Latest / Lab to Market Leadership with Chris Reichhelm / Lab-to-Market Journey: A Blueprint for Success | Chris Reichhelm

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Lab-to-Market Journey: A Blueprint for Success | Chris Reichhelm · Lab to Market Leadership with Chris Reichhelm

• 0:03
  Three phases, five stages, loads of milestones.
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  Today, we're going to talk about the Lab-to-Market journey.
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  My name is Chris Reichhelm, I'm the host of Lab to Market Leadership, and we're looking at the process that every advanced science and engineering company needs to go through in order to have a hope of creating a successful, scaled, commercialised business.
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  All of that is around the lab-to-market journey.
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  Now, why is this important?
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  Why should anyone care?
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  Because if you're an entrepreneur, if you're an executive running one of these businesses, then you probably already have some taste for how difficult a journey this is going to be.
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  It's hard enough building a software business or a digital business, but building up an advanced science and engineering business, a hard tech business, a frontier tech type of business is one of the hardest exercises, one of the hardest management exercises that you can, that you can undertake.
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  And so, in order for us to have the very best chance of being able to make it, we need to understand the map.
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  We need to be able to understand what that journey looks like.
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  And today, I'm going to walk you through the basics of the lab to market journey.
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  Now, this is important, one, so that you can understand it, and therefore you have a better chance of success, successfully engaging industrial partners and customers, and building a commercialised business.
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  a better chance of raising capital, a better chance of recruiting the right kind of talent at the right time.
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  It's also important if you're a listener of this podcast so that you understand the terms and the references that we're making.
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  along the series so that, and especially if you're coming to this new, you want to understand what we're talking about.
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  All of that, all of the main definitions and reference points, we're going to address today.
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  So let's get into it.
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  So at the very highest level, the lab-to-market journey is about three phases.
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  That's it.
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  Just three phases.
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  And the first of these phases is about defining the solution.
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  All right, what we call Solution Definition, and in order to define a solution, at the basic level, what do you need?
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  You need a problem.
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  Before you can define a solution, you actually need a problem.
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  So this first phase, this early phase, it's about figuring out what problem we want to solve, and then defining the early solution that we have for that problem.
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  That's phase number one.
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  Now, phase number two is about scaling that early solution, because it's no use solving a problem at a very small scale.
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  In order to truly solve the problem, not just for one, but for many, of course, we've got to be able to scale it.
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  So the second phase is all about scaling of our initial solution.
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  And it's trumped out by the final phase, which is about commercialising that solution, making sure that we become a leading provider of that solution.
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  Now, of course, through these three phases, you're going to have elements of solution definition and scaling and commercialisation across all three.
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  It's natural.
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  There's a lot of commercial activity that happens during the solution definition phase and during the scaling phase.
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  There's a lot of solution definition defining and refining that happens all along the journey.
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  The same with scaling.
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  But we break these phases up in the way that we do because they represent the primary focus of each phase.
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  All right?
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  So three main phases, solution definition, scaling, and commercialisation.
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  Underneath that, we have five stages, and for you engineers and scientists out there, you will most likely be familiar with these.
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  The first two are known as research and prototype.
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  If you listen to one thing on this podcast, I want you to get this.
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  Research and prototype are not just about technical research and technical prototypes.
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  They are not.
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  When we talk about research, we're talking about commercial research.
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  We're talking about scale up and engineering research.
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  And yes, we're talking about early technology research, too.
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  We've got to be doing these things in concert.
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  And when we move through to the prototype stage, we've gathered some of our early research, and now we're going to test it.
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  We're going to build early prototypes.
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  It's the same thing.
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  We're building prototypes of commercial models, technology and early product models.
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  And we're considering scale up in engineering and even early manufacturing models as part of our prototypes.
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  And research and prototype really fulfil most of the first phase solution definition.
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  Now as we get into solution scaling, we start moving from these prototypes and now we're moving to pilots.
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  And the scaling phase, as we talked about just a few minutes ago, is all about that transition to consider larger scales.
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  Because if we're going to really address the problem, we need to be able to address it at the big scales.
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  And the pilot phase, is a, is, is in a way, a long series of exercises that builds us up through to the ultimate scale that can truly address the problem.
