Business Readiness Level (BRL) and Technology Readiness Level (TRL)
Statistics show that around 75 per cent of start-ups developing new technologies or solutions fail within three to five years. Of those that survive, too few become large growth companies. We believe that too many businesses develop products and services that do not meet the customer need well enough. When a product only partially meets that need, selling it becomes difficult and time-consuming – but you can do something about it.
Business Readiness Level (BRL) is a scale that describes the commercial maturity of a new business idea. It shows how closely a new innovation aligns with market needs.
BRL indicates how firmly the innovation is rooted in your customers' needs or problems, and whether the market confirms that the proposed solution will meet them. In a start-up, the innovation project and the company are often one and the same, so the entire organisation shares the same BRL. In an established company, however, each innovation project will follow its own path towards commercial maturity.
Technology readiness is often measured using a Technology Readiness Level (TRL) scale. This scale indicates how far the technology has progressed in the development process and what evidence is available to document its performance.
Awareness of both TRL and BRL helps innovation projects develop their technology and market in step.
Customer involvement in development
Both the EU and we at Innovation Norway want to see more targeted product development that continuously involves end customers to verify how well the product meets genuine customer needs. The model below links technology readiness (Technology Readiness Level – TRL) with business readiness (Business Readiness Level – BRL), illustrating the interaction between product development and genuine customer needs in nine stages. For example, if your idea is at TRL 4 and BRL 4, the product or service under development continues to meet customer needs effectively. A step-by-step approach and a good balance between technology and business create strong conditions for success.
Description of the Business Readiness Level and the activities at this level that lead to documentation:
BRL 1. Basic research: You can describe the need, but it has not been documented.
The company has a hypothesis that there is a problem worth solving. It develops the hypothesis and formulates a proposed solution, describing it in a way that allows it to be tested with potential customers.
BRL 2. Need defined: The need is supported by real customer or user examples.
The company validates its customer need hypothesis by developing a basic knowledge and understanding of the market and the problem it can solve, including the size of the market and who to speak to. The company conducts initial market research to gain an overview of customers, competitors and alternatives. The company has outlined a potential business model.
BRL 3. Need validated: The customer confirms the need and proposed solution.
The company tests its hypothesis and achieves initial validation of the problem, the solution, the value it offers and customers’ potential willingness to pay. It conducts a more systematic market analysis. Real customers confirm that the problem is worth solving and provide feedback on the proposed solution. A framework for a business model is in place for testing. Customers, users, investors or business partners confirm that they will contribute resources to the solution’s further development, documented through letters of intent or similar agreements.
BRL 4. Small scale; the solution is tested with customers: Selected customers provide feedback on an initial minimum viable solution.
The company tests early versions of the solution (MVP) with a small group of selected customers. It identifies the technical and commercial conditions for success by thoroughly analysing the solution's strengths, weaknesses, opportunities and threats, including its potential profitability. The value proposition1 is clarified.
BRL 5. Larger scale; pilot customers are involved: Customers provide feedback on the solution under development.
The company involves pilot customers, business partners and users in the development process. It continuously tests the prototype to gain a deeper understanding of how the solution works under different conditions. Customers provide feedback on pricing and their willingness to pay in relation to the value it offers them, confirming the value proposition.
BRL 6. Initial acceptance of the solution: Pilot customers actively contribute to testing the solution.
Pilot customers confirm that the solution meets their needs by committing to test it and accept the associated risks. They contribute resources such as testing facilities, staff time or cash contributions.
BRL 7. Binding commitment: Pilot customers commit to making a purchase.
The pilot customers enter into a letter of intent to purchase or a purchase contract (preferably with special terms for the first customer). The company puts product documentation, certification and regulatory requirements, support functions, distribution, production and more in place.
BRL 8. First sale – satisfied customers: First full-scale delivery. Positive customer feedback. You can prepare sales forecasts based on valuable market insights from the first sale.
Your company has successfully completed its first delivery. Customers confirm their satisfaction through repeat purchases or formal testimonials that you can use in your marketing. You can now prepare revenue forecasts and calculations, as well as a market strategy. Secure long-term funding for further commercialisation and growth.
BRL 9. Growing sales: Increasing orders and sales to new and existing customers.
The company has the potential to generate stable revenue streams as it receives orders and increases sales. This enables the company to secure commercial bank loans.
This is how we define the nine technology readiness levels (TRL):
TRL 1. The basic principles of the technology have been confirmed
Scientific observations of the technology's fundamental properties have been conducted and documented.
TRL 2. The technology concept has been defined through analytical studies
Analytical studies of the technology have been conducted to assess potential applications. A plan for experimentation at TRL 3 is in place.
TRL 3. Proof of concept has been established based on initial research
Initial research has been conducted to confirm potential concepts (proof of concept). Studies and laboratory measurements have been carried out to validate theories. A plan has been developed for TRL 4: validating the technology at laboratory scale.
TRL 4. The technology has been validated through systematic laboratory testing
The technology has been validated at laboratory scale through systematic testing for its intended application. The results indicate that the technology may be able to meet the expected performance requirements. The technology is ready for testing at TRL 5 under simulated conditions.
TRL 5. The technology is being tested under simulated operating conditions
Results are available from testing the integrated system solution under simulated operating conditions.
