Recently, one of our clients said to us: “We’ve spent $8M in R&D over the last several years towards the development of this technology. You [August Brown] need to make it work in the market. We have spent too much money to give up on it.”
Unfortunately, despite the amount of money the client had spent, the technology didn’t perform at the level needed to achieve market adoption. At this point, no amount of tech translation, new marketing tactics or better sales techniques were going to change the outcome for the technology—it simply did not meet minimum performance requirements. By the time the client contacted August Brown, they had already invested their money into the R&D project. Had they involved our firm earlier in their R&D process, they would have saved a lot of money and time. And while we knew ending this project would be bad for our consulting firm’s bottom line, we stayed true and told the client what they needed to hear: “Shoot the laggard.”
Principles of Tech Translation
Many technology companies often fall into the same trap as this client—pushing themselves to go to market with a technically inferior product due to any of the following: (a) a perceived or arbitrary deadline for a product launch, (b) a minimum viable product that misses the technical requirements, (c) a budget shortfall, (d) egos, (e) you name it! The outcome of a move towards the market with a product that’s not fully be ready can be catastrophic, both financially and to the firm’s reputation.
There are a number of processes companies can implement to reduce failure rates resulting from a pre-mature market launch and to avoid excessive spending in product development. Here are four proven, reliable steps from August Brown’s Tech Translation Framework that you can use to improve the outcome of your R&D spend and achieve good market placement:
1. After product conceptualization, conduct a market placement activity with your team. This involves a series of assumption-storming and lateral-thinking exercises that enable your team to achieve a 360 degree view of the technology/product and to develop various formats for implementation and pain point solutions.
2. Calculate the market size to confirm the total available market and the level of sales capture required for a return on investment.
3. Establish technical milestones and associated budget levels to overcome technical gaps for the requirements set by a minimum viable product.
4. Conduct an independent test of the product embedded in real-world simulations prior to the explicit commercial launch activities.
While there are many processes that technology companies use to guard against failure, the above steps provide a strong framework for maximizing R&D spend and outcomes in the market.
Are you looking for more information on improving the returns from your R&D spend? Do you have an aging IP portfolio that hasn’t returned the investment? Contact us for a free strategy session—and avoid the painful situation of having to “shoot the laggard.”