Commercialize Technology to Produce a Marketable Product

Technology innovations can help produce:

• A new product or service with a latent demand, or
• Better versions of an existing product or service that deliver more value, or
• Deliver the functionality of an existing product or service at lower costs

The process of developing technology into such outcomes is known as technology commercialization. To avoid being simply a waste of time and money, the process must result in a marketable offer.

Commercialization of technology can take the forms of starting with pure research intended to produce some technological breakthrough, or using existing technology to develop a new product or service. The typical flow of the commercialization process involves:

• Acquiring needed knowledge through research or purchase
• Reviewing the concepts for commercializing the technology
• Developing preliminary designs; examining the technical and other issues involved in implementing it; deciding whether to proceed further or not
• Converting the design into prototypes to see how well they deliver the intended functionalities
• Starting production on a pilot scale and identifying, for example, production and quality control issues
• Scaling up the pilot operations to full scale commercial production and delivery

Focus on Marketability

Marketability involves more than existence of potential demand. Following are some of the issues that need to be attended before successful commercialization can occur:

• Feasibility of producing and delivering it to prospective customers: Technical, manpower, logistic and all other relevant issues must be identified, evaluated and reviewed
• Hazards involved: Hazards involved both in producing and using the product must be carefully investigated. The possibility of hazard-reduction attempts pushing up costs to non-viable levels must be examined
• Compliance issues: Governments typically exercise control over certain industries on security, environmental, public interest and such concerns. Gather information about all compliance issues involved and review the feasibility and costs of complying with these
• Profitability: All the information gathered is assembled into a profitability analysis. Selling prices, production and distribution costs, and possible sales volumes are estimated to review profitability.

The specific value that the product or service delivers to the customer and how it improves upon existing offers is the key issue that needs to be critically exmained. It is this "value proposition" that makes a product or sevice marketable against competition.

Technology Commercialization Issues

There are several issues that can result in failed commercialization projects or at least inefficient execution of the projects. These include:

• Taking up projects that don't fit the core competencies of the developer
• Products that doesn't solve the intended customer's core problem or does not suit the context in which the customer uses it
• Products that are not positioned right to reach the right customers who can get the intended benefits
• Poor selection of distribution channels and poor customer support
• Wasteful and ineffective approaches used for product development leading to unsatisfactory products or too long idea-to-market cycles allowing competitors to get in before you
• Starting to ship the products prematurely before beta testing is complete, fully evaluated and acted upon
• Not factoring in critical technology and market risks resulting in the product becoming obsolete before recovering the investment.

New Business Models are often Needed

Have you studied the way:

• Google monetized the various free services it provided to the public
• Amazon sold books all over the world and
• eBay converted auctions into a completely new model?

If you have, you will recognize the significance of business models for the success of new technology businesses. These new models can involve innovations not only in the product or service but also in the extent of the markets they reach, the way the product or service is delivered and the way the supply chain is organized, among other innovations.

The Commercialization Process

We have been focusing so far on a single idea being developed into such a market offer. In actual practice the exercise starts with many ideas which are examined in detail before selecting one or two.

The selected ideas then go through various stages (discussed above) to final product launch. At each stage, there will be milestones and deliverables which help assess whether it has been successful or not. If the deliverables do not materialize owing to design or production problems for example, the project can be abandoned midway.

Involving major customers in assessing the problem solving potential of the proposed product or service is a critical success factor. Otherwise, the technology focus can result in a beautifully designed product that fails to solve the intended (or any) problem. The customer, and the value you are providing to that person or organization, must be clearly identified before design efforts start.

Several validations occur along the way. For example, if the project is approved for grant funding, the design can be considered validated. And if commercial funding is approved, it validates the business model.

The final product or service launch exercise is usually the most expensive and critical phase. If sufficient numbers of customers accept the product and indicate a readiness to pay for it, the final validation of the whole process happens.