For those of you who don’t know us, introducing ourselves might sound like the start of a bad joke. “An economist and a materials scientist walk into a room…” But that’s exactly what happened. We met by chance four years ago, Ally on a listening tour at MIT related to the launch of The Engine, working to find the best ways to support future innovators, and Mike in the depths of his PhD work documenting opportunities for such support.
After that meeting, and working together as colleagues at The Engine, we realized that we shared parallel experiences as accidental entrepreneurs — entrepreneurs that had tried to commercialize game-changing technologies born out of academic research with huge potential for impact in the world: Mike as the first employee at a startup commercializing a novel battery technology for grid-scale storage, and Ally working with friends to develop an electric propulsion system for the small satellite industry.
As we reflected on our journeys and our efforts to help others commercialize their technologies, we were both struck by the absence of entrepreneurial training tools and strategies specific to launching a Tough Tech company. And, more importantly, we were united by the emphatic belief that these tools needed to exist.
While at MIT, we both spent significant time embedded in the entrepreneurial ecosystem, trying to soak up as much startup and entrepreneurship advice as possible: reading all of the books, listening to all of the podcasts, participating in all of the events, and eating all of the free pizza. We thought we were as prepared as one could be to work at a Tough Tech startup.
But, in each of our experiences, there were countless challenges unique to Tough Tech that forced us to consider trade-offs about de-risking our ventures that did not fit into established strategic plans for more “general” startups.
For example, what does it mean to make an MVP of a green steel plant, or a fusion power station or a grid-scale battery? And, let’s say for a moment that you could imagine a relevant form factor for it, who will care about it — are they the people you need to convince? Further, how do you manage business-model development when ideal pathways may be limited by technical requirements, regulatory constraints, or industry structure?
Blueprint exists to:
- Cull the most important lessons learned about Tough Tech entrepreneurship from experienced Tough Tech entrepreneurs;
- Identify issues that are common among Tough Tech startups;
- Offer strategic support for how to think through such issues;
- Provide a set of tools for soon-to-be Tough Tech entrepreneurs to develop a plan and accelerate their development as they commercialize their technology.
We do this because Tough Tech is important. Our world faces a multitude of emerging and worsening challenges: how do we avoid the worst effects of a warming world; how do we prevent and treat emergent health crises; how do we feed a growing population; and how can we continue to expand upon standards of living across the world with new technology and infrastructure?
While technology isn’t the only solution, it is absolutely part of the solution, and we need entrepreneurs willing and able to tackle these challenges.
Blueprint is built for the earliest stages of company formation, for individuals who ask themselves, “can I commercialize my research?” and if yes, “how do I start?” If that is you, we hope you will consider joining the 100+ innovators who have participated in the Blueprint program so far by joining our next cohort!
A Blueprint Primer
There is no shortage of books, plans, and courses on entrepreneurial strategy. Canonical efforts like The Lean Startup, Zero to 1, 24 Steps to a Successful Startup, and I-Corps programming are vital for all founders to understand the general startup process. These authors have built a robust foundation for starting a Tough Tech company, and it is upon their shoulders that we created the Blueprint program.
The Engine Blueprint Program explores ways that Tough Tech commercialization adds additional wrinkles that have to be considered in the entrepreneurial process. We start with one overarching observation: Tough Tech commercialization differs from more ubiquitous tech commercialization (software, for example) in the multiplicity of risks that the venture has to navigate.
Consider the uncertainty frontier in Figure 1, where the Y-axis is Market Uncertainty and the X-axis is Technological Uncertainty, it is obvious that the experimentation pathway to success for a company like Instagram and a company like Commonwealth Fusion Systems should be different.
Figure 1: Market vs Technological Uncertainty
On the one hand, while Instagram had very little technical risk, the uncertainty there was whether people wanted to share their pictures publicly. On the other hand, while Commonwealth Fusion Systems includes embedded technical uncertainty around the ability to create a net-positive energy reaction, if it works, it is clear that we know how to sell inexpensive, abundant heat and power in organized markets.
Most Tough Tech companies actually sit somewhere in the middle and will need to balance experimentation in the market and experimentation with technology in a capital-constrained environment.
Even this example is an oversimplification. Tough Tech startups aren’t only navigating uncertainty in technology development or the market, but also potential uncertainties in the regulatory environment and/or with respect to scaling up. In many ways, Tough Tech can be defined as a venture by sitting at the intersection of these risk areas, as shown in Figure 2.
Figure 2: Multidimensional Risks
The Tough Tech entrepreneur’s challenge is to navigate this multidimensional derisking challenge, and the goal of Blueprint is to help entrepreneurs evaluate these potential risks, prioritize risk abatement and develop a cumulative plan that efficiently increases the value of the company as it moves through fundraising cycles and toward commercialization.
