Posts con el tag ‘business innovation’

Isobionics: Turning a large firm’s unused technology into a business

Isobionics, a Dutch startup company, was established in 2008. Its activities focus on manufacturing natural ingredients for the flavor and fragrance industry. Their products are prepared with an innovative fermentation process, which results in high quality, natural products for customers in the food, beverage, flavor, and fragrance markets. The company’s technology was developed by DSM, a globally operating Dutch chemical company with annual net sales of 9.2 billion euro in 2014. The company has strong technical expertise in biotech and new materials.

The seed for Isobionics was planted in early 2007, when Toine Janssen met with Frank Schaap, a new business developer at Chemelot. Chemelot is an Open Campus for small companies in the chemical business, co-located at the Sittard-Geleen site of DSM in the Netherlands. The infrastructure and services comprise world-class laboratories and research facilities, development services and all-round expertise, from high-performance materials to industrial chemicals.[i] Toine Janssen, a former director at Philips, initially wanted to buy a plant in the Chemelot campus. Instead, Frank Schaap offered him an alternate business proposal: Why not picking up a research project at DSM that had been discontinued?

About a year before Frank and Toine met Rinus Broxterman and a colleague developed a way to produce natural substances—called isoprenoids—through a biotechnological fermentation process. Normally, producing isoprenoids is expensive and laborious, but Broxterman’s method produced better quality results, required fewer production steps, and was 50 percent less expensive.

Rinus decided to file his process with the Emerging Business Unit of the DSM Innovation Centre. The Emerging Business Unit is part of an Emerging Business Area (EBA), which was established to explore innovative fields outside the existing core technologies of DSM and to professionalize innovation within DSM. As 2006 came to a close, it was clear that the EBA was going to drop the proposal because the project did not fit into the DSM’s strategic scope. Jacques Joosten, senior R&D director, however, was convinced the proposal had potential and advised DSM researchers to look for other ways to valorize the technology. Following this advice, Rinus shared the news with Frank Schaap that he had an idea for a new startup. Understanding that an experienced business development manager is a key for success, Rinus and Frank started looking for external managers. By that time, Frank Schaap had met with Toine Janssen.

Once Toine realized that the business case had great potential, he decided to take on the challenge. He wrote a business plan, was looking for financial resources, and was forging an agreement with DSM. Reaching that agreement was not simple because DSM had no experience with this form of outbound open innovation. Furthermore, DSM researchers that had worked on the project were not happy with the project’s evolution. They felt that they had to sacrifice knowledge they had acquired over a long period of time. Thanks to his experience and management skills in a company such as Philips, Toine Janssen convinced DSM’s managers that this spinout had significant business potential. After signing a research and intellectual property contract to use the fermentation procedure in predefined areas, Isobionics was founded. Initially, the company employed four people. In addition to Toine Janssen and Rinus Broxterman, researcher Dr. Theo Soncke and project manager Dr. Marijn Rijckers were added to the team through service agreements with DSM. Isobionics immediately started joint research and development with the Plant Research International (PRI) institute at the Wageningen Agricultural University. They chose the Chemelot Campus as the location for their new business, just a few hundred meters from the DSM laboratories. This co-location allowed Isobionics and DSM researchers to communicate and interact frequently, which accelerated research and decision-making.

Toine successfully raised funding for his venture by filing for subsidies and attracting Limburg Ventures B.V. Limburg Ventures is an active regional venture capital investor in materials and life sciences in the Netherlands founded by DSM.

The first product Isobionics commercialized was Valencene, a sesquiterpene and one of the components of orange oil. Valencene can be used as a flavor ingredient and tastes like oranges. The majority of applications are found in flavors for the beverage industry, particularly citrus flavors. Although minor, Valencene can also be found in fragrances. Isobionics focused on selling to flavor and fragrance companies such as Givaudan, Symrise, and Firmenich, all of which supply flavors to multinationals such as P&G and Unilever.

