Nanotechnology rarely, if ever, reaches the end user in its raw form. This means that a nanopreneur must give thought to how and where a new venture will be situated within the value chain of businesses and transactions that will eventually result in delivery of a product that includes its nanotechnology to an end user.
This presentation by Dr. Stacey Frederick of Duke University’s Center on Globalization, Governance & Competitiveness offers a model for the general nanotechnology value chain. A nanopreneur can use this as a starting point for thinking at a high-level about where a new venture will need to be situated within and/or across four organizing categories:
- Nano materials: nanoscale structures in unprocessed form
- Nano intermediates: intermediate products with nanoscale features
- Nano-enabled products: finished goods incorporating nanomaterials
- Final market product: market channels for nano-enabled products
Digging a little deeper, these categories offer a useful framework for a nanopreneur thinking about the specifics of how his/her new venture’s technology will eventually make it into the hands of the end user, specifically what the new venture will do and what it will depend upon others to do. Here are two examples:
Making fabrics more functional: Nanotex was founded in 1998 by David Soane, PhD, to “replicate the natural water-repellency of plant surfaces and animal coats.”1 It was acquired by Crypton in 2014. Nanotex’s current website describes the company as a “leading fabric innovation company providing nanotechnology-based textile enhancements to the apparel, home and commercial/residential interiors markets.” To move its technology through the value chain Nanotex licenses mills to use its various technologies and works with fabric and garment companies to find a licensed mill(s) to meet their needs. Thus Nanotex’s direct customers are the mills. Were it not for the tags Nanotex provides for retail labelling of finished products it’s role would be invisible to the end user.
Based on this background and using Frederick’s categories, Nanotex operates in the nano materials category with Nanotex licensed mills occupying the nano intermediates category. Crypton (since acquiring Nanotex) spans the entire value chain for home furnishings but not for the apparel industry, which Nanotex serves through its network of licensed mills.
Building more colorful displays: There is a lot of excitement about the potential for quantum dots to enhance color quality in displays and thus the viewing experience. On their websites, two competing companies, Nanosys and QD Vision, articulate different approaches to the technology but position themselves similarly in the value chain in terms of getting their technology into the hands of end users. Both manufacture quantum dots, embed them in their own products, partner with complementary companies to mitigate gaps in capabilities, and work to integrate their products into their customers’ products.
Based on this background, both Nanosys with its QDEF® quantum dot enhancement film and QD Vision with its and Color IQ™ optical components span Frederick’s nano materials and nano intermediates categories. They depend upon their direct customers and their customer’s wholesale and retail channels to reach the end user with a nano-enabled final product.
Thinking beyond these examples, what questions would you as a nanopreneur be thinking about when it comes to a new venture’s place in a value chain? Here are a few to get your team’s conversation started:
- Is this the right value chain for my new venture?
- Where in the value chain does my venture need to operate?
- Where in the value chain does my venture want to operate?
- Where in the value chain is my new venture best able to compete?
- Can we contract with a manufacturer or does our new venture need to develop manufacturing capabilities and/or capacity?
- Will our direct customers have the expertise to build upon the product we provide to them or do we need to provide services/expertise?
* Tim Moynihan, “What are quantum dots and why do I wanted them in my TV?”, https://www.wired.com/2015/01/primer-quantum-dot/ and all other external references in this post were retrieved November 8, 2016.