Licensing Strategies for Technology-Based Start-ups: A Drone Market Focus

Abstract

Background: The value of technology-based start-ups lies in their intellectual property (IP). IP assets enable companies to leverage their knowledge and expertise to create a competitive advantage. Many start-ups will struggle to develop the full in-house capacity to commercialise their IP in early stages due to capital and capability restrictions. Licencing is, therefore, one of the business models start-ups may consider, allowing them to profit from already-established IP as they develop their own capacity. For hardware companies, licensing is particularly favourable as it allows them to extract value from IP without the capital expenditure and ongoing costs of manufacturing. Objective: This thesis is aimed at providing small companies whose primary asset is an innovation, invention, or other form of IP, a guide for licensing their technologies. It also aims, more specifically, to present a guiding piece of literature for Dotterel Technologies Ltd. (“Dotterel”) to successfully license their IP and extract the most value from it. Dotterel is a New Zealand-based start-up that develops noise-reduction and audio-recording solutions for drones. It is intending to license its Noise Reduction Suite (NRS) technology. An exploratory study of the drone market was undertaken in order to situate Dotterel’s technology within the industry and aid in constructing a successful licensing strategy. Outline: The thesis is composed of two broad areas: a literature review on licensing, and a systematic review on the drone market. Chapter 2 explains the study’s research design and outlines the overall process followed. This includes an explanation of the systematic review and why this method was chosen, as well as a description of the data sources and the analysis techniques used. Chapter 3 is a literature review on licensing. It presents literature that addresses various relevant aspects, as well as considerations for successful licensing. This was necessary not only to provide an overview of licensing, but also to identify which areas needed to be focussed on in the following chapters. It was also utilised to help compose the search protocol for the systematic review. Chapter 4 presents the findings of the systematic review. Chapter 5 concludes the thesis with a discussion of the findings and concluding remarks. Significance: The drone market is rapidly growing, with numerous new applications being identified regularly. No other literature could be identified that provided a holistic analysis of the market. It is also the first piece of literature to discuss licensing in the context of the drone market. This thesis outlines background information that will allow small companies interested in entering the drone market to benefit the most out of their licensing agreement.