The strategic decision to start by producing Valencene (and not another flavor) was made because it is a relatively small market compared to flavors such as vanilla and menthol, where Isobionics would certainly face head-to-head competition of large established companies such as BASF. Furthermore, this product could generate quick cash without major investments. Moreover, by producing Valencene, Isobionics achieved proof of principle and generated knowledge and insights needed for further steps. Isobionics patented the process of producing Valencene (Valencene-synthase), but the patent on the microorganism from which Valencene was formed was DSM’s property. Isobionics, however, had an exclusive licensing agreement with DSM for it in the domains of flavor and fragrances, pharmacy and agrochemicals.

Isobionics has been growing fast and by 2015 it was also investigating the market for nootkatone a flavor characteristically associated with grapefruits. Although the company was growing fast, Toine Janssen continued to use an asset-light model for the growth of his company. He relied to a maximum on skills and assets outside Isobionics. R&D was executed with a growing number of universities around the world, tapping in the best expertise available. The technical collaboration with DSM decreased over time as Isobionics became more knowledgeable on the specific technology for produce F&F using microorganisms. Production was outsourced: Isobionics worked through contract-manufacturing with two fermenters, one in Eastern Europe and one in India. The choice for the manufacturer is a function of their skiils and specific installations. Production included three stages: fermentation, distillation and packaging. A different type of company executed each of the stages. In this was, Isobionics could produce the flavors without investing in production capacity and without the fear that a contract manufacturer could ever become a competitor on the market. As Isobionics was growing fast, it has to distribute products effectively on a global scale. Here again, Isobionics relied on an external partner—DSM—who had already the logistic expertise and infrastructure to deliver products to B2B clients worldwide.

Isobionics next had the ambition to grow further in the valencene and nootkatone market and to start developing other flavors and flagrances that fit the size of the startup. Isobionics focuses on the markets that are small enough to avoid direct competition with established multinationals. The relationship with DSM changes over time but the chemical company remains important for the startup (see logistics for instance). Toine Janssen is also very positive about the Chemelot site. As the company continues to grow, it has to change the location of its offices, but Isobionics will look for a location on or close to Chemelot.

Text originally published as a case in the Exnovate blog by Wim Vanhaverbeke, researcher at the Institute for Innovation and Knowledge Management

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Creativity tools ready for your business

Looking for a boost in your team’s creativity? Need a new approach to a problem you’re struggling to solve? The Collage project has come to an end but its outcomes are still available and ready to use for those looking for new ideas.

The Collage catalogue of applications has been completely rebuild to offer the user the most useful tools according to its situation. Answering two simple questions about the user’s needs , the application will suggest one the best tool to help him along with a descriptive card and the tool tutorial.

The site also offers the possibility to browse through all applications and a brief description of each one.

The Collage project, funded by the 7th Framework Programme of the European Commission, has designed, developed and validated an innovative Social Creativity Service-Set which will support the synergistic interlinking of learning processes, resources and systems with social computing services for inspiring learners, social affinity spaces for leveraging expression and exploration, and social game mechanics for supporting social evaluation and appreciation of creative behaviour.

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Sunshine Challenge: an opportunity to promote innovation in energy efficiency

 

Today Europe is faced with the challenge of adapting to new technologies and innovation processes which would make cities more inclusive, competitive, efficient and, most importantly, more livable. The SUNSHINE project organizes an open, European-level challenge that this year is about promoting innovation in energy efficiency through two tracks:

The Energy efficiency initiative of the year track recognizes the contributions of public administrations or planning bodies to the transformation of our cities and neighborhoods towards greater energy sustainability. Governmental initiatives, submissions from cities and regions, as well as projects of urban and regional planners are welcome.

The Innovation in smart urban services aims at promoting these technologies in terms of best practices and innovative products in all stages of development which contribute to achieving the concept of smart cities. The project leaders are looking for solutions coming from industry, SMEs, researchers and Universities which have the potential of drivers for change, in European and local markets as well as the research landscape.

If you’re interested in participating in the Sunshine Challenge, visit the project website for more information!

Sunshine- “Smart UrbaN ServIces for Higher eNergy Efficiency” is a research project at the Institute for Innovation and Knowledge Management supported by the Competitiveness and Innovation Framework Programme (CIP) 2007 – 2013. SUNSHINE delivers innovative digital services, interoperable with existing geographic web-service infrastructures, supporting improved energy efficiency at the urban and building level. Specifically, SUNSHINE delivers a smart service platform accessible from both a web-based client and an App for smartphones and tablets.