So, what are the specifics of these risks?
Exploring Technological Risk
Key challenges common to the development of Tough Tech include the following:
- Experimentation is not rapid and feedback cycles are long;
- Experimentation cadence may not align with traditional financing times;
- Costs of pivoting to new technology trajectories could be expensive (in money and time), limiting a company’s options;
- The nature of technology development often includes prioritization across potentially conflicting performance metrics.
The goal of this module is to help develop a prioritized technical experimentation plan. Doing so requires a detailed exploration of a few important elements of your technology:
- Identification of key areas of scientific and engineering risk;
- Definition of critical metrics that you need to hit for value inflection;
- An assessment of the current status of the technology vis-a-vis those metrics;
- Identification of trade-offs across metrics as you develop your technology;
- A reasonable timeline for technical risk retirement and the set of experiments needed to do so.
Exploring Scaling Risk
Key challenges for Tough Tech scale-up include the following:
- Your technology not only needs to perform across required performance parameters, but it has to do so at scale;
- You need to consider scale-up risks across technical metrics, manufacturing processes, supply chain activities, industry standards, and economics;
- Often, there are unknown unknowns;
- Making stuff in the physical world is hard: logistics, supply chain, technical tolerances, materials, equipment…you name it.
The goal of this module is to answer the following key question: can your technology/product compete at scale. In the Tough Tech entrepreneur’s case scale means both in size and in volume. Doing so requires the completion of a few key tasks:
- Input / output mapping of your processes today and in an idealized future state;
- Techno-economic analysis through cost modeling;
- Supply chain analysis;
- Identification of long timelines that require action early.
Considering Tough Tech Markets
Key Challenges for tough Tech Market Development include the following:
- Often Tough Tech is deployed into risk-averse industries;
- Commercial demonstrations either at the pilot or commercial scales are capital intense;
- The presence of large competitors with scale efficiency and market power;
- Value capture challenges related to all of the above.
- How to think about a platform technology — how do you decide what market to go after first?
The goal of this module is to help you develop a business model and market execution strategy. Doing so requires completion of a few outputs:
- Clearly defined value proposition;
- Industry mapping;
- Market sizing;
- Presentation of business model options.
The Role of Public Policy and Regulation in Tough Tech
Key challenges for Regulatory and Policy Engagements:
- It is hard to move the needle when you have unproven technology;
- There is a concern of regulatory lock-out and incumbent power;
- Freedom to operate could be restrained;
- Safety trade-offs;
- Headline risks.
The goal of this module is to help you define a regulatory strategy that could push the business forward, possibly through de-risking with government support. Accomplishing this requires consideration of the following:
- Defining the potential regulatory risks;
- Defining the regulatory landscape;
- Outlining non-dilutive funding opportunities;
- Creating a timeline for regulatory engagement that aligns with the project plan.
Complexity Resides in the Overlap of These Four Risk Areas
In silos, these regimes of uncertainty are straightforward to manage. But as part of a commercialization process, it is in their overlap that things can be challenging. In Blueprint, we’ve created the Tough Tech Canvas to begin to navigate these overlaps, to serve as a guide for the important questions entrepreneurs need to address as they put together their plan.
To assist entrepreneurs in their consideration of these risks, we have compiled a set of Tough Tech cases, from a variety of fields including the life sciences, ag-tech, climate tech, space, semiconductors/microelectronics, transportation, and advanced computing. Through engagement with these cases, Blueprint teams are able to develop a nuanced understanding of their own experimentation plan, identify key value inflection points, and begin the process of turning breakthrough technology into commercial impact.
Equipped with this understanding, the key to success is then the ability to communicate the vision and plan to truth-seeking, scientifically and technical-rigorous audiences. After reviewing the four dimensions of risk above, Blueprint dedicates a session to storytelling, where teams develop a set of materials, including a pitch deck, that best articulates a company’s vision. For more perspectives on storytelling, check out this recent post by Ann DeWitt and Fran Barros.
It is of course important to note, that Blueprint is, and will forever be, a work in progress, with success, it will continuously evolve to meet the changing nature of technology and markets in real-time. Doing this will take a village, and we welcome you all to join:
- If you are a graduate student, post-doc, or research scientist thinking about starting a tough tech company — join us for our next program this fall!
- If you are a Tough Tech entrepreneur — we want to hear your story, share your challenges, and highlight your successes;
- If you similarly have been thinking about these issues from a practice or research perspective, we want your critiques, suggestions, and tweaks!
We will be running our third Blueprint Cohort this Fall, and we hope you will join us!
Mike, Ally, and The Engine Team