Innovation readiness level: what it is and how to use it

The term “innovation readiness level” gets used in two different ways, and the confusion creates real problems. Some people mean the KTH model: six dimensions of project readiness, each rated from 1 to 9. Others mean Steve Blank’s original concept from 2013: a startup-focused adaptation of NASA’s Technology Readiness Level. Both trace back to the same source: the Technology Readiness Level, developed by NASA in the 1970s to track technology maturity for space programs.

Understanding what each framework actually measures matters for three reasons. You’ll choose the right one for your situation. You’ll know what it doesn’t cover. And you won’t confuse project-level readiness with organizational readiness, which is a separate question that determines whether your best-scoring projects actually reach the market.

This guide covers the lineage, the frameworks, and how to use them.

Where the innovation readiness level comes from

The Technology Readiness Level was developed at NASA in the 1970s. The basic idea: define nine levels of technology maturity from “basic principles observed” (TRL 1) to “actual system proven in operational environment” (TRL 9). This gave NASA a standardized language for describing where any given technology stood in its development cycle.

The framework worked well for its original purpose: managing aerospace technology programs where the technology question dominated everything else. Is the propulsion system ready? TRL 7. Is the navigation system proven? TRL 4. Project managers could look across a portfolio of components and immediately see which ones were the constraint.

But TRL had an obvious limitation from the start: it only measured technology maturity. It said nothing about whether there was a customer for the technology, whether the business model was viable, whether the team could execute, or whether funding was available. In the defense and aerospace context, this was fine. Government programs provided funding, customers were predetermined, and business models were irrelevant. The only question that mattered was whether the technology worked.

This worked less well when TRL migrated to commercial contexts. By the 2000s and early 2010s, EU research programs including Horizon Europe and Dutch subsidy schemes including WBSO and Innovatiekrediet had adopted TRL as a standard for categorizing R&D investment. Manufacturing companies that applied for innovation subsidies became familiar with TRL whether they wanted to or not. But the framework’s narrow scope became increasingly visible in a world where technology maturity was only one of many things that determined whether an innovation succeeded.

Steve Blank’s investment readiness level

In 2013, Steve Blank introduced what he called the Investment Readiness Level. Blank was the developer of the Customer Development methodology and a central figure in the Lean Startup movement. His insight was direct: just as TRL tracks whether the technology is proven, you could track whether the business model is proven.

Using the Business Model Canvas as the underlying framework and Customer Development as the validation method, Blank defined nine levels from “business model hypothesis” (IRL 1) to “proven business model” (IRL 9). The evidence base shifted from technical tests to customer validation experiments.

Blank developed this primarily for U.S. government innovation programs, particularly DARPA’s Hacking for Defense initiative, where teams needed to develop technology and validate business models simultaneously. A team could have a TRL 7 technology and an IRL 2 business model, which told program managers exactly where to focus support. The combination gave a richer picture than TRL alone.

The original IRL stayed deliberately simple: one scale, nine levels, focused on business model validation. This kept it practical for the startup and early-stage context where Blank was working. It addressed the most obvious blind spot in TRL without adding complexity that would make it hard to use in fast-moving environments.

The key move was replacing “does the technology work?” with “do we have paying customers?” and “do the unit economics work?” This reframing was influential. It made explicit what lean startup practitioners already knew: you could have world-class technology and still fail if nobody wanted to pay for it.

The KTH innovation readiness level

KTH Royal Institute of Technology in Stockholm developed a more comprehensive version: six dimensions, each rated on a nine-level scale. Where Blank’s version added a single business model dimension to complement TRL, KTH built a framework that addressed the full picture of innovation project readiness.

The six dimensions are:

Customer Readiness Level (CRL). Has the customer need been validated? Is there evidence of genuine interest and willingness to pay? CRL starts at “customer need assumed” and advances through customer interviews, problem-solution fit, validated demand, and early adopter conversion.

Technology Readiness Level (TRL). This is the original NASA scale, incorporated as one dimension. CRL and TRL are often the starting point for teams to assess, because these are the dimensions most innovation teams have already been tracking in some form.

Business Model Readiness Level (BRL). Can the concept generate revenue? Is it financially, environmentally, and socially viable? BRL progresses from “business model concept” through viability testing, pilot revenue, and sustainable economics.

IPR Readiness Level (IPRL). Is the intellectual property situation clear? Has relevant IP been identified and protected? IPRL matters most in technology-intensive industries where freedom to operate and IP protection determine competitive position.

Team Readiness Level (TMRL). Does the team have the right competencies? Are team members aligned on roles, equity, and direction? Team readiness is often underestimated. Many projects fail not because the technology or business model was wrong, but because the team fell apart under pressure or lacked the specific skills needed for the next development phase.

Funding Readiness Level (FRL). Has the necessary funding been secured to reach the next milestone? FRL tracks the progression from unfunded concept to proof-of-concept grants to serious investment conversations to committed funding.

The visual metaphor is a thermometer: each dimension has its own gauge that fills as the project advances. You can see at a glance which dimensions are ahead and which are lagging. The weakest dimension is usually the binding constraint on overall project progress.

KTH designed this framework primarily for university-based and research-based innovation: technology spinouts, deep tech startups, and research commercialization. The framework is available under license through KTH Innovation, with an online tool and access to the detailed level criteria.

