Fractus: Sell Products or Sell Technology?

Rubén Bonet (CEO) and Carles Puente (CTO), co-founders of Fractus created a business around manufacturing and selling fractal antennas they had discovered and developed. Their business thrived in the mobile communications industry until early 2006, when their sales suddenly dropped. They quickly found out that their telecommunications customers were copying their fractal-based antennas without paying for licenses or royalties. This put Fractus on the brink of bankruptcy. Bonet and Puente knew they had to sue the companies that were infringing Fractus's intellectual property rights. They were also aware they faced a critical dilemma: whether to continue with the company's original business model of manufacturing and selling antennas, or leverage its key competencies to pivot towards a business model based on exploiting the patents.
Fractus, as a “New Technology-Based Firm” (NTBF ) or a “scientific spin-off,” faced some specific challenges. Commercializing a new invention entails a sequence of steps: recognizing and assessing the opportunity, deciding whether to pursue it, mobilizing the necessary resources, structuring those resources into a novel configuration, and formulating a strategic plan for the new venture.
The case places participants in the role of Fractus’s founders, illustrating how technology entrepreneurs make key decisions while launching and adapting their ventures within the fast-changing telecommunications industry.