will actually pay money for it once it is developed. Does it have true potential to make money—not only will investors want a return of their initial investment, but in most cases, a compounded return.
If you are seeking an investment via an SBIR or STTR award, you might not think you need to explain its market potential –after all, you don’t have to “pay back” the award. Well, that’s true, you do not have to write a check and pay them back, but the American tax payer is investing in your idea. The government is taking a chance on your idea and your company; they want to know that you can take their investment and make a sustaining product that will enable your company to grow. If you grow, you create jobs, and job creation means growth in the economy.
Writing a well crafted commercialization plan can help you make your case.
Your commercialization plan needs to be detailed and well thought out. Avoid generalized statements like “there is a huge market” or “we can make lots of money”. Start by answering some basic questions: Is there a market pull—who’s asking for the technology or who has indicated that they actually NEED your technology? What is the size of the market? How will you manufacture, market, and sell it if you only have a 1-person company? Do you have a plan to get it from your laboratory into the hands of your customer? How will you price it in order to make profitable—if the cost to produce far exceeds the amount customers are willing to pay, how will you make a profit? How is your management team structured—has anyone brought a technology from inception to market? Not only do you need to answer these questions, you need to make sure you’ve done market research to support your claims with hard facts–do not make claims you cannot back.
For a more comprehensive list of concepts to include, see Elements of Your Commercialization Plan.