By John Scott, Ph.D., Founder and Chief Strategy Officer — Innventure
How much has your Multinational Corporation (MNC) spent on research and development this year? If yours is like other MNCs, it could be hundreds of millions — if not billions — of dollars.
If you would like to recoup some of those investments while also growing your business, Innventure can change an idle asset into a long-term revenue stream for your corporation.
Innventure is in the business of building new high value companies from the combination of an MNCs potentially stranded technologies along with the MNCs market data. Not only that, it won’t cost you a thing.
Few patents turn into commercially viable products or services. According to Forbes, 95 percent of patents “fail to be licensed or commercialized.”
MNCs often shelve novel technology when their function doesn’t align with the company’s central purpose. Forrester Research estimates that, every year, US firms alone discard $1 trillion of value in underutilized intellectual property.
Given these odds, an MNCs ability to successfully bring a shelved technology to market might seem as remote as capturing a unicorn. At Innventure, we can create new shared value from some of these potentially shelved assets.
MNCs streamline their processes as efficiently as possible to fulfill their mission. Their marketing experts tend to be on a different team from the scientists researching and developing technology. Often, R&D and market intelligence teams are focused on their individual efforts and their paths don’t often cross. Rarely, if ever, is there a specific role in the company that is tasked to connect the corporation’s technology to a market need and do an analysis of the financial return.
Yet, the marketing staff knows what the market wants, and the R&D team develops technologies of high interest. As a result, a given MNC can have access to data suggesting large demand, as well as a disruptive technology to supply it, but may not always connect those two dots. In consequence, an opportunity to grow the business has the potential to be overlooked.
That’s where Innventure comes in. As part of our process, we connect those dots – mining the data to truly understand the real dollars and cents associated with the opportunity.
If you ask any Fortune 500 CEO what they care about, nearly all will say the same word: growth. Many have spent years squeezing all the unnecessary costs out of their system. Now, they want new ways to increase profitability.
Innventure offers a methodology that is designed to do just that through new company creation to the benefit of all parties.
We also analyze the quantity of new dollars that bringing this disruptive technology to market would create. We only invest in projects that we believe will generate more than $1 billion in new market value.
At the end of this process, we can determine whether the value created from this opportunity overcomes the market resistance to something new. If the answer is “no”, then we provide the results of our analysis to the MNC. These insights themselves constitute a huge benefit for the MNC, who may be able to follow up in other ways to exploit the technology.
If, on the other hand, we determine the opportunity is viable, we begin creating the new company that gives our MNC partners profit gains from that new Innventure Company being created – things like license fees, royalties, and market advantages for our MNC partners selling into their channels - thereby creating new revenue for the MNC. Our team of serial CXOs creates, funds, manages, and scales this opportunity into a potential $1B+ company to actualize the technology’s potential.
In this way, MNCs can grow their business by outsourcing the commercialization of their underutilized assets. This can lead to a passive revenue stream that can raise hundreds of thousands — or even millions of dollars — for the MNC every year.
It is our goal to make this entire process very low-risk for our MNC partners. As we like to say, the Innventure methodology is designed to deliver “accelerated success with reduced risk”.
When introducing disruptive technology into the marketplace, the biggest challenge is to compel the customer to stop using the solution that they have been used to and switch to something different. While consumers may try something novel like pet rocks or hula hoops, businesses need a quantitatively compelling reason to switch gears.
If you’re an inventor, does it make sense to spend five years of your life contributing some of your best ideas and capital, knowing you’re going to fail 80% of the time? While the venture capital portfolio model historically provides an excellent return for investors – typically with percentages in the low to mid-teens – it can be a losing proposition for entrepreneurs trying to introduce new technologies into the market.