Elena Timofeeva, PhD

Final proofs of my Chemistry Entrepreneurship book chapter.

Abstract: Energy storage is the key need and enabler of the future renewable and carbon-free economy. Currently thousands of research groups around the world are developing new battery materials, new separators, new electrolytes or a totally new battery chemistries. But how do these innovations get to the market? The purpose of this chapter is to provide clarity on the potential commercialization paths and perspectives for researchers and inventors working in the energy storage space. The chapter presents multiple case studies of successful and failed battery startups, analysis of energy storage industry landscape, and step-by-step algorithm for developing a commercialization strategy for the specific type of battery technology.

Last 6+ weeks I was a part of something very special.
I participated in the program on self-organising teams from .space. When I signed up for it my schedule was tight, the description of the course was a bit vague, course schedule was dense with daily meetings, but my gut feeling was telling me that I need to see it for myself and NOW is the right time.
I expected to get some knowledge on the project management tools that are used in most progressive Silicon Valley companies, which .space team has masterfully delivered. They presented an integrated approach to the subject, where each tool complements other as an orchestra. Besides that I also got to experience the power of remote collaboration of people unified with common mission, vision and principles and this can truly make the team unstoppable, and how some minor missteps can make the whole team and effort crumble. Some new neuronal connections have been formed, which make me see people and the future in a different light. It will take some time to truly unpack this experience, and I will try to share my insights here.
I believe this methodology, if properly adopted and used to the scientific and research process, can be transformational for our communities and the future.
I also got to meet great people and had very socially intense weeks. All online, all while doing my regular stuff. At times it felt like multiple parallel realities colliding.
Many thanks to and .space team for such a valuable experience. To my Russian-speaking readers - my highest recommendations for you to join the next cohort of this program!

Some of upcoming SBIR/STTR opportunities:

Department of Defense (DoD) Air Force SBIR 2021.2
Pre-release: April 21, 2021
Open: May 19, 2021
Deadline: June 17, 2021, 12pm EST
Phase I Budget: up to $50k for three months
Phase II Budget: $750k for 15 months

National Science Foundation SBIR
Deadline: June 3, 2021, 5pm applicant’s local time.
Phase I Budget: up to $256k for 12 months.
Phase II Budget: up to $1M for 24 months.
Project Pitch: Accepted any time.

National Institutes of Health (NIH) Cycle III
Deadline: September 5, 2021, 5pm applicant’s local time.
Phase I Budget: up to $256k for 12 months.
Phase II Budget: up to $1.7M for 24 months.

Academic and entrepreneurial worlds exist in parallel, each having its own prides, resources and deficiencies. As a career scientist turned entrepreneur I lived in both mindsets, and although in theory they should be working together creating 1+1=11 kinda synergy, this rarely happens. We will go live with this Saturday, April 3rd at 1pm CST to discuss issues and strategies on how to make the best out of academia + business engagement. Join us to share your thoughts and ask questions!


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15. NON-TRADITIONAL IP GAME PLAN

Keep in mind that the IP landscape is very dynamic, with tens of thousands of battery patents being filed, issued, and abandoned each year. Furthermore, the patent does not guarantee protection, unless it has been challenged in court. Therefore, just as with business strategy, startup founders have to be inventive about their IP strategy, because having the freedom to operate is critical for any business.

Besides the formal and traditional patents, copyright, trademarks filings, companies have found another IP strategy: maintaining trade secrets in combination with strategic public disclosures. Trade secrets are confidential information that help the company to maintain a competitive edge. Trade secrets may include manufacturing processes and equipment, sales and distribution methods, consumer profiles, advertising strategies, lists of suppliers and clients. Unauthorized use of such information by persons other than the holder is regarded as an unfair practice and a violation of the trade secret. While trade secrets protect against misappropriation of inventions that are kept secret, by former employees, or espionage, they do not protect against independent discovery or reverse engineering.

14. INTELLECTUAL PROPERTY HUSSLE

When you work as a scientist at university or a national lab you are encouraged by management to report all your inventions, and if the tech transfer department decides they like it you may score a patent application with your name as an inventor (YEAH!). The caveat is they are paying for it and you assign all your rights to your invention to university. In the future if academic inventors decide to form a company after their academic institution has filed for a patent, licensing the technology from the university can be an additional headache.

While some institutions are extremely supportive of their spin-outs, offering good licensing terms, the general attitude of university technology transfer departments is focused on potential revenue in light of successes of IT and BioTech startups. They base their “easy licence” on “comparables” and refuse to consider the commercialization challenges, timescale, capital intensity, low profit margins that battery startups have to work through. We have spent 4 years negotiating our patent with university with tech transfer departments changing and restructuring, lots of time spent, lawyers involved, but eventually had to abandon the effort and invent around the patent we authored, and naively assigned to the university. That was an expensive, but very valuable lesson that taught us the nuances of IP law and forced us to think creatively on IP strategies.

