win squared report

8/12/2019 Win Squared Report

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WIN Final ReportBamNet

Sharon NgNot yet finalised

The new Gateway Bui ld ing at Jub i lee Campus, Univers i ty of Not t ingham:Scheduled for completion Summer 2008, this building will be a business incubationunit supporting University spinout companies.

For more information about courses in Business and Entrepreneurship, go towww.nottingham.ac.uk/business

Institute for Enterprise and Innovation (UNIEI), Nottingham University Business School (NUBS)University of Nottingham, Jubilee Campus, Wollaton Road, Nottingham NG8 1BB

The University of Nottingham 2008. All rights reserved.


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What is Contained in the Evaluation?

Strongest ThreeCriteria

The three strongest and three weakest criteria were selected after consideringeach of the 44 criteria. These are brought to the front of the report for quickreference. They will help to determine where future development should focusresources, in both in building up strengths and in fixing problems.

Weakest ThreeCriteria

If any of the weakest criteria are also in the Critical category, a decision will needto be taken urgently as to whether to proceed or to abandon the project, at leastin its present form.

The SummaryRecommendation

At the end of the evaluation process, WIN evaluates each of the 44 differentresponses and comes to a weighted "score". This is shown in terms of arecommendation about further development of the project.

The Report This consists of:

Specifically, WIN selects one of six different ratings to describe the strength ofthe recommendation.

You will note that this rating is based on a 50-point rather than 100-point scale.This reflects the fact that it takes more than a good idea to be successful in themarketplace. Solid research and development, good management, skilfulmarketing, adequate financing and all kinds of venture-related issues contributeto the chances of commercial success.

Unfortunately, many of these factors are unknown at the pre-market stage of theinnovation process. WIN does not have the capability to be able to offer ajudgement about this next stage. Accordingly, the second half of the scale isreserved for these unknowns.

So 50 is the maximum possible score at the preliminary stage. In terms of ourcolour coding, only a small percentage of submissions receive blue or lavenderratings (42 or more). Even the best projects must recognise and manage thesubstantial risk that remains.

The response selected to each of the 44 separate evaluation criteria

An indication of whether this response is either Critical or Possiblycritical (something such as a failure to meet a statutory safety standard that could preclude any further development of the innovation, at least until thedeficiency is corrected)

and

Any thoughts, comments and/or questions that have been input and savedduring the assessment process.

What next? The final part of The Evaluation shows the overall comments and suggestions that

were entered at the final stage of the assessment.

Taken together, the criteria responses, the Summary Recommendation and thethree strongest and weakest criteria will provide a well-rounded appraisal of theproject at this stage, and a firm basis for development.

The WIN2 Evaluation


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The WIN2 Evaluation

What are the three criteria against which your project was judged mostpositively?

After assessing all the criteria, the three following criteria were identified as the relatively stronger aspects of yourproject. These are intended to help you in building on your projects strengths but do not constitute an endorsement to

pursue the innovation.

The strongest 3

1. Criterion 15 - Trend of demand

2. Criterion 28 - Function

3. Criterion 29 - Durability (Select Not Applicabl

15. Trend of demand

The market demand for innovations of this type appears to be:

Rapidly expanding significant growth opportunity

Critical? Risk:no

Innovators must possess adequate financial resources (working capital) to finance expanded businessopportunities. Often new or small businesses fail to realise a new products or service's potential for thisreason. In some cases they might have insufficient working capital to cover expenses and consequentlygo out of business. In order for new technology to reach its fullest potential, the innovator mightmaximise return by licensing to someone with the necessary resources to realise its potential even ifthis entails accepting a smaller percentage of the expected profits.

Comments

Low

28. Function

Relative to relevant prior art, competing and/or substitute products, services or processes, the functionperformed might be perceived by potential buyers as:

Very superior a significant competitive advantage

Critical? Risk:no

Very superior function can greatly facilitate market acceptance. Function takes on added importance whenboth Need (criterion 21) and Visibility (criterion 23) are high. For example, if a new tyre and new petrolwere both introduced to the marketplace and both offered a bogus functional advantage of bettermileage, the rejection of the petrol would be faster and surer. However, if the functional advantages ofthe new tyre and the new petrol were real and meaningful to the user, the petrol would probably be more

rapidly accepted, as it is the more visible of the two. In addition, the cost of introducing it would probablybe lower, especially when it meets a real or perceived need in the marketplace.

