• Alec Sorensen

Keeping Up in the New Space Race



We are in the midst of a new space race.


This time, national governments have been supplanted by well-funded, high-growth companies with astronomical ambitions. Driving this renaissance is an infusion of venture capital combined with the entrance of diversified technology companies like Facebook and Amazon that can bring to bear 100s of millions in cash to tackle enormous space infrastructure challenges.


In response to the influx of capital, IP generation has exploded too, growing from 1,000 patent families in 2013 to 2,800 in 2018.




While this infusion of technology and capital is healthy for the industry writ large, it creates significant challenges for companies that are not structured to attract and deploy capital as quickly or prolifically as their venture-backed peers. As technology development cycles get shorter, legacy space companies with long r&d cycles – developed to align with government development contracts – struggle to compete with smaller, more agile startups.


This dynamic isn’t limited to the space industry. Across almost every industry, market leaders struggle to maintain their positions against smaller, faster competitors.


One way companies can close this gap by is by finding and acquiring cutting edge IP. In doing so, they radically shorten technology development cycles while getting more out of their existing R&D programs. This week, we focus on how companies can more effectively identify the right IP.


Companies looking to license or acquire IP face a number of challenges. Even in an emerging industry like commercial space, the sheer volume of technologies and companies makes finding high-value, actionable opportunities extremely time-consuming. Without a single place to find all available technologies, scouting is even more difficult. Faced with these headwinds, many companies decide to simply establish a satellite office in Silicon Valley and hope they get a piece of deal-flow from other investors looking to syndicate deals.


Fortunately, the emergence of powerful new SaaS tools, including Tradespace’s Global IP Marketplace, enable companies to take a much more systematic approach to finding the right IP. Companies that are most effective at acquiring new technologies excel at three key elements: identifying the right hunting grounds, searching for the right technologies, and finding the people behind the technology.


Identifying the Right Hunting Grounds


For the past 20 years, has served as the technology scouting frontier for companies looking for new technologies. While the Bay Area has some of the deepest expertise across the broadest swath of technology verticals, it is not necessarily the best place to find actionable technology deals. Not only have other regions emerged as technology hubs, but increasing competition to fund hot new Silicon Valley startups has limited the returns companies get from the network effect.



Like commercial space technology, blockchain opportunities are no longer limited to the Bay Area

With the emergence of new tools that can consolidate all global IP on a single platform, companies no longer have to pick a physical location and wait for deals to come to them. Instead, they can proactively identify and engage organizations. The question then becomes which types of organizations to target.


Federal Labs and Universities have always been attractive sources of technology; however, it was prohibitively difficult to see what technologies a given research institution had, let alone compare portfolios across different organizations.


Using our IP Marketplace Platform, we can quickly screened the research institutions with the strongest portfolio of Space technology, ranging from propulsion, to satellite communications, to command & control. As the chart below shows, a series of high-potential hunting grounds quickly emerge, allowing us to focus our resources.





Another untapped hunting ground is the startup landscape. This may seem like a strange claim given our earlier points about the competition for access to startups. However, we find that by focusing only on “low-risk” startups that are raising large, syndicated rounds, companies ignore most of the opportunity space.


The startups that ultimately failed in 2018 raised a total of $1.4B in capital. Most developed innovative technology platforms that had the potential to disrupt commercial markets. Because of the VC industries binary view of success built around billion dollar exits, little is done to salvage this technology after a firm fails. Companies that find this IP are often able to repurpose their IP for pennies on the dollar.


In a similar sense, companies that are too early to attract venture capital can be ideal targets for corporate pilots or co-development. Again, these opportunities can allow a company to access potentially game-changing technology at a steep discount.


Searching for the right technologies


Once you have identified the right places to look, there is still the question of finding the RIGHT technology. By its nature, intellectual property is often relevant across a number of different applications. Just because a patent doesn’t mention satellites doesn’t mean it is not relevant for a space-based internet solution. At Tradespace, we analyzed millions of patent documents to develop predictive analytics that can map the content of a patent to specific markets, even if the patent doesn’t mention specific keywords.


By taking a data-driven approach, we’re able to remove the human bias that often prevents people from finding the right technologies for a problem.


Even with powerful analytics, the perfect technology solution may not be readily available. In these cases, its important to identify the people behind the technology. Imagine a space company is looking for a specific plasma propulsion technology for a new generation of satellites. By engaging researchers with the strongest IP in plasma technology, they can shape their future research and even provide funding.


Time and time again, we find that the lack of a solution to a company’s problem is not due to insurmountable technical challenges, but instead because the right researchers aren’t aware there is even a requirement for that solution. By proactively reaching out to the right researchers, companies bridge a crucial communications gap that ultimately allows them to access technology tailor made for their needs.


Takeaways


As the latest space race shows us, neither traditional R&D nor passive technology scouting in Silicon Valley are enough for companies to maintain their competitive edge. Instead, companies need to by systematic and proactive in their approaches to acquiring IP, and to do that, they need the right tools.


This article is part 1 of our 3-part series on high-impact IP acquisition strategy. Over the next month, we will be using a series of case studies to look at how successful companies find the right IP, perform due diligence, and ultimately integrate it into the enterprise.


ABOUT THE AUTHOR

Alec Sorensen

A former management consultant to Fortune 500 companies, Alec founded Tradespace to speed innovation and revolutionize the way companies get value from their IP. Using data on 100M patents and advanced analytics, Tradespace makes it faster and easier for companies to source new technology, get innovations to market, and make smarter technology decisions.

Before launching Tradespace, Alec spent five years with Avascent, the top defense and aerospace consulting firm. He led engagements focused on strategic growth, commercialization and M&A. In addition to his corporate work, Alec helped the Canadian Government to reshape their IP policy to drive innovation. For more information, contact asorensen@tradespaceinc.com

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