Techonomics
Establishing best practices in early stage technology modeling
What is Techonomics?
None of the game-changing innovations that science entrepreneurs are developing will actually change the game without also obeying the laws of capitalism. So how much does it cost to produce a new device, or a new chemical, or a kilowatt hour? Beth Zotter, Activate’s former technology economics expert and now co-founder of the seaweed protein startup UMARO, developed this educational resource, called Techonomics, to help budding technologists answer these thorny questions.
This Techonomics series includes primer videos as well as downloadable models, which are easy to read and manipulate, to estimate the cost of production of any component, chemical, or channel.
1. The Universal Law of Business
Does your tech idea obey the first law of capitalism?
2. Where Is The Value?
Know what kind of value your technology provides to the user, and quantify it.
3. Performance Specifications
Define the product made with your technology - with numbers.
4. Back of the Envelope
Do a back-of-the-envelope calculation to estimate unit cost: BOM+ or CapEx/OpEx.
5. Draw the Value Chain
Draw the value chain to see where your value proposition is located.
6. Modeling
Understand the best place to focus your R&D with a simple spreadsheet model. All models used are available below.
Sample Models
We think all models should be this easy to use. And the techonomic models reflect best practices for model construction and communication in the hard sciences. Watch the videos to see how the models are used in-practice. These spreadsheet models are all free to use, download, and modify and use for your business.
MODEL 1
Simple cost-performance model of the Super Performance Frisbee
MODEL 2
Simple manufacturing cost model of the Super Performance Frisbee
MODEL 3
Detailed chemical production cost model with CapEx, OpEx, and cash flow analysis for a polymer synthesis plant.
MODEL 4
Detailed chemical production cost model with CapEx, OpEx, and cash flow analysis for a fermentation plant.
MODEL 5
View simple formulas to calculate return on investment (ROI), net present value (NPV), and internal rate of return (IRR) with an imaginary machine that prints a $1 bill every day.
About Techonomics
Beth Zotter, independent consultant Chris Burk, and Activate’s founding CEO Ilan Gur developed the material on this site.
The videos are based on a course that Gur and Zotter developed and that Zotter taught at Activate from 2015-2019. Burk developed the models based on his experience consulting early stage startups at Burk Engineering.
We are grateful to them both for contributing such invaluable material to the Activate Fellows and the science entrepreneur community at-large.
If you want to learn more about Techonomics or any of the material we publish for scientist entrepreneurs, reach out and say hello.