{"id":205324,"date":"2020-01-29T09:57:09","date_gmt":"2020-01-29T08:57:09","guid":{"rendered":"https:\/\/innovationorigins.com\/?p=205324"},"modified":"2020-01-29T09:57:09","modified_gmt":"2020-01-29T08:57:09","slug":"martijn-ruttens-pragmatic-visual-to-judge-startup-technology-innovation","status":"publish","type":"post","link":"https:\/\/ioplus.nl\/archive\/en\/martijn-ruttens-pragmatic-visual-to-judge-startup-technology-innovation\/","title":{"rendered":"Martijn Rutten’s pragmatic visual to judge startup technology innovation"},"content":{"rendered":"

Martijn Rutten is a technology entrepreneur with a long history in challenging software projects. CTO at Othera, changing the lending market with a blockchain-based fintech platform. He coached many tech startups and corporate innovation teams at HighTechXL. Rutten co-founded Vector Fabrics on parallelization of embedded software. PhD in hardware\/software co-design at Philips\/NXP. More about him here<\/a>. This post was first published on Martijn Rutten’s own blog<\/a>.<\/em><\/p>\n

How do you best describe your technology to an investor, and make sure you stand out? The usual feature table with checks and crosses in the pitch deck or investor memorandum does not give much insight. This post gives you a unique tool: my Pragmatic Startup Technology Quadrant<\/strong>.<\/p>\n

This is especially geared towards venture capitalists looking at your business. However, I used it most of my career to judge technology on its merits in the industry. Be it academic technology transfer, corporate innovation, or a tech startup. I wrote about my technology quadrant earlier in the context of academic technology transfer<\/a>. Now, I fine-tuned it for startup tech and their investors. In the many occasions, I applied this quadrant, it was a true eye-opener for the entrepreneurs. And worked like a charm to put their feet right back on the ground.<\/p>\n

Investors, of course, like to see why your startup is gonna make it. Preferably in a nice graph or chart that is easy to pop up at the fund committee meeting. The investor should be able to easily reproduce the graph to an interested (preferably wealthy) acquaintance. On a napkin. In a bar. After a few bottles of expensive wine charged on the company account. So keep it simple yet powerful.<\/p>\n

The pragmatic startup technology quadrant<\/h2>\n

The one visual that always floats an investor\u2019s boat is the quadrant<\/em>.<\/p>\n

\"\"<\/a>Need to present your competitors to an investor? Draw a quadrant, and put your startup or technology top-right. Why? Success is always top-right, so that\u2019s where you\u2019ll be.<\/em><\/p><\/blockquote>\n

Great. Now let\u2019s think about the axes.<\/p>\n

The horizontal axis \u2013 solution scope<\/h3>\n

\"\"<\/a>Horizontally we put the technology angle: the solution scope or alternatively the problem scope. To what extent do we solve the problem, the whole problem, and nothing but the problem? Only a (small) subset of the full problem in the market? Or the real deal, with an all-encompassing and awesome solution? This axis also is an indicator of the level of complexity\u2014or \u201csophistication\u201d in investor-alluring speak\u2014of your solution. Supercharged machine-learning, distributed-ledger technology that deploys augmented-reality IoT cloud devices? On the far right of the axis.<\/p>\n

Vertical axis \u2013 deployment scope<\/h3>\n

Vertically we see the deployment scope. To what extent has your amazing technology been exposed to the harsh reality of the market?<\/p>\n

    \n
  1. Just an idea<\/strong> in a PowerPoint deck? Don\u2019t get me wrong: we raised serious Silicon-Valley seed money with just a deck and three pairs of blue\/green eyes (and a lot of Georgian vodka) at Vector Fabrics.<\/li>\n
  2. Tested in the lab<\/strong> between the two laptops of your colleague developers?<\/li>\n
  3. A Proof of Concept<\/strong> (PoC) with potential clients in a nicely constraint setting.<\/li>\n
  4. If you are actually making money<\/strong>, albeit in a niche market, you made it to the top half. Hats off to you.<\/li>\n
  5. Out there, used by all players<\/strong>, and having conquered all the productization issues the real world can throw at you? Good stuff. Top of the vertical axis.<\/li>\n<\/ol>\n
    \n

