A Lot Of Intellectual Property Is Not Exploited

I think there is widespread acceptance that Australians are very good at invention and innovation and not so good at commercialization. I don’t just mean the famous gadgets like the hills hoist and the victor mower but a wide variety of products and services across many disciplines. We punch above our weight even in the really clever stuff in high tech and biomedicine and yet we see very few businesses which have successfully brought these amazing products and services to market. The missing component is entrepreneurship. It takes a special skill to grow a successful business. Just because you are clever at inventing does not mean you know anything about business or even have an aptitude or a desire to participate in the development of a business.

The sad part in all this is that, historically, we have never given much credit to the entrepreneur’s role in commercialization. As a nation we continue to pour money into research and development and into commercialization programs to help inventors, especially our research scientists, bring these wonderful products to market but generally get it wrong. It is a basic failure to accept that the good mousetrap still needs a lot of work to take it to market, generally thought to be $7 for every $1 of research. It is also a failure to appreciate the role of the entrepreneur in making it happen and a lack of funding and support to develop potential entrepreneurs so that we have a ready supply of trained people to pick up the new ball and run with it.

Few inventors can grow a business

So if you are an inventor with a patented gadget which solves a serious problem, has a ready made market and can be produced at a price which returns a good profit margin, where do you go to find an entrepreneur to help you commercialize your invention? It is not as if they hang out on street corners with signs hanging around there necks saying ‘entrepreneur here if you need help!’ Even if you do know some successful entrepreneurs, it does not mean that they understand your specific market, have the time to help you or have the funds to bring it all together. A few years ago you would have been left swinging in the wind, fortunately there is now a source of help – the Angel Group.

Angels are typically cashed up entrepreneurs who invest across a number of early stage ventures and provide mentoring to assist in the development of the business. Unlike the single Angel working alone, an Angel Group will have 20 to 100 members with experience across a wide range of commercial sectors. They would normally have access within their member base to a wide range of experiences from which they can find the specific knowledge an inventor will need to commercialize and invention. Because of their member base, they also have access to the funds needed to develop and market the underlying products and services of the new venture.

It takes a lot to properly bring a product to market

Policy makers know little about developing a business and taking products to global markets. They are stuck in the old saying by Ralph Waldo Emerson ‘Build a better mousetrap and the world will beat a path to your door’. Ask any entrepreneur who has built a multi-million dollar business and they will tell you a very different story, one of hard work, lots of talented people and many years of breaking into a competitive marketplace. The invention only starts the journey but it is far from the solution to effective commercialization. What the inventor needs to do is to tap into business creation experience, market knowledge, risk capital and commercial networks. At best the invention represents 15% of what you need to take a product to market – however, it is often the catalyst for a successful venture.

What I find attractive about Angel Groups in this context is that you have access to many talented people who have ‘been there, done that’. Growing a business is not without its challenges and certainly often littered with mistakes, failures and wrong directions. Those who make it have some grey hairs which are worth tapping into. Not only will they help craft a growth strategy which has a high probability of success but they can often tap into the executive talent needed to make it work. But it does require the inventor to be open to allowing someone else to lead as few inventors have the experience or personality to drive a business. Also, they have to be willing to give up a share of the rewards as well as accept that the venture will most likely be sold after a few years in order that the Angel investors see a return of their investment and a profit on their contribution.

Get advice and funding from the angel community

The reason why so many of our great inventions never see the light of day or fail to generate the rewards expected of them is because we fail to recognize the special skills which entrepreneurs bring to the venture. Research institutions hold on to their IP expecting someone to pay only for the rights to access it or want so much for their part in the venture that no serious entrepreneur is willing to participate. But those inventors who are open to participating in a venture with a group of Angels has a great chance of seeing their invention commercialized and, hopefully, being rewarded well for their contribution.