Part of the problem is Australian entrepreneurs aren't internalising some important concepts regarding innovation as others are. As a result, less inventive countries with worse universities and poorer graduates are beating us at the startup game!
UQ lecturer Tim Kastelle says our problem is much like the one experienced by Mousetrapia: we are building better mousetraps; or, solutions to problems that don't exist.
Mousetrapia: Solving Problems That Don't Exist
19th Century essayist Ralph Emerson is credited with saying "build a better mousetrap, and the world will beat a path to your door." Well, there are more than 4000 registered mousetrap patents and hundreds more are submitted each year, and yet you probably only know of one. The same one as everyone else; the only one that was commercialisation ready.
Some problems have simple solutions. Have a problem with mice? Buy a mousetrap (or get a cat). Simple problem, simple solution.
Yes, a mousetrap with IoT capabilities is a cool idea, I'd probably share it on social media too, but it's an unnecessarily complex solution to a simple problem that was solved over a 100 years ago. Ergo: it's not commercialisation ready.
There isn't much point in being a leader on the mousetrap problem in peer-reviewed papers, patent applications, and R&D, as Mousetrapia is. Take one look at the NASDAQ and you will see there are over 600 billion reasons to be the leading internet search engine.
The solution to Australia's startup problem isn't more peer-reviewed papers, patents and research & development (although those certainly wouldn't hurt). It begins with Australians recognising that building better mousetraps isn't the path to riches. Solving real problems with solutions that are as simple as possible, but no simpler, is the solution.
So how do we do that? It starts with understanding the two common commercialisation readiness metrics: Technology Readiness Level (TRL) and Investment Readiness Level (IRL), and then combining them!
Technology Readiness Level
As NASA grew in size and reputation, its network of suppliers and collaborators started becoming unmanageable. Their solution was Technology Readiness Level.
When approached with a technology by a new supplier or returning collaborator, NASA would invoke TRL to grade it. The purpose was to determine whether or not NASA should invest in the technology, and, when not, to reveal how the would-be supplier or collaborator could make the technology NASA-ready.
The lack of a TRL number (TRL 0) meant an idea was completely unvalidated, and each progressive level of readiness denoted a certain degree of validation. For example, TRL 1 indicated that the basic principles that underlie the technology had been observed and reported and TRL 4 indicated that technology had been proven in a lab.
The principles of TRL are used by other government departments, as well as suppliers and collaborators worldwide. This last part is important. Rather than building the equivalent of better mousetraps (solutions NASA and other potential partners don't want), smart suppliers and collaborators use TRL as a guide when developing new products and services.
TRL is common among innovative organisations, and can be readily adapted to an organisation's particular needs. Steve Blank has reworked TRL into what he calls Investment Readiness Level. Where TRL is best applied to physical products, IRL can be readily applied to digital products and services.
Investment Readiness Level
While TRL was tailored to NASA's needs, IRL is more general and can be applied to B2C startups, including those without a technology product, as well as other organisations.
Broadly speaking, TRL and IRL cover much of the same ground, but there are some important divergences. For example, TRL is very yes/no. TRL 4 is essentially asking whether it works in a lab. On the other hand, IRL is riddled with subjectivity. For example, market size/competitive analysis and several levels of validation through user interviews and tests.
A key component of IRL that is absent in TRL is IRL 3: problem/solution validation. To be at IRL 3 it's expected that you have completed at least 60-100 interviews in which you have invalidated at least one potential market, discovered a problem, and validated your solution.
The reason that this step (which can appear comprehensive) appears so early in IRL is because the primary concern of IRL is need. Is the product/service needed? It's better to discover that it's not needed rather than releasing a solution to a problem that doesn't exist.
TRL doesn't stop you from building better mousetraps, IRL does. So which should you apply to your business? Which metrics matter?
Metrics That Matter
It's important that Australian entrepreneurs recognise that the solution to our commercialisation problem isn't more peer-reviewed papers, patents and research & development (R&D), it's recognising that building better mousetraps isn't the path to riches. As Tim Kastelle says, we are building solutions to problems that don't exist.
To be commercialisation ready, ideas need to solve real problems with solutions that are as simple as possible, but no simpler.
The best way to start being more readiness conscious is to understand TRL and IRL and apply them to your business and it's products/services. Both of them.
TRL helps you discover if your idea solves a technical problem and IRL helps you discover if your idea addresses a real need. Your idea is worthless without both.
All great new products and services begin as ideas, by understanding TRL & IRL and applying these in unison. You can better understand when your idea is commercialisation ready. Do this and the world will beat a path to your door.