What is the Deep Tech Entrepreneurship Journey?

Everyone who has a company or is inspired to have one has the same doubts in their heads. How do we innovate? What to innovate? When innovate? How much would it cost to innovate?

Those are the questions that typically lurk at the back of an entrepreneur's head all the time. After many (over 20 years) years of trying to understand what innovation is in the real sense, not the fancy and flashy startups that summits advocate, I came to the conclusion that it is somewhat more complicated than it appears to be.

1) Deep Tech Innovation

Innovation is the sum of many factors that leads to a breakthrough, mainly in terms of sales, which is in fact the conversion of a product into a sum of money, and indeed loads of money that come from a ton of clients!

But how hard science innovations can be transformed in innovation, that what is called nowadays as Deep Tech. In reality its the result of a clash between two massive supernova stars that gives rise to a burst of energy, and that is innovation.

The journey of a Deep Tech business is not an easy ride. Naturally, as with any other business, it has ups and downs. But for Deep Tech, there are more downs than ups. The downs normally surpass the ups, and the result is, most of the time, not good. The path is tortuous, and it can be very challenging and exhausting. However, a bad outcome is not the prelude to total failure. It is in essence a path correction measure that helps to straighten up the course and allows the entrepreneur to assess their previous assumptions.

2) Deep Tech ideal journey

The ideal Deep Tech entrepreneurship journey usually starts with an idea from a basic research subject. The research subject is mostly funded by public institutions with taxpayer money. After many years, the idea starts to take shape in the form of a promising product. The infancy of this product is full of problems, and as the researcher sorts it out, he notices that the scope is too big. Therefore, he must reduce the scope to be able to fit into a specific category. More funding is added to support this pivoting as the game is about to get rough as he approaches the fearful Death Valley. Now the thing gets even more complicated. It's a matter of live or die. The infant project will live if it survives the jungle of doubts and challenges, or it will perish and never see the day of light again. Here, the majority of innovation projects are buried. Once he clears the Death Valley, the product becomes a toddler, and he faces another important challenge: testing the toddler product in lab conditions. The lab conditions are well controlled, up to the point where there is no counterpart in the industry settings. This is a major mistake that researchers often make and later try to fix, with a very slim success rate. If he manages to make a prototype product that still works, he tests it again, but now in a less controlled environment. This is to see if the prototype is somewhat robust for the challenges ahead. This is the biggest challenge of all for a Deep Tech products, the adolescence period, or Scale up for that matter. A period where we have full energy, no experience, lots of arrogance, and no clue as to what to do next. We've all been there :)

If everything goes well, great! ?We can now go to the next level, to the adulthood. But first, we need to endure the undergrad and, in some cases, the postgrad phases. There is to say the transition from Scale up via Partnership Projects with an industry client There is a chams in this transition, a Funding/Investment Gap as defined by the US GAO and other sources.

Once we pass over the Gap we enter the phase of an adult product with a marketable name, quality assurance, datasheet, certificates, and so on. Now is the time to reap! The adult product, if nothing more happens — such as opportunity window closes, a cheaper product on the market, bad strategy and marketing, and any other normal commercial problems—starts to grow and mature as sales start to come in faster and everyone is talking about the innovative product. It then reaches its peak, and if nothing else new or improved is made, it begins to fade. If let it be the now eldery product age faster and dies.

3) Deep Tech realistic journey

You might be thinking or experiencing that this is already a very challenging path. But I am here to say, from experience, that it actually is, and much more.

That is the cycle of innovation that some companies refuse to understand, or perhaps to believe. To be completely honest, nothing goes as planned in the first place. We do plan, but we most of the time correct the course as we drive along the innovation road. So how would be a more precise picture of the Deep Tech innovation cycle or journey? You might be thinking that

As you can see, the R&D phase is way more complex, and there are many cycles that normally overlap with each other and go back and forth until they stabilize. The first thing to notice is that ?the Basic Research, ?Research Feasability e Technology Development together take more than 60% of the time. In TRL terms, we spent much more time in Phases 1 to 3 than in any other TRL level. Another important difference from the ideal Deep Tech journey is how long it may take to overcome the Death Valley. I know it might be daunting to see this for the first time, but in reality, the biggest corporations out there work on such a timeframe, and with one minor detail, they have a pipeline that runs in parallel to the main development line.

