Level 4: New products and services

The sub-levels of level 4

Sub-levels are a first draft, being refined. A Level 4 business sells something new. Within this level, businesses differ in where the technology comes from, how much of it they own, and how long and costly it is to develop. They are listed roughly in order of money needed, risk, control and value added; real businesses do not always climb in this order.

1. 4.1

   Technology licensee

   You license a technology developed by a laboratory or institute (such as a CSIR laboratory, an ICAR institute or an IIT, directly or through NRDC) or by a company, Indian or foreign, and make and sell the product. You usually pay a one-time fee, a royalty on sales, or both.

   Example: A small food company licensing a processing method from a CSIR laboratory and selling the product in its region.

   Money

   Moderate to large: the licence fee, a plant to scale up the process, and building a market.

   Risk

   Results from the laboratory may not hold at factory scale, the market may be new, and a non-exclusive licence lets others take the same technology.

   Control

   Medium: the business is yours, but the licensor owns the technology and sets the licence terms.

   To climb

   Improve the technology yourself and build your own product and engineering team.

   Read: How technology transfer works in India: a starter's guide

2. 4.2

   Product startup on licensed or open technology

   You build a new product or service by combining technology you license, or that is freely available (open-source software, published methods, standard components), with your own design, and sell it under your own brand.

   Example: A startup building a farm-monitoring device from standard sensors and open-source software.

   Money

   Moderate to large: product development, an early team and the launch, often with money from investors.

   Risk

   Customers may not buy, and competitors can copy you because the underlying technology is open to them too.

   Control

   High over the product and brand, but little protection for the technology.

   To climb

   Do your own research and development on the hard part, and protect it with patents or closely held know-how.

3. 4.3

   Own R&D and patents

   You develop your own technology and protect it, usually with patents. A patent gives its owner the exclusive right, for a limited period, to stop others making, using or selling the invention in the country that granted it.

   Example: A medical-device company that designs, tests and patents a new device.

   Money

   Large: research staff, laboratories, testing, patent filings, and a long wait for revenue.

   Risk

   Research that does not work, long approvals for health and safety products, and heavy spending before sales.

   Control

   High: owning the technology gives you a real say in price and partners, if customers value it.

   To climb

   Deeper science, or technology that other companies build on, backed by long-term funding.

4. 4.4

   Deep tech or platform company

   You turn new scientific or engineering knowledge into products. India's DPIIT describes a deep tech startup as one that builds solutions on new scientific or engineering knowledge, spends most of its money on research and development, owns or is creating significant new intellectual property, and faces long development times, high capital needs and large technical or scientific uncertainty. A platform company builds technology that other businesses build their own products on.

   Example: Companies developing satellites, semiconductors, new kinds of batteries or new medicines.

   Money

   Very large and long-term: usually several rounds of investment, grants or both.

   Risk

   The highest on the ladder: the science may not work, and the wait for revenue is long.

   Control

   Very high if it works: few others can make what you make.

   To climb

   The top of the ladder. The task becomes staying ahead and turning research into steady revenue.