Comments

Lower


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The WIN2 Evaluation

29. Durability (Select Not Applicable if the

Relative to relevant prior art, competition and/or substitutes, durability of the innovation might beperceived by potential buyers as:

Very superior easily promoted as a major improvement

Critical? Risk:no

The very superior durability should be highlighted in the firms promotional messages. Less risk andperhaps less cost incurred.

Comments

Lower


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The WIN2 Evaluation

What are the three criteria against which your project was judged leastpositively?

After assessing all the criteria, the three following criteria were identified as the relatively weaker aspects of your project.These do not necessarily constitute a block to any further development, but it is important to address these issues before

proceeding.

The weakest 3

1. Criterion 7 - Stage of Development

2. Criterion 8 - Investment Costs

3. Criterion 32 - New Competition

7. Stage of Development

Based on available information, there is:

An idea only, with sketches/diagrams/drawings and/or description

Critical? Risk:no

Commercialisation might require a great deal of work and investment. Innovations at this stage areviewed as risky and are difficult to license. Most firms prefer projects that are further along in theinnovation process as this reduces costs and cuts perceived risks.

Comments

High

8. Investment Costs

The amount of capital needed for commercialisation is likely to be:

Moderate may require participation of formal investors

Critical? Risk:no

There is a risk in involving others. The risk of rejection increases with the size of the required investment.The only safe alternative is to fund entirely development and commercialisation. Consider theinterrelationship with other criteria: Payback period (9) and Profitability (10). When formal investors areinvolved, the project competes with all other available investment opportunities. No matter how virtuous,projects with long payback periods or low profitability are not likely to interest formal investors.

Comments

Manageable

32. New Competition

Competition from new entrants or competitive reaction to the innovation is expected to be:

Moderate market share can be maintained

Critical? Risk:no

A normal situation, but it can be a problem for those who not recognise the possibility of new competition.

Comments

Manageable


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The WIN2 Evaluation

The Summary Recommendation

Note The ratings below show the overall evaluation of the commercial potential of yourinnovation. The result can only reflect the information that has been provided duringthe assessment. If the project is in the very early stages, there may be areas which

need much more development before a definitive decision on whether to proceedcan be reached. A high preponderance of criteria responses of dont know forexample would indicate this, but responses to individual criteria will also remind youwhere more effort is needed.

The level achieved reflects:

Its functional merits

Relevant competitive issues

Market structure issues

Thus, this rating reflects not only the relative merits of your project but also the risksinvolved in investing any further time, money and effort.

Two ratings may be given: the first one is that produced by the assessment systempurely based on the responses made by the assessor. The second will show theassessors own judgement of the rating. There may be a difference between these,and this would arise because between individual projects, different criteria will bemore important. The WIN system uses average weights to perform its evaluation,whereas an experienced assessor can incorporate the impact of higher or lower thanaverage importance of some of the criteria.

If any of the responses were rated as Critical YES then a RED rating is automatic,but bear in mind that if the problem causing the Critical rating is solved, the final

score would be increased to reflect the increased chance of successfulcommercialisation.

The rating is based on a maximum score of 50 out of 100 to reflect the unknown riskfactors inherent in the later stages of the innovation process.


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The WIN2 Evaluation

RED Is not recommended for further development < 30

ORANGE Very cautious and limited development may be warranted 30-33

YELLOW 34-37

GREENIs recommended for limited development and/orcommercialisation following further work

38-41

BLUE recommended for moderate development and commercialisation 42-45

LAVENDERIs recommended for significant development and/orcommercialisation

46-50

This score is reserved for the unknown risk factors associatedwith the market phase of the innovation process. In other words,the potential obstacles that you may face when and if you launchyour project in the marketplace.

50-100

Cautious and limited development may be warranted

The Summary Recommendation

WINs overall rating

If you or your assessor disagreed with WINs overall rating, your personal rating and your reasoning areshown below:

Very cautious and limited development may be warranted.ORANGE

Reason: Preliminary research and development costs are uncertain.


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The WIN2 Evaluation

The Report

The assessors evaluation of the 44 WIN criteria

In terms of applicable laws (particularly product liability), regulations andproduct standards, WIN evaluates ideas ranging from those that will notmeet legal standards, even with changes, to ones that will meet thestandards without any changes.

