Successful Commercialization of Product Innovation

Posted in Blog, Entrepreneurship, Innovation, Innovation by Jo North

Understanding Successful Commercialization

Successful commercialization is the journey of turning a concept into a market-ready product or service for profit. It begins with research and culminates in marketing. Often, the term means introducing something to the wider market or transitioning from public to private sectors. Additionally, it can describe the transformation of technology into products for individual or business consumption.

Commercialization progresses in stages. The process starts with the first introduction of the product, then moves to large-scale production and, hopefully, widespread acceptance in the market. It covers production, distribution, marketing, sales, and customer support. For a successful commercial venture, it’s important to create a strong marketing strategy, establish effective ways to get the product to consumers, identify and overcome potential challenges.

Successful Commercialization Expertise

We’ve been helping our clients to successfully commercialize their new products and new services for many years. We’ve worked for private sector clients across a diverse range of industries. Sectors include technology, manufacturing, digital products, engineering solutions, food and drink and many more.

We also work with public sector clients to commercialize their services and venues, and with academics to translate their research into market-ready solutions.

Successful Commercialization Training

We also run custom online and in-person Successful Commercialization Training for organizations aiming to build their commercialization strategy.

I’m sharing my insights and tips with you to help you achieve your goals faster and better, and stay clear of avoidable mistakes.

Critical Success Factors for Commercialization

Make Sure Your Product Solves a Problem Worth Fixing, in an Acceptable Way

An idea is only a great one if if solves a real problem, one that’s worth fixing, and in the right way. Your product or service could be super ingenious, but if it doesn’t offer real value in a way that suits the end user, it’s not going to sell.

There are plenty of examples of innovation failures, such as Google Glass, that illustrate this.

Google Glass

Google Glass, introduced in 2012, was discontinued in 2015, although it remains in use for certain professional tasks. Why? Its steep $1,500 price and privacy concerns hindered its widespread acceptance. The device’s discrete video recording feature led to its ban in many public venues, even leading to to the term “glasshole.” This experience underlined a key takeaway about wearable tech. People are uncomfortable being recorded unknowingly.

It’s essential to dive deep into the perspective of the end user. They are the ones who will ultimately decide the value of your product. By understanding their needs, wants, and pain points, you can ensure that your product addresses real, tangible problems in a way that is acceptable to them.

Build a Disciplined, Commercialization System

The best commercializers in any industry are those who’ve mastered the art of identifying gaps in the market, and have a repeatable innovation process. By studying their approach and strategy, you can gain insights into how they’ve captured significant market share and successfully catered to various market segments.

A Harvard Business Review Study shows that the most successful commercializers “view commercialization as a highly disciplined system.” The journey spans design, development, manufacturing, and marketing, extending to product improvements. Though many see this as a step-by-step process handled by various teams, companies excelling in commercialization view it as interconnected phases, engaging multiple business areas at once.

Create an Insights Hub

Early developers provide a sneak peek into the future trends of the market. Collaborating with them can give you a competitive edge, allowing you to refine your product before your competitors do. This proactive approach can help position your product more effectively in the target market.

Top companies excel not just with great products but by truly understanding their customers. This understanding demands more than just marketing data. It calls for an “insights hub”: a combination of the right structure, people, and systems that can turn data into a clear game plan.

Invest in data capture and interpretation skills. Make sure data use plays a central role in business planning. Strengthen the ability of your commercial support team to work collaboratively, embrace new tech and methods, look ahead, and inform strategic choices.

Ensure that your insights hub team members have these three main qualities:

• Balanced creative and analytical thinking, or ‘whole brain thinking‘.
• A drive for business expansion.
• Skill for communicating their findings through compelling narratives, rather than plain data.

Define, Estimate and Understanding the Addressable Market

Define Your Target Market

While it might be tempting to cater to a broad audience, it’s crucial to narrow down your customer base. Understanding specific market segments allows for tailored marketing and product adjustments that resonate more profoundly with potential users.

