Engineering new products customers want

You worked hard, just completed the initial substantial financing for your startup and have the financial resources to take your solution to market.

 You now need to plan and execute your short-term product features to attract early users, fuel initial sales and build references for other customers. At the same time, your roadmap should enable you to address larger markets in the mid-term, while managing overall business risk.

This webinar will provide hands-on, practical insights and tools towards a successful Product development:

  • Reviewing critical steps from Idea through maintenance and upgrade
  • Managing Prototyping vs. Production
  • Protect your Know-How and Intellectual Property
  • Smart risk management approach or “selling risk” to a partner

We will talk with Diego Casadei, Head of Space R&D at Cosylab. He will draw from his broad experience in space instrumentation, including two cosmic-ray detectors, one operated on board the NASA shuttle Discovery in 1998 and one installed on the International Space Station in 2011, and two X-ray imaging spectrometers for space, one on board of the ESA Solar Orbiter and one currently in development. In addition to project management and system engineering activities, his technical contributions range from detector R&D to the design of trigger and data acquisition systems, from instrument characterization to space qualification, from simulations to performance studies.

We will also draw from our broad Entrepreneurship experience to provide exciting insights and practical examples. You will have the opportunity of a live chat to ask relevant questions.

Register below for this Webinar on April 10th 2019 6:00pm to 7:00pm CET!

Register now

Why “Innovation Management” is losing the Adoption game

Or how you can drive growth with User-centered innovation

In November 2018, Tendayi Viki was asking again in Forbes “Why large companies continue to struggle with innovation?” – a recurring question for too many years.

We do not pretend to have the magical recipe for Innovation. However, our daily work with both large companies and startups gives us a unique perspective on closing the Gap for putting “Innovation” in practice.

Companies “hear about the advantage of disruptive innovation or step-out innovation and decide that their organization should do “some of that.” But their organizations are designed to do something else very well. Namely, what they are already doing.”
– Why Big Companies Can’t Innovate, Harvard Business Review

From large companies, we hear how difficult it is to “Innovate” in specific industries; worst, many Managers believe they are laggards while other companies are faster, more flexible and prone to innovate! There is so much noise around “Innovation” that many Manager are in constant “catch-up” mode or FOMO (Fear Of Missing Out)

At the same time, from B2B Tech startups, and the frustration of “Innovation Labs” disconnected from the priorities of the Company’s core business. Several months into meetings, negotiating proposals and running Proof-of-concepts, the initial excitement for the “innovative” solution is often buried under business lack of focus, day-to-day priorities, one-off pilots and red tape.

On a rush to “Innovate”, many Managers and Entrepreneurs alike forget the 3 levels of maturity for adoption of Innovation:

  1. Technology maturity or what everyone is talking about today
  2. Market maturity or the ability for a viable roll-out at scale
  3. User maturity, rarely talked through but often most critical

In this paper, we will uncover together 3 challenges on a path to true Innovation-for-Growth. We will also articulate 5 specific actions companies can execute to achieve sustainable Business Growth.

Challenge #1 – it’s Innovation Magic!

Remember how you watched the latest Magic show? Like a kid, you probably experienced a mix of Delight, Wonder and Superiority!

  • Delight – we are wired to be in awe of things that cannot be logically explained.
  • Wonder – we know these things are fantasy, but if magic is real, then maybe all kinds of other cool things that we want to believe are real, too.
  • Superiority – while there are some people who watch magic with wonder, there are plenty of others who get off on their perceived superiority to the magician. They can figure it out. .

Today, Innovation is like watching a magic show!
Delighted by the Technical novelty, we join the crowds of Innovation Summits & Tourism, Startup festivals and Pitching competitions. We know many of these things are fantasy but also wonder how it could work for our company. The first thing we burn to ask the Magician is “how did you do this”?

Challenge #2 – The “Innovation-as-a-service” Trap

Under pressure from shareholders, customers and competition, each business needs to “Innovate”. As so often, Managers focus on the easiest part of the equation – the How. We send people to training to acquire and learn the method and tools.

