Five Tips for Bringing Nanotech Products to Market

While each nanotech company has its own unique circumstances and challenges, some of the things that can increase the chance of getting a customer to buy a significant quantity of your nanomaterials, devices or applications are summarized as follows and further described in the subsequent sections.

Focus on harvesting the low hanging fruit

Develop “sellable” products

Regularly validate the commercial opportunity

Outsource non-core operations and special projects

Manage the customers’ purchasing process












































































































































































































Guest Writer - Gastautor - Gast Schrijver

Tips for Bringing Nanotech Products to Market
Copyright © 2004 Neil Gordon



As nanotechnology evolves from the laboratory into an industry, one of the greatest challenges still to be overcome is the penetration of nanotech products into mainstream user markets. While the promise of new materials, devices and systems has been promoted for years; the widespread presence of nanotech products has not lived up to some people’s expectations. So why isn’t this happening?

To answer this question one must look beyond the lab and view the situation from the perspective of a potential customer.

Unlike researchers who might perceive a significant product accomplishment as a functional prototype, prospective customers typically require results more resembling regulatory approved products shippable in thousands of units or tons per month, and having form, fit and function compatibility with an industry standard at a fraction of the price. And even if all this is attained, there is still a question of why a person with buying authority at a large corporation would press for the purchase of a new high-risk technology from a financially strapped nanotech start-up and potentially risk his or her career on the outcome?

Fortunately state-of-the-art technologies have been making their way into the mainstream since the invention of the wheel. And while it may vary from company to company, there is usually a process in place for firms to evaluate new products in order for them to decide on adopting next-generation technologies to replace the status quo. This applies whether the technology is bulk or nano.

It takes time and effort for nanotech companies to find potential customers, convince them to evaluate a new product, and ultimately have them purchase the product in commercial amounts. The timeline is particularly long when the target customer is a multinational or a government agency having as many as a dozen people who participate in the selection of a new product or supplier.

Nanotech companies face further challenges. In addition to the demanding tasks of completing product development, getting specialized equipment on-line, replacing key personnel who leave the team or not join when planned, scaling up the production of “real” products, conducting marketing activities and resolving the concerns of potential customers; nanotech companies have to deal with a monthly burn rate of salaries, overhead and related costs eating away at finite financial reserves. This also applies to nanotech groups in large organizations. As a result, the clock is counting down the time until firms ultimately run out of funding, and the game is over!

Clearly, time is key.

Fortunately, there are many things within management control that can reduce the time for transforming sophisticated nanotech research into revenue-generating products. These include decisions related to what you are developing, how you are developing it, how you are applying your resources, and how you are convincing potential customers to buy sooner rather than later.

1 – Focus on harvesting the low hanging fruit

Nanotech research often produces good news and bad news. The good news is that research results can significantly exceed expectations with better property performance and a greater robustness of potential applications. This opens the door to numerous commercial opportunities.

The bad news is the temptation to pursue every potential product, application and solution. When this is done, resources get diluted and the real tangible milestones needed to close a sale will ultimately slide. Not only will the resulting delays harm your credibility in the eyes of a potential customer, it also opens the door to competitors.

The reality is that most nanotech ventures lack the resources to make everything it wants to and pursue every opportunity. When critical resources (human and other) are spread too thin, they get diluted beyond the critical mass necessary to impact change.

Look at the math. Suppose you have the funding for 20 person-years of labor and require 10 to 15 person-years per product to conduct product development, marketing, business development, and sales initiatives. If you are pursuing 20 products simultaneously, there is an average of 1 person-year per product. On the other hand, if you are pursuing only 2 products, there are now 10 person-years per product – and a higher chance of attaining the desired results. While the actual numbers can vary from situation to situation, the message is that if you want to send a rocket to the moon you are better off launching one rocket with all your fuel rather than a number of rockets each with a thimble of fuel.

Consider a nanomaterial company who claims to have over 50 product concepts and prototypes. With virtually no product sales, they are struggling to stay in business.

As nanotechnology is still emerging as an industry, one measure of the commercial potential of a nanotech venture is real revenue. Revenue demonstrates credibility in the eyes of investors and can greatly increase the chance of your firm raising additional funding to develop more products.

