Hi-tech entrepreneurs and academics are concerned with where and how much investment they require to commercialize their lab technology while investors want to know “is that technology good to invest in?” If you have a good technology or idea and thinking of commercializing it, consider this text as a road map.

During  the past 10 years, I worked in academia, finance and engineering  and it always takes me a long time explaining to startups, researchers and investment banking friends what it takes to bring a great idea or a lab technology to market. They all are great professionals and smart people, but it always seemed to me that they hold separate puzzle pieces and it is hard for them to figure out how to put them together, i.e. to bring innovation to market.

Typically, academics are concerned with where and how much investment they need to raise in order to commercialize their lab technology while investors frequently call me to ask  “is that technology good to invest in?” After learning more about the startup technology, I always draw for them a particular R&D roadmap and certain milestones one should achieve in order to be ready to enter the market with a new technology.  This roadmap can be applied to every technology startup to answer the question “is the technology ready for investment and scale up?” It is called TRL or “Technology Readiness Level.”

Nowadays the word “innovation” is usually associated with the “tech startup”. The concept of a “tech startup” is still closely connected  in our minds with software products and services (Uber, Facebook, Airbnb, ect). Much less is known about hardware startups, however, as we have witnessed a commoditization of hardware  in the past 10-15 years, such that traditional hardware companies (like Dell and IBM) are seeking to provide solutions and services, rather than selling only hardware.

The new emerging trend is the combination of hardware and software technologies, enabling new business models which are scalable and have a much greater potential to reach a unicorn status. This trend is set for both deeptech (based on substantial scientific advances and high-tech engineering innovation) and  IoT startups. My work at EnCata is all about bringing innovation from labs and inventor’s minds to the market by means of engineering and product development.

The TRL  innovation development roadmap was invented by NASA in 1974. Back then, Stan Sadin, a NASA employee, created a system for evaluating the readiness of technology for the spacecraft Jupiter Orbiter, one of the most ambitious technological projects in the United States. The system gradually became NASA’s main methodology for evaluating their research and development projects. And in the 1990s, the U.S. Air Force successfully borrowed this approach and sliced it into nine levels, each of which was called the “Technology Readiness Level” or TRL.

Today, the TRL evaluation approach has received wide international recognition. This framework is now extensively employed by NASA, European Commission and many other institutional organizations involved in innovation development.

And I am still surprised how little innovators from Academia, startup tech founders and investors know about TRL.

The TRL is perfectly applicable for any hardware, IoT or deeptech startup. It is actually applicable to a software product (but in this article let’s concentrate on essential tough tech). So the TRL terminology provides a more accessible and universal understanding of the startup progress to investors and lays out the research and development plan.

What it looks like in practice?

As an example, let’s use a new light electric city mobility vehicle – a pretty cool example, provided it is a consumer product which has some level of engineering complexity and technology in it. In the following TRL-exercise the ‘technology’ will mean a set of engineering technologies and solutions fused together in order to aid  transportation for a human being with a light urban electric vehicle.

TRL-0. Idea

As you know, bicycles have been around for 200 years and the first electric-powered bicycles were available about 100 years ago. So your idea is not exactly new, and your idea is to make another e-drive vehicle.

Harvard Business Review USA – January-February 2020. Image source

TRL-1. Basic research

You have been going around with your very own idea how your light electric vehicle will change the city transportation landscape and how wonderful it will be cruising at 40 mph (65 km/h), shuttling from point A to point B and be able to recharge within 2 minutes.  You know what questions need answering and you have done some basic research to support your product idea both with numbers, publications and some technical ‘back of the envelope’ calculations,

So TRL-1 is all about the idea, which is still broad, and one should not rush to patent this idea, but instead start thinking about what comes next in terms of R&D, product features and multiple other things. In my view, it is a great pity that some people rush for patents at this stage, wasting time and valuable resources with the result that 45% of patents were determined to be fully invalid and 33% to be partially invalid, as shown in the following study

The first electric bicycle patent

TRL 2. Concept formulation

TRL-2 stage is characterised by multiple product renders of the future product. At this stage, some people start to produce patent applications and scientific and engineering papers (some produce white papers). TRL-2 technology level is very speculative, since there is literally no or very little experimental proof existing for the technology.