In making this assessment, it was judged that the innovation willmeet the standards without any changes

Critical?

Customer use should be monitored to ensure there are no potentialproblems.

no

1. Legality

In considering the potential hazards and side effects resulting from the use ofany proposed innovation, WIN evaluates ideas covering a range from those

that are very unsafe even when used as intended to ones that are very safeunder all conditions, including misuse.

In making this assessment, it was judged that the innovation mightbe safe when used as intended, with no foreseeable hazards

Critical?

Problems can have serious consequences if unattended. Customer use shouldbe monitored to ensure there are no problem areas.

no

2. Safety

In terms of pollution, litter, misuse of natural resources etc., WIN evaluatesideas ranging from those that violate environmental regulations or havedangerous environmental consequences to ones that have a positive effecton the environment.

In making this assessment, it was judged that the innovation mighthave a positive effect on the environment

Critical?

A positive response might influence agencies or legislative bodies to endorsethe innovation particularly if the degree of environmental concern is high.But this does not guarantee success, it simply enhances it.

no

3. EnvironmentalImpact

In terms of the impact on the general welfare of society, WIN evaluates ideasranging from those that have a substantial negative effect to ones that have

a positive effect on society.

In making this assessment, it was judged that the innovation mighthave no effect on society

Critical?

No impact on commercial potential the innovation will either succeed or failon its own merits.

no

4. Societal Impact


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The WIN2 Evaluation

In terms of whether an innovation will actually do what it is intended to do,WIN evaluates ideas ranging from those that are not sound and cannot bemade to work to ones that will work with no changes being necessary.

In making this assessment, it was judged that the innovation willwork, no changes are necessary

Critical?

Functional feasibility is necessary, but does not guarantee marketacceptance. The target market must want the function. Use should bemonitored for possible improvements in performance.

no

5. FunctionalFeasibility

With regard to the technical processes or equipment required for theproduction of an innovation, WIN evaluates ideas ranging from those that areimpossible to produce now or in the foreseeable future to ones that have noproduction problems.

In making this assessment, it was judged that the innovation mighthave no problems

Critical?

There is no particularly strong impact upon commercial feasibility, but thenumber of potential manufacturers is greatly increased. Such innovations canform the basis of a small non-technical business.

no

6. ProductionFeasibility (Select NotApplicable forServices)

WIN evaluates ideas ranging from those that are simply an idea withdrawings or a description but with no prototype to ones where there is amarket-ready prototype.

In making this assessment, it was judged that the innovation is anidea only, with drawings and/or description

Critical?

Commercialisation might require a great deal of work and investment.Innovations at this stage are viewed as risky and are difficult to license. Mostfirms prefer projects that are further along in the innovation process as thisreduces costs and cuts perceived risks.

no

7. Stage ofDevelopment

In terms of the amount of capital needed for commercialisation, WINevaluates ideas ranging from those where investment costs are likely to bevery heavy and will require the resources of a major corporation to oneswhere the capital required is very low and where personal resources may besufficient.

In making this assessment, it was judged that the amount of capitalneeded for the innovation is likely to be moderate it may requireparticipation of formal investors

Critical?

There is a risk in involving others. The risk of rejection increases with thesize of the required investment. The only safe alternative is to fund entirelydevelopment and commercialisation. Consider the interrelationship with othercriteria: Payback period (9) and Profitability (10). When formal investors areinvolved, the project competes with all other available investmentopportunities. No matter how virtuous, projects with long payback periods orlow profitability are not likely to interest formal investors.

no

8. Investment Costs


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The WIN2 Evaluation

Given adequate financing, WIN evaluates ideas where the time required tocover the initial investment after full market introduction ranges from thosewhere the payback period will be five years or more to ones where it will beless than one year.

In making this assessment, it was judged that the payback period for

the innovation is likely to be one to two years (13-24 months)

Critical?

Venture capital may be possible. Prospects for licensing improve as paybackperiod becomes shorter. Careful financial planning is still essential

no

9. Payback Period

Profitability is defined as the extent to which anticipated revenues will coverdirect, indirect and capital costs. WIN evaluates ideas ranging from thosethat cannot expect to cover any of the relevant costs to ones that will coverdirect and indirect costs and easily exceed capital costs.

In making this assessment, it was judged that anticipated revenuesfor the innovation might cover direct and indirect costs, and meetcapital costs

Critical?