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  And so a pilot is not just one stage.
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  We build one pilot plant, that's it.
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  If we build one pilot, if we have one pilot, we're going to have multiple pilots.
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  And hopefully they're going to be pilots that get us to ever larger sizes.
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  And the culmination of the pilot stage, if you'd like, is what we call First of a Kind.
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  F.O.A.K., First of a Kind.
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  And First of a Kind is really the first commercial scale, full bells and whistles solution that we anticipate taking to the market.
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  This is not an MVP.
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  The MVP probably happens at the pilot stage or even at the, at the end of the prototype stage.
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  We're going to dive much deeper into each of these stages in this podcast series.
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  But for right now, this is a summary.
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  The First of a Kind is the culmination of your solution.
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  Let's say you're building an, an electronic censoring device, alright, for measuring corrosion in pipelines.
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  Your early pilot might look like just a piece of hardware with a sensor attached to it.
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  Your First of a Kind might be that same hardware and sensor, but you've got a firmware, you've got electronics, you've got software that's providing data and ultimately insight and intelligence for customers.
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  That's the difference.
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  That's your first commercial scale solution.
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  And as I said earlier, it's not just about the product.
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  It's about the commercial piece.
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  It's about the scale up and engineering piece.
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  So this is our, it's a First of a Kind.
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  And like pilots, we can have many different firsts of a kind.
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  They may not be first, but we can have different exemplar units.
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  Lots of different examples of our unit, of our solution, through which we get more insight into the commerciality of it.
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  And we get more insight into how efficient a unit it is.
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  And we get more experience with it.
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  And then ultimately, and this is the goal we're aiming for, this is the goal every advanced science and engineering company is going for.
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  Market deployment, full market deployment.
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  And when we get to full market deployment, we have sales engines, we're dominated by the commercial teams.
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  We know our first generation or maybe our second generation solutions are working and our whole focus is on getting them to market, distributing them as widely as we can, pushing sales, pushing marketing.
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  We have customer success in place.
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  We are, for all intents and purposes, a proper functioning business.
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  Okay?
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  We're out of the lab-to-market journey.
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  We're now beyond.
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  We've reached escape velocity as a fully functioning business.
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  That is, in a nutshell, the lab-to-market journey.
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  Now, there are three really important frameworks that I would invite you to consider as you are developing along the lab-to-market journey.
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  As you're developing your thinking, there are three really important frameworks.
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  And for those companies that want to avoid making the most mistakes in this process, I would invite you to consider running all three of them concurrently.
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  The first I'm going to talk about is Commercial Readiness Levels, right?
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  And these are a set of milestones, a set of guidelines that help develop businesses along the Lab-to-Market journey.
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  And I start with Commercial Readiness Levels because we're building a business.
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  And if we're building a business, we're not just inventing a product and then going to try to find some home for it later on.
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  We're thinking of the market.
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  We're thinking of the problem.
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  We're developing solutions for that problem from the outset.
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  And so we've naturally got to be commercial.
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  A business is nothing if not commercial.
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  If it's not, we've got a project.
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  We've got a science project.
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  So Commercial Readiness Levels.
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  Now you'll note, we've got very specific milestones underneath each of our stages, sitting under each phase.
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  And early on in the research phase, we're starting out with identification of the problem.
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  And then we get into primary and secondary research.
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  For those of you who don't know primary research, and again, I'll be diving into these milestones in much greater detail throughout this podcast series.
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  But as a summary, primary research, going to talk to customers and partners directly, having interviews with them, finding out what matters to them.
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  Secondary research is desk research, looking into competing IP approaches, looking into legislation, doing desk based market research to understand the ultimate landscape, to build out the context that is going to impact the success of your solution.
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  And through that work, we may identify early applications, early uses for whatever solution we're building up.
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  These are really important and they're really commercial.
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  As we move through to prototype, we're going to start strategic business development, explorations that we'll have carried on from our interviews with companies as part of our primary research, understanding the nature of their problems, understanding the types of solutions that could answer or address even partially those problems.
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  And then going back and forth, sharing them, sharing them, uh, with examples of our technology, early sampling of our technology to build out a community, uh, around the solution.