Know Your Total Addressable Market (TAM)

The total addressable market represents the entire revenue opportunity for a product or service, assuming 100% market penetration. It’s an estimation of the maximum potential sales, in monetary value, for a specific product or service.

Importance of TAM for Successful Commercialization

Understanding TAM is crucial for successful commercialization because it gives your business a clear view of the potential scale and scope of your market opportunity. By gauging the full potential, you can strategize your entry, allocate resources effectively, set realistic goals, and attract investors. TAM informs your business case to determine if the effort to commercialize a product or service is justified by the potential returns.

Market Share

Achieving a significant market share is a clear indication that your product is solving a pressing issue. It’s a metric that showcases the acceptance and preference of your solution within the target market. By focusing on problems worth fixing, you not only boost your market share but also foster loyalty among your customer base.

For a product to stand out in today’s competitive market, it’s imperative to ensure it addresses a genuine problem. By understanding the end user, learning from seasoned commercializers, and engaging with early developers, you can position your product effectively and capture a notable market share.

Don’t Skip Intellectual Property Protection

The journey from research results to market-ready products, like technological innovations or new materials, involves multiple pivotal steps. One of the primary actions is to protect your Intellectual Property (IP). This may be through a combination of copyright, design rights, registered trademarks, trade secrets and the submission of patent applications. Regardless of whether the invention originates from an academic institution or a startup, safeguarding your intellectual property is paramount.

Collaborating with a patent attorney ensures that your innovation is well-protected from the get-go. This not only safeguards your invention but also enhances its value chain, making it more appealing to potential partners, be they commercial entities or research collaborators.

Having patent protection can give you a competitive advantage in the market and assure potential commercial partners and investors of your dedication and seriousness.

Regulatory Compliance and Approvals

You’ll need to make sure that your new product or service is compliant with relevant regulations, and has the necessary regulatory approvals. For example, new drugs require FDA approval.

Create a Commercialization Strategy

To transition an innovation from a mere idea into a market-ready product, a structured approach is essential. A commercialization strategy serves as this blueprint, guiding you through the complexities of introducing your product or service to the market.

Define Clear Objectives

Before anything else, pinpoint what you aim to achieve. Whether it’s capturing a specific market share, reaching a particular revenue milestone, or establishing brand presence, having clear goals sets the direction.

Understand Your Market

Research your target audience. Who are they? What are their needs? How does your product fulfill these needs? Knowledge about your market segments will shape your product’s positioning and messaging.

Pricing and Profit Margins

Determine a pricing model that not only reflects the value of your product but also considers competition, costs, and desired profit margins. Pricing can significantly influence customer perception and demand.

Distribution Channels

Identify the most effective channels to reach your target customers. Whether it’s online platforms, retail outlets, or direct sales, choose channels that align with your audience’s preferences.

Promotion and Marketing

Plan how you’ll raise awareness and generate interest. Effective marketing campaigns, tailored to your target market, can drive engagement and conversions.

Feedback and Iteration

Once your product is in the market, gather feedback. Understand what’s working and what isn’t. Use this information to refine and adapt, ensuring that your offering remains relevant and competitive.

Successful commercialization strategy isn’t just about launching a product, it’s about planning for its sustained success. With a well-thought-out strategy, you enhance your chances of gaining a strong foothold in the market and achieving long-term growth.

Select Partners and Collaborators Carefully

Choosing the right partners and collaborators can be as critical as the product or service you’re bringing to market. These relationships often determine the trajectory of your venture, influencing not only its success but also its reputation and credibility.

Alignment of Vision

Ideal partners share your long-term vision and objectives, ensuring a unified direction, and preventing conflicts and misalignments down the road.

Expertise and Resources

Seek out collaborators who bring complementary skills, knowledge, and resources to the table. Their strengths should enhance yours, creating a formidable team capable of navigating challenges.

