From Lab to Market: Commercializing Deep Tech Innovation. A chat with Marc Perron, Deep Tech Commercialization Expert @Alizem

First let's granted that you have a technology. In the end, you know, let's say you know the all the IP side is, is okay and you can talk about it, you know, you, you. Because you know there's technicalities. But let's say the IP side is okay. I have a great technology so the first thing you do is not to improve the technology. So there's a 98. They will go in the lab and say oh the, the communication, the sensor, they see this, they can. No, you take a sheet of paper and you draw with a pen and you draw something that looks like a product first.

Welcome to Deep Tech Catalyst. The channel by decinerinist where science meets venture. Together with global investors and experts, we uncover how to turn breakthrough scientific discoveries into investable deep tech startups. Welcome back to Deep Tech Catalyst. Today we have Mark Perrot, business consultant and deep tech expert. Hi Mark, it's a great pleasure having you with us today.

Thank you. Thank you, Nicola.

So you have a deep expertise in deep tech commercialization? I've been involved in numerous technology focused projects ranging from TRL from 3 to 9. Consequently you have seen many times the entire spectrum of development from the initial phases to the industry integration to start. Could you please share some more about you and your background, please?

Yes, of course. Thanks for having me. It's a very, very pleasure. I'm very pleased to be here. My background, you know, you need to understand that I come from a bit nerdy family. I start to pro. I thought, I start to program in 1983. So it's, it's a very far. Yeah, my, my, my father was you know, liking the, all the computers and the gadget and he's still like this, you know, so fast forward. I, I did a PhD in electrical engineering. So that's my background. My background is actually power electronics, anything related to embedded systems, semiconductor, that type of stuff. But I'm not a scientist. You know I have PhD, but I'm not a scientist. I'm more entrepreneur and a salesperson. So my drive is not to understand nature and do things. You know my, my, my drive is to have it happen to improve quality of lives. And, and, and for me the, the way to do it is, is to, is to market product because you know, you can think about you know, ideas or things but if at the end of the day not that million of people will use it or benefit from it, you know, you're not, yeah you know there. So, so that's my goal. So that's, that's why you know, entrepreneurship and startups and you know, building company is, is a great way to achieve that. So, so that's my background. So I come from. So, so I, I've been 15 years now into deep tech as entrepreneur myself, you know, in the field of semiconductor, in the end software and also I always kept the role of, of coaching new companies coming from university. So I've coached over, I don't know the number, but over 30 companies now that have raised hundreds of dollars of venture capital. And I have to say that I'm not in, you know, I'm in deep tech. But in deep tech there's life science. You know, you are md. You know, I know the biology stuff. I'm not in this. I'm not in this. But it's the same principle. I'm on the, on the engineering side which are anything but not life stuff. So medical device is okay, it's a device, it's electronics, but it's not biology.

Yeah. So starting from here, could you explain the differences between SaaS companies and deep tech companies focusing the perspective of commercialization?

No, it's completely different. You know, software as a service is only a business model. Actually, you know, Google is a deep tech company and they, they are a free, no, they have a free product and somehow they end up to be some kind of software as a service. But so deep tech and, and SaaS is okay. No problem is the, the difference is on the IP and the tech is does it come from a garage? Does it come from anybody is in garage tweaking things. You can do things with websites, you know, and basic websites. You know, you can have an idea on the Friday night and sell things on Monday, you know, it's possible but in deep tech you're not there. It's. You have by, you know, deep scientific R D that takes years and at the end of the day it's still a tech is still maybe an algorithm that you put on a website, but it's, you cannot code that type of thing in two days. It's impossible. So that's why there's a, you know, a very important difference between I would say general tech, you know, that you see on TV and on the papers and that's okay. But if you look the, the product is very simple and the tech is just mastering some kind of WordPress things, you know, which is completely different than having deep tech company where the technologies, you know, patents, research, blah, blah, blah. But that do that do something that's. It's basically magic, you know, it's It's a, and then you have a product to, to, to offer that to the customer and you may end up as a software, as a service company. Yeah. So it's different. It's the type of, of, of business versus a business. I would say a revenue model.

