You’re the CEO of a growing software company.  You’re successful but always under pressure: how can I grow my revenue?  How can I get new products to market faster and cheaper?  How can I get quality reference customers for my products?

Traditionally, software company growth was driven by developing new products or winning new customers.   Software commercialization presents another opportunity, and you may find that it’s a better option.

Through software commercialization, your company licenses or buys a technology developed by a Fortune 500 company originally for internal use.  The Fortune 500 company had a business problem and needed software to solve it.  Unable to find that software on the market, it developed it from within. 

This presents a great opportunity for software companies:

• License a proven technology for which you know there’s a need (after all, the company that created it acknowledged the underlying need)
• Get to market much faster and cheaper than developing in-house
• Use the original company as a reference for the value of the software
• Often times get sales leads from the Fortune 500 company’s peers

This sounds good, but isn’t all of this software not ready for primetime?  After all, it was built for internal use. 

Yes and no.  Usually there’s some work involved with “fixing up” the software and documentation.  But you may be surprised at the quality and ingenuity of these software technologies.

If you’re interested in learning about technologies developed by companies such as Northrop Grumman, SAIC, Microsoft, and Mayo Clinic, click here.

Fluid Innovation VP, Intellectual Asset Management Gloria Archuleta will present at the LES Spring Meeting and International Conference in Chicago, IL on Tuesday, May 6.  The workshop is “Content Licensing for Converging Devices”.  Gloria will speak with Tyler Lenane of RealNetworks and Joy Murray of Microsoft.

For more information, visit the conference web site.

Each week Fluid Innovation receives unsolicited inquiries from companies interested in commercializing a software technology it developed for internal use. Of course, everyone thinks what they’ve developed is the greatest thing since sliced bread. But here are two simple screener questions to determine if it’s worth exploring commercialization:

1. Why did you develop the software internally rather than buy it?

There are two common answers: a) We couldn’t find a software product on the market to solve our problem or b) it was cheaper to build it in house than buy it.

The answer we’re looking for it A. If your company had a business problem and couldn’t find an available solution, then you have likely identified a market need. Your home grown product is a solution to a problem that likely hasn’t been addressed yet.

2. How much benefit does the software provide to the company?

Consider how much it saves the company or generates in revenue. For example, a new human resources process application may cut annual overhead costs by $5 million. Although generally the higher the number the better, this isn’t always the case. Think about the total market size. If an application saves $5 million but would only be purchased by a few companies, then an application that saves $100,000 but could be purchased by 1,000 companies is better.

These are just the first two questions to answer as an initial screen. Stay tuned for more considerations when considering commercializing your software intellectual property. (Hint: note that I didn’t ask anything about patents.)

It is an interesting question, and to clarify, I am talking about the process of taking a promising idea or invention and bringing it to the commercial market (note that invention is an entirely different topic altogether – Innovation Zen has is a nice article on the difference).  Our goal at Fluid Innovation is to create a market for connecting idea creators to implementers.   The general concept is not new, ideas have been turned into innovation since the dawn of time.  What is evolving today is adding a process to the madness so that more ideas can be evaluated quicker, at lower cost and then efficiently shared with people and organizations that are best positioned to turn them into innovations.  This is not as easy as it sounds, some of the key elements that need to be integrated include:

Idea Capture-  Obviously the quality of the idea is important, the better the idea, the larger the market and the closer it is to market readiness the better.  However, we have found that when sharing ideas with implementers that quantity is also important.  Implementers like to evaluate several opportunities at the same time as it is easier to compare and contrast and they are more likely to invest focused effort on the evaluation process.

Merchandising the Idea- Quite simply, if you want someone to consider investing in an idea you need to provide the implementer with the right set of information and it must be communicated in a way that makes it easy for the implementer to quickly determine if it is a fit with their plans.  This ties into how you capture ideas, set expectations and streamline transactions. 

