"UCI Applied Innovation and the Cove are incredible opportunities for current students and researchers to take advantage of all the resources UCI offers students under one roof, particularly the Invention Transfer Group and entrepreneurship training."
– David Cuccia
Founder, Modulated Imaging
MARKET SIZE, DYNAMICS AND POTENTIAL
What is the market size? Is it growing, stable, or shrinking? When analyzing the market size, it is important to focus on the addressable market that the product will specifically benefit. (For example, the addressable market for a new high power, extremely bright LED bulb, is not likely to be the entire lighting industry, but rather, the automotive or entertainment industries interested in automotive headlights and stage lighting. This technology may be the wrong fit for residential or other uses.) Is the market controlled by a few players? If so, how will your company enter the market and/or overcome market barriers? Of the addressable market, what share can be obtained by your company?
Now that you have identified and assessed the market size, the next step is to understand your competition in that market. Are there products already in the market that address the same general need? Is your product sufficiently differentiated from competing products and/or does it offer a significant advantage over existing products? If so, how is your technology better? Are there other companies that are developing technology that would directly compete with yours? If so, what is their stage of development and why is your technology better?
INTELLECTUAL PROPERTY (IP) PROTECTION
Your IP should give you a competitive advantage. Based on your understanding of the market and your competitors: What is the best form of IP to protect the technology? Is broad protection possible to secure? Are any key intellectual property rights owned by someone else? If so, how will the startup acquire the necessary rights or re-design the technology to assure “freedom to operate”? Can the company employ multiple forms of IP rights, such as a combination of patents, trademarks, copyrights and, later in the company’s development, trade secrets, to strengthen and supplement protection of its products and services? Will it be more advantageous to treat certain aspects of an invention as a trade secret and not file a patent application?
What further research and development will be needed to get the technology ready for commercial sales? What are the key development milestones? How long will it take to achieve these milestones and how much funding is needed to achieve them? What are the development risks, including full failure points, and how do you anticipate mitigating these risks?
Are any regulatory approvals required? If so, what is the history of similar products obtaining approvals, have you sufficiently accounted for the length of time and funding in obtaining approvals and what is the risk that the approvals will not be secured?
Based on the amount of funding required to develop the technology for commercial sale, is it possible for investors to achieve their necessary rate of return? Please note that different funding sources have different needs when calculating their necessary return on investment. For example, the federal government would not expect any return on investment when awarding a grant. In contrast, venture capital firms each have a return they seek to achieve, which could be as high as ten times the invested funding. The required return on investment can vary, so it is important to research individual investors, when possible, in addition to market standards.