Industry 4.0 demands that business owners reconsider traditional strategies and processes. Waterfall is out, agile is in, and more than ever, innovation is key to entrepreneurial success.
Entrepreneurs can’t let themselves get stuck, though, within an endless proof-of-concept loop. If innovators commit to failing fast and often just for the sake of experimentation, their product might never iterate toward actually satisfying consumers and the venture might fail altogether because of an inability to overcome the commercialization conundrum.
As an entrepreneur with experience in business consulting, finance and strategy, I have made it my mission to help teams work toward a common vision. I know what it takes to commercialize tech innovations and what can get in the way.
The Process Of Commercializing Innovation
Commercializing innovation provides value for consumers and shareholders alike. There are best practices for bringing an innovation to market, as well as pitfalls to avoid. Commercialization is a process constituted of many moving parts. As T. Michael Nevens, Gregory L. Summe and Bro Uttal remarked in a 1990 article for Harvard Business Review (registration required): “While it is often viewed as a linear process — a series of steps performed by people in different functions — companies with strong commercialization capability see the process as a series of overlapping phases that involve many business functions simultaneously.”
While innovations consistently introduce new concepts, only a small percentage of them will ever become popular based solely on their potential merit. Commercialization requires a strategic vision and the right people to sell that strategy, so here are some specific steps that successful entrepreneurs have used in the past to bring innovations to market:
- Initiate entrepreneurial ideation by recognizing one or more problems that consumers struggle to overcome. Pay close attention to ascertaining their target consumers by focusing on identifying who the perceived problem is affecting.
- Resolve the ideas that are likely to solve problems for the target market.
- Perform an internal knowledge audit to determine whether the resources available to the entrepreneurial organization are sufficient to create a working model of the innovation.
- Analyze markets, and especially consumers, to ascertain whether the timing is right to introduce a new idea. By doing this, you stand to gain insight into new opportunities. Formulate answers for the following questions that consumers would likely pose: Why should anyone believe you? Why should anyone care about this? What’s in it for us?
- Establish a dedicated value chain to coordinate knowledge and effort from designers, developers, investors, suppliers and consumers. Keep the value chain limited, though, and ensure that everyone involved receives an appropriate piece of the resource pie.
- Compose a plan for the entire commercialization business case. During this step, it is important to separate precise consumer demands from any frivolous impulse to experiment.
- Secure IP protection for said innovation.
- Conduct a technical assessment of gaps that must be filled to make the product work as a solution to consumer problems.
- Build one more prototype of near-marketable quality to preclude any major revisions that might be necessary during production and to minimize the ultimate time to market.
- Devise a suitable marketing strategy, keeping targets practical for the anticipated consumer audience.
- Introduce the revised prototype to consumers as a purchasable product.
- Scale production to meet the expectations of the marketing and sales strategy.
- When the product is selling at scale and is no longer considered to be a curious innovation, maintain a cycle of iterative revision and continuous improvement while conducting ideation research into the future.
Pitfalls To Avoid While Commercializing Innovation
The novelty of commercializing innovation provides entrepreneurs with an injection of productive energy, but such exuberance might encourage oversight even if it is unintended. Here are some pitfalls to watch out for when taking a tech innovation to market:
- Too much focus on short term goals. Innovation requires resources that often come at the expense of existing production processes. If business managers concentrate on hitting sales numbers for current products, they will have difficulty bringing anything new to market.
- Insufficient commitment. If management fails to commit to commercializing innovation, or if they are unsuccessful at getting the rest of the team to commit, they will have a much harder time convincing consumers to consider their new product.
- A lack of creative talent. Many enterprises employ left-brained doers and builders without considering the benefits of a team including imaginative right-brained members.
- Legal action. Another organization might contest the uniqueness of the innovation by raising arguments in favour of their own IP or prior art, thereby creating an expensive and time-consuming challenge for the innovators to overcome.
- Inadequate funding.
- Inadequate space for development.
- An insufficient or even non-existent supply of important supply chain inputs.
- Being determined to build something from scratch instead of licensing someone else’s patented innovation. Entrepreneurs must remain aware of opportunities to forgo altogether the development of something original by analyzing the feasibility of marketing a similar product for which there already exists a published specification.
- An overestimation of consumer demand.
- Inexperience. If an organization does not already have in place a systematic process for commercializing a tech innovation, it might never make it out of the gate to compete in the race to market.
- Underestimated competition. There are often many entrepreneurs who will discover the same opportunity, so victory in the market might be decided by execution.
- Bad timing. Yesterday’s golden opportunity might look tarnished amid the context of other emerging products that might or might not have any direct correlation to the innovation under consideration.
In all, innovation not only remains an important element of economic progress, but it is also becoming more essential for competing in the fast-moving disruption of 21st-century markets. Find experienced talent among both creative and engineering types of stakeholders, and don’t be afraid to outsource help for purposes of filling any gaps in experience or ability.