Therefore, it is key for a nanotech venture to maximize its efforts on harvesting the “low hanging fruit” where significant revenue can be generated in the shortest time. Although nanotech entrepreneurs might be tempted to hit a homerun on the first at-bat, it may be more credible to be less ambitious and just get on base.

As a result, one of your most strategic decisions is deciding what you will make and promote first – and then do everything needed from A to Z. This will need to be done at the expense of other products by focusing the bulk of your effort on ONLY the best 1 or 2 applications.

A screening process can be used to find the low hanging fruit. Each potential product can be evaluated along a number of criteria and then scored with a meaningful rating system. The highest score will indicate the best opportunity.

Products can also be eliminated from consideration by evaluating potential showstoppers. For example if there is no market for the product in the next ten years, then drop it.

To get the best results, this evaluation should be conducted as early as possible in the development process. While every situation is unique, here are some general questions that should be addressed along with parameters that could provide the answer:

a) The probability of getting the product out the door the quickest:

Challenges and timing of remaining milestones

The critical elements which can determine development success or failure

Risk factors and obstacles such as regulation, environmental standards, raw materials, machines and equipment, etc

Estimation of additional time and budget to begin commercialization
Implications for quantities, cost and quality

b) The probability that a market exists for the product:

A significant demand based on many users and/or major companies with large requirements

The presence of early adopters and strategic buyers

Overall size of the potential market, projected growth rate and trends that might change them

Target industry and segments

Fit with the direction of the industry’s technology road map

Timing and size of potential sales

c) The probability of unseating the industry standard or status quo (taking the perspective that everything is new relative to current practices):

Concern about the stability of existing vendors on delivery, business longevity, financial strength, etc.

Forces that are driving companies to switch (e.g. new government regulations, dwindling supplies, increasing costs, special circumstances or crisis, etc)

Opportunity for significant performance improvement and/or real cost savings

Specifications of the products to be substituted along with the buying criteria

Reasons for being accepted or rejected by a customer
Cost to switch

Existing constraints which could prevent or delay the adoption of a new product

The technology’s innovative aspects and positioning compared to existing technologies and those under development

The technology’s stage of development compared to competition

Need to integrate to a bigger system or production process

The standard’s inability to adapt to change

d) The probability of creating a sustainable competitive positioning:

Degree and sustainability of competitive advantage in cost, performance, and other key buying criteria

Relative strengths and weaknesses of key resources including people, processes, equipment, raw materials, funding, and political connections

Principal competitors and likely response to a new threat

Barriers to entry for new entrants and emerging technologies

Key intellectual property is owned or controlled, and can be protected and defended

Feasibility of attaining strategic partnerships

e) The probability of ramping up production from lab scale to commercial requirements:

Simplicity of individual production processes

Dependency on custom-made specialty equipment for large-scale production

Evidence of similar production operations

Availability of raw materials in significant volumes

Financial viability of large-scale production

2 – Develop “sellable” products

Nanotech “products” can mean different things to different people. The problem comes when nanotech researchers and operational users have different perspectives on what a product needs to be.

Scientists devote hard work and creativity to attain specific research objectives. These can be measured in many ways including the achievement of a particular performance output (such as the bandwidth and signal-to-noise ratio of an optical switch) with a series of controlled and variable inputs, processes and constraints.

And while operational users might be impressed with the research results, there are practical considerations that must also be addressed before they can consider the output from the research as a “sellable” product. Among the many things, the nanotech product may need one or more of the following:

it may need to fit somewhere
it may need to connect to something
it may need to perform certain functions
it may need to be lightweight and mobile
it may need to work in some harsh environment
it may need to work without failure for a minimum time
it may need to have a minimum life
it may need to be manufactured or produced in a certain way
it may need regulatory approval
it may need to come with certain documentation
it may need to be delivered in a certain quantity
it may need to be available by a certain date

Not only do customers assess products on multiple dimensions, each dimension is evaluated on its own based on the customer’s expectation. For example, a customer may expect a quality acceptance of 99.9%. If your product is rated below expectation then the customer is disappointed. If the rating dips below the minimum acceptable threshold, then your product will be eliminated from consideration.