Evaluating the Idea for Viability and Value- The traditional model is to ask an expert.  We think Michael Mauboussin at Legg Mason/Columbia is right on with his “Expert Squeeze” concepts highlighted in his recent HBR article, especially due to the evolution of crowd wisdom and social networking fundamentals.  We launched VirtualVentures last year to begin to build a platform to collect market feedback, we still have work to do in this regard but are moving forward with creative new approaches.

Matching and Sharing- As more ideas filter into the system is becomes increasingly more important to effectively match the right ideas to the right implementers.  This is where a combination of technology and relationships begins to play a key role in the process.  A new version of FluidInnovation.com is due out next month and will be a first step to integrate our patent pending matching technology into this part of the process while making it easy to search, view and connect available technologies to qualified implementers.

Streamlining Evaluation- If successful in capturing the right information at the Idea Capture stage this leads to consistent and complete merchandising of the opportunities.  When you combine this with community feedback and networking, hopefully the right information will be presented to the potential implementer that enables them to quickly determine fit and interest.

Expectations- Now here is where it all comes together, it is imperative that proper expectations for deal type, time-lines, value and process are clearly established for both the buyer and seller to improve the likelihood that a successful transfer of an idea to innovation to evolve.

So, how to scale it?  All that is necessary is to tie all these moving parts together into a simple, easy to use system…..we have learned a lot so far but still have work to do - so any ideas you may have on helping us build this vision into reality are appreciated.

Rather, licensing or otherwise monetizing internally developed software solutions is like finding money in your sofa. Sometime ago you would have earned those hidden sofa assets so it really isn’t a windfall, but your money certainly wasn’t doing anything for you while trapped in your sofa.

Likewise, companies spend millions every year on internally developed software in their IT and Research organizations. Much of what they develop is market leading and has great commercial viability beyond the corporate walls and even outside their industry. So, think of a company like a giant sofa - and the technical folks are holding your technology assets. The best part is that since the assets were developed under an R&D or business unit budget , it’s sunk cost - any revenue that you bring in is a windfall! The question is; how do we beat the metaphorical sofa cushions to generate more technology disclosures?

The key is to educate and generate awareness so that overtime you can develop an IP culture where your employees know how to recognize commercialization opportunities and bring these opportunities to you on their own. In the meantime, this is where promotional campaigns can help. Promotional activities are great because they are highly effective and cost little to nothing to implement. There are several things you can do, such as, email campaigns, contests, disclosure workshops, creating a newsletter, recognition events or even implementing an incentive program that rewards developers for their innovative contributions.

The quickest and easiest approach is email. Determine which group(s) you want to target and send out a well crafted memo which tells about your IP group, your objectives and how they fit in. TIP: To maximize results from email, I suggest that you first get buy-in from the division heads and then have them filter your message down the ranks. Your email will have more traction if it is endorsed by your CTO and will be more likely read if it comes from their boss.

Contests are another great way to generate awareness. Everyone loves to win a prize! There are many things you can do, when I was building the IP group at Cingular one of the first things I did was hold a contest to name our incentive program. We ran the announcement in the company newsletter - the prize was $100. OMG! I had so many entries, it was unbelievable. Of course, I had to read them all - careful what you wish for - but it was a good problem to have. We harvested several disclosures and moreover, we made our presence known in the organization. And the winner? A technician, Sam, came up with “What’s the Big Idea?” - and so our program was born.

Another great thing about contests is that you can have one for almost any reason and the prizes can be of nominal value; a mug, t-shirt, coupon book for Seattle’s Best or Chick-fil-a (whatever’s close to the office). TIP: As tempting as it is to scrounge for leftovers from corporate events, do spend the cash to brand your give-aways with your group name, e.g., ”ACME Intellectual Property.” Let the cap, tee, or coffee mug continue the publicity long after the contest has passed.

I recently helped one of our clients, SAIC to put together a contest. Our objective was two-fold. First, to generate technology disclosures, and second to promote VirtualVentures.com. We did this by asking employees to identify which technologies posted in the Virtual Ventures marketplace belonged to SAIC. The 1st prize is a Microsoft Zune and for 2nd prize, a Slide-Rule!  The contest is still in play, but if the contest entries are any indication our mission will be successful! Stay tuned for more on promotional campaigns in my future postings…

It seems that everyone is in search of the “next great idea”.  But ideas are just the starting point for new products or services.  Implementing an idea often proves to be the hard part.