Trustworthiness

Integrity is paramount. Engage with entities known for their credibility and ethical practices. A partner’s misstep can easily become your own, so due diligence is essential.

Open Communication

Transparent and open communication fosters a healthy partnership. It’s crucial to establish clear communication channels and regularly touch base to ensure all parties are on the same page.

Adaptability

The commercialization landscape is ever-evolving. Collaborators who are adaptable and receptive to change can help your venture stay ahead of the curve and respond swiftly to market dynamics.

The selection of partners and collaborators is a strategic decision. A well-chosen ally can amplify your strengths, broaden your reach, and position your venture for lasting success. Choose wisely.

Put Good, Written Agreements in Place from the Start

However much you know, like and trust your collaboration partners, put good written agreements in place from the start.

Clarity and Direction

A well-drafted agreement provides a clear roadmap for all parties involved. It delineates responsibilities, expectations, and roles, ensuring everyone is aligned on the way forward.

Avoiding Future Disputes

Many disagreements arise from misinterpretations or misunderstandings. Written contracts act as a reference point, minimizing ambiguities and reducing potential conflicts.

Legal Protection

In the event of a disagreement or breach, a written agreement offers legal protection. It serves as tangible evidence of the terms both parties consented to, making legal resolutions more straightforward.

Defines Exit Strategies

Every partnership should have an understanding of how to proceed if things don’t work out. A written agreement can outline termination clauses, protecting all parties if the collaboration ends.

Establishes Accountability

With defined roles and expectations in writing, it’s easier to hold each party accountable. It ensures that everyone remains committed and adheres to their responsibilities.

In essence, while trust is the foundation of any collaboration, a robust written agreement is the framework that holds it all together. It’s an essential tool to safeguard interests, maintain harmony, and ensure the longevity of the partnership.

Communicate Features and Benefits Clearly to Your Target Customers

You might have a brilliant solution to a customer problem that’s worth solving, but if you don’t communicate the features and benefits well your innovation won’t succeed.

Even the most ingenious solution to a pressing customer issue can falter without proper communication. Clearly articulating the features and benefits ensures your target customers grasp the value your product offers. It’s not just about having a great product but also about making sure your audience understands its significance. If they don’t see the value, they won’t invest in it. Prioritize direct, concise, and compelling communication to enhance your product’s chance of success. My article here on how to create a compelling value proposition will help you to do just that.

Don’t Be Surprised When Customers Use Your Product Differently

Even with the best data insights and customer feedback available, you may find that your customers use your new product or service differently from how you expect. This could either be not following your usage instructions, risking dissatisfaction with the product or service, or finding new, creative uses for it.

If customer satisfaction depends on the customer using the product or service in the right way, invest in clear instructions and marketing communications to help with this. An example is the Zoe glucose monitor.

Example: Zoe Glucose Monitor

Zoe is a personalized nutrition program from the world’s largest nutrition-science study. One aspect of the program is the option to wear a continuous glucose monitor for two weeks to track your individual response to different food types. The Freestyle Libre glucose monitor needs to be applied in a certain way to be effective, and some customers are afraid that applying the sensor may be painful.

To show how easy and painless it is to apply the monitor, Zoe created a pre-purchase marketing campaign across social media featuring videos of celebrities applying their own glucose monitor. The campaign removes any customer concerns or fears.

Flaws Multiply When You Scale Up

Scaling up a business or product offering is a significant milestone. However, with expansion comes amplified challenges. Minor flaws or inefficiencies that were manageable at a smaller scale can become substantial roadblocks as you grow.

Amplified Operational Issues

What may have been a small operational hiccup in a compact setting can escalate into a major problem when multiplied across larger operations. Errors in processes, once manageable with a smaller customer base or production level, can become glaring inadequacies.

Financial Risks Increase

As your operations expand, so does your financial exposure. A minor costing oversight that once had a negligible impact can, at scale, translate into significant financial losses.