When a nanotech prototype or early stage product is evaluated by a customer and is unacceptable on a mandatory requirement, there is a natural reaction by the research team that their interpretation of the “product” should be accepted as the customer’s “product”. No surprise here.

And while it may not be possible to eliminate this gap, it can be reduced if the mandatory requirements are addressed early in the development process. And even if the first deliverable doesn’t meet all of the mandatory requirements, at the very least, a serious plan can be provided to the customer explaining how and when these requirements will be met.

Here are some questions to answer to get the team to think about developing sellable products earlier in the process:

a) What are all of the possible characteristics of the complete offering that a potential customer “needs to have”, “wants to have” and “would like to have”? These can include:

Price – Net price, discounts, perceived fairness in price, price of add-ons, switching cost, deployment cost, life-cycle cost, credit, timing of payments, etc

Performance – throughput, efficiency, efficacy, speed, lifespan, reliability, versatility, quality, purity, etc

Features, Functionality & Properties – electrical, mechanical, power, optical, chemical, biochemical, thermal, structural, etc

Physical – Size, weight, density, packaging, footprint, etc

Aesthetic – look, feel, color, taste, odor, etc

Operating Environment – Temperature, pressure, volume, chemical, biological, etc

Services - order processing, delivery, set up, maintenance, training, alteration, upgrade, operational, etc

Time – Completion, availability, quantity, etc

Capabilities – personnel, equipment, special resources, corporate reputation, documentation, etc

Safety – safety, health, security, certifications, side effects, etc
Personal – specific attributes for specific individuals

Political – job creation, exports, approvals, eligibility for government programs, visibility, etc

Risk Reduction – Guarantees, bonds, insurance, partners, use of development tools, financial strength, etc

b) How can you reduce the customer’s expectations on certain parameters and eliminate particular “want to have” and “would like to have” parameters to get your product scored more favorably?

c) Does this “sellable” product still look like a low hanging fruit? If not consider developing another product.

3 – Regularly validate the commercial opportunity

It is common for some nanotech scientists to conduct their research in isolation from the commercial world. Doing so keeps researchers focused on their work and away from time-consuming distractions. Working in secrecy also avoids tipping off potential competitors of what is being made.

While it is desirable to develop a completed product before approaching a customer, nanotech companies who wait too long can completely miss the commercial opportunity.

The big assumption in any R&D endeavor is that customers will want to buy the end-results of the development. As it may take years until a nanotech product is ready for sale, changes in customer specifications, competitive offerings, available technologies, industry standards, and government regulations can make a nanotech product obsolete before it is even completed.

While the markets for nanotech products are moving targets, each potential customer also has its own window of opportunity when it is prepared to adopt a new technology. If your nanotech product is not known by the customer or is discovered too late in its evaluation process, the customer could select a lesser product which was at the right place at the right time.

As market and customer opportunities are not readily publicized, it is in your best interest to regularly validate the commercial opportunities for your product. This means directly or indirectly finding out how potential customers will measure value from your products and when to advise specific companies of the status of your offering. Not only will regular injections of field data reinforce and/or fine-tune the direction of your product plan, especially earlier-on when changes are easier to implement, you may also tap into valuable leads for the sale of your products and related services.

Ideally the validation process will make use of a variety of sources. The first level of information can be obtained from an in-depth analysis of published sources including SEC disclosures, websites, published reports, and product literature.

The next level of information can be obtained from discreet discussions with industry pundits, prospective customers, potential partners, and competitors. This type of investigation goes beyond published information and can reveal commercial opportunities on the level of what products are being developed, what markets are being pursued, what resources are being used, etc. Third parties specialized in conducting industry surveys are often in a unique position to collect objective information at arms length to the nanotech company.

When the time is right a pipeline of potential customers can be created from the above research, as well as from meetings at focused industry conferences where customers are actively seeking solutions, and from highly targeted publicity conveying a carefully crafted message.

4 – Outsource non-core operations and special projects

When computers first emerged on the market it was common for companies to develop their own software using internal resources.
Partially due to the limitations of the commercial offerings available at the time, computer programming was often felt to be a necessary core competency required to attain operational improvements and cost reductions.