Yeah. And in your opinion, what are the main challenges that scientists face when moving technology from the lab to market?

I think the main thing and, and the main thing is to get out of the university or to get out of their research. You know, it's a very important, if I can, because we can speak for hours about this, but if I can sensitize and send a signal to, you know, the audience is you need to get out of the university. That's the, the, the biggest challenge. And you don't know how much university and academic is in your head. You know, you're, yeah, because you, you do Ph.D. and you're 25, you're, you're young. You cannot have a career of 20, 30 years when you're 25. You know, you're, you're young. What, what you know is what you see. And you've been a grade school and you, you saw no professor and you think that's life. And that's not life. Sorry. It's, you know, in the whole equation of the hero, you know, the tech is going to be probably a 5% of the story. So, so you need to, you need to just be aware that university is just the early beginning of the story. And, and, and a good test to do this is if you, if you see something, okay, if you see something and you see an opportunity, if your first I would say reflex is to say, ah, it's, it would be a great research project. Sorry, your, your brain is controlled by, by your research, you know.

Yeah, probably not the good attitude.

If you see that, oh, that would, oh, that could be in a product that, oh, people could benefit from it. And there's a lot of people that could, hey, I want, I want to use it to improve those, the life of those people. Ah, then you may have the track of, you know, going to market. But it's important you, it's important to know that so that to answer your question in your biggest challenge is to get out of the university. And that's the first thing I say to researcher or to new entrepreneurs. It's a, it's okay. And, and in some parts of the world, just for information, like here in North America, researcher and, and an entrepreneur, they work together and I think this is good. But in things like in, in, in place like Israel. They basically separate the two. You are a researcher and they put a wall and then there's the entrepreneur and there's no, basically no connection. That's another way to do it, but just to send you a signal that you need to get out of the university and that's your biggest challenge.

And focusing on the market. How can aspiring deep tech founders understand that their product idea will succeed in the market? And what are the most common errors to avoid it in defining a market? Let's say a market niche.

Okay. It's very good. First, to answer your question, 9, 9, 95 out of 100, you will not succeed. You know, it will be bad. Okay. It's just like, you know, I'm a good runner. I want to win a gold medal at the Olympics. Very good. But chances are you're not going to win a gold medal.

Yeah, this is, this is a motivational podcast.

Yeah, but you know what? No, but if, if it drives you, you know, and hey, hey, hey, I will win this medal. Okay, that's very good. But just, just let you know, it's, it's just, it's not because you decide to have a gold medal in, in running that you will win one. Yeah, it's going to be hard. Very hard. Same thing. Same thing. You won't change the world. There's so much inertia, you know, in the world industry. You won't change the boat, you know, easily. It's very, very tough. But you have, you have tools to do it. And tools to do it is technology. Very good. You're in the good track. So how to, so how to assess if I have some chance to win? Okay. I will tell you something that basically nobody do. And, and, and that's very easy to say to, to, to do is first, let's granted that you have a technology. In the end, you know, let's say, you know, the. All the IP side is, is okay. And, and you can talk about it. You know, you, you. Because, you know, there's technicalities. But let's say the IP size is okay. I have a great technology. So the first thing you do is not to improve the technology. So there's a 98. They will go in the lab and say, oh, the, the communication, the sensor. They see this. No, no, no, no. You take a sheet of paper, okay. And you draw with a pen. Okay. And you draw some, something that looks like a product. Okay. First spread it and then say, oh, okay. Okay. This product is what industry? Okay, it's aerospace industry. Is agriculture industry. Okay. I will meet people in my city, not, not in the other country. I will meet people in that city, in my city that come from this industry. So retiree people, maybe people working in a company like people in this industry. You will book a lunch. Okay. And then you will simply talk about the product and listen about what they have to say. So, so that's a very, very, very cheap way you may win, you know, free lunch. Free lunch. If let's say you talk with 10 people in your city, chances are they're going to, you're going to see things that all those 10 people, they say basically all the same things. So that's the macro side. But they also will give you advice on oh, your tech or your product. It's not exactly that. The good word in the industry to call what you have in front of me is this thing and then it opens a new world because they, you know, it's not like you thought that it was a sensor for them. It's not a sensor for them. It's electronics for mining. I don't know. You know, it's not, they don't use the sensor name, they use another name. So, okay, you were not knowing that.