There are varying degrees of risk because required Return on Investment(ROI) or costs may increase. Unanticipated costs and reductions in price arealways factors.

no

10. Profitability

In terms of the time and cost involved, WIN evaluates ideas ranging fromthose where the market research required for commercialisation of theinnovation is estimated to be extremely difficult, complex and costly to oneswhere the market research will be very simple, straightforward andinexpensive.

In making this assessment, it was judged that the market researchrequired for the innovation could be relatively easy, simple andinexpensive

Critical?

Easy does not mean unimportant. If needed, help should be obtained.

no

11. Market Research

With regard to the research and development required to reach theproduction-ready or service/process launch stage, WIN evaluates ideasranging from those where it will be extremely difficult, complex and costly toones where the research and development will be very simple,

straightforward and inexpensive.

In making this assessment, it was judged that the research anddevelopment for the innovation might be moderately difficult andcostly

Critical?

Smaller enterprises and individuals should seriously examine their capabilityto complete needed R&D. Licensing/joint venturing may be better options.

no

12. Research andDevelopment


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The WIN2 Evaluation

WIN evaluates ideas ranging from those where the total market forinnovations of its type are very small and very specialised or local in natureto ones where the market is very large with an extensive national andpossible international market.

In making this assessment, it was judged that the total market for

this type of innovation might be large

Critical?

Reaping the full benefits may require infusion of capital during growthperiods. But growth consumes capital: it is possible to lose the market tocompetitors by losing momentum due to lack of capital.

no

13. Potential Market

Given alternative or competitive products or services and the current marketsituation, WIN evaluates ideas ranging from those where the expected salesare likely to be very small (and with a very low level of resourcerequirement) to ones where expected sales could be very large (and with avery large resource requirement).

In making this assessment, it was judged that the expected sales ofthe innovation might be large

Critical?

Large sales require significant resources and abilities. It is easy for smallerfirms to fail in mid-growth if not prepared. Often, it is better to license tosomeone who has the necessary resources and capabilities. Sales potentialmay be sufficient to interest large firms.

no

14. Potential Sales

WIN evaluates ideas ranging from those where the market demand forinnovations of a given type is rapidly declining and the product or servicemight become obsolete to ones where the market is rapidly expanding and

there is significant growth opportunity.

In making this assessment, it was judged that the market demandfor this type of innovation appears to be rapidly expanding there issignificant growth opportunity

Critical?

Innovators must possess adequate financial resources (working capital) tofinance expanded business opportunities. Often new or small businesses failto realise a new products or service's potential for this reason. In somecases they might have insufficient working capital to cover expenses andconsequently go out of business. In order for new technology to reach its

fullest potential, the innovator might maximise return by licensing tosomeone with the necessary resources to realise its potential even if thisentails accepting a smaller percentage of the expected profits.

no

15. Trend of demand

In terms of the fluctuation in demand for proposed products or services, WINevaluates ideas ranging from those where the demand is highly unstable andsubject to severe fluctuations to ones where the demand is highly stable withlittle susceptibility to fluctuations.

In making this assessment, it was judged that the fluctuation indemand for the innovation is likely to be predictable variations canbe foreseen with reasonable accuracy

Critical?Risk will be very much present if the firm does not track market conditions,carefully monitor sales, and conduct relevant market research.

possibly

16. Stability ofDemand


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The WIN2 Evaluation

WIN evaluates ideas ranging from those where the product life cycle is likelyto be short, perhaps less than two years, to ones with a long life cycle ofeight years or more.

In making this assessment, it was judged that the life cycle for theinnovation is likely to be six to eight years

Critical?

Long life generally means greater expected value because of a longer streamof earnings and a lower perceived risk. But not all firms know how to managemature products or services profitably, and this can abbreviate the PLC.

no

17. Product Life Cycle

WIN evaluates ideas ranging from those where the potential for additionalproducts or differentiated services is very limited, perhaps to a single productor service, to ones where the potential for additional products ordifferentiated services is very high.

In making this assessment, it was judged that the product linepotential for the innovation is likely to be high new product/servicespin-offs are likely

Critical?

