Building a Deep-Tech Business Model: Reconfiguring as You Progress in TRL
In deep tech, a business model is not a fixed template—it is a living, breathing construct that evolves with technological progress.
Deep-tech entrepreneurship is a game of constant evolution. Unlike digital startups that can pivot overnight, deep-tech ventures are bound by the physical constraints of technology readiness levels (TRLs). Each step from lab discovery to commercial deployment requires not just technological validation but also business model reconfiguration.
The Myth of the Fixed Business Model
Many founders start with a rigid vision of how they will monetize their technology. But in deep tech, a business model is not a fixed template—it is a living, breathing construct that evolves with technological progress. What works at TRL 3 (experimental proof of concept) is unlikely to hold at TRL 7 (system prototype in operational environment). The journey requires strategic shifts, from customer segments and revenue models to partnerships and value propositions.
A B2B Deep-Tech Example: Industrial Nanocoatings
Let’s take the case of a startup developing nanocoatings for industrial machinery to reduce friction and wear. At TRL 3-4, the focus is on scientific validation—showing that the coatings improve material performance in lab conditions. The initial business model is typically grant-funded R&D with a few early research collaborations.
As the technology reaches TRL 5-6 (validation in relevant environment), the startup begins working with industrial partners for pilot projects. Here, the business model shifts toward licensing agreements or joint development contracts with large manufacturing firms. These partnerships not only provide funding but also access to real-world testing environments.
By TRL 7-8, the company is ready for scaled deployment. This stage demands a fundamental reconfiguration of the business model: Should the company manufacture coatings in-house and sell directly? Or should it license the technology to a coatings manufacturer with existing supply chains? Each choice impacts margins, capital requirements, and growth potential.
The Art of Reconfiguration
Every deep-tech startup must master the art of business model reconfiguration:
From R&D to Commercialization: Early-stage funding comes from grants and research collaborations, but long-term sustainability requires transitioning to revenue-generating models.
From Custom Solutions to Scalable Products: Many deep-tech ventures begin with highly customized solutions before refining them into scalable, standardized offerings.
From Licensing to Direct Sales: Some companies start by licensing their technology but later shift to in-house production as they gain expertise and market traction.
From One Market to Another: Initial markets are often niche applications where technological advantages are most critical, but scalability often comes from broader, adjacent markets.
Navigating the TRL-Business Model Nexus
The key takeaway? Business model evolution should be an integral part of the TRL progression, not an afterthought. Founders who treat their business model as a dynamic system—one that co-evolves with technological maturity—are far more likely to succeed in scaling deep-tech innovations.
Building a deep-tech venture is not just about developing breakthrough technology. It’s about continuously reconfiguring how that technology creates, captures, and delivers value. And that’s the real science of deep-tech entrepreneurship.
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