The Real Innovation is Your Business Model

If you’ve been following our work over the years, you’ll know it spans the full spectrum of growth, with an emphasis on pre- and early-revenue ventures.

Recently, conversations have been centred on the challenges we’re facing in research commercialisation in Australia.

This article is an aspect of this thinking - and if you’re not in research, this has parallels to innovation across the board.

Hope you find it useful.

Best,
Dougal

Most people think commercialising research is about selling a great innovation. They're wrong.

First, let’s be clear on the definition of innovation.

An innovation is the realisation of a positive step-change to the status quo.

And in this flat world in which we live, this now means at scale.

Your breakthrough discovery, life-changing treatment, or revolutionary diagnostic? That's not the product. The actual product is a working business model that takes your discovery through to an innovation available at scale.

This fundamental misunderstanding has led to a system where research and commercialisation operate as separate, sequential activities—to the detriment of both. It explains why, despite billions poured into "translational research," promising research innovations so rarely achieve significant adoption. Recent analyses of biomedical innovation show that fewer than 10% of university discoveries with demonstrated efficacy ever reach widespread clinical use, and less than 5% achieve commercial sustainability beyond initial funding.

Every research institute faces the same challenge. Brilliant science. Promising validation. Initial excitement. Then momentum stalls as the path to real-world impact proves elusive.

It's not for lack of infrastructure. The research and innovation ecosystem has built entire systems around commercialisation:

• Technology transfer offices protect innovations and facilitate licensing
• Implementation scientists integrate solutions into healthcare pathways
• Business development teams forge industry connections
• Commercial advisors offer generalised business guidance

Yet the gap persists because this established system continues to try solving the wrong problem at the wrong time. It’s limping along, firing on one cylinder. Some teams are doing an incredible job of keeping it moving, but if we’re honest, it’s a system in decline.

The conventional approach artificially separates what should be integrated: research excellence and commercial thinking.

This artificial separation creates several interconnected problems that hinder impact:

Research Excellence vs. Commercial Value

Researchers often perceive a false choice between scientific excellence and commercial potential. In reality, research excellence is typically elevated when there's an expectation that findings must be reproducible and can withstand commercial scrutiny. The commercial lens often demands greater rigour and real-world validation, directing excellent science toward problems with both scientific merit and practical application.

Laboratory Isolation

Decisions that determine commercial potential are typically made within laboratory settings, without sufficient engagement with potential users, clinicians, or other stakeholders. Researchers who explore problems through direct engagement with end-users often discover entirely different approaches or applications for their expertise.

Misaligned Incentives

Researchers are evaluated primarily on publications and academic impact, creating tension between the imperative to publish and the occasional need for confidentiality. Meanwhile, industry partners typically seek innovations that fit established business models with clear paths to significant scale (often $1 billion+ markets), creating a mismatch for novel approaches.

Where to from here? While grant structures and funding timelines certainly warrant review, the more fundamental solution to these challenges requires shifting the locus of control earlier and back to the research team itself. Commercial considerations need to influence research design from the earliest stages while maintaining scientific rigour, not as an afterthought once the science is baking in the oven.

The real challenge isn't proving a potential innovation works. It's creating a sustainable business model around it before resources are exhausted—and this process must begin alongside the research itself at the earliest stage, not closer to its conclusion.

This means business model validation becomes an integral part of the research process. If done properly, the business model evolves as the research matures, with different funding sources coming online at different stages based on the readiness of the technology. The scientific questions about efficacy and the commercial questions about sustainability must be explored in parallel, with each informing and reshaping the other throughout development.

This integrated approach creates five key outcomes that traditional, sequential approaches rarely achieve:

Enhanced Research Excellence Through Real-World Focus

When commercial considerations inform research design, investigations tend to focus on aspects with both scientific merit and practical significance. This integrated approach leads to more robust, reproducible findings as commercial scrutiny demands higher standards of validation and real-world applicability.

Accelerated Path to Impact Through Parallel Development

Instead of treating business (model) development as a post-research activity, integrated validation advances both in parallel. This dramatically compresses timelines through:

• Simultaneous validation of scientific and commercial hypotheses
• Early identification and addressing of implementation barriers
• Proactive development of partnerships aligned with maturing research

This accelerated approach is particularly valuable for innovations addressing urgent healthcare needs, where delays in achieving scale directly impact patient outcomes.

Higher Adoption Rates Through Stakeholder Integration

Would-be-innovations developed with integrated validation achieve significantly higher adoption because stakeholder needs shape the research itself. This integrated approach drives adoption through:

• Systematic identification and addressing of usage barriers during research
• Development of evidence that matters to each stakeholder group
• Creation of implementation models that align with existing workflows

Healthcare innovations that achieve significant adoption are designed from the beginning with adoption in mind, not retrofitted for implementation after the science is complete.

Sustainable Funding Through Strategic Staging

Integrated validation creates sustainable future-focused funding trajectories by aligning research phases with appropriate funding sources. This approach creates funding continuity through:

• Strategic staging of different funding mechanisms as research matures
• Development of clear commercial milestones that attract appropriate investment
• Alignment of research outputs with specific funder requirements at each stage

By creating realistic anf forward-thinking funding pathways tied to both scientific progress and commercial milestones, this approach prevents promising innovations from stalling after initial research support concludes.

Stronger Research Integrity Through Clear Boundaries

Rather than compromising research integrity, integrated validation often strengthens it through:

• Explicit frameworks for managing potential conflicts of interest
• Clear boundaries between scientific validation and commercial activities
• Governance structures that protect academic freedom while enabling commercial progress

This integration of commercial thinking with research integrity is particularly important when navigating relationships with industry partners, ensuring science remains rigorous while becoming more relevant.

The traditional model creates a false dichotomy between research excellence and commercial success. This binary thinking ultimately limits both scientific progress and real-world impact.

In reality, the most successful innovations emerge when research excellence and commercial thinking strengthen each other. When scientists understand implementation contexts from the beginning. When commercial considerations sharpen research questions rather than diluting them. When each domain elevates the other rather than competing.

This isn't about compromising research to chase commercial outcomes. It's about recognising that the highest levels of both scientific excellence and real-world impact come from integrated approaches that respect and enhance both domains.

Success in translating research comes to teams that integrate commercial thinking from the earliest stages of research design. Research institutions that adopt this integrated validation approach—focusing on parallel development of scientific and business model validation—will significantly improve both their scientific contributions and their real-world impact.

The key insight remains clear: While traditional scientific validation and traditional commercialisation each have their own methodologies, the most powerful innovations emerge when these approaches inform each other from day one. When researchers embrace commercial thinking not as a distraction from scientific excellence, but as a force that can elevate it.

This represents a fundamental shift in how many think about the journey from discovery to impact. Because the real product isn't your innovation. It's the integrated approach that makes it matter.

If you want to explore how we do this with some of the best researchers and institutes in Australia, Let’s talk.