New products add to the stream of income and reduce the risk, as the riskand investment costs can be shared with spin-offs.

no

18. 'Product-line'Potential

In terms of compatibility with existing attitudes and methods of use, WINevaluates ideas ranging from those with a very low level of compatibility thatwill block market acceptance to ones where compatibility is very high and willgive market acceptance a strong boost.

In making this assessment, it was judged that the compatibility of

the innovation is high the compatibility will aid marketing effort

Critical?

Ready consumer acceptance will smooth the path, but success is notguaranteed. Proper design(for a product), pricing, financing, marketing andplanning will still be necessary.

no

19. Compatibility

WIN evaluates ideas ranging from those where the amount of learningrequired to use the innovation will be very high and perhaps expensive ortime-consuming to ones where the learning is low and no instructions will beneeded.

In making this assessment, it was judged that the amount oflearning for correct use of the innovation is very low noinstructions are needed

Critical?

Low learning involves a minimal amount of cost, time and risk. There will begreater flexibility for marketing. Generally products and services needing noinstructions do not require highly specialised distribution channels andconsumer products can be sold by mass merchandisers, who usually providelittle instruction or customer assistance.

no

20. Learning


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The WIN2 Evaluation

In terms of the level of need or utility provided by a given innovation, WINevaluates ideas ranging from those that are very gimmicky and soonforgotten to ones with a very high level of need that fulfils psychological aswell as physical needs.

In making this assessment, it was judged that the level of need

served by the innovation is high it fulfils either basic psychologicalor physical needs

Critical?

The innovation may have a competitive edge. Appeals to basic needs can bevery effective, and the product life cycle tends to be longer.

no

21. Need

In terms of the degree to which the sale or use of a proposed innovation isdependent on other products, processes or systems, WIN evaluates ideasranging from those with a very high degree of dependence (and therefore nomarket control) to ones where there is very low dependence (and thereforecomplete market control).

In making this assessment, it was judged that the degree to whichthe innovation is dependent is moderate the innovation will havereasonable market control

Critical?

A common situation would be any innovation likely to require service. Failureto provide service can lead to a quick termination of the product life cycle.

no

22. Dependence

WIN evaluates ideas ranging from those where the advantages and benefitsof the innovation will be very obscure to potential buyers, to ones where theadvantages and benefits are very obvious and easy to understand.

In making this assessment, it was judged that the advantages andbenefits of the innovation are likely to be visible they will requiresome explanation

Critical?

Necessity for some degree of explanation should not create problems, butoften does, as many firms fail to explain and promote their productsadequately.

no

23. Visibility

Taking into consideration the market environment, the costs and the effortrequired to promote the advantages, features and benefits of a proposedinnovation, WIN evaluates ideas ranging from those where the cost of

promotion is very high and prohibitive in relation to expected sales, to oneswhere the cost will be very low relative to expected sales.

In making this assessment, it was judged that the cost and effort ofpromoting the advantages of the innovation are likely to be moderate

Critical?

Risk is a factor. The firm must have the appropriate skills in marketing or bewilling and able to obtain them. The cost/benefit ratio should be checked.

no

24. Promotion


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The WIN2 Evaluation

WIN evaluates ideas ranging from those where the cost and difficulty ofestablishing distribution or access channels are likely to be very high andprohibitive in relation to expected sales, to ones where the cost and difficultlywill be very low relative to expected sales.

In making this assessment, it was judged that the cost and difficulty

of establishing distribution or access channels for the innovation arelikely to be moderate

Critical?

Small/ new firms may need some help in penetrating sophisticated buyingorganisations.

no

25. Distribution

WIN evaluates ideas ranging from those where the cost and difficultyassociated with providing product service is likely to be very high, to oneswhere the cost and difficulty of product service is very low.

In making this assessment, it was judged that the cost and difficultyof providing service for the innovation is likely to be low the needfor service and parts will be infrequent

Critical?

Service provisions must still be in place. Where the risks associated withservice and barriers to market entry are low, it is easier to expand to meetmarket potential. The intrinsic value of the innovation is usually greater.Such products have more potential for introduction by entrepreneurs andinnovators with limited financial resources and undeveloped channels ofdistribution.

no

26. Service (SelectNot Applicable if theinnovation is itself aService)

Relative to prior art, competition and/or substitutes and appearance, WIN

evaluates ideas ranging from those that might be perceived by potentialbuyers as very inferior (with no customer appeal), to those that would beseen as very superior (and having strong customer appeal).

