The path to commercialize a potential product, technology, or service based on new research and knowledge is a complex, interconnected series of decisions and associated actions which need to be customized to fit with the current and predicted market conditions. These steps or decisions must be developed simultaneously because each decision can affect the viability of several commercial paths that a new product or service may follow. Individual decisions completed now, must be connected to a desired, predicted future opportunity. These decisions aim to maximize the probability that a new product or service will capture adequate customer demand (traction in the market) to eventually generate repeatable and reliable income that matches the needs of the organization (for profit corporation, not for profit, or social enterprise).
This section will focus on using new research and knowledge to create new products and services that will be sold by for-profit companies (traditional corporate commercialization). There are dozens of business decisions to be made when planning to commercialize a new product, such as: facility location, product design, target market, supply chain partners, manufacturing process and cost, quality level, inventory control, regulatory approvals, packaging design, logistics/shipping, distribution, financial and shareholder support, branding, marketing strategy, sales process and cycle, and general business administration. We will address only a few of the touchpoints that are key to the successful development of a new product and enterprise. For clarity, when we mention products, this term includes services and technologies which are not physical products, as well.
The process of commercializing a new product is based on the collection of relevant objective data and information that, when analyzed, will support and validate your business assumptions. It is extremely important to validate your assumptions about the current and future market opportunities before you get too far down the path of creating a commercial product. This section provides a window into freely available tools and resources that will assist you to collect data and information to validate your unique set of business assumptions. The biggest assumption of all is that customers will buy your product if you build it! Customers do not buy products because they are elegant, sophisticated, state of the art technologies, they buy solutions to their problems that just might happen to be sophisticated technology. As a researcher, be careful not to fall in love with your solution (or technology) because you have invested so many years developing it. Fall in love with solving the problem anyway possible that is sustainable and, if needed by your business model, profitable.
The main steps to complete before you commercialize a new product are:
- Market Validation: Do customers have a problem and are they demanding a solution?
- Technical Validation: Can a product be built and designed to uniquely solve the customer’s problem?
- Economic Validation: Can sufficient profit be generated by product sales to maintain the company?
If you answered yes to all three and you have data to support your answer, then you are on your way to commercialize your potential product. The key here is to do all the hard work to discover and test each of your many hypotheses for a potential product by generating data specific to your product, market, and customer segment. This validation is critical before moving forward and often it is an iterative process requiring a return to the beginning to generate new hypotheses, and to reframe and refine hypotheses and product features, before finding a product that is feasible. The process often yields unexpected results about the customer and market opportunity for which this process may generate a new solution or product more suitable to solve the customer’s problem. For researchers this is very similar to running experiments to prove or disprove a scientific theory, except the laboratory is now the real world and real people who may be potential customers.
Just assuming “yes”, is using hope and luck and is almost always a poor and risky decision. Remember, good entrepreneurs are risk managers, not unsubstantiated risk takers. Know the probability and impact of negative events happening before you make big decisions so you can minimize your risks and maximize your gains.