SciBlogs

Archive May 2012

Product development….no place for the faint hearted Peter Kerr May 31

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Some interesting thoughts on product development at a gathering-cum-lecture at Victoria University’s School of Design.

Now there’s almost entire libraries devoted into taking an idea through the design and product development process – so compressing theory and practice into just under three hours was a pretty good primer.

The 80 or so people, including a fair swag of the Design School students heard stories of how to identify winning products and develop them successfully, and sometimes not so successfully.

The lecture was repeated the next night out in Lower Hutt, so the presenters could probably expect more hands-on manufacturers at that location.

The three main speakers were talking about, (mostly, except for Kah Chan who was more about gaming apps) physical objects and product creation.

locusresearch.com director Tim Allan had some nice sound bites for people going down a research and development phase.

  • Ideas are a battleground for egos, where objectivity has no place (& on a similar theme)
  • Ideas are possessions which have no time for objectivity
  • When researching, it is the relationships between things that are important
  • During the early research phase, you’re looking for insights
  • Leading (with a new product or service), changes everything; be prepared

Paul Davies of EverEdge IP reckons that most companies completely under-estimate the IP that they have. Most (initially) only regard patents and trademarks as IP.

But, if you look under the hood of many companies, there is a huge amount of know-how and trade secrets, that if packaged correctly is a sellable item on its own.

“You can only value what you identify,” Davies says. The process required to make use of IP is:

  • Identification
  • Assessment
  • Development
  • Articulation
  • Exploitation

Motovated’s boss, Jonathon Prince warned against “starting at the concept.”

“It means you miss out on the ideation, the intellectual property creation bit,” he says.

The School of Design speakers, Tim Miller, Tiago Rorke and Kah Chan gave some different perspectives on trying to get new product ideas off the ground. If there was one lesson it is, ‘it isn’t easy’.

The School sees a newly emerging scenario – Exporting to the Internet.

Present in the audience were Lee Bennett and Nick Taylor, the founders of new Wellington creative/creation space (with sophisticated kit as well), MakerSpace.

The internet is exactly where MakerSpace users/partners will take their new products to the world, perhaps after testing user/buyer reaction at outlets such as the Frank Kitts market.

MakerSpace has just taken delivery of its industrial-sized 3D printer – no stopping them now!


One place to access everything digital takes off its training wheels — Unified Inbox Peter Kerr May 29

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When you simply state the idea of having one place where all forms of contact — email, Facebook, Twitter, text and others — end up in one place for reading and responding to, it sounds an eminently sensible thing to do.

But there’s a pretty good reason nobody’s managed to pull this off, and all the more reason that NZ-originated, globally-created Unified Inbox is ever so slowly bringing its product to market.

‘It’s an incredibly hard thing to do,’ says UiB founder and CEO Toby Ruckert, whose international team first set out four years ago to create such a beast.

Toby Ruckert; launching one place or everything


‘There’s a huge amount of functionality and product layers that has to be built in,’ especially so that different channels can be opened and responded to in other channels. Think answering a Facebook query while within a mobile phone email application for example.

‘At this stage we’ve written 1.6 million lines of code, which in total are equivalent to 25 man years of development,’ Ruckert says.

Dotting all the i’s and crossing all the t’s of UiB is one reason the privately funded venture has kept its head down, only late last year releasing a free beta version for self-selecting potential and real users to help iron out bugs.

That soft launch has been extremely useful he says, and as well as soon looking for public funding through the issue of convertible notes (prior to seeking Series A funding within the next year), UiB will be launched as a paid for item in the next couple of months.

UiB also has more than 2000 signed up customers from 72 countries, and has been deep in discussions with channel partners such as ISP’s (internet service providers), telcos, shopping cart/e-commerce service providers and others about integrating it into their systems.

Unified Inbox comes at a time where the ‘pain’ of reading and responding to all the different forms of communications available to people is reaching ever higher proportions Ruckert says.

He quotes a study showing interruptions from communications costs U.S.A productivity $900 billion a year.

‘If someone is working and thinking productively, and they’re interrupted to check say an email, it takes them 10 minutes to get back to the same level, the same train of thought,’ he says.

‘Unified Inbox can enable its user to have no one, or five only say, be able to interrupt.’

UiB’s most valuable feature in a sense is its ability to address ‘overload’, and users being able to ‘communicate in their own time whenever they feel ready for it.’