In making this assessment, it was judged that the appearance of theinnovation might be perceived as superior it has customer appeal

Critical?

Superior appearance may help to gain a competitive edge, but ways toimprove design should still be sought. Competitive advantage may besufficient to help penetrate the market. In general, the more affluent themarket segment and the more likely the innovation is to be used in public

places, the more important its physical appearance will be. Frequently thecase with industrial and institutional products as well (engineers andscientists are also interested in style and appearance!).

no

27. Appearance

(Select Not Applicableif the innovation is aProcess or Service)


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The WIN2 Evaluation

Relative to prior art, competing and/or substitute products services orprocesses, WIN evaluates ideas ranging from those where the function mightbe perceived by potential buyers as very inferior (and therefore a significantcompetitive disadvantage), to those that would be seen as functionally verysuperior (and having a significant competitive advantage).

In making this assessment, it was judged that the functionperformed by the innovation might be perceived as very superior ithas a significant competitive advantage

Critical?

Very superior function can greatly facilitate market acceptance. Functiontakes on added importance when both Need (criterion 21) and Visibility(criterion 23) are high. For example, if a new tyre and new petrol were bothintroduced to the marketplace and both offered a bogus functional advantageof better mileage, the rejection of the petrol would be faster and surer.However, if the functional advantages of the new tyre and the new petrolwere real and meaningful to the user, the petrol would probably be more

rapidly accepted, as it is the more visible of the two. In addition, the cost ofintroducing it would probably be lower, especially when it meets a real orperceived need in the marketplace.

no

28. Function

Relative to prior art, competition and/or substitutes, WIN evaluates ideasranging from those where the durability of the proposed product might beperceived by potential buyers as very inferior (and therefore a significantcompetitive disadvantage), to those that would be seen as very superior (sothat durability could easily be promoted as a significant competitiveadvantage).

In making this assessment, it was judged that the durability of theinnovation might be perceived as very superior it could easilypromoted as a major improvement

Critical?

The very superior durability should be highlighted in the firms promotionalmessages. Less risk and perhaps less cost incurred.

no

29. Durability (SelectNot Applicable if theinnovation is aService)

Relative to prior art, competition and/or substitutes, WIN evaluates ideasranging from those where the price is much higher than other products orservices (and therefore a significant competitive disadvantage), to thosewhere the price is much lower (and therefore a definite competitiveadvantage).

In making this assessment, it was judged that in relation to thecompetition the price of the innovation might be lower a

competitive advantage

Critical?

This price positioning should help establish a sufficient competitive edge, butproduct or service appeal may also need to be based on other advantages.

no

30. Price


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The WIN2 Evaluation

WIN evaluates ideas ranging from those where the existing competition (bothdirect and indirect) is very high, making market entry difficult or expensive,to ones where the competition is very low and market entry is easy orinexpensive.

In making this assessment, it was judged that the existing

competition for the innovation appears to be very low entry mightbe easy and/or relatively inexpensive

Critical?

With proper marketing, this might capture a dominant market positionrelatively early. A better new-product opportunity for the emerging newbusiness. But very low levels of existing competition do not automaticallyensure low cost or easy entry. Other elements, such as Learning (criterion20) or Service (criterion 26) may raise costly and difficult barriers to entry.

no

31. ExistingCompetition

In terms of the competition from new entrants to the market or acompetitive reaction to the proposed product, WIN evaluates ideas ranging

from those where such competition is likely to be very high (making shortproduct lead time imperative) to ones where the competition may be verylow.

In making this assessment, it was judged that the new competitionfor the innovation could be expected to be moderate market sharecan be maintained

Critical?

A normal situation, but it can be a problem for those who not recognise thepossibility of new competition.

no

32. New Competition

Considering patents, prior art, copyright, technical difficulty, secrecy and

other bars to competitive reaction, WIN evaluates ideas ranging from thosewhere there is no meaningful route to protecting the product (legal orotherwise), to those where a patent, copyright and/or trade secrecy arealready in place.

In making this assessment, it was judged that the prospects forprotection of the innovation indicate that patent, copyright and/ortrade secrecy is/are possible

Critical?