In his book Open Business Models, Henry Chesbrough gives the example of Qualcomm.  The company succeeded in licensing its CDMA technology.  It tried to repeat that success by licensing a technology to deliver movies to theaters over the internet.  It failed at the latter.  The difference was that Qualcomm went through the pains of implementation before licensing CDMA.  With the movie technology, it came up with the idea but left the implementation to licensees. 

That’s one reason Fluid Innovation focuses on commercializing software technologies originally developed by companies for their own internal use.  These are not merely ideas; they have been acted upon.  The software is usually developed and battle tested inside the company that created it. 

Compare this to the typical patent, which is just an idea that has been explained in a legal filing.  Finding someone to make the idea become reality is the hardest part.  Why not search for ideas that have already made it over the implementation hurdle?

It’s that time of year again, DEMO 08 kicks off this coming Monday1/28… As DEMOfall 07 Alumnae, DEMO will always hold a special place in my heart. For those of you that don’t know, Fluid Innovation had the distinct honor to be selected from among the hundreds of applicants to launch Virtual Ventures, our online intellectual property marketplace (thanks to all our family, friends, clients and supporters that made our launch such a huge success!). There are only 70 demonstrators selected to launch so it really is a major accomplishment.

What a fabulous experience! First of all, it was held in San Diego at the Marina Sheraton – what a beautiful city, it doesn’t get much better. The atmosphere was so exciting — nervous energy filled the air — but it was good energy. In every corner you could see demonstrators rehearsing their presentations; some nervously pacing, others brimming with confidence and excitement. We were all so proud just to be there!

Let me provide some background re DEMO for those that are new to the start-up world. Here’s a quote from their site, “Every success story has a starting point…for 2,460 technologies, that place was DEMO.”

That about sums it up. DEMO has long running been the premier launch pad for emerging technologies. What’s hip, what’s wow, what’s now, and what’s hot…That’s what you’ll find at a DEMO conference. As the name implies, each company is provided with an opportunity to demo their product live on-stage to a very influential audience. You may have never heard of the majority of invitees selected to launch – yet some go on to become household names. For example, Skype, SquareTrade, ETrade, the Palm Pilot, TiVo - and VMWare’s been invited twice to show off their virtual machines! (major kudos!) and the list goes on… Big guys like Yahoo and AOL have also launched products there, but I’m not as impressed when giant corporations with mega R&D funding create something innovative. It’s a great accomplishment and I’m all for innovation, but there is just nothing as inspiring as to see a little self-funded guy/ gal with a great idea make it big – it’s so the American dream!

Speaking of funding, another key element is the DEMO Audience, made up largely of VC’s/ investors with a sprinkling of media for good measure. Now, if that doesn’t make a start-up company all warm and tingly, nothing will. Funding opportunities and free press, what’s not to like? But, I can’t forget the demonstrators. The exhibit hall was almost better than the actual demos (which were awesome). What a great group of people, so much genius and talent in one room - and really nice, too. Everyone was really friendly and the DEMO staff couldn’t have been more helpful.

As for the demonstrators, I mentioned above that we were “selected” to launch. No amount of money can get you a slot in this show. You have to prove your worthiness. The process?Go to the site, register, fill out an application, and cross your fingers while Executive producer, Chris Shipley and her team of technology experts rigorously scrutinize every application and hand-pick the 70 best and brightest new tech ideas. If you are selected, you will receive an invitation to attend. Needless to say, this is what makes DEMO such a privileged opportunity. 

Once you’ve been accepted there are a few rules. To launch at DEMO means just that. You unveil your product to the public and launch live at the show. It’s all very clandestine. You have been given this great opportunity and you can’t tell anyone. We could conduct business, but absolutely no talking to the press, and no telling anyone you’ve been invited. This is serious. If you violate this agreement you are out. But, this is also what creates such anticipation and interest for the investors and media.