The start of UiB’s global charge will also be spearheaded when Ruckert speaks at June CommunicAsia conference in Singapore with a speech named ‘2012 — The Year of Overload’.

The company’s reputational stock also received a recent boost with the announcement that it had achieved #11 in the USA Business Insider 2012 Startup Competition. Over 200 companies put their names up for consideration in this annual event.

After years of lying low and writing those 1.6m lines of code, Ruckert and UiB can see some light, and hopefully much revenue, at the end of the tunnel.

At a time where simplification is becoming one of the big new trends Ruckert and UiB might just be a right product right now!


Venture Solutions operates in commercialisation’s ‘no-man’s-land’ Peter Kerr May 24

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Grant Marris of Venture Solutions Ltd – “we don’t own the IP”

The untitled head of nine month old Venture Solutions Ltd recently and reluctantly agreed to put up a website advertising its services.

Grant Marris’s reluctance is warranted. Operating in the ‘no-man’s-land’ between the (often backyard) inventor and other types of commercialising entities, VSL may now find itself being plagued by tyre-kickers and the sometimes mad.

However the Lower Hutt based, three person privately funded company has made the website move, and will see whether inquiries grow beyond the couple a month that VSL has been receiving.

Marris has an automotive background, as well as an involvement with the startup/incubator scene.

One frustrating element of the angel investment and commercialisation space is that often people, an inventor, would come along with a good idea.

‘But no one ever invests in the wrong people,’ he says. ‘They’re more likely to invest in a B project with an A person, rather than an A project with a B person.’

Often, Marris says, the inventor will have to give away most of the (shareholding) equity in a project or idea, or ‘generally they walk away and the project dies.’

Hence Venture Solutions (whose name came to Marris while he was in the shower) and its process which is very much built around collaboration with the inventor, without VSL owning any of the project’s intellectual property.

What VSL does provide though is, following a market validation that a pain point exists for the proposed product, finance to get a product to market in return for a cut in its retail price (this will and does vary from product to product but is around 15 — 25%). The inventor retains all the I.P.

Marris drew a remarkably simple diagram of how VSL and its inventor’s projects hang together, which also includes a 5% marketing budget as part and parcel of the whole. The inventor receives a 25-35% portion of the retail price depending on circumstances and the product.

The inventor also continues a role which most suits them. It could be as the main salesperson, or they may be happy continuing in that inventor/improver function.

Perhaps just as importantly, VSL looks after the back end administration, dealing with aspects such as production, invoicing, chasing debts (the accounting is all on Xero).

‘We create a trading company that is totally transparent for the inventor,’ says Marris.

‘We’ve looked around the world, and haven’t seen a model like this. It’s a different approach.’

He gives examples of some (we should probably read most) inventors who have good ideas, but not enough money to kick them along. Options such as TechNZ don’t stack up as these usually require a 50:50 funding contribution.

‘It is the classic inventor that we’re really aimed at, the people who don’t tend to fit the mould….indeed, sometimes other people think they are mad,’ Marris says.

‘But, if you prise the person away from the product, then usually you can work something out. We want to collaborate with the inventor, with them, not against them.’

He says there’s a common goal to increase New Zealand’s and the inventor’s wealth through the VSL model. ‘We’re more about doing than talking.’

Under the VSL model however, the inventor, after a discussion about their attributes and the function they’d like to have moving forward, remains an integral part of the whole operation.

With one small exception!

‘When we’re at the final product design, generally we keep the inventor out of it,’ says Marris. ‘We want the minimum viable product to get to market, and often the inventor will be wanting to add a bit here, do something else there. So, we tend to keep them away at that stage, though the product doesn’t head out unless the inventor’s happy with it.’

VSL has recently entered into an agreement with Weltec Connect to collaborate on developing prototypes of new ideas (for which the polytech’s commercialisation unit receives a royalty from the final retail product).

Marris says as a ‘sweat equity’ model, the market validation has to be extremely sound.

‘Both parties can pull the pin at any stage, and we have go, no go decision points. Initially there’s a casual memorandum of understanding process, and as we get closer to putting a product into the market, then we go to a full contract, generally for three years.’

VSL has some defined goals for its own growth, and has modelled the company’s growth to having 13 people.