Brand Reputation at Stake

With growth, more eyes are on your business. Flaws become more visible to a larger audience. A single unresolved issue can quickly damage your brand’s reputation, especially in today’s interconnected world.

Strain on Resources

Scaling without addressing existing inefficiencies can strain your resources. Human resources, production capacities, and even customer support can become overwhelmed, leading to decreased quality and performance.

Complexity in Problem-Solving

As you scale, the complexity of addressing issues grows. Solutions that worked in a smaller setting may not be applicable or effective on a larger scale.

While scaling up for successful commercialization offers immense potential and rewards, it also magnifies existing flaws. It’s crucial to address and rectify any shortcomings early, ensuring a smoother and more sustainable growth trajectory.

Don’t Take Too Long

Time is of the essence. While thoroughness is commendable, taking excessive time can hamper opportunities and stifle growth. This is especially true in the context of lean innovation and a growth mindset.

Lean Innovation Values Speed

At its core, lean innovation emphasizes rapid iteration. It’s about quickly testing ideas, gathering feedback, and making prompt adjustments. Lingering too long in decision-making or product development contradicts this principle and can result in missed market opportunities.

Growth Mindset Urges Forward Motion

Having a growth mindset means embracing challenges and viewing failures as learning opportunities. It’s about continual progression. Delays or prolonged inaction can hinder this developmental journey, preventing both individuals and organizations from realizing their full potential.

In short, while it’s crucial to make informed decisions, taking excessive time can be detrimental. Balance deliberation with the principles of lean innovation and the proactive drive of a growth mindset to stay competitive and forward-focused.

Round-Up of the Successful Commercialization Journey

The path to commercial success is a complex tapestry of steps, each playing an important role in the broader commercialization process. From the inception of a new idea to its final realization in the market, the journey is a mix of technological innovation and strategic planning.

For both small business owners and major corporations, the onset of this journey often begins with recognizing a market need. Whether it’s in response to technological advancement or a gap identified through clinical trials, there’s a trigger that prompts the introduction of new models or incremental innovations.

University Research

University research plays a leading role in fostering technological innovation. These establishments not only contribute new innovations but also the validity opinions necessary to gauge the commercial potential of your research. It’s not unusual for a promising research project to evolve into a spinout company, taking on the mantle of translating findings into tangible products.

Knowledge exchange plays a critical step in these stages, including when it comes to securing translational funding or negotiating licence deals. The commercialization process requires a blend of technology commercialization tactics and traditional business strategies.

Commercialization Choices

As business owners spearhead the development efforts, they often face choices. They could opt for different approaches, such as establishing their startup company or aligning with an established company. Both avenues come with their sets of challenges. While a startup offers the thrill of crafting a new narrative, an established company provides a safety net, especially in terms of capital investment.

The journey doesn’t halt at the creation of innovative ideas. Protecting intellectual property rights, often through rigorous validity opinions, becomes paramount. Following elements like proof of concept, joint ventures, and aligning with early adopters are just a few of the many best practices that underscore successful commercialisation.

Human Factors Matter

Management teams play a key role, ensuring the balance between technological development and business strategy. A start-up founder may spend a long time fine-tuning the business model, but without addressing the human factors or anticipating failure modes, the venture might falter.

The commercial success of any new idea depends heavily on understanding market demand, having a resilient management team, and ensuring that every step, from phone calls to capital investments, is taken with precision and foresight. The positive impact of a well-executed commercialization strategy can lead to a ripple effect, setting new benchmarks in best practices and inspiring further details of exploration and innovation in the market.

While the road to successful commercialization is paved with challenges and myriad approaches, it’s the amalgamation of technological innovation, best practices, and strategic collaborations that brings an idea to commercial success.

Next Steps for Your Successful Commercialization

Get in touch now to book a call with me to explore how we can help you and your business with successful commercialization. From custom, live virtual and in-person learning and development programs for you, your leadership and commercial teams through to hands-on innovation consultancy, we are are experienced and here to help you achieve your goals faster, more sustainably and better.