How did Open Innovation impact the two companies?
Maxim benefitted from saving the shut down costs and instead now has the ability to participate in the upside by retaining equity in a promising startup in a market that may have long-term strategic interest to them, all without incurring incremental market and product development costs. Additionally, the spinout presents a potential channel relationship for Intelleflex products through Maxim, which in turn could drive higher sales for Maxim’s existing products. Finally, the spinout invoked a renewed sense of entrepreneurship in the Maxim team that further fueled innovation. Intelleflex benefitted by gaining valuable engineering talent and IP that will allow the company to extend its technical and market leadership in Class-3 RFID. Intelleflex also benefitted by finding a valuable potential go-to-market partner for its technology in Maxim and a valuable source of key components for its Class-3 RFID hardware platform.
In today’s highly competitive landscape, embracing innovation may not be sufficient. Adopting a paradigm, such as Open Innovation, that allows you to capitalize on the latent value of your portfolio of innovations could enable significant growth and allow you to maintain your competitive advantage into the future.
Ketan Patel is a Principal at New Venture Partners, a venture capital firm dedicating to partnering with global technology corporations on technology spinouts.