Innovation is essential for the progress of humanity, but this is not enough for it to develop. Discovering a vaccine against cancer would be of little use if we were unable to bring it to the market for people to buy it and benefit from it. For any innovation to truly succeed, you must be able to market it. And the process of marketing an innovation is often more difficult than discovering or developing the actual innovation. Thinking they’ll try to grab my product out of my hands just because it’s innovative, or even because it solves a problem, may not be suitable. So focusing solely on the technological and scientific part of the innovation is like building a house from the roof down.
Through my work I’m lucky enough to be in contact with many businessmen and entrepreneurs with innovative ideas that are sometimes really disruptive.
It often happens that some people invest a huge amount of time and resources into developing prototypes and products, and even approach stages that are very close to production without knowing 3 critical pieces of information:
- Who’s going to buy it?
- What price are they going to buy it at?
- How many times could they buy it?
I’m not even including other important points, for example, why they’re going to buy it or how soon they’ll buy it. It’s about having the minimum information to keep up to date with the market and be able to make the first iterations of the money I hope to make. Even though it’s really aspirational.
In the usual process, after finishing developing their product, many innovative companies end up at a stage of conducting multiple pilots of their new technology with different companies, which think that they’re doing the innovators a favor by testing their products and, of course, don’t consider paying them for it.
This leads to a period of project begging, price reductions, giving exclusives, etc. (See Article on ‘the contract of your life’). That is, it implies extending the ‘Time To Market’ of our innovation and thus losing some of our competitive advantage, which was being the first with this idea in the market.
Willful assumptions of “we have a potential market of 1 trillion euros,” “we’re technological experts in the field”, “our product is very good,” “it would be rubbish to have a market share of 0.5 % in two years, which is nothing”, etc. suggest that within a certain timeframe divine providence will result in us having a turnover of 2 million euros. And this doesn’t usually work.
It’s not about trying to stop developing or stopping an ongoing investigation. It’s about involving customers from the beginning. It’s about conducting concept tests with them, both technological, which I’m certain they are already doing, and economic; confirming how much they would pay; conducting a collaborative analysis to see what benefits it might produce (in direct costs and opportunity costs). All with the threefold objective of:
- Bringing our innovations to the real market.
- Investing our resources efficiently.
- Reducing the ‘Time To Market’.
What can you do to achieve that good base? Among the different options, I would like to highlight 3 possibilities:
- Performing several iterations of our sales scheme for the coming years. It begins with a “song to the sun” and gradually seeing what seems to be more or less realistic and tweaking the final result. That’s when you can compare the results with more futuristic studies by analysis companies, not before.
- Collecting a letter of intent from potential customers or partners. It doesn’t commit them to much, but it’s a statement that can motivate investors and future customers. Companies that don’t see the usefulness and real marketing possibilities will not want to sign it, so managing to achieve this will be a good sign.
- Understanding the product that replaces our innovation well and working with a close customer on a joint analysis of benefits, with which to set a price and then a return on that investment for customers.
Thus, when the proper foundations are laid, when our innovation is market-oriented, marketing it is achieved much faster and more profitably.
Jose A. Martínez
Manager of Nautilo, Business Innovation Coach of European Union’s H2020 Program