Conversation with passionate founder: “I’ve built a device that is an amazing addition to the business traveler with features of x,x and x. Can you help me get a conversation with the big 3 cell phone firms?”
As part of my work, I get a chance to work with early stage firms and their passionate visionary leaders. Sometimes these leaders are embedded in large firms, sometimes in solo endeavors. Every time I get close to this white hot energy, I’m always inspired.
During our sessions, I’m always listening on a variety of levels to hear not only if they have an idea with legs, but also the context they are evaluating their idea in. There are two key rules here:
The first is that every idea needs to be in a value delivery chain to have value. This may seem obvious, but you would be surprised at how many experts discount the need to have partners in creating and delivering value to their target market. There are many, many alternatives for both direct and indirect paths to get to market. The truth is that ideas “in the wild” are valueless – they only have value when placed into an economic ecosystem.
The (potential) value of any insight or invention is completely defined by the economics of the ecosystem it is introduced into.
The second is that your choice of landing zone determines the challenges that will be faced in entering that value chain. Most early stage products need a lot of refinement before being ready for the market the founders intend. Choosing ecosystems that allow for this refinement is very important to the successful outcome of the project. Said another way, my client above was choosing a very high bar, where near perfection is expected upon entry. This placed huge expectations and development costs on them.
Some additional examples might be useful.
One client had built a fantastic solution that was desperately needed by small local government agencies to provide services for their constituencies. As we explored her options, we began to talk about international opportunities, private industrial sites and locations where small governments could team up with one another. The outcome is that they found willing international participants that were willing to be working partners and are now using these references to leverage up here in the US.
Another client had built a private communications solution that had some remarkable embedded security. When I first started working with them, they had developed a business plan that had initial launch in the private wireless ISP market. After working through the options, it made a great deal of sense to complete the product development work in cooperation with the US Government on a DARPA grant. By using this vehicle, they were able to complete their low-volume technology development and perfect their security work in a highly capable process environment. This environment was also very competitive, and was looking for a commercial solution, so it validated the product and also set it up for commercial success.
A last example was an individual with a remarkable set of smart vision technologies that they originally conceived as a stand-alone product. When we reviewed the industry, it was a tightly controlled consumer market where it would be very expensive and risky to launch a new product category as a solo-preneur. By licensing out the elements, we were able to build a successful annuity of licensing fees.
Each of these opportunities were areas where the founder/champion had done the hard work to carve out a significant New/Unique/Differential product and/or service. The value of this work would be defined by the venue that they choose.
So how can you get started on this kind of thinking?
- Use a thought starter tool like the business model map or value proposition map. By doing this homework, you will gain deeper insights that allow you to make better choices about where your great work will see the most value. Pro Tip: Don’t stop with one, do several, share them with people in your network and refine until you have at least two viable options.
- Look at the value chain for your target market. This work should include not just the who, but how much value each step adds from raw components to product in the hands of the end customer. Clients are shocked when they find that typically more that half of the value is added in distribution. Pro Tip: Look for value chains that value innovation and have a pathway for lower volume entry – for example commercial trucking is very different than consumer vehicle space.
- Get involved with organizations that can open your breadth of thinking. There are many good accelerator programs available to solo entrepreneurs. There are numerous design thinking workshops that specialize in this area (Check Business Innovation Factory for example). Pro Tip: Don’t be seduced by recently funded whiz kids. Find humble founders who have had a successful exit. The best will be found through networking with good accountants, attorneys and banks.
- Grab a good consultant who has been in the mix. SCORE has some very good resources that are available to emergent firms. A larger firm would be well served finding a “T” consultant who has industry breadth and subject matter expert depth in the area they are pursuing.
There are signs on the Alaska highway that chide “choose your rut wisely, you’ll be in it for the next 50 miles.” When you are launching your new-to-the-world solution, be sure to choose wisely, because those ecosystem partners will come to be your friends and define the value of what you have developed.
If you have found this to be a helpful post and would like to continue the conversation, please click on this link and set up a 20 minute, “roll up your sleeves” call with me, or call my direct line at 847-651-1014.
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