Choose the best path to market.

Many companies we see at the NSW Innovation Advisory Service are uncertain about which route to market is best for their product or service.  Much time and money is wasted pursing the wrong strategy.

A simple way to consider the best route to market is to ask the question:

Is it a sustaining technology or a game changer?

If sustaining (incremental improvement, better design, improved service function), that is a sustaining improvement – we suggest to our clients to resist going head-to-head with the incumbent competition, but rather to pursue a licensing strategy.  This is where as the owner of the intellectual property (patent, brand, design, trademark), you license the technology to another company to manufacture, market and distribute.

If it is a game-changing opportunity(as VOIP was to telephony)– then we suggest the company pursue a spinoff or startup strategy – which generally means capital raising.

We have clients that have come to us after spending three years pursuing a licensing strategy, unsuccessfully for a game-changing technology.  The product they were endeavoring to license – would have resulted in reduced sales to the target company’s existing product line.  If a product being pitched for licensing, makes an existing product line redundant – a company is unlikely to license in the new technology.

Three years on, management should have asked that simple question – is the innovation an incremental improvement or a game-changer?

So what are the skills required to bring new products and services to market?

This is a major area our innovation consultants discuss with clients. We regularly have the technology specialist seeking advice on commercialisation of the product they have designed.

At the NSW Innovation Advisory Service, our first response is – who is your team to deliver this product to market?  Successful commercialisation is about team.   We suggest to technical types – that they team up (and share the equity) with an entrepreneur who understands how to bring something to market and sell.  Days, weeks, years are lost with the wrong people attempting to bring products to market.

It is a major reason for the weakness in Australia’s track record in achieving successful commercialisation.  We are great inventors – but not great innovators – that is, when you commercialise that invention.

Technical-types spend many hours getting their product 100% perfect.  It’s in their DNA to do so.  Budgets get overrun and timelines extended as a result.  But when teamed up with an entrepreneur, who’s DNA is to get the deals and secure the cash-flow – a product is delivered to the market can be 75% ready.  By setting to market early and remaining flexible, the team can incorporate customer and distributor feedback to fine-tune the product and can start generating the sales to keep the show on the road.

Understanding the market can save time

At the NSW Innovation Advisory Service, an innovation consultancy service, we often see teams who have assumed they know their market and have not assessed if the market warrants the investment in time and money.  Wrongly pitched product launches can easily be the result.   We site an example of a kitchen manufacturing company which was about to launch a website for purchasing kitchen components.  A short focus group test market session indicated they needed to tweak their campaign and introduce a “touch and feel” element – women would not buy the kitchens without feeling/seeing the surfaces. They adjusted their service accordingly and went on to a successful launch.

Had they not undertaken that focus group session they would have launched and spent years reshaping their product offerings.

The focus group was cost effective and saved considerable time.

Successful commercialisation doesn’t have to be about trial and error. There are proven, cost-effective ways to bring products and services to market without wasted effort and heartache.

Start with assessing the opportunity correctly, build a team around the opportunity and understand the marketplace.  Seek out advice from those that have trodden the path before.

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Kate Ingham is the Senior Client Manager with Alchemy Equities, a Sydney-based business innovation consultancy firm which assists companies commercialise technologies and services.  Alchemy Equities is contracted by the NSW state government to deliver the NSW Innovation Advisory Service.