13. INTELLECTUAL PROPERTY STRATEGIES - 1

Patents are a prerequisite to protecting some of the most valuable aspects of your intellectual capital and are thus a key to competitive survival. Every startup should assert strong IP protection from the very beginning. Many instantly associate IP protection with patents, which is parts of it, but not many realise that patents cost money. A lot of it. The average American patent runs around $100,000 over a patent’s lifetime. Filing and maintenance fees alone often run between $30,000 and $40,000, with international patents costing as much as $400,000 over a patent’s lifetime depending on the countries of coverage. This is a very costly proposition for a battery startup looking towards bootstrapping and government funding during the initial development phases. In the next few posts I will share some of my experiences and creative IP strategies.

12. ISSUES IN STRATEGIC PARTNERSHIP

The activities of a strategic partnership can also include a shared research and development department between the partners. This requires a higher level of knowledge sharing and sharing of technological capabilities. In forging this kind of partnership, the costs and risks of innovation can be spread between the partners.
Despite many advantages, strategic partnerships also raise questions concerning co-inventorship and other intellectual property ownership, technology transfer, exclusivity, competition, hiring away of employees, rights to business opportunities created in the course of the partnership, splitting of profits and expenses, duration and termination of the relationship, and many other business issues, that need to be addressed in the process of establishing the relationships.

11. STRATEGIC PARTNERSHIPS-3

Strategic partnerships can develop from outsourcing relationships where the parties desire to achieve long-term “win-win” benefits and innovation based on mutually desired outcomes. In a strategic partnership both parties possess one or more business assets or have expertise that will help the other by enhancing their businesses. Particularly for battery startups, which usually possess the knowledge and intellectual property for a new battery technology, strategic partnerships can be with a customer or with a raw material supplier.
A critical component of strategic partnerships is a trust-based relationship between the partners, regardless of whether a business contract was signed or not. When looking for strategic partners, consider a company with complementary, not overlapping expertise, markets and business models.

10-2. STRATEGIC PARTNERSHIPS CONTINUED

Strategic partnerships take time to develop. A typical relationship begins with a demonstration project in which the startup’s battery product is tested in the partner’s product – a battery pack for a drone or an electric vehicle, or a new electrode material, for example – in the partner’s battery assembly line. Such a partnership advances both businesses, by providing marketing and market expansion for a startup, while also improving the partner’s product through introduction of a novel energy storage technology.

One common strategic partnership scenario involves one company providing engineering, manufacturing, or product development services, and partnering with a smaller, entrepreneurial firm or inventor to create a specialized new product. Typically, the larger firm supplies capital and the necessary product development, marketing, manufacturing, and distribution capabilities, while the smaller firm supplies specialized technical or creative expertise.

10 STRATEGIC PARTNERSHIPS

Strategic partnerships seem to be a common critical component in the battery startup success stories. In strategic partnerships the relationship between two companies can take on various forms: handshake agreements, contractual cooperation, or equity alliances such as formation of a joint venture or cross-holdings in each other’s stock.

Strategic partnerships can develop from outsourcing relationships where the parties desire to achieve long-term “win-win” benefits and innovation based on mutually desired outcomes. In a strategic partnership both parties possess one or more business assets or have expertise that will help the other by enhancing their businesses. Particularly for battery startups, which usually possess the knowledge and intellectual property for a new battery technology, strategic partnerships can be with a customer or with a raw material supplier.
A critical component of strategic partnerships is a trust-based relationship between the partners, regardless of whether a business contract was signed or not. When looking for strategic partners, consider a company with complementary, not overlapping expertise, markets and business models.

9 VENTURE CAPITAL

Most entrepreneurship courses suggest considering angel investor funding for early stage startups. However, angel investments are not feasible for battery startups, due to the risk and amount of capital needed for success. In a typical angel deal, investors are comfortable with offers of $50,000 to $500,000 investments in exchange for 25 to 50 percent of the company’s stake - a completely unreasonable arrangement for companies that will need tens of millions of dollars to build a functional prototype. Of course, there are exceptions and “super-angels” out there, but it is advised to exercise caution when considering this funding route as a battery startup.

Venture capital can be dangerous and has to be taken at the proper time and amount, specifically when the company is ready for rapid growth and expansion. For a battery company such a stage could be after a successful demonstration of a prototype and readiness for its manufacturing scale-up. With this milestone achieved, the company’s valuation goes up an order of magnitude, making investment more palatable for both investor and the startup. Our case studies show that average series A round in the battery space is $5 to $10 million.