Protection must be worth the cost before pursuing. The commercial value ofprotection depends on the strength of the protection, the need for protection

and the commercial potential of the intellectual property involved. Solidprotection generally reduces risk.

no

33. Protection

WIN evaluates ideas ranging from those where commercialisation requires avery high level of marketing experience and sophistication, to ones wherecommercialisation requires a very low level of experience

In making this assessment, it was judged that commercialisation ofthe innovation may require a moderate degree of marketingexperience and sophistication

Critical?

The obvious solution for innovators who lack the necessary expertise is to

use outside consultants. However, many fail to do so and fall short.

no

34. MarketingExperience


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The WIN2 Evaluation

WIN evaluates ideas ranging from those where commercialisation requires avery high level of technical experience and sophistication, to ones wherecommercialisation requires a very low level of such experience

In making this assessment, it was judged that commercialisation ofthe innovation may require a high level of technical experience and

sophistication

Critical?

Very small firms can often commercialise sophisticated technologies. Suchenterprises have pioneered many new technological breakthroughs, some ofwhich have been invented by individuals lacking in strong relevanttechnological backgrounds. However, development to the market-ready stagewill require high levels of technological input. If the individual innovator orthe small firm does not have the necessary technical skills or resources,licensing may be an option but consider the issues of Technology transfer(criterion 38).

no

35. TechnicalExperience

WIN evaluates ideas ranging from those where commercialisation requires avery high level of financial experience and sophistication to ones wherecommercialisation requires a very low level of such experience.

In making this assessment, it was judged that commercialisation ofthe innovation may require a moderate degree of financialexperience and sophistication

Critical?

Entrepreneurs will probably have to turn to others for a significant portion ofthe financial resources and/or advice required. In which case, they should beprepared to part eventually with a corresponding portion of their equity tostart the new venture. Venture capital firms, sophisticated investors or other

formal sources of capital may be involved. These will demand completebusiness plans, detailed sales forecasts and financial projections. Often, pre-or new ventures do not have the necessary resources or abilities. Findingavailable seed capital at the right price is one of the major barriersexperienced by many new ventures. Licensing is sometimes the onlyalternative.

no

36. FinancialExperience

WIN evaluates ideas ranging from those where commercialisation requires avery high level of management or production experience and sophistication,to ones where commercialisation requires a very low level of suchexperience.

In making this assessment, it was judged that commercialisation ofthe innovation may require a high level of management or production

experience and sophistication

Critical?

Could be best left to those with substantial experience in managing anongoing enterprise, although a few smaller enterprises may have the plant,equipment and experience to undertake such projects. But mistakes on theproduction floor or in service management are very costly to correct in themarketplace. Licensing may be the wisest option for many innovators.

no

37.Management/Production Experience


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The WIN2 Evaluation

WIN evaluates ideas ranging from those where the potential for technologytransfer (or licensing) are very remote, to ones where the potential fortechnology transfer are very good and therefore an attractive investment

In making this assessment, it was judged that the potential fortechnology transfer of the innovation is modest it is worth a very

limited investment of personal time and effort

Critical?

Worth very limited investments of time and effort in terms of pursuing alicensing deal. In modest situations, innovators should invest little moneyand never make significant advanced payments for assistance in marketingthe innovation.

possibly

38. TechnologyTransfer

WIN evaluates ideas ranging from those where the potential for using theinnovation as the basis for a new business is very poor (and should not beconsidered), to ones where that potential is very good (and might attractserious investment).

In making this assessment, it was judged that the potential for usingthe innovation to start a new business is good it might attractinformal smaller investors

Critical?

May not attract large, more formal investors, particularly venture capitalists.An informal investor may provide seed capital, but this doesnt come cheap ifthe venture is high risk and at the early stages of development. Moreconservative informal investors will look for projects that are further along,but with modest needs so they will not run out of funds prematurely. Theywill require a business plan and a management team to be identified, if not inplace. A good response does not indicate that an entrepreneur should

necessarily gear up to the maximum potential of his or her technology.

no

39. New Venture


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The WIN2 Evaluation

Suitable distribution channels for introducing any innovation into themarketplace differ. WIN evaluates ideas where the most suitable channelsrange from highly localised ones to large industrial or government channels.In making this assessment, it was judged that the optimum channels forintroducing the innovation into the marketplace are likely to be:

Critical?

