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An energy & transportation twist + a tried and true curriculum = commercialization

By Posted on March 1, 2016
Blog

Jean Redfield
President & CEO, NextEnergy

Back in 2013, I was skeptical about how relevant Steve Blank’s “Lean Start-up” curriculum was to the energy and transportation industries. My understanding of the premise behind Blank’s work was that in the course of a semester, start-up teams could essentially build a business through a series of “test and pivot” steps informed by customer interviews. At the time, I thought to myself, “that approach may work fine for consumer products or apps-based businesses, but energy and transportation are different.” Everything about my experience working with start-ups and established players in energy and transportation said “no way” – it’s at least a seven to 10 year timeline before a new technology makes it into an energy or a transportation application, so how much progress is likely in a six to nine week course? Both energy and transportation are very capital intensive industries, have long investment horizons, and are risk averse, so “fail fast”, one of the key concepts behind Blank’s approach, is not an option.

That being said, I suspended my doubts and listened to the folks at University of Michigan’s Center for Entrepreneurship as they described how Steve Blank’s curriculum had been modified through support from the National Science Foundation to become I-Corps (the “I” stands for innovation) designed for university researchers. I skeptically reviewed the videos and course materials to decide how much of the materials could be used with start-ups or university and national lab-based research teams working on technologies for the energy and transportation industries. I was also looking for the fatal flaws that would make the course inappropriate for energy and transportation.

What I found was a powerful set of frameworks and tools that apply to any business, including: the business model canvas, a simple but powerful framework that describes all the key aspects of a successful business on one page; the customer discovery process, built around at least 100 interviews to help teams create, test and refine their “hypotheses” about their business, and the scientific process (near and dear to traditional research teams) which encourages them to develop hypotheses, design ways to test them through “data”, then reject or modify the hypotheses based on the data. What’s different is that the data are not from the lab, the data are gathered by getting out of the building and talking with customers.

What is a little different for energy and transportation businesses vs. consumer products or apps is that the “customer” for a specific technology is often not the end user—it’s an existing player somewhere in the customer value chain. Using the customer discovery process to really understand this customer ecosystem, how decisions are made, what is of value at any part of the chain including the end user, and how that value gets spread across the chain in the form of price and cost is absolutely fundamental to understanding how to launch and grow energy or transportation technology-based businesses. And that customer discovery process is what is at the heart of I-Corps.

What we did to customize I-Corps to become I-Corps Energy and Transportation (I-Corps E&T) is to take the basic curriculum, and build out the case studies and the value chain materials specifically for energy and transportation. We also bring together over 100 industry players to network, so the teams can hit the ground running when it comes to customer discovery.

And since we customized I-Corps to I-Corps E&T, we have partnered with the Department of Energy to go one step further, Lab-Corps. The Lab-Corps program includes the E&T customization, as well as additional information and ideas on how to move technologies from the national labs into licensing or new ventures, as well as how to develop more focused research agendas so that higher returns may be realized from our collective investments in research.

Since the inception of I-Corp E&T:

  • 33 teams have benefitted from program including 2015 alumnus University of Michigan College of Engineering’s Solid-State Batteries project, led by faculty researcher Jeff Sakamoto. Utilizing the skills learned in I-Corps, the project recently received a $3.5 million award from the Advanced Research Projects Agency-Energy (ARPA-E) and matching funds from the NextEnergy MATch Energy Grant to further develop new lithium-ion battery electrodes and manufacturing processes for solid-state electrolyte/ceramics that will significantly improve energy storage.
  • Teams conducted a total of 971 customer discovery interviews (average of 60 per team) and 85% of teams added more than 20 industry contacts to their network.
  • 150 hypotheses were invalidated – which is a good thing. “Fail early and fail fast” is the shorthand for the idea that one of the most valuable things a team can do is STOP going down a path that is unlikely to yield results. Invalidating ideas and shifting time, energy and resources (i.e., “pivot”) to the next set of hypotheses is a critical skill built through the I-Corps process.
  • 40 industry advisors participated in the program. NextEnergy scheduled a total of 80 meetings between teams and relevant industry advisors in our network.
  • 50% of teams plan to spin-out a new company in the next three years, 15% plan to license their technology to industry in the next three years, and more than $4M in follow-on funding has come to participants in 2015.

Who should attend I-Corps E&T? Researchers and entrepreneurs focused in the areas of energy and transportation are invited to apply for the program. Applications are open for 2016 through April 3.

Learn more about I-Corps Energy & Transportation here.

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