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  And through that process, we start building up value propositions.
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  We start building out business models.
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  We get an understanding of early unit economics and supply chain issues, bills of material, pricing, uh, you know, potential margins, all of which are going to impact the overall value of the enterprise.
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  So all of this has to be considered in the very early stages when we're defining our solution.
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  As our proc as our process matures, as we evolve, we go into the pilot stage, we're starting to form, we've, we've identified partners with whom we can do our pilots.
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  And they'll be partners.
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  Can we convert them into customers at some point?
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  How do we do that?
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  That's going to be fleshed out during the pilot phase.
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  We'll be refining our financial models.
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  We'll be considering the viability of the commercial strategy and approach.
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  Our go to market possibilities will be considered here.
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  And by the time we get into First of a Kind, we have, we should have a fairly mature understanding of what our commercial model and all the different metrics around which we will be governed as a business, the important metrics for us that we should be considering as we mature.
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  So that by the time we get to full commercialisation, we've considered all the possibilities, we've narrowed on the things that have worked, that we believe will work, and we have validated and tested these.
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  So this is, at a very rough 30, 000 foot view, this is what it looks like.
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  Commercial Readiness Levels and commercial early on, the commercial role feels a little bit like a blend of product manager, strategic business developer, maybe even a little bit of market research analysis, actually quite a bit of that, okay?
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  We have nothing to do with sales.
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  Sales doesn't even come into it at the early stage.
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  God, if you had the second point to learn from this podcast, don't even think about fricking sales early on in this process.
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  Your sales isn't coming on until much, much later on.
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  Here, you've got to figure out the problem and build a solution for that.
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  You're in strategic business development mode.
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  You're in early product formation mode.
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  You've got to think much more strategically.
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  So that's Commercial Readiness Levels.
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  The second, framework.
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  You've got to be considering your Technology Readiness Levels.
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  Now, any engineer or scientist worth their salt will be familiar with TRLs.
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  These milestones will be familiar to many of you.
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  And over the course of my nearly 30 year career in headhunting, 20 of which have been advising startups and spinouts focused on advanced science and engineering innovations, I've had a lot of different viewpoints around TRLs.
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  Some use them, some don't.
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  Most don't.
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  Most don't.
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  Most find them too restrictive.
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  Uh, and while I can kind of understand that, given the complexity in driving a business from lab-to-market, I think having TRLs can help enormously if you use them in the right way.
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  Early in the research phase, we've got our basic technology principles observed and reported.
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  Often, our technology has been spun out of ongoing research, research that's been going on for some time within a university lab or a national research laboratory, something along those lines.
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  And again, bearing in mind what I said earlier about the commercial piece.
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  If we're going to become a business, we've got to make sure that our early approaches, technology and otherwise, are considered in light of the solution we're trying to solve, and the participants of our market, and potential integration issues, and thinking about the economics very early on.
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  So we make sure we're building solutions from a technical perspective in a way that's going to fit.
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  So early on in the research phase, we're developing our early concepts.
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  We're trying to build repeatability.
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  This is all about failing fast, finding approaches that work, and as quickly as we can, getting to prototypes, validating those prototypes as we move into the prototype stage, validating those prototypes with industrial partners and customers, and ultimately finishing off the prototype stage with something that is on client site that is working.
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  This can be your minimum viable product, but we've got some level of technical validation achieved.
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  And we have some way, some kind of feedback from the partner or customer that says, if you can scale that, we're very interested.
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  We're very interested and we're going to buy it.
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  Okay, so you have to know what those metrics are.
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  What are they going to say yes to?
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  That early technical validation that comes at the end of your prototype stage should be that.
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  So that when we move on to the pilot stage, and we're scaling up now, we're not doing it in vain.
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  We're doing it with a purpose.
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  We have a sense.
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  If we can build this, if we can scale it, we have a good chance of making it.
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  Now, scaling it from a technical perspective involves increasing collaboration with engineering and scale, which we're going to get to in our next framework.
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  And so we're focused on supporting the existing platform development that's happening and building up our teams to make sure we can do that.
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  And ultimately, we're trying to get to something that is near commercial scale and quality.
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  And we've got to factor in regulation.