Channels providing some specialised promotional support offer theopportunity to substitute in-store promotion for mass media promotion and,generally, more flexibility than mass-merchandise distribution. Better suitedto a roll-out strategy that matches distribution to available resources.However, new products must be capable of producing the higher marginsrequired by such channels. Channels with a high degree of potential forpersonal selling would suit products (particularly special-use products) lowerin price and, perhaps, quality, but with good earnings potential. Impersonalforms of communication tend to be used more than personal selling.Channels providing some specialised promotional support offer theopportunity to substitute in-store promotion for mass media promotion and,generally, more flexibility than mass-merchandise distribution. Better suitedto a roll-out strategy that matches distribution to available resources.However, new products must be capable of producing the higher marginsrequired by such channels. Electronic channels may be better suited togeneral-use products that are lower in price and, perhaps, quality, but withgood earnings potential. Well suited to a roll-out strategy in which a newproduct is introduced on a limited basis to specific internet or

television-viewing markets. This enables targeting of potential customerswho are most likely to be interested in the product. This limited markettesting avoids substantial investments in national advertising until after theproduct has gained some market success. Smaller established distributionchannels offer the advantage of high volume, but may be a disadvantage tosmaller enterprises short on financial reserves. Smaller mass merchandisersplace less financial strains and frequently demand less stringent standards ofpackaging, product testing and quality. Products suited to this channel musteither be supported by extensive promotion, or be capable of generating ahigh level of demand without a formal introduction to the marketplace.

40. Initial DistributionStrategy (Select NotApplicable if theinnovation is aProcess or Service)

channels providing some specialised promotional support (specialist

outlets, specialist / trade catalogues)

smaller established distribution channels offering promotional support

electronic channels of distribution

direct to industry

In terms of the difficulties of establishing an innovation in the marketplace,WIN evaluates ideas ranging from those where the barriers are very high(and will require an established, well-financed and sophisticated product

champion), to ones where the barriers are very low so entry to the market iseasy.

In making this assessment, it was judged that the barriers to marketentry facing the innovation are very low entry should be easy; itcould be handled by a new-venture start-up if appropriate

Critical?

Outside experience may still be needed.

no

41. Overall Barriers toMarket Entry


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In considering competition, the difficulty of establishing channels ofdistribution, the cost of reaching the target market, the financial, technicaland other barriers, and the potential risk set against the potential profit, WINevaluates ideas ranging from those where the associated risk/profit ratio isvery weak to ones where it is very strong.

In making this assessment, it was judged that the overall risk/profitratio of the market opportunity for the innovation is very strong

Critical?

This is a good position to be in but other factors should be considered beforeinvesting. The innovation must offer a better solution to the needs of themarketplace. Projects that do not offer some clear-cut advantages onappearance, function, durability or price, typically face high odds. Narrow orminor advantages are usually insufficient to gain market share from existingproducts, services or processes. In terms of military strategy, a rule ofthumb is that it requires a force three times greater to successfully invadeterritory held by someone else. But even when the innovation has a superior

advantage and the market opportunity is attractive, risks still abound.

no

42. Overall MarketAttractiveness

Risk is inherent in every effort to commercialise new innovations. WINevaluates ideas ranging from those where the overall level of risk associatedwith further commercialisation is so high that it fails the prudent persontest (and further investment is not warranted), to ones where that risk isvery low (and further investment is acceptable to prudent risk takers).

In making this assessment, it was judged that the overall level ofrisk associated with further commercialisation of the innovation islikely to be moderate a prudent person would be likely to seekways to reduce the level of risk before investing further in thisproject

Critical? no

43. Overall RiskAssessment

Expected value is defined as the anticipated return discounted by the degreeof risk associated with a venture. The known value is defined as theestimated investment required for successful commercialisation. Inconsidering both the potential returns and the degree of risk associated witha project, WIN evaluates ideas ranging from those where the expected valueis likely to be very low (the risk being too high and the returns too low), toones where the expected value is very high and the expected value exceedsthe known value (and investment is therefore recommended).

In making this assessment, it was judged that the overall expectedvalue of the innovation is likely to be high the expected value forthis investment may exceed the known value; investment should beconsidered

Critical?

Further investment may be worth considering, but the willingness to take riskis always at issue. Only the innovator knows his or her propensity to takerisks and only he or she can decide whether or not to invest further in theproject.

no

44. Overall ExpectedValue

Thoughts, comments and questions to feedback

The WIN2 Evaluation

The University of Nottingham 2005 All rights reserved

win squared report

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