During the February meeting of the Institute for Quantum Computing (IQC) Entrepreneurship group, postdoctoral fellow (postdoc) Rolf Horn spoke to us about the basics of business and start-up jargon, including information on intellectual property and business strategy. For scientists, sitting down to learn the definitions of business words can seem like a waste of time: many of the terms and concepts appear fluffy in comparison to those defined in quantum computing. But there are some very good reasons why you should know how to talk the talk.
Why do I need to know business terms?
When idly discussing a business ideas with your peers, it may seem unnecessary and even cumbersome to use special business words or phrases. However, pitching to potential investors can be very difficult when your idea is technical and requires expert knowledge in order to understand the basic principles behind it, as is the case in quantum computing. It's in these crucial moments that business speak becomes a necessary component of your toolbox. Below are some tidbits from Rolf Horn's February talk to the IQC entrepreneurship group.
Technology vs invention vs innovation
Is your business idea interesting enough to pursue? A quick way to determine this is to figure out whether your idea is a technology, an invention, or an innovation. Investors want to hear that your idea is an innovation, and knowing exactly what the difference is can help you spin it that way.
A technology can be seen as simply a capability, which must be incorporated into an invention and is difficult to pursue on its own. An invention is a device or method that has some usefulness or purpose. An invention typically incorporates existing technologies into one method or device to create something different from what is currently available. An innovation describes the incorporation of the invention into society, including a change in the behaviour of the consumer. Not all inventions have the potential to be innovative.
Where is my idea located in the market?
As Rolf explained, the market can be broken down into quadrants (Fig. 1). Quantum devices have the potential to be low end disruptions. This new technology can be introduced into an overserved market (where the products are seen as too expensive) to drive the growth of the new business. Research in quantum computing could also create a new market of ancillary electronics and equipment for quantum experiments. These inventions would probably be disruptive and could create new markets. The invention of the quantum computer itself could produce new devices or consumer products and would fall under the “radical disruption” quadrant, which has the possibility of outstanding financial success.
Which strategy should I use?
Many categories of business strategy exist, but some lend themselves better to quantum start-ups than others. Here are a couple of examples:
Cost Leadership Strategy: Produce low cost products or services (e.g. Walmart). A cheaper method of production of a device that is currently expensive would fall under this category.
Differentiation Strategy: Offer different products (e.g. an entanglement classroom demo to compete with classical physics demos and existing quantum demos).
Niche strategy (high barrier to entry): Specialize in a very narrow scope. Quantum products could very well fit under this category.
For more advice, information, and support regarding your start-up or general business skills, email Corey Rae McRae at email@example.com to join the IQC Entrepreneurship Group.