We establish Innovation Labs, “Silicon Valley Outpost”, Accelerator, Incubators and often even hire a Chief Innovation Officer! And then we outsource the essence of Innovation to external providers or “innovation-as-a-service” consulting firms, with the promise that you too can innovate … efficiently!

From this, the “Innovation Manager” feels free to share deep insights travelling the world, giving keynotes about Innovation at the ever growing audience of Innovation Forums.

Challenge #3 – The “Halo Effect”

Our business world is full of research and analysis that are comforting to managers: that success can be yours by following a „Innovation“ formula, that specific actions will lead to predictable outcomes.Innovation is one good example of “The Halo Effect” where the perception of one quality is contaminated by a more readily available quality. In this case, Innovative companies being rated as more performing when promoting Technology innovation.

What the authors claim to be the causes of long-term performance are more accurately understood as attributions made about companies that had been selected precisely for their long-term performance… In fact, lasting success is largely a delusion, a statistical anomaly… – The Halo effect, Phil Rosenzweig

So what we should do instead?

Build on your business and management strength.
Stop focusing on Technology Push “Innovation” and instead address the key hurdles on the way to sell a new product or solution into the market – User Adoption. And be ready to transform your company in a challenging but rewarding process!

Focus on customer (re) discovery

Established companies have a deep market experience, established channels and long standing customer relationships. From there, Managers are best positioned to identify user’s problems, both internal and external.

B2B Tech startups engage in Proof-of-Concept with prospective customers to offset their lack of “track record”. For larger companies, this PoC can also be a fantastic opportunity to (re)discover their customers, adjust features, increase value capture – and secure user adoption along the way.

Be ready to Test-and-Learn

Most companies have established a functional, geography or product-driven organization or a mix of all. Many also have or thinking of establishing a Chief Digital / Innovation Officer.

One particularly useful organization is along the Customer Journey including a Customer Success team or some people committed to a great product value experience. These customer-centered teams are key in ensuring customer maximize value from new products. More importantly, embedded in the New Product development teams, they can provide invaluable insights to for new user-driven product innovation while increasing value capture!

Organize to Execute

Once the customer insights are flowing into your organization, the true business growth will come from implementing the new product or solution features. This phase will rely on a higher tolerance for Risk and the proper frugal mindset or Jugaad.

Methods such as Agile process to execute and iterate evolving product features over time can be helpful. This is done sometimes under a separate organization with required “Air Cover” to protect from interferences while also giving marketing freedom with eventually a distinct Brand.

Not-Your-Sales-as-usual

New products require also new sales processes, capabilities and metrics. First you will need to invest more qualified sales people time for Inbound vs. outbound sales and Solution vs. Product selling. The focus is on establishing a long-term relationship and on ensuring your customer is deriving sustained value from the solution. e.g. Partnerships and network effects.

When we work with a Startup, we define what are Key Performance Indicators and identify Solution-selling talent. While the solution might be new, the KPIs are generally well established in the given market but might be quite different from the established Company core business!

Business and Talent acquisitions

For many large companies, hiring the required talent, particularly round “hot new tech” such as AI, Cloud computing, Software Development is a real challenge.

We rave at the GAFA & Co. and their incredible ability to innovate and grow. We should not forget that most AI solutions the GAFA are now deploying to the market are arising from many Product & Talent-driven acquisitions over the past 5 years.

Used properly, Innovation marketing and “Acquihire” can be powerful tools to evolve the way your company culture, customers, employees and new hires image.

To bring it together, some takeaways:

And of course Mind the Gap between Innovation and Adoption!

  • Focus on user-driven innovation to deliver true business performance & Growth
  • Listen and partner with your customers to increase your value capture
  • Review your organization design to ensure customer success and feedback
  • Implement Reverse Mentoring to upskill your organisation and evolve Culture
  • Set clear goals for your innovation initiative… you get what you measure
  • Challenge “Innovation-as-a-Service” solutions against your Business goals
  • Validate first startup Commercial value-add, not equity transaction
  • Foster experimentation Mindset to address new customer unmet needs
  • Consider creating a separate Brand & organization for execution

Looking forward to your comments, questions and feedback !

