The Product Market and the Market for “Ideas”: Commercialization Strategies for Technology Entrepreneurs

This paper presents a synthetic framework identifying the central drivers of start-up commercialization strategy and the implications of these drivers for industrial dynamics. We link strategy to the commercialization environment – the microeconomic and strategic conditions facing a firm that is translating an " idea " into a value proposition for customers. The framework addresses why technology entrepreneurs in some environments undermine established firms, while others cooperate with incumbents and reinforce existing market power. Our analysis suggests that competitive interaction between start-up innovators and established firms depends on the presence or absence of a " market for ideas. " By focusing on the operating requirements, efficiency, and institutions associated with markets for ideas, this framework holds several implications for the management of high-technology entrepreneurial firms. (Stern). We would like to thank the firms who participate in the MIT Commercialization Strategies survey for their time and effort. The past two decades have witnessed a dramatic increase in investment in technology entrepreneurship – the founding of small, start-up firms developing inventions and technology with significant potential commercial application. Because of their youth and small size, start-up innovators usually have little experience in the markets for which their innovations are most appropriate, and they have at most two or three technologies at the stage of potential market introduction. For these firms, a key management challenge is how to translate promising