And you decided to move ahead with the new light electric vehicle idea and start concepting your future e-cab. Say your future urban vehicle will be a two-seater, and it will have some cool design features and it should  get the fastest charge. In order to achieve the latter, your CTO and you decide it will utilize supercapacitors as a power source (why not supercapacitors? I have a PhD in electrochemistry and for the sake of TRL demonstration, I choose this cool technology to be at the core of our “urban vehicle”. Read more about supercapacitor-powered e-bike project report by CALTECH students John Chen et al.

Urban e-vehicle concept developed by CityQ Startup

It is common for the automotive and aerospace industries to produce car and aircraft “concept cars” or “mock-ups” for demonstration at various fairs in  order to attract potential customers and investors. I would rather call these “concepts” or as TRL-2 concepts under NASA methodology.

So your light e-vehicle project all of a sudden is about bringing together a novel supercapacitors technology into the new vehicle design.

TRL 3. Proof-of concept.

Validating your basic technology at TLR-3 is crucial in many ways for your future project as at this stage you need to prove that you can move beyond theory (most projects never do!) For deep-tech projects, TRL-3 is about the physical demonstration of your nice academic research into the simplest prototype, called proof-of-concept prototype (POC). Some people can use terps POP (proof-of-principle) or POT (proof-of-technology) instead of POC.

Image source

So TRL-3 stage requires demonstration of your core technology and (in our made-up case of the light urban e-vehicle) that prototype would be somewhat similar to chassis + with a chair attached + simplest power management system which will be able to power the prototype for a 3-5 min drive.

Garages, labs and makerspaces are ideal to build POCs, as it typically requires basic craftsmanship and engineering skills from those who build them. POC just needs to demonstrate that your nice idea and well-thought concept is actually feasible. For the purpose of building a crude TRL-3 prototype I recommend using kits and materials you can find in the nearest DIY shop.  Single-board microcontrollers and mini-computers such as Arduino and Raspberry are very helpful, as well as using the cheapest components and donor devices from places like Alibaba.

… And do not forget these [super]capacitors to power your POC prototype! These can actually be ordinary capacitors (if you manage to pack them properly) with the simplest charging system one can acquire (remember that you need to just demonstrate that you can move your chassi by electromotive force from point A to point B, separated by 1/4 of a mile).

TRL 4. Component and/or Breadboard Laboratory prototype

Congratulations! Reaching the TRL-4 stage means either you have secured some investment (most likely FFF), or received a grant, or you are so self-motivated that you invest your own cash into this project.

Image source

Essentially, real engineering R&D starts with TRL-4. This stage is about bringing together and designing [multiple] subsystems and making sure they work separately as intended.  One must start any early stage product development and engineering program with a well written/documented technical product concept. Technical [product] concept can be as simple as drafting the vehicle’s engineering architecture in a mind map and decomposing all the electric vehicle’s systems into subsystems.

At this stage, your e-vehicle project will be puzzled with choosing the right components:

  • brushless BLDCs vs brushed e-drives?
  • hub-drive vs mid-drive configuration?
  • drive train question
  • supercapacitor producer selection (keep asking yourself, why didn’t you choose Li-Ion or Li-Poly), assembly,
  • power management system
  • chargers
  • chassis design
  • foldable vs fixed roof
  • suspension, brakes, power recuperation system, speed control, etc., etc.

Essentially, the project gets broken into subsystems design and a milestone achievement will be to demonstrate these engineering units and engineering mock-ups in a lab environment.

TRL 5. Subsystems designed and tested in real life

To validate  the engineering units and subsystem prototypes, more engineering hours will be spent in order to polish them up. TRL-5 is different from TRL-4 by achieving performance of all the subsystems in a real environment.

Having TRL-5 successfully completed means that the R&D program has solved major hurdles.  As you move further, more and more ‘classic’ engineering resources are required.