3 scaleup paths to grow your startup

“What got you Here, may not get you there”

After numerous pivots, sleepless nights and uncertainty, you’ve survived the chaos and crushing ambiguity of start-up life and managed to develop a unique tech idea or already patented an offering for customer. You are bootstraping your venture through project consulting while further developing your new product before scaling up. But the same strategy that got you through the initial start-up stage, is not working anymore. Still wondering why?

Tech companies face different challenges when it comes to scaling up and coping with risks at various stages.

Scaleup strategies

Recode in 2016 provided the following definition which we think are to the point:

  • A startup is on the quest to find product-market fit, developing and iterating its product or service, experimenting with customer segmentation and working toward a positive contribution margin.
  • A scaleup, on the other hand, has already validated its product in a market, and has proven that the unit economics are sustainable.

When a Venture is exiting the startup phase, it generally needs to choose:

  • In-house Scale up – Develop and test the product in-house. Upon successful development and validation, set up production unit and selling through own channels.
  • Outsourcing a function of the business – Letting an external partner handle the function, for eg. Marketing or HR or production, to get expertise in the field.
  • Licensing – Licensing a well-developed technology to another company / person and charging a royalty fees on the Net profits or revenue-share-agreement obtained through implementation. 

Key factors guiding your scaleup strategy

Plans for scaling up must consider a broad range of factors and balance what is desirable with what is feasible. Following are some of the factors to consider:

  • Barriers to entry – in some industries, regulation, certification, scale of production, brand reputation or distribution can be formidable barriers to a new Product entrant; in such case a Licensing strategy could be preferred
  • Time-to-Market – Depending on the stage of startup, competition and strength of IP, licensing can be a fast track route to get your product in the market faster.
  • Integration risk – while you might have validated a first lab prototype, some residual technology risk might remain from the integration of your solution into existing products; a high integration risk threshold would favour a licensing strategy to OEM
  • Team capabilities – Available expertise and experience of your team will confirm the capabilities to produce inhouse or with partners; this allows you to focus on your core strengths, avoid the challenge to develop expertise across the board.
  • Access to capital and Return on Investment – Licensing requires much less investment and time as compared to in-house development. The access to adequate capital is often a key driver in strategy decision.
  • Location and cluster – your geographical ease of access to specialised capabilities, processes, talent and know-how can play a decisive role in your scaleup

How to implement your scaleup strategy

Once you have chosen a strategy based on above factors, below are some key steps to consider on your path to implementation.

  1. Research the environment and current situation – Assessment of external environment is critical to know your market, know the bigger picture and the challenges you might face.
  2. Build a plan based on the idea and selected strategy – Assess you core competencies, adopt your business plan in line with the selected strategy and capabilities of your team, set KPI’s and a clear roadmap for the future.
  3. Outsource what is non-strategic to optimize leverage – find the right partners, for non- essential activities and focus on leveraging on key capabilities. Scaling up is not only about leveraging internal capabilities but also outside resources.
  4. Strengthen your team to support core capability – Recruit more people to strengthen special know-how and broaden the Management skillset of the team.
  5. Leverage your network to build collaborations – Network plays a key role in building the trust with the partners for your idea. Leverage your existing network to find the right partner with required competencies to scale up your idea.
  6. Monitor and Evaluate the results – regularly review KPI’s to evaluate the success of your strategy and take corrective actions as necessary

A plan, no matter how strategic, is only a plan. The success of scaling up depends on actual implementation but also the ability to react to changing market conditions.

Photo by Samuel Zeller on Unsplash

Which events are right for startups?

As a young Entrepreneur, you know that getting out of the office is key to building a relevant network. You know that a great event can propel your startup where it can thrive and achieve its business goals more efficiently. However, we are always amazed at how much time Entrepreneurs waste attending the wrong events. Are you also tired of not getting what you expect from events?

