There are a number of ways to approach commercialisation. Personally, I am repeatedly drawn to the utility of the Human Centred Design [HCD] drivers of Desirability, Viability and Feasibility. In my mind this model succinctly underpins much of the innovation process and consequently provides an excellent platform for thinking about commercialisation. I’ve mentioned before that the single most important takeaway from the Lean Startup movement ought to be that the business as a whole needs to be modeled, prototyped, iterated and validated. This concept dovetails nicely with the HCD framework above since both the Lean Canvas and its progenitor, the Business Model Canvas, focus on three main areas that ostensibly address each of these three overarching themes.
“Commercialisation is about more than just turning Intellectual Property into products. It’s about creating markets. Unless companies embrace the broader view… they are limiting their opportunities” – Grant Steinberg, Entrepreneur
When it comes to developing a commercialisation strategy there is often an overwhelming array of things to consider and precious little time or resources available with which to do so. Moreover, it is not uncommon to slip into the trap of giving undue bias to one of the guiding themes at the expense of the other two.
It can help, therefore, to reflect on the simple frameworks mentioned above and distil from them the key questions that must be answered. Standing on the shoulders of giants, I have tried to do that here and the material presented can serve as a useful checklist to make sure you address the most critical considerations up front.
Desirability. For something to be worth pursuing it must be desirable both externally and internally. From a market (external) perspective there has to be a problem worth solving and the solution offered needs to be more attractive than the alternatives. From an internal perspective, the venture needs to be desirable in terms of alignment, risk profile and return on investment. In terms of business models we are talking about the problem space, customer segments, channels and customer relationships. The key questions that emerge are:
· What is the compelling need?
· What existing solutions, workarounds or alternatives exist?
· What target market segments have been identified?
· Who are the likely early adopters (and future evangelists)?
· How are the necessary relationships being built?
· What is the edge, the unique value proposition, the secret sauce?
· Does this align with your interests?
· Does this align with your capability?
· Is the gain worth the pain? (in terms of complexity and perceived risk)
Viability. The viability of the proposition is driven by the accessible market, its associated channels, the nature of the competitive environment and the sustainability of the offering. From a business model perspective we are talking about revenue streams, cost structure, key performance metrics and the delivery of the value proposition. Ultimately, the key questions emerging from this area of focus are:
· What does the industry structure and environment tell you about your chances and necessary positioning?
· What is the accessible market size and what proportion is winnable?
· What does the path to market look like?
Broadly speaking there are only three options: sell or lease something (for the DIY community), collaborate with the buyer to deliver a product or service (Do It With Me), provide a complete experience (Do It For Me)
· How well does the adopted distribution model integrate with existing supply chains?
· What does the business model indicate about profitability and ROI?
· How sustainable is this model (in terms of protection and durability)?
· What alternative applications (diversification options) are there?
· How will this scale?
Feasibility. The overall feasibility is driven by three key factors: (a) the level of development required to get the product or service to market, (b) the capability of the venture to both develop the product or service and, subsequently, operate the business to exploit it (c) the availability of funding to enable what needs to be done. Again, from a business model perspective we are talking about the solution, the advantage, key activities, key resources and key partners. From these considerations the key questions that emerge are:
o What is the product or service? (simply, succinctly)
o How mature is it? How ready are you to deliver value to market?
o What is the development plan?
o What is the operations plan?
o What is the transition plan? [often overlooked]
o What is the level of risk associated with these plans? how will it being managed?
o How will IP (underpinning the secret sauce) be captured?
o Can the necessary resources be sourced and deployed as needed?
o Who/what is already committed and active?
o How well do their knowledge, skills and experience match what needs to be done (across the five broad domains of value creation, marketing, sales, value delivery and finance)?
o What partners and alliances have been secured to bridge any gaps?
o How well does the organisational culture align with its aspirations?
o How will the necessary infrastructure be provided?
o What systems will be in place to manage: priorities & commitment, metrics gathering, analysis & response and overall governance (incl. quality, change, escalation, OH&S etc)?
o How does the existing or planned capability exploit key value chain advantages?
o How well have the capital needs been identified?
o What options have been factored in to secure funding? (eg cash flow, grants, rebates, loans, equity)
o How well is the organisation set up for attracting funding and facilitating an exit event?
By answering these questions, or simply considering your ability to answer them, you can quickly gauge the robustness of your commercialisation proposition. Additionally, since the three overarching themes need to be matured in tandem, understanding any imbalance will allow you to easily identify those areas that need priority attention. By applying a simple weighted-criteria scoring system (easy to do in a spreadsheet) you can readily direct focus to those areas that matter most.
Although geared towards commercialisation, many of the questions highlighted above can, with slight modifications to the wording, provide a valuable steer in the realms of continuous improvement in general. The critical questions being answered are what needs to be done, why should we do it and will it be worth the opportunity cost?
“If commercialisation is putting my art on a shirt so that a kid who can’t afford a $30k painting can buy one, then I’m all for it.” – Keith Haring, Artist | Activist