How can one seize an opportunity in the high technology sector when the marketplace is reinvented every five years?
This is the story of Smartinst, a very good start-up founded by a top-notch team: Jean-François Pinton, world renowned in the area of fluid mechanisms and General Director of the Institut de Physique du CNRS and Christian Graffin, ex senior VP of the first worldwide distributor of industrial control materials.
What is it about?
A very simple invention in appearance: a small plastic ball-bearing, 2.5 cm in diameter, stuffed with electronics. In fact, it is a probe that can be plunged into any type de product whose fabrication process is based upon the blending of mixtures of liquids, fluids or granulites. Relying upon the technology of “Core Inline Measurement”, this autonomous captor evolves in the mixture into which it is plunged by collecting important information about the physical reactions produced there : temperature, acidity, turbidity (texture of a fluid in materials disturbing it), conductance (capacity of a substance to allow the passing through of an electrical current), to cite only a few. Transmitted by radiofrequency to an analysis center, this information is analyzed in order to follow and to measure the evolution of the mixture in real time. Clearly this is a technology with vast possibilities of application: industries producing mixtures with much added value such as chemicals, agriculture, cosmetics or pharmacy-biotech, and also activities such as water treatment, hydrocarbons (petrol and gas) or BTP (quality control of the mixture and transport of high performance cement).
Rupture innovation or Technological rupture?
A rupture innovation generally relies upon an existing technology. It induces a change in concept for its clients to whom it delivers superior benefits with lower costs. It most often leads to the creation of a new market. On the contrary, a technological rupture relies upon a new technology specially developed to improve the performances of a product or a service in a market that already exists. It leads to an incremental innovation and not to a rupture innovation. The distinction might appear subtle but it does have an effect on the valorization of a technology. In the present case, it is a question of a new measuring concept: a technology embarked in autonomous probes, inserted into the mixture and permitting dynamic measurements at a distance and in real time. The rupture is evident compared with current solutions relying upon static measures, obtained by taking grafts from the mixture and resorting to external captors. Yet, will this create a new market making this technology a rupture innovation? Not really, the essential basically lies elsewhere. At the heart of the elaboration of many products, the impact of this technology on industrial processes is considerable: reduction of scrap rates, optimization of manufacturing cycles, a better supervision of production processes, productivity gains, and product traceability. This could impact the competitiveness of numerous industries and reinforce the pre-money value (1.8 million €) of this fast growing startup.
Profitability in 2014
It is not surprising that with such impetus, this startup expects to multiply its sales revenue by four in 2013. Its technological model is under an exclusive license – all sectors and all countries – with a patent from the Centre National de la Recherche Scientifique and the Ecole Normale Supérieure de Lyon. As to its commercial model, very simple and very performing, it is articulated around two objectives: to be the reference for the measuring at the heart of mixtures and to become the partner of major companies for industrial and quality control. The cash generators underlying this model are clearly positioned: services of analysis and consulting expertise, sales of measuring and steering equipment, sales of reconditioned probes, licensing to those controlling and supervising industrial processes. For the moment, the immediate operational objective is to begin the industrial pre-series by capitalizing on six years of research and three years of development. That is all that is necessary to ensure recurrent sales revenues that should reach 15 million € in 2018.
Gilles Bouchard – VP Harvard Angels France