    Technology Readiness Levels<\/h3>\n

    \"\"<\/a>EU-funded research projects adopted the Technology Readiness Levels (TRL), originally developed by NASA in the 1970s to check the maturity of a technology. This says a lot about the level of productization and hence a good measure for the deployment scope (vertical axis) of the quadrant. As this relates predominantly to research projects, the accent is on the early stages of deployment with levels 1 through 8 all in the bottom left quadrant. Nice for subsidy in the early stages, but not suited to get a VC across the line.<\/p>\n

    TRL 9 \u2013 Actual system proven in an operational environment<\/strong>
    \nTRL 8 \u2013 System complete and qualified<\/strong>
    \nTRL 7 \u2013 System prototype demonstration in an operational environment<\/strong>
    \nTRL 6 \u2013 Technology demonstrated in a relevant environment<\/strong>
    \nTRL 5 \u2013 Technology validated in a relevant environment<\/strong>
    \nTRL 4 \u2013 Technology validated in lab<\/strong>
    \nTRL 3 \u2013 Experimental proof of concept<\/strong>
    \nTRL 2 \u2013 Technology concept formulated<\/strong>
    \nTRL 1 \u2013 Basic principles observed<\/strong><\/p><\/blockquote>\n

    So what\u2019s in the quadrants?<\/p>\n

    Top-right quadrant \u2013 nirvana<\/h3>\n

    Clearly the startup nirvana is here, solving the full problem and proven in the whole market. This is the land of the Big Hairy Audacious Goals (see my post on why you need a BHAG<\/a>). A level-5 fully-autonomous self-driving car. In Delhi. At rush hour. When it is raining. Or to remain in Elon Musk territory: living on Mars. A bit closer to home for me is ASML\u2019s Extreme UV (EUV) wafer stepper. The technology and physics challenges ASML had to overcome to create a UV light<\/a> source to illuminate silicon wafers and keep on track with Moore\u2019s law were equally crazy. One invention was rotating electrodes to keep them from melting and depositing unwanted layers of tin as they generate the plasma. Wild stuff.<\/p>\n

    Let\u2019s face it, you don\u2019t reach this quadrant so easily. So let\u2019s look at the other quadrants first.<\/p>\n

    Bottom-left quadrant \u2013 amateurs<\/h3>\n

    So you have some basic technology that any first-year student could have made. And it works on a laptop in your lab. That\u2019s great. A bit more ambition, please. Most of the public blockchain stories end up here. A simple smart contract to notarize a document. But no thought on making it work for the masses that don\u2019t know how to create a private key and not lose it. This quadrant is a good place to start, but not without the ambition and roadmap to get out of this quadrant as soon as possible.<\/p>\n

    Bottom-right quadrant \u2013 award winners<\/h3>\n

    Here it gets interesting. Sexy, sophisticated technology, and already working in the lab, maybe even a proof of concept. This is where 95% of the academic paper awards are handed out. The awards triggering the new PhDs to found their own business. Cool and complex tech tested in an academic environment, an abstraction of the real world. Also, a fantastic place for press releases to announce your proof of concept results. Virtually each and every proof of concept in blockchain (or its preferred DLT euphemism) is in this quadrant and nowhere else. The Singapore stock exchange blockchain project UBIN Phase 2<\/a>. Done by Accenture and a number of other consultancies that know how to write invoices. State of the art stuff with zero-knowledge-proofs used by a unique global-netting algorithm (look it up if you are into blockchain tourism). Laptop to laptop. Started 2016, the project never got beyond its extensive PR thus far.<\/p>\n

    What else is in this space? A lot of the deep learning hype is here. Typically any hyped technology that is not yet time-tested and technologies that are still looking for a real market problem.<\/p>\n

    The obvious thinking is to start here with your unique technology and full system, and then incrementally move up the ladder into the real world. Straight up to the nirvana quadrant. Technology-push startups operate on this belief, as do many academics. \u201cAlmost there, just gotta go from TRL 5 to 9. Just gimme a bit more subsidy please.\u201d<\/p>\n

    Forget it. As the investor would say: \u201cany further investment at this point is throwing good money after bad money.\u201d<\/p>\n

    \"\"<\/a><\/p>\n

    Quadrants to judge startup technology against solution and deployment scope<\/em><\/p>\n

    Don\u2019t let the awards and PR mislead you into thinking this is market validation of your technology. You will hit every barrier possible so hard that you will run out of time and money long before the first client takes it to production. Too many hurdles to overcome.<\/p>\n