With the rapid evolution of the computer industry, teams of people were needed to continuously upgrade code for compatibility, standards, interfaces, features and functionality. While internal costs to develop and maintain in-house products escalated, the economies of scale gained from mass-market vendors, having thousands or millions of customers, made outsourcing and the use of commercial-off-the-self products the only viable option for most mainstream applications.

Outsourcing permits products and services to be supplied at a fixed price with a high degree of certainty in what you are getting. As well, an off-the-shelf product and/or a specialty firm with considerable experience at the task at hand can significantly improve the completion time and outcome compared with in-house personnel who might be doing a particular activity for the first time in their careers. Therefore an opportunity exists to evaluate if certain operations and activities really need to be core competencies and then determine the benefits of having them outsourced.

As an example, consider a nanotechnology company developing applications from nanotubes. While the “use” of nanotubes would be critical for the application, it may not be necessary to have the “production” of nanotubes as a core competency.

If nanotubes are produced internally, then capital, expertise and equipment will have to be allocated to nanotube production and away from the principal application. Diluting key resources could lead to bottlenecks and delays in completing the development of a sellable product.

Alternatively, nanotubes could be sourced externally and purchased at market prices from one or more vendors. As the price of nanotubes is dropping and the quality, consistency and other parameters are improving, it may be a great strategic decision to buy nanotubes on the open market and negotiate price, support and delivery time. In addition to avoiding a capital outlay to build an in-house plant, any risk for quality assurance, production ramp-up, and product support can be passed on to the nanotube supplier.

While it may seem counter-intuitive for companies developing intellectual property to give up any control of their product plan or processes, the benefits of getting a product to market faster greatly outweigh the complete control over secondary operations and projects which are not leading-edge, secretive or strategic if done internally. It is in your best interest to evaluate all required competencies with the objective of outsourcing non-core operations and projects – entirely or in parts.

While every company has its own way of best leveraging scarce resources, here are some areas to investigate the merits of a “make” versus “buy” decision.

Raw materials – commodity components, chemicals, etc.

Equipment – lab equipment, microscopes, test equipment, etc (on a pay per use basis)

Manufacturing – production, packaging, testing, order fulfillment, etc

Financial– accounting/bookkeeping, financing, applications for government programs, etc

Sales and Marketing – publicity, market research, business development, lead generation, etc

While you may look for partnerships with various nanotechnology firms, professionals, universities and government labs, it is essential to have legal agreements in place where appropriate, to clearly spell out ownership of intellectual property. If this is not done properly, you might be giving away ownership or rights. In this regard, you must also have a trusting relationship with any partner as it may be viewed as a marriage with messy implications in the event of a divorce.

5 - Manage your customers’ purchasing process

Getting potential customers interested in nanotechnology is easy. Getting them to actually buy nanotech products is another story.

Initial customers for nanotech products are most likely to be large companies and government agencies. Selling state-of-the-art products and services to these entities is a lengthy process as there are typically many people involved in the selection. To further complicate the process, each person has different needs and influence. And even if a company’s nanotech product is technically superior to the status quo or another offering, some of the customer’s people can be working behind the scenes to block your product from being purchased.

Consider the following:

A purchasing manager might have a great relationship with the current supplier and won’t want to risk changing vendors

An executive might have pressure from a government agency to do business with a certain company

A financial evaluator might think that a start-up company is too weak financially to support a major program, as it might not be in business next year

Often, many of the people involved in the selection process are not made known or are not accessible to the selling company. As it may take weeks or months just to get an appointment with the head of R&D at a major corporation, you may end up with only 30 minutes to persuade him or her to give your company a chance. As a result, firms who want to increase their chances need to be intimately involved in understanding the customer’s decision making process and proactively managing events that encourage the purchase of its products.

While there is no definitive way of assessing every customer or sales situation, here are some of the things that you should be aware of:

The Need – Nanotech companies have to focus on the primary “need” driving a customer to change from the status quo and select a new technology or supplier. Any change has risks and switching costs that must be overcompensated by the additional value from your product.

The Champion – Nanotech firms need to identify a champion in the selection team who wants its product and is prepared to stick his or her neck out to do the internal promotion on its behalf.

