“The value of an idea lies in the using of it.” – Thomas A. Edison
For an entrepreneur, there is no greater fulfillment than seeing one’s innovative idea launch forth into a marketable product or service. Ask anyone who has experienced that trajectory and they will tell you it was not by luck, but by hard work and a carefully planned process that led them to success.
The path from imaginative innovation to a competitive marketplace takes us on a winding road marked by intellectual property protection, product development, establishing a business structure, securing funding sources, regulatory guidelines, product pitches, and more. While the excitement of a new innovation ramps up the adrenaline, the learning curve can be steep and daunting. Where to begin?
VtSBDC business advisor Scott Holson, an experienced specialist in innovation and tech commercialization, suggests that innovators should plan for the end goal, and ensure that the overall project meets both personal and business goals.
Ask the right questions
When Scott provides clients with one-on-one counseling and guidance through the process, he recommends addressing the following questions:
Does the Innovation Solve a Real Problem?
The innovator’s journey should include an effort to verify that they are taking the most effective and efficient commercialization pathway. Entrepreneurs should pause and ask themselves: How hard have I tried to make sure my target customers want the solution I’m proposing? Most innovators focus on why the potential user can’t live without their new technology. Success comes from meeting the needs of target customers and if you are going to fully understand those needs then start by understanding the problems those customers have from their perspective.
Is this a real problem worth solving?
You should find customer-driven proof that substantiating evidence exists to verify the problem you identified and outlined. Friends, family and coworkers aren’t objective, so look outside of this circle.
Is the Technology Sound?
The commercialization pathways for developing revolutionary and evolutionary technologies can be significantly different, in both methodology and opportunity. Being realistic about the technology is another important reality check. It’s one thing to create a new device by way of applying existing techniques and processes from one industry to another. It’s entirely different if you’re bringing materials together in a shape or style that has never been thought of before. We recommend a realistic and thorough assessment of the technology to ascertain if this can be done. Ensuing questions include: how long will it take, how much money will it cost, and what are the major obstacles for introducing the new technology paradigm to potential customers?
Can this Business Operate From a Legal Perspective and Do We Have Freedom To Operate
A successful tech company is built, in part, on intellectual property protection and freedom to operate, which means that you’re not infringing on anyone else’s intellectual property.
An initial patent search is advisable, however, a more rigorous process should be undertaken by a patent attorney who specializes in this field.
If your project is an outcome of years of early research, now is a good time to give your product a name. Move beyond the five- or ten-word literal description of your research. A name makes the project/product real. When considering names, it is worth your time to also conduct research on that name. Just like patents searches, trade names can also be searched.
Is the Innovation Effective At Solving the Customer Problem?
Customers want to see their problem solved, and this reinforces the value they perceive.
- The steps in validating the value proposition are linear and include:
- Verifying user needs, problems & their priorities
- Verifying how existing and competitive products fail to meet their needs
- Verifying that the prototype solves the problem in a manner acceptable to the customer
- Verifying that the pre-production model has the look and feel that is acceptable to the customer and that it continues to solve their problem
Once the innovation is on the market, you should verify that the innovation actually solved the problem by measuring outcomes.
Does the Project Make Financial Sense?
Understanding the financials behind a successful tech launch is the difference between a brilliant idea and a brilliant idea that leads to a return on investment (and success). An effective pitch to investors will be better received if the pitch on the business is based on verified data about the market and opportunity.
A diligent first time innovator should gather verified market data, development costs, legal and intellectual property estimates, sales and distribution costs, and business costs organized into financial forecasts that show the expected cost and timeline of the commercialization pathway and early sales. The innovator should use this insight to assess the realistic opportunity and whether this project makes financial sense and offers a reason to move forward.
Bottom line is that personal engagement and passion for your innovation are essential to drive the innovation process forward, but objective analysis of the technical soundness, legal freedom, knowledge that the innovation solves the problem, and financial return on investment are also absolutely necessary for a positive outcome.
When you need a trusted resource VtSBDC can help
Have a great idea and want to explore what to do next? When clients have questions about product development, funding other than debt financing, patents and anything else related to innovation or technology commercialization, Scott can assist with:
- Seed funding, series funding, private equity, dilutive and non-dilutive funding strategy
- Pitch deck, executive summary, elevator pitch
- Patents, trademarks, service marks
- Exit strategies leading to licensing and/or acquisition
- Product development pathways
- Reimbursements, Regulatory
- National/multi-sided markets and business models
- Quality systems
Looking for more? Check out our Innovation & Technology page or reach out to get in touch with Scott!
Scott Holson is a business advisor at Vermont Small Business Development Center (VtSBDC) where he specializes in Innovation & Tech Commercialization. His career has spanned from manufacturing in consumer goods and medical devices, business ownership in the automotive field and food products, retail in food and household goods, sales of computer hardware and software, consulting on government contracting, research and development funding options and commercialization.
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