A single-product offering presents a significant challenge, particularly for startups. The success of the product is paramount to the company's long-term viability.

3) Deep Tech is a cash burn company

Interesting to know that no company alone can do high-tech without a helping hand from the government. Good public policies are instruments that easily transform the business scenario of a country. For example, let's say that your country has a law that incentivises companies to buy nanotechnology products with a tax exemption for a period of six years. If you are a nanotech company, you have gained a huge market demand for your product overnight. Just like that, markets are created almost instantly, just by writing something on paper (now in digital format). Therefore, laws and presidential orders can shape and profoundly impact our lives.?But this is a subject for another time. More on another article.

The governments spend billions and billions throughout the years to stay ahead of the competition, which is also called sovereignty. Basic Research consumes even more money than Startups, but they are the cornerstone of all the ideas. Startups come and go, but they are also a mechanism to try and fail fast spending less money at the begining of the development. However we have seen some cases where investors are pouring money at the very begining, as in the case of Open AI that received $1B from Microsoft or all Elon Musk companies that in 2015 received a whopping $4.9B in government subsidies .

Those extraordinary Deep Tech examples are amassing a ridiculous amount of money. But for the ordinary Deep Tech startup, that might not be the case. It will make a great deal of money, but if empowered by the government subsidies and good public policy, it can grow exponentially more rapidly. The basic idea here is that convergent technologies are amazing by themselves but, when combined, make a stronger impact. Let's get back to Tesla's example for a moment. Although Tesla is a car maker, they do not only sell cars, actually, they sell loads of high-tech embedded in the shape of a vehicle. Just think for a second, if the car is autonomous, why do we still need a steering wheel? or if the car knows its surroundings, why do we need to seat front facing? These are all good questions, because they challenge the original idea of a car. Perhaps, in the near future, we will not have anything similar to a car as it is today. The concepts change as technology progresses. Another example is the OpenAI pledges to invest $7 trillion — an investment bigger than most countries GDPs— in a state of art AI chip semiconductor factory. Why is that? OpenAI needs $ 700k/day to run its systems , that is $ 255 M/year, only for the infrastructure. Let alone the payroll costs, which salaries + stock compensations, ranges from $300k/year to $925k/year, for a software engineer with 10 years of experience. There are some higher-level software engineers making as much as $1.4 M/year. If we do a quick calculation, if 2100 employees make at least $750k/year each on average, in one year we will have an aditional of $1.6 B+ just on payroll. This is a very impressive cash burn company.

Right now, you may not be in the billions range, but you should aim just as high because, who knows, you might have the next big breakthrough technology!

4) Conclusion

The idealistic Deep Tech journey offers a roadmap, but true success hinges on navigating the labyrinthine complexities that lie beyond. Unlike a pre-defined path, the real challenge lies in cultivating the foresight to identify and circumvent the pitfalls that can cripple progress. Here's where my extensive experience in Deep Tech innovation comes into play. Having weathered the storms of R&D cycles, navigated the treacherous terrain of Death Valley, and witnessed countless pivots along the way, I've developed a keen eye for these roadblocks. My expertise transcends simply knowing the steps; it lies in guiding companies through the detours, dead ends, and unforeseen obstacles that inevitably arise. This allows them to optimize their resources, accelerate their timeline, and ultimately achieve groundbreaking results.

Feeling the pressure to keep your business afloat in today's ever-changing market? Struggling to break through plateaus and achieve growth?

I've been there. For over 20 years, I've guided businesses across industries, academia, and even government to success. I bring a global perspective and a deep understanding of cutting-edge technologies like nanotech, advanced materials, AI and more.

Here's what I can do for YOU:

• Dramatically increase revenue: I helped CIASC achieve a record-breaking 30% growth and secure over R$1 billion in federal amendments.
• Unleash innovation: I'm passionate about fostering game-changing ideas and turning them into reality.
• Build high-performing teams: I create an environment where your team thrives and innovation flourishes.

Ready to take your business to the next level? DM me today for a FREE consultation! Let's discuss your unique challenges and craft a customized strategy to propel you towards explosive growth!

Thank you!

Leandro Antunes Berti, BEng, PhD, MBA