Why attend an Event in the first place?

Motivation and goals to participate in an event can be diverse but mostly fall into one or several of these categories.

  • Scouting for new ideas, market intelligence and competition
  • Reputation marketing to build credibility as opinion leader & employer in your field
  • Raising funds for your venture and increasing your visibility to Investors
  • Accelerate Customer acquisition and connect with relevant decision makers
  • Influence key policies and decisions within your industry
  • Have fun, combining team building with business related discovery

As with any business decision, in a resources constraint environment, it is foremost important to ensure you have clear goals regarding event participation.

What types of events can you attend?

Of course there are many different types of events available to startups depending on time, resources and costs of participation.

  • Networking & Apero & Meetups
  • Pitching competition
  • Startup event e.g. Pioneers Festival
  • Hackathon: 1/ 2 or 3 days of rapid prototyping (coding) for project sponsors
  • Tech show: horizontal events covering multiple markets, typically focused on selected technology solutions e.g. Mobile World, CES Las Vegas
  • Trade show: Vertical events covering multiple technologies but focused on targeted market segments e.g. CEBIT
  • Accelerator: 2-3-month programs e.g. Kickstart Accelerator, IKEA Rainmaker
  • Incubator: 6-12-18-month program often with co-working spaces

You can check some selected upcoming events for startups here.

Some things to watch-out when picking Events

Whether with customers, investors or partners, it is great to try out some various events formats. However, below are some pitfalls you should be aware of.

  • Being in the spotlight: as Founder, you put yourself in front of your business; you use the venture as a vehicle for you to get visibility and positive reinforcement; this syndrome is likely to appear in pure-play startup events, remote from market challenges
  • Comfort zone: some Entrepreneurs tend to select those events where they know they have an edge; remember that for a deep tech start-up, pitching and winning at tech events might feel great but does not solve key business questions
  • The Booth: getting a booth at an event can be a curse for a startup; A booth is great for established companies to gather partners or customers efficiently. Generally understaffed, startups are better off walking the floor and talking to people
  • If it is Free… you are the Product: many events are popping up financed mainly through corporate sponsors; they are scouting for innovation & ideas but not always with a clear purchasing mandate
  • Vision vs. Market: as you engage on the growth path for your business, you will encounter many challenges along the way. As you do this, be prepared to call “bullshit” on pitch focusing only on “vision”, “paradigm shift”, “disruption”. As your talks shift away from talking about markets, customer and sales so are your chances of building a sustainable business.
  • Selling vs. Discovering: as you start facing commercial challenges, watch out for being stuck in “discovery” event mode; early on you should shape your ideas and technology into a product + pricing proposal you can bring to potential customers
  • Escaping reality: as the business challenges increase, attending Events can become a place of comfort away from the tough reality of the business

Making the most out of your event

  • Selection: take a bit more time to challenge the need to join specific events; look for qualitative assessments and peer recommendation to meet your objectives
  • Priorities: stay focused on key business questions you are trying to answer? Key challenges? Resist the temptation of going to events just because it is free or you “won” a pitching slot! (Remember: if it is free…)
  • Liquidity: most likely you are better off not renting a booth and walking the show; as needed, booking a demo room nearby a larger event can be a great alternative to renting out expensive space on event premises
  • Time: you might leverage the event platform to connect with speakers or participants but decide not to attend in person; this might prove a great compromise to not participating to the event at all
  • Impact: prepare extensively before attending time-intensive events and particularly when you have a targeted audience in mind e.g. Investors or customers; review their specific strategy, focus and priorities so you can be razor sharp in your message
  • Value: a thorough and timely post-event follow-up is critical to getting real value from an event and send a clear execution-focused signal
  • Focus: Events should only be a means to an end; make sure you do a candid post-event lessons learned to inform your business decisions and challenge further event participation.

Given the lack of transparency, information and reviews, identifying and leveraging the most out of the right events can be a challenge for most Entrepreneurs. The need for exposure to peers, customer, partners or investors should force a sound judgment on to the few events, which a Startup must attend.