It works by having one dedicated person handling one (inventor’s) product, as ‘one person can’t do more than that.’

‘But it is a very scalable model, and we’ll bring on new people in Venture Solutions as they’re required,’ he says.

VSL currently has three projects it is developing through to retail sale, with one ‘YouBike’ (exercise equipment for the disabled and paralysed) about to be launched.

Undoubtedly Marris will soon have more than the two enquiries a month — Venture Solutions appears to be a valuable addition to the tricky job of getting an idea to fly.


Gene patents in Australia — an ongoing saga Peter Kerr May 23

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By guest blogger Doug Calhoun

In an earlier guest blog I commented on the gene patent debate inAustralia.  My conclusion then was that the opponents were a determined lot.  That observation has been reinforced by yet another initiative in the form of a proposed private member’s bill.  This was reported in the ABC programme ‘Lateline’ on 14 May.  The programme and a transcript are at the link:

I was sufficiently annoyed at the lack of any balance in the report to respond to their invitation to comment.  The following is what I said:

Your story on gene patents is unbalanced, it omits several important facts and it repeats a discredited myth.  For the other side of the story I refer you to this post I made on a science blog earlier this year:

The myth is:

‘Four thousand human genes have been patented already – that’s 20 per cent of the human genome.’ ‘Already 4,000 of these genes have been patented by organisations hoping to profit through exclusive research on them.’

The 4,000 figure is based on one 2005 article in Science.  (And the patents referred to areUS patents, not Australian ones.)  That article has been misinterpreted and its conclusions misrepresented.  For an in depth analysis of why I refer you here:

While Dr Oliver may be an eminent physician, his knowledge of patent law does not appear match his medical expertise.  He stated:

‘Look, if you can just get a patent for just discovering the presence of a gene, then you really block everyone else from being able to work on that gene. And so we are saying that that’s not what patent law should be. It should be about an inventive step, then you can have the patent.’

The Patents Act requires that a discovery must have a practical usefulness before a patent can be granted.  The need for this was reinforced with the passing of the Raising the Bar Act.  That requires the patent applicant to show a ‘substantial, specific and credible’ usefulness before a patent is granted.  The change and the existing law require far more than ‘just discovering the presence of a gene.’  An inventive step is yet another requirement that must be present along with usefulness before a patent can be granted.

Suzanne Smith expressed an incomplete understanding of how cures get to patients when she stated:

‘At stake here is the future of cancer therapies. If an organisation can monopolise a gene, that means the world’s scientists can’t collaborate and swap their results. This could potentially delay a cure for cancer or the invention of a vaccine.’

There is much more to making cures for cancer available than scientists collaborating and finding a potential cure.  The initial promising results must go through patient trials to prove that they work and that they are safe before a cure can be made generally available.  And for many new cures, half or more of the patent life may be up before a cure is approved and a patent owner gets any return on their investment.   A patent gives exclusivity in respect of a defined invention for a maximum term of 20 years.  (A fact nowhere mentioned in your report.  The Myriad patent expires inAustraliain 2015.)  After that anyone can use it.  The purpose of a patent is to motivate investment in taking a promising research result to the medical marketplace.  Those who are promoting the ban on gene patents do not explain what will drive the commercialisation of ‘targeted therapies in cancer based on genes and their products’ if they succeed.

The suggestion that the world’s scientists can’t collaborate and swap their results because of the gene patents is simply wrong.  Over 8,000 scientific papers have been published on the BRAC genes since the patent was granted.  Part of the patent bargain is that the patent document must fully describe the invention and how to put it into practice.

While interviewers have no control over what their guests have to say, responsible reporters should at least do rudimentary fact check before making supportive statements like those that Suzann Smith made here.  And on the question of balance you might have mentioned that two different senate committees and the Advisory Council on Intellectual Property have all considered the case put by Dr Oliver and Melissa Park; and all have declined to recommend banning gene patents.  (See my blog post linked above for the details.)

And as for the throwaway line that AusBiotech were unable to comment, how much warning were they given?  It sounds like a cheap producer’s trick to give someone five minutes warning and then pretend that this equates to balanced reporting.

The reply ABC sent me was:

‘Thank you

Thanks for your message. Your input is important to us.

