Top Down or Bottom Up…or Both?
Given the current climate, emerging companies often need to partner with or be acquired by larger companies in order to establish fulfillment channels or production facilities that are not readily financed. Understanding what makes these large companies tick is key for nano startups as they chart their path to success.
What are some of the big company perspectives we heard at the Lux meeting, in presentations and discussions?
- The world has changed – and not always in the way we expected even two years ago. North America will surpass Saudi Arabia as an oil producer and has abundant natural gas, but rising exploration and production costs of $30 per barrel will keep prices high. American coal is being exported to Europe in record amounts even as US coal plants shut down. Cheap energy is shutting down alternative energy. Climate change patterns mean that droughts are creating unexpected regional water shortages. These create opportunities for, and threats to, nano companies.
- The economic crisis has tightened payback perspectives so that corporations are more interested in shorter term results, which leads in turn to them being more interested in startups rather than in supporting longer-term academic research. “Technology Scouting” has been replaced by “Growth Scouting”. The Growth Scout challenge is how to make a significant difference in a large corporation turnover by acquiring small businesses?
- Open innovation: some companies get it, some don’t. The ones that get it tend to be the largest corporations.
- Opportunities occur in unexpected places such as bio-based synthesis, construction materials and yes, solar (inverters, micro-inverters, financiers, and installers).
- Partnering is critical to success, and interestingly the “Alpha Partner” who makes it all happen may not be the company with the most to gain financially, but is the company that has the drive and ability to form the coalition necessary to bring the product or service to market. To paraphrase some great insights, “partnerships are about access not control (Dow Corning), and you need to “go where the action is…and don’t go alone!” (DSM).
So the answer to the question in the title (Top Down or Bottom Up…or Both?) is: “all of the above – and more!”
Potential partners need access to information on who is doing what; this is aided by NNI and by knowledge disseminated by Lux and others that can help identify leads to practical investment opportunities for corporations.
We especially need meetings like the Nanotech Commercialization Conference and the Lux Executive Summit to showcase opportunities and allow the parties involved to understand each other’s needs, objectives, and current status on an ongoing basis. This status and the requirements change regularly, for example in the availability/unavailability availability of IPOs, and the relative importance of intellectual property versus a revenue stream. New business generation really is a contact sport…and these meetings present great opportunities to make meaningful contact!