Achieving a product prototype with the basic characteristics needed to be tested on the market, or presented to potential financial and industrial investors is fundamental in the initial phase of a startup. This strategy, defined as the Minimum Viable Product (MVP), is consolidated within the IT startup sector, in particular among those who are proposing web consumer products.
How can an MVP strategy be made in the case of science-based startups? Let’s consider, for example, the startups that work on proteins for diagnostic and therapeutic purposes; or rather those that work in the area of new materials; more generally, those startups that are created with the results of university laboratory research. Even early on in the seed phase of these new enterprises investments can be pretty high (personal, for tests, external services for verification, equipment, etc.), therefore defining the steps needed to reach a minimum product that would allow it, especially in conditions of limited resources, to be presented to industrial and financial partners could be important.
This theme pertains to many startups in Italy. Over 1,000 research spinoffs exist. And the potential is very high: there are almost 2,800 active patents in our universities (Netval, 2013) that could be valorized through the creation of innovative startups. So, here below are some steps that can be taken to define an MVP for science-based startups.
Step 1: Identify the result obtained in the laboratory
The first step consists of delineating the specific results that have been obtained in university laboratory research (i.e., composite material, proteins in the oncological field), describing the characteristics, the performances that have been achieved, the processes and methods used. These startups are created from a period of research, spanning even over a period of many years. The first step, therefore, for research to become commercial is the identification of the result that one intends to finalize through industrial investment, not to be confused with the larger competencies or areas of research of the laboratory.
Step 2: Protect intellectual property
Once the result has been identified, the next step in defining the ‘minimum product’ consists in verifying the protection of laboratory results with a patent. Or, rather, confirming whether the research has the characteristics of novelty and inventiveness that would allow it to obtain a new patent so the startup could then have exclusive rights for commercial use. In this phase it is necessary to apply at least for an Italian patent, whose costs can be covered by the research team itself, in order to guarantee priority for successive international patents. This, for example, is a fundamental step for biotech startups that will never sell a finished product but, instead, a portfolio of patents to the big pharmaceutical companies.
Step 3: Define the industrial application target
It is also necessary to individualize the industrial application target – the focus – in the startup phase. Typically, technological platforms are created in laboratories, so, a research result often has numerous industrial application possibilities. Though the technological platform is definitely a strong point in guaranteeing scalability for startups, it could become a weak point if the goal of the application/product is not identified in the initial phase. Individualizing ‘the exact thing’ I will sell tomorrow rather than the ‘possible things’ is fundamental. In this phase, analysis of growth expected in sectors of potential interest, feedback from experts, together with the first laboratory trials on the application of the research results for a given industrial use allows for the startup to direct its choices.
Step 4: Starting the verification process
And, finally, it is necessary to start the verification process, that is, a series of tests that allow for a demonstration of the efficiency of the implementation of the research results for the determined industrial application or, rather, the most valid option among the commercial solutions. The verification process can occur at numerous levels. Typically, the team makes the first tests at the initial research phase. Successively, there can be blind tests, that is, a third party verifies the validity of the results; or it can be done with the first partner clients willing to experiment with the new solution. Tests of a comparative nature, those that can verify the effectiveness of a product compared to similar ones that are already on the market, are particularly interesting. Obviously, the specific characteristics of the verification process depend on the industrial sector in which the startup is operating. Normally, the first phases of verification can be done with self-financing by the initial team; successively the necessary investments will increase and external capital must be obtained.
These are the 4 steps, though they do not necessarily follow chronological order (because often they overlap or it is necessary to go back to a previous step), that can help in structuring a minimum viable product in science based startups in order to obtain initial confirmation on the market and make presentations to potential investors – venture capital or consolidated companies – who could be willing to invest in the growth of the project.
