Commercialization is the process by which a new product or service is developed and introduced into the market. Commercialisation is broken into stages, from the conception of the product through its production and adoption and support of end users. It takes into account the production, financing, distribution, marketing and customer support required to achieve commercial success.
Commercialisation is often confused with sales, marketing or business development, so maybe a deeper understanding is necessary. However, it is clearly about turning a concept, or an idea into a successful business outcome. Commercialisation runs hand-in-hand with creativity and innovation because they are the key drivers. Unfortunately, many people have little confidence in their ideas and their acceptance by the market. This leads to lack of confidence in the commercialisation, and of course, inhibits their potential.
One of FAQ Support’s objectives is to foster creativity and innovation. This means promoting the growth of new business initiatives in small-medium businesses and not-for-profit organisations, along with regional community development initiatives.
Important aspects of commercialisation
Recognise and understand your ideas and opportunities. I have been inside many organisations where there are people working on great ideas. Unfortunately, many of them think their ideas are a bit boring and nobody else would be interested. Others just don’t think that there is any commercial significance in their idea, as it was only designed for their own use.
In some cases, it will pay you to involve others with some expertise. This will help you to fully understand what you have or, are developing and to advise you on what is of real commercial value and how to go about commercialising it. This could include patents, copyrights etc.
Don’t be put off, consider what you have to do
- How many ideas do you have because it is ideas that lead to opportunities to commercialise?
- What export opportunities are amongst your ideas so you can expand your horizon?
- What are you developing your ideas for since they are important to sustainability?
- It is essential to look at many ideas because it can take many to achieve one or two sustainable products.
- Have you the necessary skills so you can commercialise your idea?
- Don’t lean on your own understanding, involve key stakeholders including trusted customers and facilitators early in the process.
- Develop your marketing plan so you can determine how the product will be delivered to the market,
- Anticipate barriers to success throughout the process because there are many things that can hold you back.
- If you are not an entrepreneur, it may be a good idea to engage one. http://goo.gl/uq9or1
- The opportunities are boundless for small-medium enterprises (SMEs) as they are the engine room of our economy.
Commercialisation needs to be backed up with a budget
Commercialization is the process of introducing a new product or production method into the marketplace. It’s about transforming new ideas into practical, commercially viable products and services. The actual launch of a new product is the final stage of new product development. This is where the most money will have to be spent for promotion and training and other marketing efforts.
All too often people spend all their money on developing products, only to find they have no money left to promote it. From dreams to reality, turn your research into a successful marketplace reality. Become more financially savvy, http://goo.gl/mOYFhO
Use a commercialisation process to bring your ideas to life
The very first step towards commercialisation is being able to clearly disclose the basic idea or concept behind your new product or service. You should be able to explain your idea outside your industry. Have a prototype for demonstration, complete internal and external testing, and get professional advice to protect your intellectual property.
The entry of your product or service into the market needs to be validated by completing trials. You also need to finalise your target market, pricing model and market entry strategy. Finalising the process will mean having financial projections and systems are in place prior to your entry into the market.
As early as possible, and before your decision to go. You need to demonstrate that your product or service is workable, and your intellectual property (IP) can, and will be protected.
Make use of a facilitator
When looking for a possible facilitator, it may be important to have someone with technology, industry and international experience.
You may need the help of a facilitator to:
- Understand the technology needed to commercialise your idea because you don’t have the necessary knowledge.
- Provide you with specific industry knowledge which could be critical so you can stay ahead of your competitors.
- Provide International experience as the real market for your idea may be in other countries, along with the toughest competitors.
- Market assessment, is the market big enough to make you idea viable, so does anybody want it and what price will they pay?
- Conduct a Due Diligence so you can have an independent validation for financiers (does the idea do what it’s meant to do?)
- Negotiate with seed funders and long-term investors because you will need money at some point on your commercialisation journey.
- Make decisions as you move through the commercialisation process because it can be too hard doing it by yourself.
- Develop agreements, proposals and other documentation you are not familiar with.
- Manage ownership and patent/copyright issues so important in building your competitive advantage.
- Calculate and manage royalty distribution, or shares in any venture so conflicts are avoided.
Are you an inventor or a business person
You will often find when you visit small businesses, the owner out the back working on a new idea for the business, tweaking their products. They are generally doing what they like doing, the things that put them into the business in the first place. However, other areas of the business may be suffering.
There are two choices:
- Keep doing what you are doing and employ a business manager.
- Employ someone to do what you are doing and become a good business manager.
How much time is being devoted to this activity across the business? How much is it costing the business, in time, money and lost the opportunity? Could these activities be better handled by other businesses you know?
Perhaps, what you are doing in your business that is already being done and done cheaper and better by other businesses.
The process of commercialisation is likened to a funnel. At the widest part are the many ideas that a business might have. As the funnel narrows, the process weeds out ideas based on the degree of difficulty, costs, consumer and economic trends, and feasibility. The eventual introduction of the product into the market may require adjustments to the process. The process one person takes from innovation to commercialization can be quite different from the path of another, use this process as a guide.
Starting today quantify and qualify your ideas and opportunities. Make a comprehensive list of all the good ideas around your business and as well as ideas you know about and think would be worthwhile.
Look at your funnel of ideas and categorise and prioritise them
- The ones that are worthwhile for improving the efficiency of business operations.
- Ideas that would add to your product and service range.
- Ideas you think would be suitable to commercialise.
- The ideas you would be happy to outsource their development.
Good business practice requires innovators to confirm their idea addresses an existing frustration, problem, want or need in the marketplace. A ‘demand-pull’ approach will help assure your idea solves a real-world problem. This approach is more likely to cut through possible cultural and other issues.
Many ‘supply-push’ ideas, those in which an idea is pushed into the marketplace. They do it without an established need. This is a waste of time because there is not a real market for them. Be aware that innovator’s egos need to be kept in check to ensure proper process is maintained.
Doing your market research
This is a critical part of the commercialisation process. It provides information that helps to identify marketing opportunities and address problems that may arise. Use primary market research techniques, such as focus groups, surveys and usability tests. These help to gather information about the viability of the product and how to hone it for the marketplace for optimum results.
Your secondary market research should take advantage of research previously collected and published by other people. Such as published professional journals, industry magazines, conference papers, trade shows, reference books, catalogues, product literature and the Internet. Always be aware of any spin-offs that may appear from your original idea, some spin-off ideas could well be much more valuable.
“Everything you’ve ever dreamed of will often show up in different packaging than you were envisioning”. Peter Sergeant
“If commercialisation is putting my art on a shirt so that a kid who can’t afford a $30,000 painting can buy one, then I’m all for it”. Keith Haring