In the exciting world of technology entrepreneurship, deep tech startups emerge as a transformative force. Positioned at the leading edge of innovation, these groundbreaking companies are reshaping our world with profound scientific and technological advances. Continuously pushing the boundaries of possibility, they strive to tackle our most pressing global challenges using breakthrough technologies previously confined to the realm of science fiction and human imagination. When they succeed, they bring to life impactful, real-world solutions for a cleaner, smarter, healthier future.
And yet, even as deep tech startups seek to facilitate such profoundly important changes, they face a formidable hurdle: the challenge of technology commercialisation – transitioning a particular piece of innovation from the research lab to the market. More often than not, the greatest obstacles arise in mastering this highly complex business journey, which is filled with unique strategic and leadership challenges. Based on years of industry expertise, our Lab-to-Market Leadership Model seeks to aid in that process, helping more of these businesses and their exceptional innovations achieve success.
Technology entrepreneurship: where business & innovation align
The task of turning cutting-edge innovations into successful products is extremely difficult. This aspect of technology entrepreneurship involves creating something extraordinary, while also ensuring it solves a significant problem and is stable, marketable, and scalable. A company must be able to find compelling market applications for the innovation and produce it repeatedly, ensuring the economics make sense – delivering it at a price acceptable to the industry and using a methodology that fits the broader market.
Traditionally, this is a role that large corporations have taken on. However, despite their resources and embedded processes, corporations often struggle to deliver in the innovation space. As such, the task usually falls to deep tech startups, who, as entrepreneurs, build successful businesses in the sector because they are uniquely positioned to do what corporations can’t achieve.
Deep tech startups: the push to innovate at scale
Deep tech startups are driven by an ambition that goes beyond their initial status. These companies are not content with just being startups; they aim to evolve into highly successful new businesses capable of innovating on a large scale.
This aspiration to grow and transition out of the startup phase hinges on earning the trust of the value chain, meeting milestones, and embodying the right mix of skills, talents, and experiences. When they succeed, they have the power to transform industries.
The unique journey of a deep tech company
From semiconductors and quantum computing to artificial intelligence and machine learning, the realm of deep technology encompasses a broad spectrum of fields. Unlike software, apps and other sectors that often fall into the ‘shallow tech’ category due to their more straightforward solutions, deep tech companies frequently chart new territory without the guidance of established playbooks or operating models.
Although these companies share the common goal of transitioning from lab to market, their business models and pricing strategies vary significantly. As a result, each company’s journey from lab to market is distinct, defined by its unique beginning, the resources at its disposal, and the specific challenges inherent in its sector.
What goes wrong for tech entrepreneurs?
While first-time CEOs and founders tend to innately understand innovation, which lies at the core of their work, they often struggle with the leadership and management aspects of building a successful deep tech business. The lab-to-market transition is laden with complexities even for seasoned leaders, from scaling innovation and integrating into value chains to maintaining the right strategic perspective.
These challenges can derail even the most promising and urgently required innovations, underscoring the need for a more considered and structured approach to business development. This leads to an interesting question: How can we develop a single, widely applicable approach to help companies navigate their own unique experiences within the lab-to-market journey?
The Lab-to-Market Leadership Model: a framework for success
Our deep understanding of technology entrepreneurship comes from decades of executive search expertise in the deep tech sector. During this time we have cultivated a nuanced understanding of the challenges these companies face. Our experiences, enriched by interactions with a spectrum of industry players – from successful entrepreneurs and close contenders to investors, corporate sponsors, and advisors – have led us to develop the Lab-to-Market Leadership Model. Reflecting principles encompassed by innovation science, this model serves as a playbook to help deep tech companies along their unique paths to market success.
The Role of Technology and Manufacturing Readiness Levels
The Lab-to-Market Leadership Model accounts for these variations using a flexible and dynamic approach. Forged from our extensive experience, it recognises the uniquely variable path each deep tech company must travel, incorporating factors like team experience, innovation level, and capitalisation, as well as accommodating the need for adaptable business and operating models.
The framework incorporates strategic tools to help all innovators, including those struggling with technology entrepreneurship, to navigate this journey more successfully – illuminating the path and enabling them to reflect on exactly where they are within their own journey at any given point.
Tools like Technology Readiness Levels (TRLs) and Manufacturing Readiness Levels (MRLs) are invaluable in this process. Originating from NASA and the U.S. Department of Defense, respectively, these scales measure the maturity of a technology and the production capability of solutions, providing a framework to gauge progress, understand challenges, and plan the next steps.
A holistic approach to framework development
By integrating these tools with other metrics, such as commercial and financial readiness levels, we can gain a comprehensive understanding of a company’s progress. This holistic approach allows us to layer various leadership and management disciplines onto the TRLs and MRLs, creating a robust framework to help guide deep tech companies through development.
While the final goal of the lab-to-market journey is to commercialise and scale these new solutions efficiently, to achieve this state a novel innovation must be stable, market-ready, and able to achieve product-market fit. This means it must be aligned with viable unit economics and broader industry acceptance. Using the Lab-to-Market Leadership Model, deep tech companies can evaluate their progress along the path and help to ensure they’re heading in the right direction for success.
