'Market Discovery' method helps Hoechst Corp. target new technology   A Platform technology discovery was too good to pass up. So Hoechst opted not to license the IP but instead to systematically exploit its potential. By Paul Harris A fiber filtration technology developed in the U.S. by the Hoechst Corp. for the military will be commercialized in at least a dozen different markets, most of them identified by a special panel of corporate executives drawn from a variety of industries. Their motive: to get a jump on commercializing the technology in their respective fields. Hoechst (formerly Hoechst-Celanese), the Frankfurt, Germany-based chemical giant turned life sciences company, has established a new business unit in Charlotte, N.C., to systematically pursue opportunities for the "platform" technology. The 12 markets, which range from indoor air to medical filtration, were distilled from a list of 75 potential applications for the technology. It will initially pursue four markets, according to John M. Reeves, business unit manager for the new Hoechst division, Air Quality Filtration (AQF). They are cabin air filtration such as autos, trains and airplanes; clean rooms and other indoor applications; blood filtration; and biotechnology processing. In each case, Hoechst will supply a specific form of the technology to an industry partner for product manufacture and distribution. At issue is "cellbond particulate structures" (CPS), a technology developed in the late 1980s by Hoechst under an Air Force research contract for chemical defense. It involves a unique filtration technique based on a proprietary fiber structure. A system of functional particles effectively captures dangerous airborne contaminants and fumes because they are bonded and entrapped within the fiber filtration system in a manner so that less than I% of their surface area is covered by the bond. The technology was delivered for use in safety garments during the Gulf War but was never used by the military. The contract has since expired. "When we determined in 1992 that the chemical defense business was diminishing, we brainstormed other applications," says Gunter H. Groeger, a Hoechst research associate and co-developer of the technology. Using a "stage gate" business development process, Hoechst identified cabin air filtration as a key opportunity. It also determined that numerous other applications seemed likely, so it began pondering how to scale up a business unit. Since filtration represented an entirely new market for Hoechst, it could not easily be incorporated within an existing division. The company was not interested in licensing the technology to others, so in 1996 it opted to create a new business unit, focusing on the manufacture of specific forms of the technology that could be sold under contract to specific industries. Reeves was promoted to run it. A "summit" of executives To help it identify potential markets, Hoechst contracted SICO International Technologies Inc., (now a division of ISIS International) a Monroe, Conn-based consulting firm that specializes in corporate strategy, technology commercialization and market development. SICO has created a process called "Accelerated Commercialization," which enables technology developers to focus on research and commercialize products faster and more profitably. SICO used its "Market Discovery" process in which high-level "industrial opinion leaders" from noncompeting companies are interviewed, either individually or within a group. Typically, the executives provide their time and perspectives in exchange for first crack at a new technology presented by a sponsoring company. The process reduces the cost and time associated with technology development and commercialization, and has helped numerous large company clients, according to Richard A. Siegel, executive director. Siegel and company quickly put Hoechst in touch with a disparate group of individuals. Included were executives from Carrier Corp., Xerox, W.L. Gore & Associates, The Filtration Group, Johnson & Johnson, Pharmacia Biotech, Baxter Healthcare, Nike and 12 others. The Market Discovery project enabled AQF to measure its investment in pursuing new markets and applications, says Reeves. "While we focused our energies on cabin air filtration, the SICO team identified other commercial potential for the technology." From a long list of applications, it helped Hoechst qualify a list of 12 prospective markets, each with a presumed minimum sales potential of $50 million per year. Hoechst's aggressive growth strategy called for pursuing each technology market itself rather than through licensing of the technology. As one market begins to pay off, it will proceed with others, he says. Its method of pursuing the gas phase air filtration market sets the blueprint. With the help of SICO, AQF selected The Filtration Group, a Joliette, Ill-based company, to develop the market. "The company is very aggressive in developing new business, and is growing at 35% a year," says Reeves. "We liked that." It was not a lengthy courtship. The two parties were introduced by SICO in late August 1995. "One week later, we had developed a specific media for the company, and it had developed the first commercial filter," says Groeger. AQF produces a pleatable, nonwoven media that is delivered in rolls, from which The Filtration Group produces filters for retail. Its products based on the technology are already being distributed globally. Similarly, AQF is contracting with the Carrier Corp. for the indoor air market and with Baxter Healthcare for the medical filtration lines. AQF's products are manufactured under contract in Tennessee, but it will begin production from a new facility of its own in the Carolinas, says Reeves. For Hoechst, the experience illustrates its aggressive attitude toward developing and commercializing new technologies worldwide. Its earlier emphasis on industrial chemicals has recently been replaced by new strategies of advanced technologies involving life sciences - especially pharmaceutical, diagnostics and nutrition. It has contracted SICO to help spot markets for two other technologies, a unique separation technology and a new polymer.   Richard Siegel, SICO International Technologies, Inc. (a subsidiary of ISIS International, Inc.) 203/261-5300. www.isisusa.com Article republished with permission of Technology Business Magazine. RETURN TO CASES & PRESS