TRL 6. Pilot-scale system solution tested under relevant operating conditions and meets functional requirements
Results are available from testing a pilot-scale system under relevant operating conditions. The relevance of the test environment is described, including scale, choice of operating conditions and safety functions. A clear and comprehensive technology description is available, covering functional requirements, operating conditions, the design process undertaken, etc. A plan for achieving TRL 7 is in place.
TRL 7. Full-scale prototype tested at a commercially relevant scale and under real operating conditions
Test results are available from trials of the prototype system solution at full or market-relevant scale under real operating conditions. Evaluation of the risk profile. Description of the scope of testing, validation activities completed, plan for achieving TRL 8, etc.
TRL 8. The technology is complete and qualified for sale, but has limited operational experience
Operation of the final system solution under real operating conditions has been documented, although operational experience remains somewhat limited. Achievement of requirements (performance and functional requirements) has been evaluated. Operating procedures and operational plans have been developed.
TRL 9. The technology is commercially available and has been operational for some time
Documentation confirming operation over time under all expected real-world operating conditions. Operational reports, maintenance plans, and completed operating manuals and procedures are available.
How do TRL levels align with the definitions in the State aid rules?
The State aid rules do not use TRLs to define stages of research and development. Instead, they distinguish between fundamental research, industrial research and experimental development.
As our innovation instruments target products and solutions that are close to market, most products and solutions will have a technology readiness level of 5–7. Similarly, most activities will be defined as experimental development:
Experimental development (TRL levels 5–7):
Includes the acquisition, combination, development and application of existing scientific, technological, commercial and other relevant knowledge and skills to develop new or improved products, processes or services. This may also include activities aimed at defining concepts, planning and documenting new products, processes or services.
Experimental development may include prototyping, demonstrations, pilot production, and the testing and validation of new or improved products, processes or services under conditions representative of real-life operating conditions. Its primary purpose is to further develop products, processes or services that have not yet reached their final form. This may include developing a commercially viable prototype or pilot where this must necessarily be the final product and where it would be too costly to produce solely for demonstration and validation purposes.
Experimental development does not include routine or regular changes to existing products, production lines, manufacturing methods, services or other ongoing operations, even if such changes may constitute improvements.
Some activities or work packages in innovation projects that we fund may be classified as industrial research. Projects classified entirely as industrial research are not eligible for our funding schemes and should be referred to the Research Council of Norway.
Industrial research (TRL levels 2–4):
This corresponds to planned research or critical investigation aimed at acquiring the new knowledge and skills needed to develop new products, processes or services, or to make significant improvements to existing products, processes and services (i.e. experimental development).
This includes the development of components for complex systems and may involve building prototypes in a laboratory environment or in an environment with simulated interfaces to existing systems, as well as pilot lines where necessary for industrial research, particularly to validate generic technology.
Especially for startups
Our startup funding is designed to help innovative new businesses progress along the green path shown in the illustration above. Our goal is to equip your business to operate profitably and become commercially viable (bankable) as quickly as possible.
A company is 'bankable' when it can secure sufficient funding from commercial banks and investors based on its earnings, operating results and future prospects. In practice, most start-ups only become 'bankable' once they have completed the green pathway, meaning they have progressed through all the TRL and BRL levels and are 'ready for business'.
We offer startup funding at three stages of this journey.
First phase: Market validation
BRL and TRL at levels 2–3
Your company has identified a need in the market and proposed a solution that offers something significantly new. The first step is to test the idea with potential customers or user groups to determine whether the proposed solution is viable. Start-ups can receive grants from us for this phase. Read about Startup grant 1 here. Once you have completed this phase, you will know whether the solution is worth pursuing.
To move forward, your company must have received clear feedback that the need is worth addressing and that people believe in your solution. Customers in your target group are willing to contribute to the further development of your product or service.
Phase two: Developing the business model
BRL at levels 4–5
In this phase, your company will carry out the activities needed to further develop the product and market. You will develop the solution by involving relevant users or prospective customers in the development and testing process. By the end of this phase, your company will have:
- defined its value proposition
- developed and tested a minimum viable solution with potential customers
- chosen a business model (and payment model) for the solution
- described and substantiated any positive environmental and societal impacts of the project
- a plan for managing intellectual property rights
- owners who are willing to provide sufficient capital to implement future plans, or the company has realistic prospects of attracting external investors
- a well-considered plan for further activities to ensure commercial success
Phase two: Developing the solution
TRL levels 4–6
Developing new technology solutions involves several stages and customer input before they are ready for market. Typical activities in this phase include:
- test the technology at laboratory scale, with selected customers providing feedback on an initial minimum viable solution
- test the first prototype under relevant operating conditions, with pilot customers providing feedback on the solution as it is developed
Phase three: Testing and organisational development
BRL and TRL at levels 6–9
As you develop the technology, your company must also define the key elements of a scalable business model by:
- test the prototype and system solution under real operating conditions together with pilot customers
- establish operating procedures and obtain operational reports
- continuous evaluation of the solution
- put product documentation and certifications in place
- secure suppliers and distributors
- offer the solution on commercial terms
- establish internal systems for customer follow-up, production, marketing and sales, and financial management
- take on different roles within the organisation
- look after all stakeholders