Commercialization Plan Series 1/2: Aspects to consider when writing an SBIR Commercialization Plan
May 29, 2021
Several US federal agencies solicit SBIR awards for small businesses. While these agencies focus on technology development from various scientific disciplines, they all require a commercialization plan (CP) along with the technical SBIR proposal. Here I will discuss key aspects that I have come across when writing a solid CP.
Regardless of what federal agency you are writing a CP for, it needs to include the following topics:
- Technology, and technology outcomes and impact
- Technology development team
- Market characteristics and entry strategy
- Status of Intellectual Property (IP) and IP strategy
- Finance Plan
- Manufacturing and Production Plan
- Revenue stream
Whether it is a Phase I, II, or III proposal, the level of details on the SBIR Commercialization Plan can vary. For example, an NIH Phase II proposal is 12 pages, whereas in NSF Phase I and DOD Phase I, you will need to provide 1-2 pages of CP or some parts of the CP listed above.
But regardless of the awarding agency, the goal of a CP is to answer one simple question: ‘How would you leverage your company’s assets to discover and validate a repeatable, and scalable business model with this technology or idea?’ It is a simple question, but a BIG one with some keywords in it. First, let’s focus on what are typical assets for an SBIR applicant; a small business.
- Subject matter expertise
- Agility and speed
- Business creation acumen and experience
SBIR applicants need to have a good team that covers most of the expertise required to develop the technology. Team members could include partners based at educational and research institutes (faculty), and industry experts. It is essential to keep this team small (my recommendation would be 12 people max); otherwise, reviewers get a sense that project execution may not be as efficient. The team should also include folks with a track record of developing business models for technologies similar to the envisioned product in the SBIR proposal. It is also helpful to have teammates that have experiences of working together.
As you work towards crafting the right CP, it is essential to remember the purposes of SBIR awards. The goal of SBIR awards is to eliminate technical risks related to technology development in early stages, and just before scaling up for production. This stage of technology development covers about 75% of the ‘valley of death’ for startups; when cash flow is tight, private investment is almost impossible to raise, and when about 80% of the startups die. Therefore, federal agencies would like to award funds to those SBIR applicants that have a team with a good set of skills and experiences for the venture, as mentioned earlier.
Hence, a SBIR commercialization plan is a vital part of your venture’s success, and its value is immense. It allows investors (private and public) to know how deeply your team has thought of the challenges and developed a strategy to overcome those challenges. And whether it makes financial sense to pursue this venture.
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