How Manufacturers Can Benefit from Distributed Innovation

2 The Problem(s) For Innovation-Driven Companies • Increased pressure for faster, more cost-effective R&D • Monolithic financial risk • Limited access to share of mind For Scientists and Engineers • Retirement does not equal end of productivity • Geography trumps talent • Excess capacity has no channel for distribution 3 Opportunity: A Perfect Storm for Sci/Tech Companies Reduced inflow of foreign scientific talent Aging U.S. scientific workforce ROW has surpassed U.S. in science education 4 Our Key Resource: Untapped Talent Pools Traditional pools y US, EU Academics y Contract labs (FTE) y Individual networks Traditional networks Opportunity pools y Global Academia y Researchers in Russia, India, China, etc. y Scientists in other industries y Excess capacity y Retirees Nontraditional pools of intellectual capacity 5 Our Platform: How InnoCentive Works Today InnoCentive Operations Seeker Companies Solvers 6 Center of the Scientific Conversation Developing Challenges Scientific Operations helps you identify appropriate Challenges Scientific Operations helps you formulate your Challenges Outcome: Challenge posted Tapping Global Talent Scientific Operations proactively matches the right Solver scientists with your Challenges Evaluating Solutions Scientific Operations forwards appropriate solutions for your review Scientific Operations actively works with Solvers to be sure their submissions address your criteria Scientific Operations facilitates award payment and Intellectual Property transfer Outcome: Submissions received Outcome: Award given 7 Scientific Disciplines of Challenges CHEMISTRY & APPLIED SCIENCES LIFE SCIENCES Analytical Chemistry Catalysis Colloid Chemistry Formulation Chemistry Materials Science Nanotechnology Organic Chemistry Physical Chemistry Polymer Chemistry Synthetic Chemistry Biochemistry Biomarkers Enzymology Food Science Pharmacology Physiology Plant Biology 8 Challenge Types Theoretical Reduction to Practice “Paper” Chemistry “Wet Chemistry” No lab work required Requires lab work 9 Solver Success Case Study • Peroxisome-Proliferator-Activated Receptors (PPARs) • Reduction to practice challenge 10 INNOCENTIVE 3109 R4-(4-HYDROXYPHENYL) BUTANOIC ACID POSTED: June 26, 2001 DEADLINE: Nov 30, 2001 $25,000USD HO O OH Abstract An efficient synthetic strategy for the following butanoic acid derivative is required. This molecule has been previously reported in the chemical literature but the existing known synthetic route may be lengthy, expensive and/or low yielding. Devise and execute the "best synthetic pathway". 11 INNOCENTIVE 3109 R4-(4-HYDROXYPHENYL) BUTANOIC ACID POSTED: June 26, 2001 DEADLINE: Nov 30, 2001 $25,000USD HO O OH Solution Criteria • 2 steps or fewer • >80% overall yield • >95% purity • <$100/Kg • 2.0g white to off-white solid 12 Chemistry: Complex Synthesis O O O HOAc HO OH + OH HO OH OH H2 Pd/C O HO HO O • Solution Meets Challenge Criteria:  2 steps or fewer  >80% overall yield  >95% purity Delivery of 2.0g white to off-white solid • Solver receives $25,000 USD! 13 Our Model Works …some of the Talent Accessed • INNOCENTIVE 216128 (Protein crosslinks) Head of Indian research institute • INNOCENTIVE 3109 (R4-(4-Hydroxyphenyl) Butanoic Acid) Retired head of Hoechst R&D • INNOCENTIVE 96229 (Regio-Stereocontrolled Tricyclic Alcohols) N. Ireland CRO and US Professor • INNOCENTIVE 258382 (Paracrystalline Arrays) Outside discipline • INNOCENTIVE 55195 (Substituted isoquinoline) Russian scientist 14 Why Do Solution Rates Vary? Varies Among Different Seeker Clients 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Synthetic Organic Synthesis Challenges: 50% Success rate related to award level and nature of scientific problem Experimentation provides evolution 15 Comprehensive IP Protection 1. Challenge formulation • • • • • Trusted companies Established IPR positions Anonymity Appropriate information Confidentiality 2. Information access 3. Submission and award • Gated details • Confidentiality/IPR agreements • Secure, private project rooms • Solver verification • InnoCentive administers presentation and payment • Awardees transfer IPR; all others retain IPR InnoCentive facilitates entire process 16 Creating Value for All Participants Seekers Solvers Project Roadblock Capacity – cost reduction Innovation Claim Staking Revive Stalled Projects Close “Dead” Projects Culture – work outside the walls Intellectual challenge Business development opportunities Financial reward Recognition 17 World’s Largest Virtual Lab InnoCentive currently has 75,000+ Solvers in 175 countries and 44 scientific disciplines 18 If You Build It…… So What Direct e-mail marketing of Challenges to targeted Solvers Major Global Program Elements • • • • • • • Online/Offline Advertising Public Relations Direct Marketing Market Research Thought Leader Development Trade Shows/Conferences Referral Program Focus Geographies • China, India, Russia/Eastern Europe 19 Solver Base Increasingly Asian Solver Demographic December 2004 12% 13% 3% 7% 3% Africa & Middle East 12% Asia Pacific E. Europe/Russia 37% 30% The Americas South Asia Western Europe 31% 32% April 2004 % 10% 10% 20 Steady Rise in Time Spent on Website Average Length of Visit to Website 13.86 14.00 Minutes 12.00 Time 10.00 8.13 8.00 6.00 6.20 4.17 4.00 2.00 0.00 2001 2002 2003 2004 21 Target Market: Russia •Scientific Conferences •Public Relations •Advertising •Partnerships •Russian Academy of Sciences •Universities •Direct Marketing 22 Target Market: India •Advisory Board •Scientific Conferences •Public Relations •Partnerships •IITs •CSIR, NCL, IICT •IIChE •Direct Marketing 23 Target Market: China •Partnerships •Chinese Academy of Sciences •Universities •National Science Foundation •Country Manager •Major Scientific Conferences •University Programs •Direct Marketing