Please Note: The ABC’s Current Affairs department welcomes feedback on its programs. Your email will be passed on to those responsible for producing the program. Emails containing general comments or suggestions and those offering personal opinion will be noted but may not receive a reply. Any emails relating to complaints concerning accuracy, impartiality and objectivity will be considered by ABC Audience and Consumer Affairs. In this case, please be aware that it may take up to four weeks for a response to be forwarded. We will not respond to anonymous emails and we are unable to help people with research for school projects, student assignments and enquiries unrelated to our service.’

I await their response with interest.

 

            ~ Doug Calhoun

IP Mentor

Serial Stirrer

 


Creative space of technology, digital and storytelling tailor-made by Mohawk Media Peter Kerr May 22

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Where do you start with a couple of geeks come tech gurus come writers (though not necessarily in that order) that make up Mohawk Media?

Their knowledge of how the various components of the connected and digital world fit together, and ability to anticipate how that will play out in the next couple of years is way beyond sticK’s insightfulness.

That’s one reason Helen Baxter’s in demand as both a lecturer and speaker — some of this cascading off her radio broadcast work with Radio New Zealand’s ‘Afternoons with Jim Mora’ and ‘the g33k show’ on Kiwi FM’s ‘Radio Wammo’ show.

Meanwhile, lurking in the software/hardware interface is Chelfyn Baxter — whose latest ‘product’ is a free ‘Inter:play’ — a realtime avatar that mimics a person’s motions and creates audio and visual outputs through their gestures and positions in front of a Kinect camera. (Baxter’s pulled together several pieces of other software, and written a tiny portion of code in a way that no one else apparently has).

See an example of Mark Stevenson (who was reported here in sticK) as an avatar here as he gives his optimistic view of the world

Their combination allows Mohawk Media (MM) to straddle today’s ever-evolving storytelling space, as tools such as embedded video, cartooning and other alternative ways of creating a two-way message, proliferate.

As storytellers, MM sees itself as being in the remix culture (using, altering, reusing material in different ways). MM itself is in the write, educate and animate end of town says Helen Baxter.

One example of this is a project carried out for Creative Commons Aotearoa (supported by InternetNZ), an illustrated animation, explaining how Creative Commons licensing works.

‘Our niche is to bring to all through video, what was traditionally boring [think a talking picture] something else that is informative, fun and creative,’ she says.

‘At the same time, given the number of channels that exist, there’s more and more need for content. What we’re seeing happen is a change from where a small number of people use to entertain large numbers, we now have all of us entertaining each other.’

Baxter points out that Cisco predicts that video will increase to 90% of internet traffic by 2013. See some background stats on these predictions here.

‘Videos are becoming the new site map,’ she says. ‘They allow viewers to go on a journey, pointing out highlights that are available. These days, people are expecting this kind of content as well.’

Such a guided pathway also makes website viewers more confident of what they should click on, ‘provides a sense of potential of a website or app of much more value than a static site map,’ she says.

‘Once people have a idea of the scale of a site, it provides a sense of its potential. You’re selling the context, what to expect, and that makes learning much easier.’

Mohawk itself devotes about 20% of the company’s time to non-revenue and/or passion projects. The free sharing of knowledge and knowhow, as well as new tools they’ve developed such as Inter:play drives much of its day to day operation.

‘We occupy a middle zone in what we do for our clients,’ Baxter says.

‘We’re about a culture of flexibility and fun, and where the experience of creating something is just as interesting as the final product. The types of jobs I enjoy are with people I like, everyday, with time left over to play.’

Part of MM’s philosophy, reflecting the changing landscape of business and its relationship to individuals, is that it is part of the ‘experience economy’.

In this sense, it is more about ‘doing stuff than buying stuff.’

While many companies may make out they understand how to operate in this constantly shifting world, Mohawk Media’s considerable track record and knowledge in these areas, and its ability to tell a story, singles them out as walkers of the talk, or talkers of the walk.

They really can do both.


‘Negative know-how’, one way to make money from so-called failure — KiwiNet Peter Kerr May 17

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‘Negative know-how’ was a fantastic idea thrown up at the KiwiNet commercialisation forum in Wellington on May 2.

Kate Wilson was talking to about 100 people actively trying to kick university or CRI ideas into life.

It refers to keeping records of so-called ‘failure’ in research and development. It may be notes of what was technically difficult, impossible or not very successful.