The Friend – Nanotech firms should make a friend in the customer’s organization who can inform them of the situation behind the scenes. This will allow nanotech firms to prepare tactics for overcoming obstacles.

Senior Management Support – Nanotech companies need to ensure that the customer’s senior management will support the consequences of the selection team going with its solution.

Developing Capabilities – In cases where certain capabilities are lacking, nanotech companies may need to find solutions that help the customer develop the necessary capabilities to use its products which could include the supply of training, access to equipment, special financing, etc.

Overcoming Resistance – As there will be resistance to any change, nanotech companies need to find ways to identify and overcome the sources of resistance. This can often be done by making its offering more appealing by adding value, cutting price, soliciting strong partners to the team, making use of political connections, etc.

While the sales process can be complex and time consuming to manage, it is a fundamental step for generating revenue. Getting to know the customer’s processes and people, professionally responding to their inquiries, building relationships, and making use of partners with existing relationships are all steps for building trust and credibility.

It is in your best interest to get accurate and timely information, and stage “strategic events” to move the customer closer to selecting your product. For example, it may be possible to have a potential customer find out from a third party that its main competitor is seriously evaluating your product.


Bringing nanotech products to market ultimately comes down to focusing your resources and making a product easier for a customer to buy. Nanotech executives need to be conscious of every lever at their disposal to speed up the processes, since time is a precious commodity. While these tips can reduce the time for bringing a nanotech product to market it is essential that any nanotech product be based on a solid foundation of good science, a strong technical and management team, and the perseverance to stick it out.


About the Author: Neil Gordon

Neil Gordon is the President of the Canadian NanoBusiness Alliance and specializes in the commercialization of nanotechnology and MEMS. As a nanotechnology business consultant he works with nanotechnology investors, early stage ventures, business units in large companies, and government agencies in assessing investment opportunities, establishing strategies, developing business plans, obtaining financing, defining sales opportunities and tactics, launching new technologies, and developing marketing campaigns. He developed the InfoCast Executive Seminars "Developing a Winning Nanotechnology Business Case" and "Bringing Nanotech Products to Market".

Neil heads the Commercialization Committee for CANEUS, which is defining micro and nanotechnology standards for the aerospace industry. He is also on the Advisory Boards of the Nanotechnology Opportunity Report and the World NanoEconomic Congress, was Judge for the annual SmallTimes Awards, and is regularly interviewed as a nanotechnology industry analyst. Neil was a Runner-up as Nanotechnology Advocate in`s “Best of Nanotechnology 2003” Awards.

Neil has a Bachelor's Degree in Engineering from McGill University, an MBA from the University of Western Ontario, and 20 years of business experience, including as co-founder of two technology start-ups.

Neil can be reached at

Copyright © 2004 Neil Gordon



Neil Gordon
P.Eng, MBA



Low Hanging Fruit

Low hanging fruit are products that can be shipped in reasonable quantities over the next 12 to 36 months and offer significant value to a real market. While low hanging fruit might not revolutionize any industry or market, they do represent an opportunity for transforming an R&D nanotech venture into a revenue-generating going-concern.

One item that is commonly overlooked in early stage nanotech products is the basic requirement to provide significant value to potential customers. For example, a product bringing a 5% improvement in the fragrance of a consumer soap will not be a hit – regardless if it is nano or bulk!

In comparison a company that is close to delivering a hand-held device capable of detecting certain life-threatening



A Sellable Product

A nanocatalyst might be considered a scientific success if it achieves a target activation rate at a certain price point. For the catalyst to become a sellable product it may need to deliver on a number of other criteria beyond price/performance, including:

• Upper and lower temperatures for achieving the required activation rate
• Ability to adhere to a particular substrate
• Lifespan
• Reaction with other chemicals in the operating environment
• Ease of handling
• Customer support for custom variations
• Flexibility in placing orders
• Shelf life
• Ability to work with large-scale users




While the commercial opportunities for nanotech products can vary by industry, market and customer, and change over time, in some cases the best opportunity is to license intellectual property rights (IPR). For example, if the IPR comprises certain production processes that cover a wide range of markets, it may be more profitable to focus on developing, protecting, marketing and licensing the processes rather than developing products.