Embedded Files
This blog post isn't a guide for investors or startups. It’s rather a discussion, triggered by the thoughts that came out during the panel discussion, organized by European Space Agency (ESA) Business Incubation Centre (BIC) Estonia. The panel topic was as easy as the headline of this piece- attracting investment in deep tech. But discussions went way further, as the topic has more questions than answers and the road to attracting investments is long. So, what is deep tech, how to take innovation out from the labs, and is done better than perfect?
Firstly…deep tech?
Firstly…deep tech?
We have all heard and quite some of us lived within that definition. But for more clarity, let’s try to sum it up. Whatever source we use or google for the definitions, some key points remain the same:
providing technology solutions based on substantial scientific or engineering challenges[1];
Innovations are radical and have big effects. They have the potential to impact everyday life[2];
they might create new markets or disrupt existing ones [3], and that might take longer to achieve real market adoption
true innovation needs huge early-stage funding for R&D and prototype development. [4]
With these points clarified, the first thing I imagined was Henry Ford's quote, which he supposedly said. Yes, the classics: “If I had asked my customers what they wanted they would have said a faster horse.” He saw the struggle that needs solving, not just the need that customers said- this is innovation. Deep tech is on the same line, solving problems in new ways. There is no need to ask, are these innovations needed or wanted. Question is, how to do it more and more effectively?
Jan Bogdanov | Co-founder & Head of Applications Engineering
Taking science out of the lab
Taking science out of the lab
Scientific solutions often come from university labs, where the ideas have been marinated and tested for years. But whose responsibility is it to help to bring science and these scientific solutions out from the (university) labs? Is it the scientist, university, corporation, government, or some mystical creatures themselves?
It is clear that high-tech innovation in engineering or significant scientific discoveries needs a kick, a support system, and an entrepreneurial skillset, to come out to the market. But where to get it or how to understand, that this is the solution the world needs?
LightCode Photonics is also a university spin-off company. So how did it start in this case?
LightCode's origin has two roots – first, a recognition of a market demand obtained through private sector experience, and second, deep academic knowledge in a cutting-edge field.
The co-founders saw the market demand firsthand by working in a robotics company where it became apparent that existing technological solutions are either completely insufficient or restrictively applicable for solving the required problem. The ramifications of these unsolved or half-solved problems had a direct impact on the feasibility of business cases.
Soon after, the to-be co-founders recognized that their existing research could theoretically be applied to better solve the technical problems in the market and therefore enable many of the unreachable business cases. After completing the first proof-of-principle prototype, it was shown to a first investor, whom CEO Heli Valtna had met when working in the private sector. The investor, being technically fluent, saw the potential of the technology, understood the gap in the market, and became an advocate for the solution. In addition, together we could figure out ways how to better reach our future investors and explain both the problem and LightCode's novel technical solution.
Last, but not least: done is better than perfect
Last, but not least: done is better than perfect
So as our example is- put the entrepreneurial skillset, experience on the market, and science together - magic happens (firstly in the form of prototypes).
The academic world teaches us, that performance needs to be perfect. The business world teaches us, that innovative ideas need to be done. By done we mean that it's market-driven, and better done in prototype or as a minimal viable product, than perfect on paper.
Investing into deep tech might be hard, but (mostly) worth the shot. Seeing and solving the problems behind the scenes, and coming out with new products and solutions (that may not even have any competitors yet) is a great virtue. But the market often needs time to adapt and understand the value. And when these solutions are in an R&D phase, explaining and deep diving to show the potential, might be tough for some potential investors. And it’s totally okay, they don’t need to be scientists in your company. You need to translate your solution and value to them. You need to show them, that the problem you are solving is real, the solution is groundbreaking and viable.
What are your thoughts, regarding attracting investments into deep tech companies or how could we help and support the ecosystem, to bring more deep tech solutions to the market?
Thank you for the insightful discussions at ESA Investor Forum Estonia 2022
Moderator: Paul Liias | Ministry of Economic Affairs and Communications for Estonia
Panelists: Maud Moullec | European Space Agency
Jan Bogdanov | LightCode Photonics
Riivo Anton | Specialst VC
Page updated
Report abuse