But you identify the unmet need.

Yeah. And do that. It costs nothing. You will get free lunch. And, and at the end also. And when you're going to meet investor and they're going to say do you have traction? And you go, you, if you say I don't know, I was in the lab or if I say oh, I know a bit because I, in my city I have identified let's say 10 people in this industry. I met all of them in one month and here's what they said to me. Oh, that's a very positive signal.

Can you share some talks about the differences between a nice to have compared to a must have?

That, that, that's a very important question because you know, if you have a nice to have you, you will see it. And, and I, you have no idea how it's. It's black and white. It's black and white.

Yeah.

When, when you have a, a must have product, people call you back and they ask when it's going to be ready. When you have a, a nice to people say oh, that's cool. And they forget you and then you need to come back to them to get back to them. But of course you, you will go back to people in any situation. But the, the, the real difference, the real difference is when you, they, you meet people and this you have when you meet people and say I, I, I, we met together and since then I think about this in every day. And I would pay right now let's say 1000k to have it. That's a must to have. You know, you want to have this, but, but you cannot invent this. But you not you cannot invent this. And I will go back to the definition of a technology. The, you know, the, the, the, the, the cliche is say if I ask my customer what they want, they want to have a faster horse, but I give them a car. Okay, that's, that's great because basically if you go to your tech, your tech should basically be okay. There's all ores in the market. But my horse is speed is not the 1.1. The typical horse. The speed of my horse is 10x. You know, 10x of any other horse. Any, any other. So that's, that's amazing. Okay, so, so, so that's, that. That's the core of the tech. So basically what you want to do is have such, such horse, but you have to have it in a form factor that acceptable for the, the user. And, and but if, if it goes very fast, maybe he stinks, maybe he does a lot of, of of sound. You know, is it. But they go fast. But so, so a lot of people will say it, it stings, I cannot have it. It's great, but it stings. So the form factor is bad. Okay. But you are gonna find a few applications and, and those applications they're going probably to be new application and then you have a must have product probably. That's, that's the difference. And, and one, one on another point, even though you have a 10x hours if that typical or price is 1k but your horse, you can sell it to $10 million. So sorry, you know, even though it goes very fast, the price point is, is, is, is too. Maybe you can sell a 5K, you know, five times but not orders of magnitude. And so it. When you, the product form factor you also need to integrate the, the form factor. But the conditions in which you can sell it and the price is one of those conditions.

And in this regard let's assume that you have a working prototype at your L4 or 5 and you have got a positive feedback from a potential customer segment. What are the key metrics to prioritize to demonstrate to investors that you have gained enough traction in the precedent seed stages?

Yeah yeah. Actually you know, if you are a TRL 4 or 5, you actually have feedback from the customer. Normally you know, at that point to have, we take for granted that your solution technically is okay, you know, 90, maybe 9, 80 of the, the feature is okay, but the, the, the, the, the what is going to be changed? The very key is the quality of customer. So sometimes I, I, oh, we have a NASA or we have CERN as customer. Sorry, that's R D centers. They are, it's not something that you can repeat. You know, it's, it's very high profile. You may get millions from them, but from a funder, funder point of view, you know, from a venture capital point of view, it's not something that you can scale and replicate. So, so it's important that let's say you have to choose between two customers in your city. You have two customers, you have one customer, it's a small company, that's a small company and they have one shop and that's it. Or the other one is a larger company, but they have let's say, 10 business units in the world.

Yeah.

