Going from “Tradeshow” to “Solutionshow” via Open Business Model

4 05 2007

NineSigma

Imagine you had a tradeshow experience that went beyond the “sales lead” opportunity to create “an end-to-end business deal solution” that closed real business. Now that would really provide essential value to better differentiate your old tradeshow.

Innovation often takes place at the intersections, and in this case, making a member experience one that goes from a “pure marketing cost” to a net “revenue generator” opportunity can change the entire value proposition of an existing product.

 

One such example is a company called NineSigma (see link to right under Open Business Model) that helps its clients “source innovative ideas, technologies, products and services from outside client organizations quickly and inexpensively by connecting them to the best innovators and solution providers from around the world.”

NineSigma is at the leading edge of Open Innovation. Like InnoCentive (see earlier post) NineSigma offers a marketplace for seekers and solvers of solutions. The trend of more and more companies seeking to leverage external innovation strategies to better focus on their internal core capabilities is growing. NineSigma facilitates connections between companies and expert solution providers. They encourage “solution providers” to respond to the requests NineSigma issues on behalf of its client “solution seekers” so that they may create “win-win” relationships.

The connections that are being formed are creating real value for both parties in the form of contracts, supply agreements, co-development or licensing arrangements, research contracts and consulting agreements across a broad range of industries. NineSigma (NS) uses an extensive database of email lists to target RFP’s of NS clients to its lists and it solicits proposals online as well as responses to direct emails.

Business Model
NS maintains “open identities” throughout the sourcing process. They help their clients define the problem so that “solution RFPs” more closely meet requirements and to protect a client’s IP. Proposals are posted to its community of solution providers via email (NS uses business intelligence to refine its email database of contacts from every search it performs).

NS acts as the intermediary between the thousands of solution providers to see the request and the dozens that are asking questions and fashioning a response. Then NS manages the response process, and in about 4 weeks, receive, summarize and present the results to its client.

NineSigma is compensated by the client based on a shared risk model which rewards NS by helping the client make connections that result in transactions that solve client problems.

Solution providers benefit because the process is fast, reduces the prospecting time, and is at no cost to receive RFPs. Providers can negotiate directly with the NS client and NS encourages its clients to quickly communicate about proposals that they aren’t going to select.

NineSigma Model

Creating a Community of Solutions Providers

NineSigma offers an Innovation Alliance Program that let’s partners earn compensation in return for giving NineSigma access to its supplier community. The program helps to create new member value for these partners within their own science or technology community.

Some associations are partners in this program: the American Oil Chemists’ Society, National Microelectronics Institute, and the Indian Innovators Association.

If a partner’s member submits a proposal that is accepted by NineSigma’s client, the partner will receive 10% of the success fee with a minimum of $1,000. On average, NS says partners may expect to receive $3,000 for each successful proposal.

ROI
January 2007, NineSigma saw its highest month of business volume in the history of the company. NS produced and released more than 50 RFPs – a 60 percent increase over the prior monthly record and nearly eclipses the record volume for RFPs released in an entire quarter.

With six months of order backlog, the company was assured of record volume in the first quarter of this year.

UPDATE 4/30: Newswire

 

NineSigma Extends Global Alliance Program to Over 250,000

Open Innovation Network Spreads Expertise in Science and Technology Sectors

CLEVELAND, OH — (MARKET WIRE) — April 30, 2007 — NineSigma, a leading provider of open innovation solutions to the enterprise, today announced the extension of its Innovation Alliance Program, a global innovation network, now consisting of more than 250,000 scientists and technologists that augments the hundreds of thousands of innovators from academia, industry and private-public research institutions in NineSigma’s total worldwide solution provider network.

This expanded reach significantly elevates NineSigma’s market leadership position, adding to their larger and unparalleled global network of innovation providers. NineSigma connects clients with opportunities to make solid, workable connections to solve their business and technology challenges.

NineSigma’s unique “Discover-Connect-Solve” approach, based on the principles of open innovation, enables clients such as DuPont, P&G, Kraft and General Mills to locate, connect and facilitate real business partnerships for bringing inventive new technologies and concepts to the market. The Innovation Alliance Program reaches out to industry, academia, and private-public development organizations, with recent new additions including the Commonwealth Advantage, Japan Technology Group and Global Ventures Industry Limited (GVIN).

 

 

 

 

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