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  We've got to factor in quality.
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  We've got to factor in bills and materials and pricing and the cost of things.
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  We've got to think about the journey of our scales.
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  Finally, when we get to First of a Kind, we've got commercial grade technology performance.
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  This is a big challenge for researchers coming straight out of labs or, or universities who've never worked before.
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  Many of them will not have experience of commercial grade, commercial quality technology performance.
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  What does that look like within the domain on which you're focused?
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  What does that look like for the solution you're building?
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  And how do we replicate that?
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  So this kind of integration, this kind of, uh, with engineering and scale is so crucial.
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  And of course, the one thing I haven't mentioned in here, but is, but is, is, uh, is, is crucial is IP development, making sure our intellectual property, we are defining our moat.
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  We're building on our technology moat.
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  We have freedom to operate.
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  We're thinking very carefully about what we go ahead and patent and what we leave as know how so that we leave ourselves with optionality later down the line.
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  And the final framework, which is as important as Commercial Readiness Levels, And Technology Readiness Levels is Manufacturing Readiness Levels, MRLs, CRLs, TRLs, MRLs, they're crucial.
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  Because at the end of the day, what you have to remember is you want to build a commercial solution that scales.
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  By commercial, you're addressing a problem.
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  With the solution, it's a technology enabled solution that's addressing the problem that scales, and the that scales piece comes into the MRL piece.
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  So all three of these things need to be considered, and in my view, and a view that I have heard countless times from entrepreneurs and executives that have been on the lab-to-market journey themselves, some have failed, most have failed, and some have succeeded.
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  The same thing I hear time and again.
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  I wish we had started with these three concepts.
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  up front.
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  I wish we had started with CR, with a consideration for our CRLs, TRLs, and MRLs all up front.
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  We would have saved years in the process.
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  Manufacturing Readiness Levels in the early days.
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  This is about establishing approaches for scale up.
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  And a lot of that comes from engineering.
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  And so during our research phase, we're thinking about what is the best way?
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  What is the prime approach to scaling some of this early technology?
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  And so when we're thinking about our technology approaches, we also have to think about, well, how are we going to be able to manufacture or produce this at scale?
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  And so we've got our early concepts identified along with the TRLs.
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  And when we move through to prototype, again, very in line with TRLs, we're thinking, we're starting to think about early supply chain considerations, bills of material.
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  We're starting to think about unit economics.
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  They're going to impact the overall value proposition.
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  We're starting to think about, uh, facilities, and we're starting to think about ways of manufacturing as well.
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  And as we move through to pilot, that's when, that's when the obvious scale up and engineering work comes into play, because the scale up phase is really about bringing this to life at a big scale.
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  And that's all about MRL.
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  Now, sometimes we're doing that in house, sometimes we're working with, with EPCs, or we're working with other consultants, or we're working with toll manufacturers, we're working with other industrial partners.
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  And the more novel engineering solution to produce this, probably the more time we're going to have to spend with some of those partners.
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  And given that everything we do in advanced science and engineering is ultimately about producing something novel, the likelihood of having a novel engineering process is high.
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  But tollers and some of these partners are really good with standard manufacturing methods, not necessarily novelty.
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  So you've got to consider the time that you're going to spend with some of your partners.
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  You've got to think about some of those risks involved.
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  And that's what's coming into, that's what's involved at the very early stages, but certainly coming to the fore at the pilot stages.
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  But by the end of the pilot stage, we've got a certain level of capability, and either that's being hosted externally, or we've got our own in house production capability.
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  In these early stages, we're also thinking about demonstrator plans, because when potential partners and customers come around, we want to be able to show them, even at a smaller scale, what a sensible demonstration of our technology, of our solution looks like.
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  And through such a demonstration, we can provide confidence.
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  We can inspire confidence in our, in our potential customers and our partners.
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  But ultimately, we're trying to get to that commercial scale.
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  This is, this represents one of the biggest challenges that companies on the lab-to-market journey have.
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  How do we take novel innovation, how do we scale it at a commercial level?
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  If this were easy, the corporates would be doing this all the time.
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  and they're not, which tells you that it's hard.
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  And that's one of the reasons we need startups.
