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FEATURE

Taking innovation to market

Because the biometric market is still fairly fragmented, has few international standards and needs more than just government clients to survive, there is a need for a business-view approach that would benefit the industry by focusing further research on market-readiness and acquiring credibility through commercial installations.

Many of today’s security technology start-ups originated at universities. In fact, just over 40% of entries received in Global Security Challenge’s annual US$500 000 competition come from universities. While this percentage seems high initially, it is not surprising, especially for biometric technolo-gies, as they require years of basic research in labs and universities before reaching the prototype stage.

“The main focus of development should lie on the technology’s progress to market requirements, such as speed and interoperability”

The timeline for iris-scan commercialisa-tion is exemplary for the entire industry, as it took eight years from granting the first patent to Dr. Flom in 1987 for the develop-ment of the core algorithm with Cambridge professor Dr. Daugman, until its first installed unit in 1995 in a German bank.

Because of the significant development time in labs and universities, biometric innovators are unavoidably out of touch with the customers (for example, border police) and end-users of the technologies. Understandably, experts often call for more advancement in biometrics’ technical core capabilities. However, it can be argued that the main focus of development should lie on the technology’s progress to market require-ments, such as speed and interoperability.

The main reason why iris-scan technology has not surpassed fingerprint technology in government applications, such as the

US-VISIT programme, lies in customer requirements rather than technological capabilities. Fingerprint was selected for this US$10 billion US-immigration program because of the government’s existing finger-print database and the end-users’ fearful per-ception of eye-scanning. Customer require-ments and not technological capabilities made the difference, and biometric innova-tors should learn from this lesson.

A way to solve this problem is by organ-ising frequent encounters between research-ers, government, industry and venture capi-talists (VCs), who are good representatives of the market’s voice. While researchers often get carried away by technical details, they repeatedly stumble when asked by a VC how their technology could be used by an airport screener, police officer or nurse in a hospital. Therefore, exposure to mar-ket views and realistic expectations about market needs is a critical step in advancing biometrics.

The slow emergence of standards in biometrics has been cited for years as a stumbling block for broad implementation. We acknowledge that there is a strong need for international standards and a power-ful industry voice that can integrate the various associations in this field. However, there is an even bigger onus on biometric SMEs to proactively deal with this situ-ation, instead of passively sitting on the sidelines waiting for a settlement.

For two important reasons, we are strong proponents of dual-use technologies that appeal to government clients and commer-cial customers alike. The first reason is the commercial attractiveness of a huge market outside government that helps biometric SMEs with raising necessary funds for con-tinued research. Venture capital is a proven catalyst for innovation, and VCs only invest in ideas that have disruptive poten-tial in large markets. VCs have successfully

dealt in the past with the emergence of standards in operating software and the Internet, which makes them crucial guard-ians for emerging biometric start-ups when it comes to influencing and adapting to technical standards.

The second reason why dual-use technol-ogies are so important is because the pri-vate markets act faster and are more flex-ible than government players, which makes them the ideal test-beds for biometric installations. The iris-scan instalment for access control at Equinox Fitness gyms in New York is a great example of how a biometric company can learn about techni-cal integration, system accuracy and usage in a real life setting, while also building its credibility through sold projects. Having an installed user base that can be shown to government clients, is a powerful way to convince the risk-averse public agencies of your reliability and capabilities.

“Venture capital is a proven catalyst for innovation and VCs only invest in ideas that have disruptive potential in large markets”

We also advocate business plan compe-titions as a great gateway for biometrics’ commercialisation, as they not only bring together innovators and market forces, but also give the winners a ‘stamp of approval’ from independent judges that can often levitate some of the customer’s fears when deciding on a new biometric solution. Dual-use was also at the heart of Iridian, the successful biometric start-up which monopolised the iris-scan market for a decade. Their commercial appeal helped them raise more than US$30 million in VC money along the way, and their first customer was not a government entity but a commercial bank in Germany that gave them the critical first boost of credibility.

This article was written by Simon Schneider and Janeen Chupa, presidents of the Global Security Challenge, the largest security innovation competition in the world. They can be contacted at email: simon@globalsecuritychallenge.com, Web: www.globalsecuritychallenge.com

As organisers of a unique international security competition, we interact daily with biometric researchers and entrepreneurs, who tell us about their pains in commercialising their fingerprint, gait analysis, iris-scan or other biometric inventions. What we have learned from them directly is that almost always, the people who come up with the most amazing technolo-gies are not the ones who are best placed to build a company around these technologies. This highlights two fundamental flaws in the growth proc-ess of a biometric SME – not fully understanding the customer needs, and failing to set realistic market expectations.

July/August 2008 Biometric Technology Today