Many patentable solutions are generated at this stage, but if you are bootstrapping, it is a bit too early to hire a patent attorney. But one certainly should start developing an IP strategy at this stage!

Image source

We in EnCata utilize the following policy regarding the IP: our customers own all the IP generated throughout the development in Engineering Catalyst.

TRL 6. First prototype integration (alpha) demonstrated

TRL-6 is about embodying and integrating all the previously designed subsystems into a “sort-of final looking prototype”. Design and mechanical engineers at this stage work alongside manufacturing engineers, crafting the first sexy prototype (which still is not necessarily working as intended).

Design-to-manufacturability (DFM) approach for manufacturing and assembly is typically left aside and TRL-6 prototypes are expensive as they are nearly always handcrafted.

It is good practice to demonstrate your alpha to early “alpha”-testers who will provide you invaluable customer feedback.

Outrider prototype trike ready for first tests.

TRL 7. Field demonstration of the alpha

Well, by now you may have cruised around town in your new light TRL-6 electric vehicle and noted that some features did not work as intended. Maybe a charging system malfunction, or cold weather prevented the foldable roof from retracting, or the speed monitor showed 100 mph speed when you were just barely moving.

TRL-7 is deemed to be achieved when – through engineering – you are able to demonstrate performance in a relevant ‘field’ environment.

If not, you continue working on engineering development further: use other components, refine electronics and firmware, or even go back to the drawing board and completely rebuild your electric vehicle.

DHL field supervisor Jose Polanco (left) and Streetsblog Editor Gersh Kuntzman show off the future of package delivery in New York City. Image source

TRL 8. Final Beta prototype.

Engineering your TRL-8 or “Beta” prototype involves DFM approach and the produced prototype(s) should have a reasonable/adequate bill of materials (BOM) price and should be relatively easy to produce at a batch scale.

In addition to engineering development of a Beta prototype, much work is typically brought into tooling and jigs design. So beta-tests can be performed on a number of manufactured prototypes at the same time. Upon successful completion of the beta-tests, one can confidently say that his/her project has reached the TRL-8 level.

It is common that a new product or technology is brought to market at this stage, but one must stress it is still just  a prototype.

TRL-8 is a great milestone achievement and, in an ideal case, startups should target the next funding round to finance volume production, sales and marketing campaigns.

Organic Transit pedal hybrid vehicle batch manufacturing. Image source

TRL 9. Mass-production and commercialization

If you are ready to bring your light e-vehicle to city streets and start business operations – you are at the TRL-9. This means you are now qualified to launch mass-production in-house, domestically or overseas. For that, one should have some cash secured for both production, marketing and distribution. Investment at this stage is called late-seed/round-A investment. In some cases, running a crowdfunding campaign at Indiegogo or Kickstarter is a good idea to support your production with some upfront payments and market visibility.

Mass-production is a big topic on its own, and what becomes crucial at this stage is: planning, logistics, working capital and capital turnaround. And I shall write later another blog post about MRL (Manufacturing Readiness Level).

Mass-production (Image source)

So, what now? Action plan below!

If you have a good technology or idea and thinking of commercializing it, consider this text as a road map.  Go to the garage, coworking space or nearest makerspace / fablab. (We at EnCata have built a fablab specifically for this reason.) Start crafting your first proof-of-concept! Change the world, make it better.

If you are already working on your project and you have a working prototype (TRL 4-6) then:

  • hire a team of professional engineers
  • apply for a  hardware accelerator program,
  • find a professional product development company or engineering consultancy (such as EnCata). They will help you move your product with confidence from this stage to TRL 8 or 9.

If you have a fully developed hardware-based product (TRL 8…9) you need investments, so do the following:

  • Contact professional VC funds investing in hardware in seed stage.
  • Train yourself to become a manufacturing manager or hire professionals to manage your mass-production.
  • Gradually transform into the hi-tech CEO with focus is on sales and operation (this is not what VCs want – this is what your startup now needs!)