Wilson, of patent attorneys James & Wells, says such a record can actually be a saleable product — especially to those working in the same field, who can save themselves time and money by NOT repeating what’s been shown to be not useful.

But in the line of reframing the idea of failure, negative know-how is a powerful term.

The KiwiNet university and CRI commercialisers were also given a reminder (as if they didn’t realise it anyway) of the mindset(s) that researchers will often have. Whereas someone who is trying to figure how to turn an idea into something of (commercial) value might think in days or weeks, some researchers have a much longer timeframe — years even.

As Prof Alison Stewart says too (having had 20 years successful and less so experience in commercialising science) told attendees, when she’s briefing researchers about to engage with industry she reminds them — what, why and how.

The big picture, particularly from an industry (in her particular case innovative and natural plant bio-protection) needs to be kept in mind by scientists — the what and why — before they jump to the how….which is the science experiment itself.

Too often Stewart says, recently graduated PhD’s are thrown into the deep end of a research project for an outside client; when these are the very people who should be nurtured and guided through the whole process.

A simple management strategy is very helpful in this case she says — in particular the maintenance of an accurate laboratory book, and monitoring progress against commercial milestones.

‘Researchers also need to be taught how to talk the talk,’ when they’re in discussions with industry clients Prof Stewart says.

In identifying valuable intellectual property, the before-mentioned Kate Wilson says there’s four categories of competitive advantage:

  • Knowledge
  • Function
  • Look
  • Brand

Sometimes scientists will almost have to be ‘interrogated’ by commercialisers — ‘often they don’t know what they’ve got or how to communicate it.’

One of the more effective techniques Wilson says, is to ask a researchers why they’ve bothered to do a particular piece of work?

‘Then you need to pause,’ she says. That silence, that answer is often ‘when the breakthrough occurs.’

If there was one observation of what might help improve the quantum of commercialisation from KiwiNet members, it was from a couple of non-New Zealanders.

Both Anthony Francis of Flinders Partners (of Flinders University, South Australia), and Duncan Ledwith of UniServices/The Icehouse, had that salesman come dealmaker aspect to how they viewed converting an idea into a product.

After some hard and fast market validation, their attitude was simply to let people (preferably with a vested interest in the gig) get on with it.

Don’t get too worked up about IP ownership, just get on with it as hard and fast as possible!


Enspiral’s collective model taking on the world Peter Kerr May 15

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Wellington’s Enspiral is a difficult beast to describe in traditional terms. For a start, there’s very little to compare it to.

The two-year old collective of developers and designers and other connected people, is a work in progress, which its founder Joshua Vial considers to be more closely akin to an organic network than a regular business.

What it isn’t is a hierarchical company model of being. Decision-making is very flat and inclusive, and the Courtenay Place based business (but going global) has even released an ‘alpha’ version of software to help develop consensus conclusions. (See here for loom.io)

From half a dozen people, it now has over 40, and Vial’s yet to find a similar overseas model for how it works and operates.

Vial’s been an independent contractor (back end web development) himself, and was influenced by the thinking behind Richard Semler’s book, ‘Maverick’ and ‘Seven Day Weekend’ (see a Wikipedia version here ).

‘Part of the ideas there is that if you treat people like children, they’ll behave like children,’ he says. ‘If you treat them like adults, they’ll behave like adults.’

‘From that, we figured we wanted a business in which there was no distinction between who works and who owns.’

Hence Enspiral’s model, in which members share the same information and have the same level of autonomy as a business owner would have.

Enspiralites also set their own salary — what they think they’re worth — but have to bring in work and show they’re justified in receiving it.

For Enspiral to achieve its ongoing success, ‘we’ve had to evolve a strategy that involves all, for which we have an emergent shared values and vision,’ he says.

‘That’s why it is as important how we get to a decision [bringing on new members or companies, spending shared resources] as to what the decision actually is,’ Vial says. Also, hence, the development of loom.io — loosely derived from loom as to weave.

Along with the extensive use of work-focused intranet ‘Yammer’ and Google Docs, loom.io has been developed ‘because it would be impossible to run Enspiral without it. There would be too much noise to make decisions.’

loom.io is built around the concept of a motion or proposal — should Enspiral do this or that?

The participatory process seeks to build consensus. ‘It forces us too to front load the decision-making with conversations to get everyone onboard, obtain perspectives from different people.’