Navigating the Five Key Stages of the Lab-to-Market Journey
Throughout the journey from initial research to market deployment, deep tech companies undergo several transformations. With each step, new challenges and opportunities arise, necessitating a strategic, well-thought-out approach.
Deep tech startups and scaleups should seek to understand what their specific path will be as early as possible and begin to prepare for what lies ahead. To do so, they’ll first need to understand that the lab-to-market journey typically unfolds in the following five key stages:
- Research
- Prototype
- Pilot
- First-of-a-Kind (F.O.A.K)
- Development
Throughout this process, deep tech companies must ask themselves a single, pivotal question: are we building the right product in the right way?
In deep tech, that single point of reflection becomes, quite literally, a billion-dollar question. An affirmative answer ensures both successful market integration and scalability. Therefore, deep tech startups should explore its implications fully, addressing the question from all possible angles. For example:
- What will each of the key stages mean for the business?
- What milestones and challenges are likely to arise along the way?
- What skills and experiences will be essential at each stage?
Anticipating and preparing for these stages offers a clearer view of what lies ahead.
Leadership team development within the Lab-to-Market Journey
The Lab-to-Market Leadership Model helps to support deep tech startup success by aligning a company’s developmental journey with the distinct leadership and skill requirements necessitated at each stage of the journey.
Although in an ideal world, every deep tech company would have a comprehensive team in place to support the business early on (strategy, operations, finance, technology, and engineering), the reality is often very different. As a result, it’s important for innovators to at least be aware of the need for those different perspectives and to take steps towards achieving them, potentially through advisors or board members.
From the lab to impactful global solutions
Let’s explore the journey further. While the path from novel ideas to marketable products is complex and multifaceted for all deep tech innovators, for most companies the story at least begins in the same place.
For many deep tech startups, innovations are conceptualised and developed into future technologies within the walls of a research lab. This portion of the journey is led by a team of researchers and developers looking to solve a significant problem and can often span years or even decades.
Progressing deep tech: from investment to prototype & pilot
As the research evolves, it gives birth to solutions with the potential to transform our world, and so this initial phase of research might eventually attract investments. These early investments, frequently from angel investors or sector-focused funds, often come when the technology reaches a certain level of readiness, indicated by TRLs.
The journey then progresses through the stages of prototyping and piloting. This period is not just about technological development; it involves a consideration of the operational challenges, including engineering, production, supply chain and quality; strategic business development, exploring various business models, pricing strategies, and partnerships.
At this juncture, decisions will need to be made regarding the financing of an exemplar unit. Securing finance for a first-of-a-kind unit is notoriously challenging, so commercial creativity is essential for this exercise to be successful.
Advanced stages: integration, scaling, and global reach
Assuming financing of exemplar units can be arranged, additional challenges remain. Stabiliing product performance is critical, as is the integration of solutions into a wider value chain. This includes the need to align with the journeys and trajectories of other companies, partners, and potential clients.
This requires leaders who understand these specific dynamics and can engage effectively with larger corporations and stakeholders; who understand how to negotiate and create win-win scenarios. Plenty of solutions have arrived at this stage, only to fail because they have underestimated the challenges of value chain integration.
As the lab-to-market journey hurdles towards the deployment stages, companies focus on scaling up, refining their value propositions, and preparing for global distribution. Sales partnerships are put in place, sales plans are enacted, and market distribution can start to happen. This does not mean the challenge is over. But it does mean that the journey of the deep tech startup becomes more aligned with that of any other product company within the value chain.
Conclusion: advice on getting started
While TRLs and MRLs can act as effective anchor points to measure a deeptech company’s progress, every Lab to Market Journey is going to be different.
When we at Deep Tech Leaders meet with a startup for the first time, we often ask them to map out their Lab to Market Journey for us. What are the challenges they expect? How will their journey be different? What skills, experience and talent are they anticipating? And by when?
It’s vital that they are incorporating market data and feedback into their planning. Testing their plans with value chain members is critical, particularly for first-time executives.
We pose these questions to facilitate a critical point of understanding: success in the deep tech sector goes beyond the realm of developing groundbreaking technology. It’s true that when entrepreneurs match promising technology with the world’s most urgent problems, they create powerful solutions to improve our future. However, this involves the comprehensive journey of building a company adept at navigating the multifaceted lab-to-market path, with all of its inherent challenges.
When founders and innovators thoroughly consider these critical aspects from the beginning, they significantly enhance the overall preparedness and resilience of their businesses. By supporting successful business and operating models in this way, they produce solutions that are more likely to succeed.
While deep tech companies often operate at the cutting edge of science, where preparation does not always guarantee results, our experience shows that thorough planning significantly boosts the likelihood of success. In this challenging yet rewarding journey, the Lab-to-Market Leadership Model serves as a valuable addition to a company’s toolkit, aiding in navigating the complex landscape of technology entrepreneurship and deep tech innovation.
We’ll be discussing this model, as well as how it relates to the different phases of the lab-to-market journey and the venture creation process, as this blog series progresses. Additionally, you can learn more about what it takes to succeed as a deep tech startup by watching our video, Exploring Lab-to-Market Leadership.
Sign up to our mailing list below for notifications about our latest releases.