I have been in a technical leadership role with a product (15yrs old) for 9+ yrs. I'm presently leading ~10 devs and report to a senior manager. We don't have clear mgmt and engg leadership tracks, so I fill in a lot of shoes currently. Over the yrs there have been always interest from research group to commercialize our product. Our owner always thought that it was too customized for our environment and didn't think it could be productized. Recently executive mgmt has decided on commercializing it. Owner isn't interested in this and think that it has very little chance of success(given the avg success of start ups being pretty low). So, the mgmt has decided to spun off a different subsidiary.
The owner wants us to play no part in the new subsidiary. He thinks the new product will be a different fork and existing product as a enhanced (ahem heavily customized) version. None of us can move to new subsidiary, only my manager has been moved over there.
Now I'm tasked with completely managing this team more of mgmt and less of technical leadership role). The team feels let down and think that the product could have been bootstrapped internally with the same team. It would have given a opportunity for us to learn new tech and possibly grow in career of the product were to be successful.
What is a successful strategy in commercializing internal products like this?
If you are an C-level executive, have made these kinds of decisions? What is the basis of it? When would you choose a different team ( beside technical skill)?
If you are in my position, how do you work with fellow members who feel let down morally?