To simplify this task for you, sparksense.co provides you with a platform for start-up events here. We would appreciate your suggestions and feedback !

Pricing for Value… not Price

You have spend nights, tears and money to develop a fantastic new Product. You are excited, now getting ready to launch it to the market, but there is a big unknown: PRICE! You know that establishing the right pricing is one of the most critical step for your Venture. Unfortunately, many innovative Startups fail to capture their true value potential because of inadequate pricing.

Avoid common Pricing pitfalls

  • Lowest bid wins it all

    Confronted with uncertainty, many Entrepreneurs are looking for ways to undercut the “market”. It is a common misconception that a low price will increase the likelyhood of success. In reality offering the right Value is key to sustainable success.

  • Do not blindly follow the pricing herd

    There is a large wave of solutions which are being priced through a monthly subscription fee model. While this brings many advantages, your customer group might be used to a very different model e.g. one-time fixed price.

  • Free “Proof of Concept”

    Winning a first customer is a challenge for most new Ventures. Getting a track record has often priority to first revenues. However, offering a Free solution does not demonstrate if you provide true customer value, or confirm Readiness to Pay.

  • Project consulting temptation

    Selling a new solution often requires some pre and post sales consulting. While these consulting revenues help pay the bills, they are not scalable, non-recurring, postpone price discovery and distract valuable resources away from building a great product.

Maximise customer perceived value

  1. Anchoring value through a high price point

    It is key to position the Value point for your product as high as possible. This provides an “anchor” for any future reference of value. It also pushes you to offer true benefits. Second it is very difficult to “work your way up” from a low price point.

  2. Match customer value points

    Remember that customer perceived value extends way beyond pricing. This augmented value includes reputation, brand, leadtime or quality. It is an opportunity to revise your Product delivery, Make vs Buy to best match key customer value.

  3. Maximise value from product Features

    Acknowledging that each customer within the defined segment will have different needs, you should take the opportunity to establish a feature-based pricing model. This will further guide your product roadmap towards the most valued features.

  4. Simple pricing to optimise readiness to pay

    From day one, your pricing should support customer readiness to pay. A subscription, % or unit based pricing can enhance the stickiness of your product and bind customers over a longer period of time. Sometimes pricing simplicity can increase customer value.

Implement a successful Value Based Pricing

  1. Define your target customer

    Pricing is a reflection of perceived customer value and hence highly depends upon your target customer base. One helpful framework for this is to use a user Persona.

  2. Assess market value

    Survey and evaluate the customer perceived value for each persona and the product being offered. This includes evaluating the pain points, product features, and eventually readiness to pay.

  3. Validate customer benefits

    Understand how you create value for each customer. It is important to quantify specific process-level benefits derived from cost reduction, higher efficiency or increased quality .

  4. Setting the Price

    Your price will be reflect additional value creation, price of competing solutions or products and value capture strategy e.g. Premium pricing. You might include feature-based or subscription based pricing as appropriate.

  5. Lean Pricing method

    Continuously gather specific pricing feedback and market intelligence to narrow down which features ‘ideal customer profiles’ will value the most. This will also allow to fine tune the value capture and pricing, particularly important in rapidly evolving Software markets.

In essence, shifting to a Value-based pricing model will not only maximize profits but more importantly foster an on-going understanding of your customer value proposition. For some it might come as a surprise on what customers truly value, focusing on product features you didn’t know were important .

We are curious to hear back from you and your specific experience as you implement this value-based pricing for your business!

Smart fundraising for startups

We receive many investment requests from Technology Startups, Impact investing to even ICO’s. Some have great businesses to share; others underestimate the fundraising trap.

We talk with Balz Roth, a professional Business Angel, investor and board member for SMEs and technology startups. Various successful exits of technology startups to companies like Intel (Lemoptix), Monolithic Power Systems (Sensima) and Everyware (Safe Swiss Cloud). Balz is also a Venture Partner at Go Beyond, an international business Angel Network.

