Business+models+for+commercializing+IP


 * Business model for IP commercialization**

IP business model is aimed to create, capture and deliver value from the innovation. The successful business plan has to have clear understanding of what kind of company one wants to build in order commercialize the innovation. In practice that means sound answer on the following questions:

1. Market positioning - what is the targeted market segment 2. The offering - does the new product create value for customers? 3. The value chain - about the network of suppliers, potential customers, distributors, key people and how firmly they are connected 4. Finance - all about the money; how much the business cost and how much profit it can make.

The first goal of every new business is identifying the market segment e.g the customers whom the new technology creates value, and establishing the relations with them. Secondarily, but not less important is the way the new product is going to reach the customers. There are two most common ways: directly to the market or via the retailers. Both have some strong and weak points and which one should be chosen depends on the nature of the product/business and is a matter of careful analysis. It directly affects the cost structure of the whole business.
 *  1. Market positioning **

It is all about the customers' perception of the new product. Based on their feeling they evaluate the offering. Best way to express their appreciation for the new technology is a willingness to spend money on it. Switching costs to new technology play an important role to this decision.
 *  2. The offering **

Identification of key business processes and core resources of new start up / spin off. Establishing the network of suppliers, distributors, and potential customers.
 *  3. The value chain **

The first three points shape the cost structure and revenue stream, which directly lead to the fourth point "The Finance".

Estimate the cost structure and profit potential of a new offering, based on value proposition and value chain.
 *  4. Finance **

Definition of the legal structure and estimation of the financial structure? Calculation of the cost of capital, risk premium, and task regime? As a final point in order to finalize the capitalization of new company WACC (Weighted average cost of capital) has to be determined.

The answers to those questions should formulate a sound business strategy which will enable the start up company/spin of to gain competitive advantage.




 * External links:**

[|http://www.cs.berkeley.edu/~tlavian/spring2008/guesstSpeakers/Ron-_LSI_08PATSCA_IP_Business_Models-1-.pdf]

[|http://www.quantuminsight.com/papers/030915_commercialization.pdf]