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  So some of the biggest challenges come from scaling it, thinking of the engineering and the partnering with production and scale up.
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  For some, particularly in some energy industries, take nuclear fusion as an example.
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  Nuclear fusion is a wonderful platform technology, could answer, could address a lot of issues.
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  What's the biggest challenge associated with something like nuclear fusion?
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  It may not be the science or the engineering.
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  It may be supply chain.
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  Where are you going to find the materials?
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  Where are you going to find the advanced materials, some of which may not exist yet?
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  So when you're thinking about scale up and you're thinking about your engineering, all of you will be thinking about this at some level, I'm sure.
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  But these are the considerations that will impact our approach early on, that have to be thought through.
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  By the time we're getting to First of a Kind, we have a good sense of what this looks like.
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  We have partners that are willing to support us.
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  We, we have our approaches nailed down, and we're producing at scales that indicate we are going to be a presence in this market.
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  We're going to have presence, so that by the time we reach full market deployment within Manufacturing Readiness Levels, we are a significant presence with significant assets.
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  I can't stress this enough, all three, Commercial Readiness Levels, Technology Readiness Levels, and Manufacturing Readiness Levels, need to be considered as early as possible, as part of almost the formation team, the founding team.
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  So at a 30, 000 foot overview, that's the lab-to-market journey.
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  Those three phases, those five stages, those different milestones.
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  And I walk through very briefly the different commercial and technical and scale up engineering and manufacturing considerations along the way.
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  And hopefully you're taking away the importance of considering all three aspects, commercial, technical, and manufacturing from day one.
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  And you want to do that because you want to avoid the most common mistakes.
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  The most common mistakes which we see as a headhunting firm all the time.
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  Common mistakes that you've probably heard about and continue to hear about all the time.
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  Common mistakes like starting off on a technology development path, picking up post PhD, continuing on with technology development.
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  This is really interesting.
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  I'm enjoying this.
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  We can do all these nifty things with our platform.
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  Now we just have to commercialise it and find a way to apply it.
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  And we need to find some partners to work with to help us do this.
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  And I've seen so many of those companies who haven't considered the commercial implications up front.
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  I've seen so many of those flounder for so long.
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  Or I've seen companies where the commercial logic seems right and the technical platform really interesting.
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  but they can't scale it.
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  It makes no sense to scale it.
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  The economics are all out of whack.
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  They haven't considered the supply chain issues.
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  They haven't considered regulatory issues.
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  There's something toxic in one of the ingredients that they're not going to be able to get through European legislation or the EPA.
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  These things happen all the time and from where I sit as a outsider, insider, as a headhunter, we're not in the core, we're advising, but where I sit and what I've seen after so many years of looking at these companies and watching, they make the same basic mistakes.
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  These are basic mistakes.
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  These are failures of planning.
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  And the whole point of this, the whole point of this podcast, the whole point of Lab-to-Market Leadership is about anticipating the challenges and obstacles you're going to face along your journey and planning for those so that you are able to recruit the right customers and partners at the right time in a credible way and maintain leverage and power throughout.
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  You're able to get the right capital you need at the right time.
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  They say there's a capital issue, a funding issue in Europe, in the UK, and there may be, but I don't think it's as big as everyone makes out.
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  There may be a management issue in the UK and Europe when it comes to the development of these types of businesses, and that may come, the root of that may be about planning.
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  Lab-to-Market Leadership is about that level of planning, that level of anticipation, considering all of these different factors, and if you're able to consider all of these different factors up front, You're going to stand a better chance of getting to the other side.
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  So that's it.
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  If you want to learn more, click on the link below and download our Lab-to-Market Journey presentation, and keep listening to this podcast.
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  We're going to be speaking with entrepreneurs and executives that have been on the lab-to-market journey.
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  You're going to hear about the actions and the decisions and the compromises they've made as they've navigated from one end of the journey to the other.
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  If you've enjoyed this podcast, give us a like, [if] you want to learn more, give us a follow.
• 29:49
  Thank you so much for joining us.
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  See you next time.
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  You've been listening to the Lab to Market Leadership Podcast, brought to you by Deep Tech Leaders.
• 29:58
  This podcast has been produced by Beauxhaus.
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