Plextronics – a five-year old technology company near Pittsburgh – thinks it’s onto the Next Big Thing. And early evidence seems to support their belief. It’s called printed electronics, and it’s based on the properties of a fluid polymer first developed at Carnegie Mellon University that can be applied like an ink to various substrates where it performs a variety of amazing functions.

For example, it can become a light – illuminating small tasks, entire rooms, or even working as a video display. Tweak the chemistry just a tad and it becomes a solar panel – absorbing sunlight and turning it into electric power. Or print it like a circuit board and it becomes a semiconductor chip, performing the task of simple silicon circuitry in a variety of electronic devices.

It’s cutting edge technology, with novel application techniques, and more development work will be needed before much of it becomes fully commercial. But unlike the traditional metal and silicon components it seems poised to displace, the company’s organic print technology will be able to deliver the goods for pennies – opening the door for a surge of innovative low-cost applications that no one is doing today, including smart product packaging that feature LEDs, solar cells and circuits all printed onto the same package where they can educate, calculate, monitor, and entertain customers before getting pitched into the wastebasket.

Ubiquitous electronics

“Low-cost, innovative solar products will become ubiquitous. You’re going to see them everywhere. MP3s, cell phones, laptops and all the other individual consumer products you carry around are going to have solar cells printed on and integrated into the surface,” according to Plextronics Vice President for Products, Troy Hammond.

“Printed lighting will compete for and replace the light bulb. It can be flexible and integrated architecturally into the room instead of just a lamp you plug into the socket. And if you’re bothered by the fact that you’re starting to see information displays in more and more places, brace yourself: that’s only going to escalate. You’ll see information presented to you everywhere you can possibly imagine because it’s going to be cheap to have displays the size of a wall and in essentially high definition quality.”

One of the first commercial applications will likely be RFID tags, the probable successor to bar codes. Its biggest customer is a German firm spun out of Siemens whose work is focused on creating a 1¢ printed RFID tag using Plextronics’ special polymer technology. And those pennies can add up quickly. One analyst, according to Hammond, recently assessed the overall printed electronics market as approaching $50 billion within ten years. And even that may be small potatoes.

A really, really big deal

“The world’s major electronics manufacturing companies say this is going to be a $300 billion market in the 2020s and will challenge silicon for total size – it’s that big a deal. And Plextronics’ vision is to be the world leader in printed electronics technology. We want to enable the growth curve in the biggest market application areas,” he said, pointing to a graph projecting steeply climbing sales over the next 15 years.

“Our big, hairy, audacious goal is that we want our technology to be enabling 15 billion printed electronic items in 2015. And that isn’t just a crazy guess. It is built from an understanding of product opportunities we could potentially enable,” Hammond said. “If you start talking about having active functionality on a cereal box, you start to understand how we can talk about individual products in the hundreds of millions instead of thousands.”

It all seems very heady. But Plextronics doesn’t actually see itself in the business of building or selling the devices that use its novel technology. Instead, it visualizes itself as the enabler and partner of companies which do while manufacturing and supplying them with the critical materials and inks they require. However finding just the right point of entry into commercialization has proven harder than it might have seemed.

Strike one

The first attempt was in the electronics manufacturing industry where electrostatic discharge is a major issue. And the logic was pretty good: “Billions of dollars of electronics are lost every year because the current technology to control electrostatic discharge just mixes carbon black into the coatings you put on the floor and other areas in an electronics factory,” Hammond said. “So there were all kinds of problems they believed could be solved by using conductive polymers instead of carbon black.”

Early trials of the technology proved successful and it was easy to hit the specifications the customer seemed to be asking for. Maybe it was too easy. “Over time, reality sank in,” Hammond recalled. “Although things seemed rosy in the early days – it looked like a large market addressing a real problem – in reality, the customer’s pain was mild. There wasn’t the level of urgency needed to pull the product through the commercialization process. The more details that surfaced, the more it appeared that it would take a very long time to get broad acceptance for replacing the traditional product. And when the alternative is carbon black, it means you’re trying to compete with dirt, and dirt’s cheap. So the math showed low margins.”

Heads on swivels

“When you’re running in football or skating in hockey, they always talk about having your head on a swivel. Because otherwise you might just get blindsided and demolished,” he observed. The same applies to finding traction in a new market. “What else is out there? We know there are other applications. But let’s not get so focused on our original idea that, by golly, we’re going to make it work no matter what. So our eyes were constantly open for what other opportunities might be out there for this technology. That was one of the first lessons we learned: keep your head on a swivel.”

It turned out to be a good lesson, because other opportunities quickly surfaced which reflected a lot more customer pain and much more promising margins. “That really led to a product strategy shift. We were able to clearly identify the beginnings of this market called Printed Electronics. And they had gotten some early indicators that there were technical problems – some missing pieces of enabling technology,” he said.

“We really felt that we had the enabling technology, and as we looked at the burgeoning field of printed electronics, we knew we also had a platform technology. Our core technology could be developed and pointed in multiple different directions within that very large market. That presents a tremendous amount of opportunity as well as a tremendous challenge to manage,” he said. “So within a couple of months, we had punted completely on our original business plan and were off and racing in a completely new direction. Now we clearly had a platform with which we could begin to build the company and raise capital on.”

Awash in choices

With a product platform capable of supporting so many different applications, one of the greatest practical challenges is deciding – even while your head keeps swiveling – exactly where to place your product development priorities. For Plextronics, a series of analytic tools and management disciplines have helped to provide that focus. Roadmapping, Opportunity Analysis, Voice of Customer, House of Quality, a Stage-Gate Product Readiness Process, and Developmental Partnerships are among the many moving parts of the company’s strategic tool kit.

But Hammond discovered one more risk that is awfully easy for startup companies to succumb to. “We’ve learned that you’ve got to be able to say ‘no’ to bad money,” he noted. “Not all money is good money. Some money can be very distracting. We’ve had a couple small grant opportunities that were exciting at the time because we won them and, in hindsight, we might have preferred not to. It’s one of the lessons you learn, especially in an emerging market where there are a lot of different funding opportunities with different motivations: We want to make sure that the things we secure to support our development process are not going to distract us from following our product roadmap.”