‘It also forces a level of trust and communication within the teams.’ Under this model, a person may not necessarily agree with the final decision, but can generally run with it says Vial.

He’s also the first to admit that Enspiral’s very much learning about the process of how to make decisions, and how people engage with each other and their level of contribution that ‘isn’t normal in an ordinary company.’

Part of the non-ordinariness is how Enspiral has organically grown, and acquired much of its work and clients.

Much, if not most of this has been through word-of-mouth and social networks. That is, people knowing people, businesses knowing about Enspiral through other businesses, and a general awareness within the community of what Enspiral offers.

‘Every time a new person comes into Enspiral, they release untapped potential within the organisation and their own networks,’ says Vial. ‘It is one of the laws of networks; if you double the size of the network you haven’t doubled its value, you’ve increased it by much more than that.’

‘When you envisage a company as a network then, you have more value as the size increases….though you do have a natural ceiling.’

As Enspiral has increased in size, Vial’s also noticed that smaller groups are naturally coalescing into their own teams. This too requires a balance between Enspiral’s role and the individual’s autonomy and freedom.

‘We are mostly learning by doing,’ Vial says.

From Enspiral’s point of view, ‘growth’ sees new Enspiral entities springing up in Auckland and Hong Kong (already 30 people under its banner) and a soon to be established node in Berlin (as former Wellingtonians set up shop in the German capital).

Using a network analogy, this will expand Enspiral’s ability to ‘do things’.

Because though the collective is partly a business play in the traditional commerce world, it also has a larger purpose.

Some of the biggest issues of our time — think climate change, environmental degradation, poverty, food security — have only had a trickle of human energy thrown at solutions.

‘Enspiral’s as much a capacity play, where people, having provided for their own living requirements, have the skills and time to work on some of the biggest issues of our time,’ Vial says.

‘Our people tend to have a much deeper purpose, want to make a tangible impact on the world and make it a better place. The only rational strategy for the world, is to increase the resources allocated to finding solutions. What holds us back in a global sense, is not a lack of good ideas, but a lack of people working in those spaces.’

From that point of view, Enspiral is a resource play, and more specifically a human resource play. Its strong sense of looking to provide better social outcomes and making the world a better place is THE underlying ethos.

This is part of the reason that the Enspiral developed BuckyBox (software for better food distribution) and Loom.io.

As an organic network, Enspiral is and will always be a work in progress.

‘We have no perceived perfect model,’ says Vial. ‘The world’s always changing, and so will we.’


Kiwi battery technology charged up on green car opportunities Peter Kerr May 10

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By guest blogger, Imogen Reed

Congratulations are due to UC’s Dr John Abrahamson (Chemical and Process Engineering) and Christchurch company ArcActive who recently won one of three prestigious awards at the April 2012 CleanEquity Conference in Monaco.

The award, for Excellence in the Field of Environmental Technology Research, is proof positive that New Zealand is at the forefront of exploration into new battery technology for the green car market, and the future for the company looks bright.

The CleanEquity Conference is magnet for the world’s investors and ArcActive, buoyed up by their success, aim to raise enough equity over the coming year to develop a mass market for their innovative battery. As ArcActive’s Chief Executive, Stuart Mackenzie, commented: “This will be a multibillion-dollar market by 2020. Our technology has world beating performance and is very low cost, so we hope it wins out over other new technologies.”

Igniting the Spark

The Company began its life at Canterbury University; building on technology first developed over 30 years ago by Dr John Abrahamson, but has since expanded and taken this initial research much further.

ArcActive is targeting the “stop- start” and micro hybrid vehicles which are increasing in number in China, Europe and the United States. These cars’ engines reduce or turn off in certain situations such as when the car is idling or coasting to a stop which saves on fuel but places huge demand on traditional batteries which last only weeks in these vehicles.

ArcArctive’s long term aim is to fine tune the negative electrodes found in the batteries for stop/start vehicles in order that the DCA (Dynamic Charge Acceptance) can allow the battery to have a much longer charge life. (See a slightly technical explanation here)

McKenzie commented that: “every man and his dog” had been trying to enhance the DCA of batteries and stated: “What we have developed is a battery which has got astonishingly good DCA and lifetime and is no more costly than a state of the art battery.” However, he felt confident that although other companies were also in the running to solve the DCA problem, ArcActive were in a strong position to beat their rivals and take a chunk out of the car battery market if they could scale up their technology and replicate the results with international car and battery manufacturers.

