Commercialization – Key Considerations for Founders and Entrepreneurs

The recipe for success when developing a commercialization strategy should not be complicated.  Many of our suggestions may seem obvious, however it’s surprising how many companies we encounter are far into their launch before they reflect on these topics:

·       Clearly defining the mission and vision of your business

·       Identifying your ideal customer

·       Clear strategy for targeting and positioning to your ideal customer

·       Establishing your sales channel, and metrics for early success

Mission and Vision

This may seem academic, but your mission and vision are more than just statements in marketing collateral, they define how your company will be viewed by customers and the industry at large.  They have broad implications on your commercialization strategy and the direction of your business.  Is your mission to become a “Top 3” in your market or region, or is it to introduce an entirely new way doing things in your space?  One of these may require a heavy focus on pricing strategies and sales channel.  The latter may require careful cultivation of customer advocates, case studies, ROI analysis or other compelling reasons why your technology should be adopted.  Your mission will most certainly influence your product roadmap, with each product and line extension creating the future state you envisage.  Your vision will guide how you communicate your value proposition to potential clients, ideally this vision will be perceived as different than the status quo, and that of your competitors, and will add value to your offering.

Identifying Your Ideal Customers

A common commercialization pitfall is not taking the time to identify your ideal customer, this is often obscured by the distraction of trying to get early sales by any means possible.  In our market, the idea of placing an innovative, new technology at a big biotech can be quite alluring.  However, during commercialization with a limited team and resources, is this the best target to begin?  Using the examples from the section above, will your potential customer be price or technology focused.  More importantly, which client type is your product or technology geared towards.  During Beta evaluations you will develop a good understanding of your ideal client type, however we caution the number of Beta sites to consider and how you interpret feedback.  With Beta sites it’s quality not quantity, a few key strategic sites that will work collaboratively, provide data, and a clear roadmap to commercial placements is the way to go.  Entrepreneurs quite often underestimate the strain on their organization in placing and supporting Beta systems.  Finally, process client feedback with the right perspective, if you conduct 10 Beta site evaluations you are likely to get 10 different sets of user requirements.  Do not translate this feedback into an endeavor to create a system catered to all, keep the focus and positioning (next section) squarely on your ideal customer.      

Positioning and Targeting 

With a mission, vision and ideal customer defined, positioning should not be difficult for your marketing team to develop.   Here the guidance is to be concise and catered to that client persona.  Too often we see startups trying to cast a wide net with their messaging and strategy, again hoping to attract all client types rather than the those with maximum commercial potential.  With respect to targeting, there are geographic considerations as well as a strategy for developing the right sales team.  Many startups are born out of research with most of the leadership team either just leaving or still with one foot remaining in academia.  If your technology is intended to be used by and sold to commercial bioprocess applications for example, do you have the right team and perspective to speak to these clients?  If not the leadership team, what is your strategy for ensuring your sales team is catered to speak to such clients?  What regions will you target at first, and even what sub-region?  Are you looking at any client in cell and gene therapy for example anywhere in the US, or are you better served with a limited team of sales and applications specialists to focus on one hub like Boston, MA?  These questions will define your sales team and sales channel requirements, the next section will expand on this topic.                   

Sales Channel and Key Metrics

Entrepreneurs can sometime be so enamored with their technology they feel only a highly specialized salesperson will be effective and a highly consultative sales model must be employed.   In some cases, this is true, more often they may be underestimating the capabilities of a good distributor.  This is particularly true outside of the U.S.  Throughout the APAC region for example there are numerous agencies selling highly technical systems for U.S. and EMEA based companies for decades.  Quite often these organizations have service teams, application specialists and inventory management.  Rather than hiring direct sales throughout the world, and absorbing the costs associated with such a team, founders may be better served with a handful of regional experts supporting such distributors.

Sales metrics are another critical aspect to your commercialization strategy.  Top line revenue is always key for an early startup.  To achieve your mission and vision, other metrics will have to be tracked.  The metrics defined during commercialization will steer the direction of your sales team and often how they are incentivized.  Looking at the “Top 3” example above, metrics like the number of repeat orders, time to close, conversion from competitors may be just as important as top line revenue.  If you are looking to up end an entire industry by introducing a new technology, metrics like the number of systems in process development, pre-clinical or early phase may be more important.  Even targets like the number of end-users publishing on your technology may be a sales goal. 

Wrap Up

The key message for those commercializing is to have a game plane right from the start.  Use your team’s shared mission to guide what you will sell, where and how.  Leverage initial Betas and early sales to fine tune your positioning, avoid chasing every application or diluting your value proposition. Choose your target markets wisely and leverage distribution channels where appropriate as to not overwhelm your newly formed sales team.  Track your business level revenue targets but make sure to establish the underlying metrics that drive the actions and results you want.