How to use IRL in practice

The most valuable output from a multi-dimensional IRL assessment is identifying the weakest dimension. In almost every innovation project I have seen, one dimension is the binding constraint. Address that one, and the project can advance. Ignore it and keep building on the stronger dimensions, and you’re creating imbalance that will show up as a bigger problem later.

For a project team, the discipline is: score each dimension honestly, find the lowest score, focus resources there. If TRL is at 6 but CRL is at 2, your technology development is ahead of your customer validation. This pattern is common in engineering-led organizations. Teams build before they verify there’s a paying customer for what they’re building. Testing business ideas is the practice that closes the CRL gap: designing structured experiments to validate customer assumptions before committing to full development.

For portfolio managers, IRL creates a common language across very different projects. You can compare a materials science project and a software platform project on the same six dimensions, which is far more useful than comparing stage-gate status. A portfolio where most projects have strong TRL but weak CRL tells you something specific about the organization: it’s technically excellent but commercially underdeveloped. That’s an organizational diagnosis, not just a project diagnosis. Innovation portfolio management connects IRL assessments to resource allocation decisions across the portfolio.

For coaches and accelerator programs, the KTH IRL provides a structured framework for individual coaching conversations. Where is the project on each dimension? What would level 5 BRL require as evidence? What’s the specific experiment needed to advance from CRL 3 to CRL 4? The explicit criteria make conversations concrete and prevent the vague progress claims that stall coaching relationships.

The gap IRL doesn’t fill

Here is what IRL, TRL, and all their variants have in common: they are project-level frameworks. They assess the readiness of a specific innovation project. They say nothing about whether the organizational conditions exist for innovation to succeed in the first place.

And organizational conditions are often what kills high-readiness projects.

I see this pattern regularly in manufacturing and industrial B2B companies. A project team reaches TRL 7 and IRL 5 or 6 across multiple dimensions. The technology works. Customers have validated the need. The business model is plausible. And then the project gets cancelled because: leadership changed and the new director doesn’t believe in it, the budget was reallocated when the core business had a bad quarter, the innovation team couldn’t access production resources because the factory was running at capacity for customer orders, or the incentive system made it rational for middle managers to deprioritize innovation work when operational pressure increased.

None of these failure modes show up on an IRL or TRL assessment. They’re organizational failures, not project failures.

The Innovation Readiness Assessment I use measures nine dimensions across three levers: leadership support, organizational design, and innovation practice. These dimensions don’t overlap with IRL or TRL. Leadership support measures whether there’s strategic commitment, protected budget, and active portfolio governance. Organizational design measures whether innovation has legitimacy, whether the bridge to the core business works, whether the incentive system rewards innovation rather than punishing it. Innovation practice measures whether the right tools, processes, and skills exist.

Both assessments are useful. But they answer different questions. If you’re running a project and want to track multi-dimensional progress, use the IRL framework. If you want to know whether your organization is structurally capable of taking high-IRL projects to market, you need the organizational readiness assessment first. In manufacturing companies especially, I have seen strong project readiness scores paired with organizational conditions that made success nearly impossible.

For a full comparison of TRL, IRL, and Manufacturing Readiness Level side by side, see [Innovation readiness level vs technology readiness level](/innovation-readiness-level-vs-technology-readiness-level/).

Frequently Asked Questions

What is the innovation readiness level?

The innovation readiness level (IRL) is a framework for assessing how ready an innovation project is across multiple dimensions. Steve Blank introduced the concept in 2013 as an adaptation of NASA’s Technology Readiness Level, adding a business model validation dimension. The KTH Royal Institute of Technology expanded this into a six-dimension model: Customer, Technology, Business Model, IPR, Team, and Funding, each rated on a nine-level scale.

What is the difference between IRL and TRL?

TRL measures technology maturity only: has the technology been proven to work, from lab prototype to operational deployment. IRL measures multi-dimensional project readiness. The KTH IRL includes TRL as one of its six dimensions, alongside customer validation, business model viability, intellectual property, team competency, and funding. A project can score TRL 8 and still have IRL scores of 2 or 3 on other dimensions.

Who created the innovation readiness level?

Steve Blank, the entrepreneur and academic who developed the Customer Development methodology, introduced the Investment Readiness Level in 2013. KTH Royal Institute of Technology later developed a six-dimension IRL framework designed for university-based innovation and research commercialization. Both trace back to NASA’s TRL, which was developed by Stan Sadin in the 1970s.

What does IRL not measure?

IRL measures project readiness: how ready a specific innovation project is to advance to the next stage. It does not measure organizational readiness: whether the company has the leadership support, organizational design, and innovation culture to support innovation projects in the first place. A project can score high on IRL and still fail if the organization cancels it, defunds it, or prevents the team from accessing the resources they need.

How do I use IRL to improve a specific project?

Score each dimension honestly. Find the lowest score. That’s your binding constraint. Concentrate resources and management attention on advancing that one dimension before trying to advance others. In most engineering-led organizations, the pattern is strong TRL paired with weak CRL: the technology is advancing faster than customer validation. The fix is to shift some of the development effort toward customer discovery and assumption testing, using structured experiments rather than assumption-driven product development.