by Adam Javan, Serial CXO — Innventure

Of 2.1 million active patents, 95 percent fail to be licensed or commercialized (Forbes, 2014). Given the challenges of commercializing innovations, it is easy to assume this ratio is much smaller for patents granted to breakthrough innovations.

Let us start by distinguishing between breakthrough innovations and incremental innovations. By breakthrough innovations, we mean innovations that create major new products and/or new markets, versus incremental innovations which create predictable improvements in stages to current, or slightly modified, products into adjacent markets.  

Since breakthrough innovations create much greater value for customers and innovators, there have been great interests and efforts, particularly by Multinational Corporations, to systematically commercialize breakthrough innovation. These efforts are not always fruitful.  

Whether one can commercialize breakthrough innovation or not, given the massive amount of money invested in R&D, breakthrough innovations are destined to happen. However, major challenges have led to a very small percentage of these innovations becoming commercialized. These challenges are: A) these breakthrough innovations often disrupt the existing businesses of the major corporations and can potentially be sabotaged by managers of those businesses (aka “innovator’s dilemma”), and B) while major corporations are great at executing current business models, the critical requirements for business model innovations and new business model execution are typically the domain of entrepreneurs.

At Innventure, we work to institutionalize the commercialization of breakthrough innovation by directly solving the challenges. First, we don’t suffer from innovator’s dilemma, as each innovation represents a completely new market for us, and secondly, our DownSelect® process is designed for a deep understanding of true market unmet needs, detailed quantitative assessment of the value creation opportunity, and the value sharing scheme to accelerate and maximize the market adoption of the breakthrough innovations. This enables business model prototyping, a critical requirement for the successful deployment of breakthrough technologies. Finally, since we found and fund our own new companies, we utilize experienced entrepreneurs with a history of accomplishment in starting new companies to continuously refine and execute new business models.  

Thus, our partnership model with Multinational Corporations to leverage more of their R&D spending, and particularly surrounding breakthrough innovations, is a combination of respective complementary capabilities - they have institutionalized R&D which leads to breakthrough innovations, and we work to institutionalize the commercialization of breakthrough innovations to increase their likelihood of success and to maximize their potential.

Innventure invests in and rapidly commercializes potentially disruptive technologies through strategic collaboration with leading Multinational Corporations, and we strive to build strong relationships with Multinational Corporations and to fully leverage their R&D spending and innovation machinery. We believe our partnerships and business model will be a completely new vector to change the world at a time when we desperately need breakthrough technologies to address some of the greatest global challenges our world has ever faced.

Footnotes

1. Daniel Fisher, The Real Patent Crisis Is Stifling Innovation, Forbes, 2014, https://www.forbes.com/sites/danielfisher/2014/06/18/13633/#367856a6f1c0