The project is now halfway through its last year of implementation, and its solutions are being tested in eight pilots that are currently running at full capacity, testing and assessing the three SUNSHINE scenarios: Energy mapping and pre-certification, Building energy awareness and Remote control of lighting networks. Their success in achieving a valuable socio-economic impact, as well as in developing a short and long-term exploitation plan are currently being analyzed.

For more information, stay tuned and check the last newsletter!

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Entrepreneurial Cities should become Urban Labs

Remember the days when Nokia and Motorola owned the phone market? They are not so distant, only a few years ago. Yet how many of you have a Moto or a Nokia now? Let me guess: none!

If you are sceptical about the power of innovation for shaping markets and destroying fortunes, these two examples are a reminder of how fast things can go. But they tell us more; they describe a change in the way we compete.

Not so long ago, firms competed on price. In a way all societies started here, taking advantage of low wages, natural resources or any other factor that might provide a sustainable advantage, difficult to replicate. As we know now, these advantages were far from sustainable. Low wage countries, if successful, became richer, raising wages. Shifts in extraction technology, such as fracking, made extraction advantages less relevant, and so on. So, let’s forget about sustainable, ok?

Competing on innovation needs early adopters, experimentation and fast market validation of proposals.

Productivity replaced low costs as the main form of competition. Knowledge became the new buzzword. Nowadays however, knowledge is everywhere and while some sectors strive to maintain their knowledge advantage, engineers in India or China have become just as competent as their rivals in Europe or America, and with them the productivity level of these different societies is levelling out.

We are no longer competing on productivity. Some of the biggest, most thriving companies such as Apple, Google, Airbnb, Tesla, Facebook, GE, Amazon and Apdo still compete on productivity of course, but they earn their huge surplus and tremendous market share from innovation. They compete not on making similar things more efficiently but on transforming the world with completely new products and services.

This Copernican change in the way we compete has huge implications.

Competing on cost doesn’t need much. Competing on productivity needs good engineers and labs, it is the territory of incremental improvement. Competing on innovation needs early adopters, experimentation and fast market validation of proposals.

Cities are becoming the medium for this experimentation to take place. New proposals for smart cities cannot be validated in labs; they need real-life spaces and the interaction with citizens for validation.

Barcelona, for example, put in place quite some years ago the idea of ‘urban labs’: a simple idea with a difficult implementation. Put simply, firms were invited to submit their proposals for experimentation and, if selected, they were allowed to use the urban space for testing, experimentation and as a showcase for their new technologies. At the same time, Trentino, Manchester and Helsinki worked on similar concepts from the point of view of Living Labs and the facilitation of citizens’ involvement in innovation.

Sounds great, doesn’t it? It certainly is, but implementation has been complicated because you have to navigate a maze of permits, economic incentives and costs. Moreover, user experimentation is at the firms’ expense and many firms are not – to put it politely – up to speed in this area. Therefore the project ends up being badly done or not done at all, greatly diminishing the whole purpose and value of the urban lab experiment.

After some years’ experience of urban labs, their flaws are well known. Pilots such as the Barcelona example are great, but continuous programmes are better. Spaces should be prominent if they have to function as showcases. Global awareness is a must and user-driven development and co-creation should be facilitated by the programme. Finally, many firms, particularly the small ones, the most innovative ones, need support and resources to implement their programmes, either from the city, crowdsourcing or regional government. If not, probably most of the really innovative ideas won’t even be attempted.

However, in spite of all the problems, urban labs have been a success and it has been proven that they are the right way to go. We need cities that once again want to become places where ideas are born and developed.

Nevertheless, for that to happen we need change. Not only in the companies themselves but also a complete change of mindset in the cities and their policymakers. They need to embrace, facilitate and foster open innovation – innovation that is not coming from the city but to the city. They need to be proud of helping this process to thrive, to be facilitators in this new transformation of cities into entrepreneurial spaces.

This change of mentality will go far beyond the businesses, empowering the entrepreneurial spirit of citizens and changing the government’s role to that of an ecosystem orchestrator instead of trying to solve everything with the provision of resources and services.

Fostering this change is our job; it is everybody’s job.

Originally published by Esteve Almirall in Illuminated Minds

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