Partner Article

Turning high-tech ideas into successful technology businesses

Dr Colin Smithers is co-founder and managing director of Plextek, one of Europe’s largest electronics and communications design consultancies. He shares his thoughts on starting up a technology business.

Coming up with that big idea is just the beginning. Taking the idea and developing it into something tangible that is worthy of mass sales is where it really starts to get complicated. Armed with your idea you need to engineer it, perfect it, commercialise it, get the projections in place and get it to market without someone beating you to the punch.

There are plenty of good ideas around (and many bad ones!), but very few actually make it to become successful products or businesses. The most common reasons include running out of money (or underestimating the amount of money required), and inappropriate team composition where key skills are missing. The journey from bright idea to finished product in the market requires a wide range of skills and temperaments and these are rarely met by chance groups of individuals. Achieving the right mix of product engineering, ergonomics, marketing, manufacturing, supply chain and finance knowledge, to say nothing of simple organisational skills - requires deliberate skill acquisition. TV shows like The Dragons Den have shown how rare to find someone with the perfect blend of business, people management, sales, marketing and engineering competences needed to guide the transition of an idea into a thriving business. More often than not entrepreneurs are either very capable engineers, but fall to pieces when selling to customers, or at the prospect of putting together a business plan; or alternatively, they have a very sharp business mind but no clue when it comes to the finer details of getting a product into manufacture.

Unless youre one of these rare multi-faceted, multi-skilled superheroes its vital to recognise your shortcomings and acquire those missing skills or youre sure to have a real struggle ahead. Unless you fall into this group it may be best to discuss your idea with specialists in incubation.

Incubation can fast-track the growth of early stage businesses and dramatically improve the survival rate of start-up companies by helping them become viable more quickly. Incubation also creates an environment where entrepreneurs learn from the experiences and expertise of others - creating working partnerships that may help to open doors to markets and resources.

There are companies out there who have the track record and a portfolio of consulting services to help accelerate the development of start-up and early-stage businesses. More than just advice, these incubators are able to provide practical engineering design services and support that will help non-engineers through the complex, yet vital, new product introduction and design for manufacture process. The incubator also gives the fledgling company more credibility by providing them with instant access to proven business processes that investors and buyers can trust.

Working closely with the owners of the ideas to create a business, the incubation process will vary from case to case, but it will always involve helping with developing the technology and the business. Ideally youll already have secured funding, but if not incubators will work with you to develop the idea to the stage where money can be raised, often adding vital credibility into this process.

Lets say that you came up with an idea. You’ve written up a business plan, got some money in the bank, talked to contacts in the industry and done some research with potential users who all nod approvingly at the idea - but then it comes to building a prototype. You realise you dont know enough about technical components to do your idea justice. Here an incubator could work with you, buying into the idea, helping you to refine and develop it. It would give you advice on things like technical feasibility, marketability and practical engineering issues e.g. Is it safe? Does it need to be more ruggedised? How long will the batteries last? What is the regulatory environment for such products and what approvals must it meet? Is there a risk of patent infringement? What will the unit cost be in volume? How can I adequately test my product prior to launch? How will manufacturing test be efficiently done? How long will all of this all take? In short, all the things that will stand you in good stead to have the best chance of succeeding.

For business planning the incubator will have the experience and know-how obtained from helping other companies in a similar situation and theyll know what your customers, investors and partners are looking for. You might have found some good business plan advice online, but its very different to have that hands-on working relationship that an incubator can offer.

For anyone out there with a high tech idea, the important thing to remember is that most successful entrepreneurs have failed multiple times before getting their break and making it big. Every time they failed, they learned vital new business lessons - but this is the hard way to do it - it doesnt have to be this way. My advice would always be, dont be afraid to ask for help early from people who have been doing this as their day job for many years.

This was posted in Bdaily's Members' News section by Tom Keighley .