One of the most common dilemmas of technologists and scientists is how to convert their technologies into viable businesses. The technology excellence is a given; in fact, it’s common for these technology people to have such a leadership position in the given vertical of technology that there may be only a handful of people around the world who they consider peers.
The relationship between and technology excellence and market awareness is unfortunately often inversely proportional. The tech leadership only arises due to abject ignorance of everything else, which often includes the markets that the technology is supposed to address.
Often, these tech people try and address the markets which may have the greatest appreciation of the technology. But these are often the markets which are still evolving and make take many years to become mainstream. Additionally, since tech people have a great deal of comfort with all things tech, they often try to find excellence in each route of the process of go-to-market. This implies that they try to design machines that may have the highest specs possible; work on creating a software that is superior to existing ones and is fully customised, since the off-the-shelf ones simply don’t have all the capabilities that they expect to deliver to their discerning customers. Their vision of the product is one that performs better than existing ones in all technical specifications.
This focus on excellence across the entire manufacturing cycle results in addressing multiple variables at the same time, most of which the tech people have no competence over. As an example, simply because a scientist has the capability of designing and building a machine to his specs does not mean that he has the same level of competence in ensuring that the machine provides consistent quality and throughput required for commercialisation.
Successful transition of technology towards commercialisation entails not solving the most technology-intensive problems, but ones that have the greatest impact on perceived value for customers. For this, tech teams need to know what the problems of customers are, and the value of the solution to the customers. The value of the customers helps define the revenue opportunity for the tech team. The second element that defines successful commercialisation is the timeline to addressing market needs. Often, the opportunity may be significant and the value of the solution recognised by customers, but it simply takes too long to get the solution to address this need. It is for this reason that near-term impact is key. This shows the capability of the tech team to identify a customer need and address it and in the process, monetise some value in the form of revenue. While this may not be adequate for sustain the startup started by the tech team, it shows the team’s awareness of the steps needed for the transition. This helps gain investor traction and accelerates the process.
Often, tech teams try and drive the process of commercialisation alone, since there is often a lack of trust in investors. It is important to know that the main risk of doing this is that the organic revenue is often not adequate to drive rapid scale. Thus, in spite of addressing a viable market which recognises value in the team’s solution, the lack of its capability to deliver simply drives customers away. At best, this results in the startup remaining niche. At worst, it simply becomes commercially irrelevant and eventually fades away.
The best way then is to start with identification of possible customer groups where the tech may have relevance. Then, without further ado, it is imperative to actually reach out to customers and initiate discussions, with some kind of prototype in tow. This is far more powerful than simply a presentation, since it shows something that’s real, rather than simply theoretical. This helps to get customer feedback regarding what’s important for them, how this will address their pains and requirements, and consequently, the monetary impact (read ‘startup’s revenue) from this. The team then needs to go back and evaluate how long it takes to address the various customer markets, and link it with the addressable impact. This helps to define what market the team should be addressing first.
Delivering a solution to the first customer entails the most frustrations, since every mistake that can be made is made at this time. It is also the most rewarding and liberating, since it provides validation to the team that they can actually deliver and generate real revenue.
This is the first step towards successful commercialisation.