Collaboration Has Been Key

The initial University of Canterbury project received some much needed initial support via a $225,000 KiwiNet PreSeed investment from Ministry of Science and Innovation to prove the technology worked.
McKenzie felt that this early support was critical in getting the project to this stage as early work identified electrodes for batteries as a key application for the technology.

He commented: ‘It’s been a very collaborative effort getting to this point. We’ve received some great support from KiwiNet in terms of funding and expertise from other members. This support allowed us to move the project to a point where we could attract additional technology grants from the Ministry of Science and Innovation and private investor funds to get to where we are today.’

Raising capital in order to develop a product is a hard task in itself, but it is clear that the company has worked diligently to raise $5m in grants and investor capital with about $2.5m still unspent in the bank.

Such is the faith in this product that investors in the company have grown as ArcActive continue to develop and refine their product. They now include NZVIF, ACC, Neville Jordan of MAS Technology and Endeavour Capital fame and K1W1, while Canterbury University still has a large stake.

Greener Products for the Planet = A Billion Dollar Industry

Recently mandated emission controls in both the EU and USA are driving the take up of electric vehicles as automakers focus on fuel economy and protecting the environment. The race is on.

There are big bucks to be made for companies who can provide cheaper solutions to ongoing issues within the green car market.

It is worth noting that the market for start/stop batteries has been forecast to grow from 5 million batteries per year in 2011 to 39 million per year (US$6.3B) by 2017 and nearly 100 million per year by 2020.

In Europe 30 per cent of all new cars are expected to be stop-start by 2015 and all cars by 2020, with China and US following shortly after.

Stuart McKenzie is positive about this: ‘The auto industry is undergoing a quiet revolution towards green cars. We’ve tested the performance of our batteries using new protocols developed by the hybrid car industry and obtained exciting results.’

From the research the company has undertaken, it has been estimated that that start/stop cars using ArcActive lead acid batteries will have a longer life and consume 10% less fuel, compared to 2-4% if using alternate technology AGM batteries, at no extra cost.

By cutting costs in this way, ArcActive are aiming to become an important component of this emerging multibillion dollar market and with the desire to have their components being manufactured in New Zealand, it could also be good news for the country’s economy.

What Does The Future Hold?

Stuart McKenzie is the first to admit that the company have a long way to go.

“If we sell one battery to a car maker we will be a very big business,” an optimistic McKenzie said, but he pointed out that one of the biggest challenges facing them would be to convince battery makers to adopt the new technology.

There was also the added technical problem of making the batteries in volume, but the company are determined to find a way to solve this issue, hence the reason why they have given themselves until 2015 before they fully promote the product on the market.

However, with the arrival of Westerby’s Mitsubishi MiEV electric car now available on the New Zealand market, and one of eight, midway through a two-year trial to evaluate their real world performance, the signs look pretty positive. This compact car has been expressly targeted at government and corporate fleets that travel short commuter distances.

One of the proposals put forward is that this nifty little car could be used for carhire or as a ‘pool car’ employed on short trips by multiple users and being quick-charged between runs. In that scenario, it could be a powerful tool, and ArcActive are only too aware of the potential that their product can offer to the green car market in New Zealand and worldwide.

As the Ministry of Science and Innovation chief executive Murray Bain so aptly put it: ‘Kiwis are great at coming up with good ideas, but it’s sometimes a challenge to turn those ideas into something valuable. ArcActive are showing the way — not only developing new technology, but doing so in such a way that industry wants to be a part of it.’


‘Do the deals’ commercialisers told — KiwiNet Peter Kerr May 08

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The recent KiwiNet group hug in Wellington showed the value of having a dealmaker come salesman attitude when it comes to commercialisation.

KiwiNet is the collective commercialisation arms of eight CRIs and universities — combining knowhow and networks and providing an outward facing view for much of our tertiary smarts and ideas.

The May 2 forum was an opportunity to up the networks, and provide practical knowhow.

In this regard, Anthony Francis managing director of South Australia’s Flinders Partners (part of the same named university) reckoned there must’ve been a mistake when he was brought in the commercialisation scheme.

