Windmill Revenue

It amazes me that the windmills over in Princeton have never stopped turning. Every time I gaze across the Wachusett Reservoir to the ridge in Princeton, the big white blades are lazily spinning. Maybe they do stop once in a while, but I’ve never seen it. Many companies would love this type of business – at all hours of the day the cash keeps rolling in.

This is a conundrum for companies, large and small, that are developing new products. How do you maximize the revenue that can be obtained from the innovative products coming out from behind the curtain? Many look to the windmill model where they first sell a piece of equipment then watch as the revenue rolls in from the consumption of the bits and pieces needed to keep it operating. This works great if the measurements or tests are all the same, the thousands of samples are the same type, and the operator does not need 3 PhD’s.

However, many companies making equipment are relying on the customers to be the experts and develop their own custom methods. This case is more like the windmill manufacturers that sell 3 million dollar windmills to towns like Princeton. A long sales cycle, a big sale, then start a new sales cycle again – kinda lumpy.

To smooth this out, others look to leveraging their technologies to offer a service to their customers. Many companies consider this as an easy add-on to their current businesses. Just look at how many instrument vendors now have service arms (Bruker, Caliper, Beckman, Millipore to name a few)

Another approach to harvesting your innovations is to collaborate to create valuable biological discoveries. This is a riskier approach with longer payback, but has worked for some folks with unique platforms such as BG Medicine and Rules Based Medicine.

A final pathway is to take your research technology and move it downstream to a production environment or a diagnostic facility. Both have much more stringent requirements than the RUO (research use only) world. But once inserted into a process or accepted as a routine test, the revenue flows quite nicely.

So when you are looking to get the most from your innovations, be sure to look beyond just selling a cool new box. Like the windmills in Princeton, consider the various ways to bring your value to the market, and you too may be able to generate energy ($$) day and night.