Slideshare 

Podcast

This webinar will provide hands-on, practical insights and tools towards a successful Fundraising:

  • Do I really need 3rd party money to achieve my goals?
  • Which Investors are most likely to be a good fit for my Business and development stage?
  • Key steps towards a great first Investor meeting and the first Term Sheet
  • Critical ways how to take the relationship further and get through Closing

He will draw from his broad investment and Entrepreneurship experience to provide exciting insights and practical examples. You will have the opportunity of a live chat to ask relevant questions.

B2B markets: Delivering top line growth

How to get traction with large organisation as a startup

As per the 2017 European Scale-up report, contrary to Silicon Valley, where 2 out of 3 startups are consumer oriented, 60% of European scale-ups are B2B focused. Initiating, building and maintaining productive relationships with large customers are challenges for many startups.

Slideshare 

Podcast

Adapting to a different operating framework

To become successful at driving sales in a Business-to-Business environment, it is critical for any Entrepreneur to first accommodate to a very specific operating framework.

Large customers are primarily assessing new innovation against Return on Investment, validating how it will help them increase profitable sales. In the background, the Entrepreneur will have to establish deeper relationships with a small number of companies. A further focus will be to cater for a Person-to-Person selling across multiple stakeholders. And above all, to be patient, acknowledging slower decision process of large organizations.

Executing the Key account sales process steps

In the established context, it will be important to manage the related end-to-end process:

  • Robust pre-sales approach
  • Well prepared sales interface
  • Thorough post-sales follow-up

To prepare for the sale, it will be critical for the Entrepreneur to get-out and understand the industry structure and its dynamics, so also to articulate a solid, simple Value Proposition. Beyond the market focus, it will also require to research customer organization and identify the true decision makers, their readiness to pay and seek early adopters.

During the sales process, it is very critical to listen to customers, so as to deliver what they need. To build credibility, the Entrepreneur will need to apply full human resources bandwidth to gain management trust, similarly to Venture Capital discussions. During this critical phase, the focus should remain on key contract items: scope, liability, IP ownership and termination terms. The Entrepreneur should always be weary what its organization signs and seek legal advice whenever appropriate.

The management of the post-sales process is a fundamental building block to success. The Entrepreneur will have to expand its discussion and reach to other functions within the customer organization. It should be useful to consider implementing a Key Account penetration plan but also some simple but effective web-based sales pipeline management tools. Finally, the Entrepreneur should ensure not to be blindsided by the urgency to get the order on the table and prepare for the next sales opportunity.

About the Author

Roberto Magnifico, Chief Commercial Officer, with the Startup ActLight SA.

He draws from his broad key account sales and senior management experience to provide exciting insights and practical examples. You will have the opportunity of a live chat to ask relevant questions.

Fake it before you make it !

We enjoy working with diverse Entrepreneurs and Ventures, also on supporting them on their path to Market Launch.

Before moving too quickly towards Product & solution development, we recommend each Entrepreneur to focus:

“Make sure
you are building
the right it,
before you build it right!”

They are a lot of excitement around Minimum Viable Product, Product-Market-Fit and other Prototypes.

We find the use of “Pretotype” a great way to focus on what matters – the customer and market adoption.

” Pretotypes make it possible to collect valuable usage and market data to make a go/no-go decision on a new idea at a fraction of the cost of prototypes: hours or days instead of weeks or months, and pennies instead of dollars.”

Download and read along in this short, practical and useful guide called Pretotype It

Making a great first impression

We receive many investment requests from Technology Startups, Impact investing to even ICO’s. Some have great businesses to share; others underestimate the fundraising trap.

Fundraising can become a substantial distraction from getting your business off the ground with real customers.

We felt it could be useful to share some experience-based guidance for Entrepreneurs to manage the “Fundraising” process, starting with a great Teaser. And increase your chances for application to possible “Accelerators”, Startup competitions or ICO’s.

Download your copy below

WP_Teaser_Picture

The Power of your Investment Teaser