But it was soon clear that the ex-accountant (who got out before he was bored to death), and has been involved in some private ideas to market ventures, is the ideal dealmaker in this commercialisation space. There’s a suspicion that this Aussie is more in the ‘ask for forgiveness rather than permission’ camp.

If there was one Francis take-home message, it was NOT to get too tied up about where/who has the intellectual property.

FP’s general policy is to vest the IP in the separate company that is set up. Often this was someone else with money and/or passion, and willing to drive the idea. Basically, they’re told to get on with it.

Francis isn’t than enamoured of the idea of licensing IP either — ‘it sets up an adversarial mindset right from the start’.

He gave one example of some IP ‘freed’ (sticK’s description) from Flinders — where large collections of data in the form of icons or images are displayed in a 3-D array organised about axes of relevance.

As described on thereitis.com’s website:

‘Scanning large collections of visual data, users are able to detect clusters of the type of objects they are looking for — often in their peripheral vision. They then focus on the general area to further refine their visual search until frequently they announce ‘there it is!’ Our studies to-date show a significant reduction in search and find times’

This startup is less than a year old, has already been valued at $5 million and has been selected as one of the most innovative technology firms in Australia.

It is a perfect illustration of what Francis described as ‘it is good to be where the problems are.’ From that you can figure:

  • How to solve them
  • How to extract value from solving them

He gave a couple of other illustrative quotes.

‘Entrepreneurship is the process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled.’ (Jeffrey Timons)

“A good idea is a bad idea that learns’

‘The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time.’ (Henry Ford)

Another of FP’s relationships is with the Aussie Rules team the Adelaide Crows. Now sport’s not something that a university would normally be thought to be part of; but some of Flinder’s thinking is applied to how the players can be better decision-makers on the field. In other words, upping player’s sports-smarts.

For Flinders, having Francis in the driving seat doing some of the deals has been a savvy move — do the deal, don’t get too worked up about the IP (let it go free!)


Aquaflow plays its bargaining chips smartly Peter Kerr May 03

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One of the more interesting aspects of Aquaflow Bionomic Corporation’s deal with CRI Catalyst Company of the USA, is having bargaining chips or cards in your hand.

Last September Marlborough-based Aquaflow announced a partnership of its wild-algae biofuel generating technology project with Texas’ CRI.

The wild algae has a dual ability to clean water and produce a ‘green crude’ (like black but without the millions of years of heat and pressure). CRI has a catalyst and process to convert this green crude into hydrocarbon fuels and blend stocks in typically a few hours.

CRI calls this proprietary technology Integrated Hydropyrolysis and Hydroconversion (IH2) — which can also convert biomass directly into renewable gasoline, jetfuel and diesel. CRI is also a subsidiary of Shell Oil (who recently sold its NZ downstream assets from refining to retail to Z Energy).

Whether or not Aquaflow’s promotion and use of wild algae (localised to the region) will be the route to market for what is plethora of global algae-to-oil projects, is still to be determined. (See here for a small list of such projects).

Aquaflow director Nick Gerritsen says using algae that naturally exist in an area is much more cost-effective and water-cleansing that attempting to create mono-cultures of algae specifically for its lipid oil production.

There’s also the question of whether a globally scalable algae focused solution will be deemed riskier if genetically modified species are used.

But, presumably based on Aquaflow’s understanding of how to optimise algae growth, harvest and production of multi-components, (for everything from fertiliser to bioenergy feedstocks), Gerritsen’s obviously been able to have other ‘conversations’ with CRI.

That includes the introduction of CRI’s IH2 technology to New Zealand — just in time for the growing quantities of biomass we produce (think forestry, gorse, solid waste).

The ability (as stated by Aquaflow and CRI admittedly) to convert biomass into renewable transport fuels, at close to the current price of crude oil puts Aquaflow in an interesting position in the country’s energy security stakes.

Gerritsen’s after investment beyond the $8.5 million already ponyed up by Aquaflow’s investors over the past six years, to crank up the IH2 process (and refineries) in New Zealand.

The point is, without some cards in their hand (or a bit of IP), Aquaflow wouldn’t be in a position to leverage CRI’s technology into New Zealand.

Now Aquaflow’s a long way from getting any sort of IH2 process off the ground — but it is a heck of a lot closer than it would’ve been without its own smarts to bargain with in the first place.

A bit of a case of ‘what you know’ combining with ‘who you know’ to create a ‘do you know what we can do for you’.


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