The Challenges of Commercialising Deep Tech
It’s not called “deep tech” for nothing. And yet, however “deep” certain technology might be, one might say it remains nothing more than a pipe dream unless its potential is harnessed and optimised for the good of mankind.
But what exactly is deep tech?
Very simply, deep technology may be defined as a scientific breakthrough or significant advancement which, when applied, has far-reaching implications across sectors and can potentially change human life, ideally, for the better.
Sectors wherein deep tech has made giant strides include Biotech or Life Sciences, Cleantech, Computer Science, Energy, Electronics, Semiconductors and Materials. Robotics, gene-editing systems, the latest nuclear reactors, the newest medicines and medical devices and 3D printing are all examples of deep tech. Only through extensive testing can the full impact of each deep tech development be determined.
Deep tech is not a business model innovation, but rather an innovation in the science or technology around which a business may be created. This is how a business or startup that is built on deep tech, distinguishes itself from companies such as Facebook, Spotify, Uber or Airbnb.
Deep tech companies own their intellectual property, spend years on testing and research, and have scientists, engineers or other experts on their teams in addition to their business personnel.
The Difficulties of Deep Tech
One would think that any invention or innovation that helps make life easier for so many would inevitably and almost automatically find its way into the homes and habits of the everyday Joe. But like the proverbial princess or, more aptly, Nobel Prize-winning scientist, not everyone is aware of the challenge-strewn path to profit and a happy ending.
A closer look at the process of moving deep tech out of the lab and into the marketplace reveals that while it’s one thing to discover, design or develop, it’s quite another to mass produce, monetise or market.
While deep tech commercialisation might be perceived or hastily dismissed as making a buck off someone else’s brains, it is actually the process of making sure that as many people as possible will benefit from a particular breakthrough. The disciplines, principles and skills involved in that process can be very different from those that created or enabled the deep tech to begin with.
Because of this, the people behind the deep tech aren’t always the same people responsible for bringing it to market. But even with a separate, dedicated specialist to take this responsibility on, the challenges to be faced are many and often complex. Not the least of these challenges is being able to identify the opportunities that a deep tech development presents from a practical as well as economic standpoint.
Sometimes, research institution representatives are stymied when approached by interested investors because they are unclear themselves as to the growth capacity of their project, or even about the specific need or problem that their new technology addresses.
Also, because of the newness of their tech, the developers often have to educate the market in how to use and benefit from it. This entails getting to know the market in general and the end user of the deep tech in particular, and this kind of market research is often beyond the developers’ ken. Difficulties may likewise stem from the shift in focus from technology development to commercialisation.
And even if marketing is the main focus of the startup’s business team, team members must still have a working understanding of the deep tech on which the company is based, and know how to manage technical knowledge. Meanwhile, as the development team works to perfect or further develop its deep tech, compromises in quality might be made to facilitate the commercialisation process.
Other hurdles to successfully commercialising deep tech include
· Validation or Accreditation
· Third-party certification
· Infrastructure development
· Supply chain management
· Market identification or creation
· Customer service
Many investors tend to shy away from deep tech companies because of the high level of risk that they carry, and how much longer it can take to get a substantial return on investment. Deep tech companies can take as long as four to five years just to get off the ground. Social media companies such as LinkedIn and Instagram may seem much more attractive in comparison.
The number of research institutions (i.e. universities) having trouble breaking even with the investments made into them could be another investor deterrent, as are the high-profile cases involving deep tech companies that have seen major investor exits.
Driving Deep Tech Transformation
There are investors and investment institutions, however, who do favour deep tech startups for their projected high profitability due to their initially low valuation, as well as their well-nigh invaluable intellectual property. These investors, some of whom go to great lengths to find deep tech developers in unlikely places, also back these startups from altruistic motives such as helping to save lives or save the planet.
These noble and open-minded investors have no small role in the success enjoyed by deep tech companies in spite of the many difficulties they face. New Paradigm Biosciences, Visenti and Mobile Market Monitor are just a few of the many successful deep tech companies whose projects have not only made significant contributions to society, but have also proven to be viable and highly profitable.
Building Deep Tech Business Leaders - an SMU-SMART Collaboration
Offered in partnership with the Singapore-Massachusetts Institute of Technology (MIT) Alliance for Research and Technology (SMART), SMU Academy’s Advanced Certificate in Technopreneurship (ACT) develops the business leaders that deep tech developers need to be able to make a real difference.
Under the instruction of trainers with backgrounds in research and technology as well as finance and entrepreneurship, programme participants work with real-world deep tech projects to learn business development skills unique to deep tech commercialisation. Modules include Adaptive Innovation Framework, Assessing and Evaluating Market Opportunity and Risk, and Pitching and Fundraising.
Take an active role in transforming lives through deep technology—discover ACT today.