The format of the presentation itself is very innovative. You get SIX minutes to present your product to a room full of highly sought-after media and investors. So not only is this a rare opportunity, but you only have six minutes to make an impression on a most important audience. They are really strict about the time as well – if you go over the limit you lose points and the chance to be a DEMO God! This is the coveted award of distinction presented to the most elite demonstrators that rise above the fray and make the most compelling and entertaining use of their six minutes. Although all the DEMO God recipients did an outstanding job, my personal favorite has to be LongJump. Pankaj and Derek were hilarious and Pankaj, what an amazing ball of energy! 

Needless to say, it was a fantastic opportunity for our company. As a result, we have really grown and fine-tuned our concept. Check back for DEMO Part Two where I’ll dish on life after DEMO!

Welcome to the Fluid Innovation blog.  We hope to share with you a variety of perspectives on Open Innovation, technology, commercialization, intellectual property and probably some random thoughts and ideas that pique our interest.

So who is Fluid Innovation and what is Open Innovation all about?   The term was coined by Dr. Chesbrough at UC Berkley, he has written two books (Open Innovation and Open Business Models).  The term Open Innovation has taken on a life of its own and now encompasses a wider net of topics that may lead to some confusion since it touches on open source projects, intellectual property, collaborative R&D and technology commercialization.  We will focus on the traditional definition that supports the transfer of technology from and to the firm best positioned to execute successfully in the marketplace.  In general it is a fairly simple idea BUT it leads to significant shifts in thinking and strategy.   The premise is that good ideas and inventions can (and should) come from anyone, anywhere.  It highlights the fact that the people or companies that create a novel new product or process are not always in the best position to implement and execute successfully in the marketplace.  If we can all agree that this is true then we should be willing as a company or an individual to be more “open” about sharing opportunities but also be more “open” to evaluating opportunities from outsiders.

Simply put, firms should look outside of their traditional sources of growth (internal development and acquisition) to create systems and processes to quickly evaluate external ideas and efficiently acquire and integrate outside innovation.  There are a couple key points to highlight:

• This strategy often delivers new products and services at lower cost, less risk, shorter time to market and often include ROI models, reference customers and sales leads. 
• Leading organizations of the future will be the ones that are able to make the shift from “not invented here” while creating the systems and culture to execute on their Open Innovation strategy. 

The final key idea behind Open Innovation is that it works both ways.  Firms should not only be open to identifying and bringing in new growth opportunities but they will also need to (a) be honest in evaluating their ability to execute in the market and (b) be prudent to their shareholders by capturing and evaluating all of the firms investments in intangible assets and then actively seek to transfer/out-license/sell opportunities that the firm is not in the best position to implement in the market.

So you may be curious what firms are embracing Open Innovation today, here are a few of the early adopters and some related content:

• Proctor & Gamble
• IBM
• Philips

And now, who and what is Fluid Innovation?  Well we have been working in the technology commercialization and intellectual property landscape for years and our goal is to create the marketplace, the tools and processes and the community of buyers and sellers that lead to the execution and visibility of real transactions.  We are about creating value through transactions, it is about reducing the transactions and communications costs that exist in the market for good ideas.  We are not talking about a craigslist for patents/IP or an expensive consulting organization or a collegial open innovation community.  Although we will include similar elements in our solutions, at our core we are about matching market opportunities with growth oriented firms that are best positioned to execute in the market.  So stay tuned and check in on us as we evolve and progress toward our goal of ”Making Open Innovation Easy.”

 And in true Open Innovation fashion, please feel free to comment or contact us with your thoughts and ideas.  Who knows where it may lead.  Welcome!

Welcome to the Fluid Innovation blog. 

Fluid Innovation was founded in 2005.  We help commercialize technologies built by Fortune 500 companies, typically for their own internal use.  Our customers include Microsoft, Lockheed Martin, SAIC, and a half dozen other large firms.

On this blog we’ll write about current trends in intellectual property, intellectual asset management, mass collaboration, and technology commercialization.