When I was running the Innovations Project, I had the opportunity to speak to various business groups, inventors, and economic development organizations. My opening line in my presentation was, “Ideas are a dime a dozen – people who put them into action are worth millions.” At Innovations, we looked at thousands of inventions, product ideas, and concepts over the four years the program ran. Of those, we were successful in helping to commercialize just over 100. Our program was judged to be a success. The inventions and products that made it to market generated millions of dollars in revenue and royalties for the companies and inventors. Some inventors were able to commercialize their ideas.
During the Innovations Project, we got pretty good at predicting, early on in the process, which opportunities should receive the focus of our limited resources. Our mandate was to match inventions and ideas with industry for economic growth and job creation. We did this by introducing the inventor or innovator to someone who could commercialize the concept, such as a manufacturer and coordinating research and development assets, finding available venture capital, and securing intellectual property protection and grants and loans.
We began to understand what makes for a winning new product and what separates the winners from the losers. Conventional wisdom suggests that there is no pattern – roll the dice. The implication is that something is bound to stick if you throw enough stuff up against the wall. Does anyone remember Pet Rocks or hula hoops? Some say a tailwind will propel a product to success, meaning external factors over which we have no control, such as market conditions, competition, substitutes, etc. So again, the implication is luck. We did learn that people’s actions and how well they execute the commercialization process were essential but not crucial to success.
What became apparent was that there were only three crucial ingredients for a successful product launch. If all three were present, then the likelihood was high the venture would succeed in the marketplace. We could determine the winners and losers before making a real investment in development. The initial market research that determined the likelihood of commercialization success would guide product development.
The first key to success: A uniquely superior product in the customer’s eyes that delivers unique benefits to the customer. That is a strong product differential advantage. Ingredients to a superior product of service include:
- Superior to competing products in meeting customer needs
- Product is of higher quality and at the same price than competing products
- The product significantly reduces customers’ cost
- The product has unique features for the customer
- The product solves a significant problem
- Highly innovative product, new to the market
Product launches with a product that is the same as, or as good as, never succeed in gaining market share.
The second key to success: Early and sharp project and product definition. Before the product development phase of the project, the following were defined and agreed to:
- The target market – exactly who the intended user is. The narrower the focus, the better
- The product concept – what the product will be and do
- The products specs and requirements
A common mistake is to assume a product or service will have universal appeal in the particular market segment. It doesn’t. The first key to success is product differential, meaning it is unique and delivers significant new benefits to the customer. A winning product will therefore be attractive to early adopters before mass distribution occurs. Product development and introduction must focus specifically on those early adopters to gain traction and momentum – the rest will follow.
The third key is a product champion. Without a dedicated sponsor to push through the obstacles to full commercialization, the project can languish due to the lack of capital, technical resources, marketing expertise, or production and distribution capabilities. Generally, inventors, idea persons do not make good product champions. Even within a corporation, a new product can never see the light of day if someone within the organization does not have the desire or the authority to move things along.
In 1968, Dr. Spencer Silver, a scientist at 3M in the United States, was attempting to develop a super-strong adhesive. Instead, he accidentally created a “low-tack,” reusable, pressure-sensitive adhesive. For five years, Silver searched for a problem for his solution. A colleague used the adhesive to anchor the bookmark in his hymn book. That idea eventually led to developing a notepad that could be affixed to any surface and removed without any damage or residue and reused. The Post-it Note was born and became 3M’s most successful product. Had Dr. Silver not persevered, a truly unique and beneficial solution would not have survived. Post-it Notes succeeded because a genuinely unique product evolved from a failed glue experiment that provided significant benefits to customers who had a specific need for quick labeling and posting messages and a committed champion in the name of Dr. Silver.
There are lots of ideas out there. Very few succeed. Those who can put together the winning ingredients are truly worth millions.