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Insights for product managers from a case study with an electric vehicle gamechanger
Today we are exploring technology-driven vs. market-driven innovation. I want to set up the topic for us a bit. There are times that a technology comes first and later a problem associated with a market need is found that the technology addresses. Examples include the glue that made 3M’s Post-it-Notes possible 7 years after the glue was invented, an electric actuator Caterpillar invented that went unused until they later created a digger that couldn’t use their standard hydraulics platform, or the magnetic research my daughter is doing as a physics student, studying spin wave properties, for applications that are yet to be discovered.
However, I find market-driven innovation is more common—the wants and unmet needs of customers are first discovered and then solutions are considered. This is the innovation process seen in the Jobs-to-be-Done methodology and described in many books including The Innovator’s Method.
To help us compare and contrast these approaches, Dr. John Cooley is with us. John has five technology degrees from MIT, starting with dual bachelors in electrical engineering (EE) and physics and including a PhD in EE. He founded Nanoramic in 2009 and now serves as the Chief of Products and Innovation. Nanoramic is a nanocarbon composites engineering company, currently working on electric vehicle batteries by reducing their costs while increasing their energy density (more energy in smaller and lighter batteries) and at the same time providing rapid charging.
Summary of some concepts discussed for product managers
[3:21] How do you view the value of pure research and market-driven research?
At Nanoramic, we have developed a product development business model. Some of our products are market-driven and some are technology-driven. We recognize there always needs to be a market-driven aspect for a successful product. Even if we start with a cool technology, we link that development to the market. Our product development has a large surface area in contact with the outside world. We create ways for our product development teams to interact with customers and get feedback that they formalize into the product development process.
We look for sensors to sense the market need. The most effective sensor is
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A lot of products come from market need, but we have developed products starting with technology. Our original energy storage technology was a technology-driven innovation. It was a highly efficient electrode technology for a niche energy storage device called a supercapacitor. We had a way of making electrodes with a uniform array of nanotubes, which had advantages for ion transport and overall efficiency. We connect innovations like this to clean tech.
Another example is our business line Thermexit focused on polymer composites and products. Our key product line is a thermal interface for electronics systems. It helps dissipate heat from electronic components, which is crucial for performance because the efficiency with which you can remove heat is directly related to performance. This technology began while we were studying carbon nanotubes and other nanocarbons. Some of the composites we created had very interesting properties like high thermal connectivity. At an investor meeting at MIT, we talked about how we would use our technology for thermal interface materials, and everybody got excited. We eventually developed a product and found the market in high-performance consumer electronics. That’s an example of a product that started from a bunch of nerds in the lab working on something we thought was cool. Later we found the application as the technology developed, and we turned it into a product that is a successful business line today.
On the other hand, our electric vehicle lithium ion battery is a market-driven product. We adapt our core innovations, driven by the requirements and needs in the market.
It’s always a mix. Successful products can be market-driven or technology-driven. Be opportunistic but also disciplined. We do a feasibility analysis to create discipline in identifying product concepts and how they fit the market. If we start with a market, do we have technology that addresses that need? If we start with technology, is there a market that will buy the product?
[10:32] How did you get on the path that led to creating the thermal pad?
In our company we encourage engineers to experiment in the lab. Some engineers had already played around in the lab with polymer composites and had seen some neat properties. If you establish a mesh of carbon nanotubes or other nanomaterials with a high aspect ratio, you get a low percolation threshold, meaning you don’t need much material to establish the mesh. We also noticed that carbon nanotubes have hyper electrical connectivity, meaning their resistance decreases as temperature increases, the opposite of normal metallic conductors’ behavior.
After noticing these properties, we had conversations with investors and customers and decided to make a business line that became Thermexit. We made a list of product concepts and identified the lowest hanging fruit based on market adoption cycle, customer interest, and alignment with our technology capabilities. Through this feasibility analysis, we ended up with our first product in that business line, the thermal interface. This product goes through a very fast one-year design cycle. It was a good choice for our first product because it’s easy to understand and it has a simple, small manufacturing footprint.
[16:21] How did the team with both research and business expertise come together to create Nanoramic?
I co-founded the company with another MIT grad student, and we were coming out of the 2008-2009 recession when a lot of stimulus funding went to clean energy applications and technology development. My co-founder and I took a business class called Clean Energy Venture, and we turned our final project into a business plan for a clean energy prize competition. We then turned it into a grant proposal for a major DOE grant award. We won $5.5 million to develop advanced carbon nanotube-based electrodes for supercapacitors and clean tech applications. We’re passionate about creating technology for clean tech applications. Our goal is specifically to commercialize technology in an application and industry that’s worthwhile. That goal comes out in our day-to-day conversations.
My personality has put a thumbprint on the organization. I’ve always been fascinated by electronic systems—the ability to cobble together a collection of electronic parts into a system that does something you want it to and that other people will pay you for. I’m energized by the idea that you could connect a cool technology idea to a market-driven need and a paying customer, and I think that shows up in the organization.
[22:01] How did you go from building supercapacitors to doing tech for batteries and electric vehicles?
Our aspiration has always been to make a big impact on clean energy. In 2009, supercapacitor technology was very popular. Supercapacitors are nanoscopic capacitors with a high surface area and small separation between conductive plates, meaning they have high capacitance. Dielectric capacitors are high power and low energy, and chemical batteries are high energy and low power. Supercapacitors are in the middle. We figured out where our technology could fit in the market by matching the power and energy capabilities of each technology to the application.
[26:57] How did the capabilities and IP you built up lead to working on electric vehicle batteries?
In the first seven years of the company, we worked on a lot of innovations around energy storage devices because we had grants from the DOE and NASA and commercial contracts. All that taught us a lot about the fundamentals of energy storage devices. In 2016-17, the electric vehicle renaissance began, and we developed electrode technology for supercapacitors that eliminated the most limiting material, a nonconductive binder, providing benefits in cost, performance, and sustainability. We had exciting technology right at a time when the electric vehicle market was becoming very exciting. We were looking for an opportunity to finally get into clean tech, and we found it.
[30:43] How did you decide to create technology that enhances the way batteries are created, rather than creating brand new batteries?
One of our competitive advantages is the ability to create lithium ion battery technology with advantages in cost and performance that reuses existing manufacturing equipment and infrastructure. The ability to rapidly scale, commercialize, get the batteries into vehicles on the road, and have an impact on CO2 emissions as soon as possible sets us apart.
There wasn’t a moment when we decided to adapt our technology to existing batteries. It was inherent in the way we work and think. We focus on practicality in processes and supply chain and on product commercialization, not owning high-volume manufacturing. We want to get the products commercialized as fast as possible, so we manufacture up to a point to prove it’s scalable then outsource manufacturing. We had the technology to eliminate the nonconductive binder, and we thought we could transfer it to lithium batteries. We realized we could reuse manufacturing equipment and license our tech to existing facilities, and everybody would want it because it simplifies the manufacturing process, reduces costs, and improves performance.
Our innovation strategy was born out of the organizational strategy.
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“The harder a decision you make, the more value you add.” – John Cooley
Thank you for taking the journey to product mastery and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below.