In let's say they have other plans. You should, you should maybe for many reason. You may choose the, the one with the 10, 10 plants because if you sell to this guy, then you may have a chance that if it works well, you're gonna sell to the, the nine other plants. You know, so that's the type of things you need to have in mind. So in front of the, of the, of the investor. Yeah, the quality of the customer is very important. Oh, okay. That type of company, they, they are interested. So we know that okay, just in Canada or in Italy, that type of company, we know if there's only one or two or there's let's say, hundreds of companies. So, so it's a way also, you know, if I'm able to sell the product just here in my city or in my state, that's, that's something interesting because here in Canada, if I, if I sell here in Quebec in my state, then I can, I sell two in Quebec. So I can say, oh, I can, I can sell 20 in Canada and I can sell 200 in U.S. know, it's easy to do as. So, so, so if it is important to keep in mind those metrics so that in, in the view of the investor. Okay, if it works, we already have some kind of scaling.

Yeah. And focusing on this topic, here's a question for you related to scaling. Can you explain in simple terms the differences between freedom to operate an IP in a perspective of commercialization. It's really important to understand when planning, when the Startup is trying to scale in different countries. So I would like to hear your thoughts about it.

Yeah, yeah, yeah, it's very. Okay. Yeah it's a very important concept for information FTO have freedom to operate.

Freedom to operate.

If you, if we check here, big entrepreneurs, major entrepreneurs, they, they do articles and in journal on this topic because it's so important. You know, IP is, IP is, is your ownership. You know, it's you own something, you own invention. Okay. You own a house on a land. Okay. But to access that house are you, can you directly access that ice house or, or you can scale the house on, on other lands just nearby or you have neighbors.

Okay, if, if it's a great example.

If to go, to go to this land I need to pass on my neighbor, you know, place my neighbor needs to tell me to grant to me, you know, some kind of license or you know, to grant me the right to go on his land, to go on my land, you know, so, so freedom to operate is exactly. This is, it's not because you own or you have access to IP that this IP is not on the land of other people as well. And just to give you an example right now in the field of batteries, you know, batteries, industrial batteries for automotive, for machinery, you know, the world is currently electrifying, so everybody has his own idea for doing batteries. But you know, if you, if I, I may as a researcher have a right get some kind of IP on, on the, on the batteries. But if you look at a company like Caterpillar, major machinery company, just on the batteries, last time I checked they had 300 patents just them on, on. On the, on the design of batteries. So yeah. So what are the chance that your invention is, is completely different or, or not included in the patents of Caterpillar?

Yeah, it's something that investors probably look at when you're conducting a due diligence for your startup project.

Actually there's, we need first if the answer to this is, I don't know is very bad, very bad. If the thing the, the answer to this is we did our homework and we know that caterpillar has 300 patents. But okay, the, on the analysis, there's only 10 patents that are relevant to our field. Okay. Our strategy to, to, to, to avoid or to complement those patents are the following. And maybe if you're a good entrepreneur, you're going to do a deal with Caterpillar, maybe to have a license on their technology because they, they use it in machinery, but maybe you use it in a field that they won't use it. So, so you get the right. And then you have the freedom to operate clean. Very clean. But if you think that you will, you will reach 100% certainty of freedom to operate. It's. It's impossible. Yeah. So you have to do some kind of basic homework and just be diligent on the major risk. And, and if you do that, chances are that you're gonna be good. But you, you need to do the strategy on your side, but you need to have also a lawyer that's going, or a patent agent that's going to help you to do this, because, you know, you may know the technicalities, but the, all the legal and the way to do it and cleanly, you should work with a patent agent or a lawyer to finish the work. So maybe 80% can be done by technical people, but there are certainly 20% that's done by the lawyer.

Okay, Mark, this is the end of our conversation. I thank you a lot for your social and your experience and your time and the insights you provided.

My pleasure, Nicola. If anybody has a question, they can reach me on LinkedIn or on Twitter. I will be pleased to answer them.