In an informal poll, commercialization experts agree that understanding your market opportunity is the single most important criteria for successful new ventures.  http://polls.linkedin.com/poll-results/50819/mrtbl

Yet, on occasion, I still meet many excited idea people who believe so firmly in their idea, that they block out everything to pursue the costly patenting, product development and more, only to end up broke and drowning in inventory of a gadget that has no buyers.

I do advise protecting your IP, I do advise spending wisely on R&D but there is nothing to prevent you from doing the basic components of a business plan and market research prior to spending a single dime.  You can uncover need in the market without divulging your IP and you will certainly learn key insights from your potential customers that can drive the product design so it is even better than you originally imagined.  Do your market research first and everything else will work better and you will save money and time.

Pitching an idea, creation or innovation can be exciting and fun but how do you ensure you secure the “Buy-in” you are looking for?  Let’s face it, you are often your only champion so before you go and tell someone you need to partner with you about your great idea, remember they are unlikely to view it the same way.  So how do you approach a potential partner, investor or customer?

Provide them data.  I have discussed “pain” before and this is an extension of that same point.  You have to paint a picture of your innovation in the context of facts that apply to your audience.  That could be return on investment, it could be competitive technical data on performance.  Regardless of what it might be, do your homework and arm yourself with data to answer any question that can come your way.  If you can’t quantify why your idea is better, faster, cheaper, more profitable, few people will listen and fewer will join your cause.

Q: Who is your market?

A: Everyone.

Is this right?  It is EVER right?  Well, if enough prospective entrepreneurs had their way, it would be the right answer but here is the real truth – your target market will NEVER be “everyone”.

Too many times, an innovator will write in their business plan that their market includes everyone.  Even if you are making toilet paper or even food, do not put in your business plan that your product is for everyone – it simply isn’t and even if it were true, you are sealing your demise if you don’t exhibit some focus on your target market.

Here is an example of what you should be thinking about.  Let’s use the toilet paper example: First, it isn’t everyone, many cultures don’t use the stuff, so do some research in Google or your local library and you may find some estimates of the total world market – put that number in the business plan, that is the ultimate prize but no one will own that whole market. Since no one can own that whole market, then tell investors in your plan who your target marketis by defining the specifics about a select group you feel you can adequately market to effectively.  For instance, “our target market is 65-85 year olds in the US who have annual incomes of X”.  Next, tell investors about who you think the early adopters are that you will focus on immediately after launch.  These are the people within the target market who are searching for an innovation like yours, are willing to deal with glitches along the way and praise your product once they’ve used it.  This might be 65-85 year olds who have recently had surgery for a colon problem.  Now you have some real information!  This isn’t just for investors, you probably see now that you are armed with that info, you could send samples to general surgeons or specialists who would pass them along to these patients. 

Focusing early on a very select group of people is essential to success.  Remember, your market is never “everybody”, it is a small group of people that allow you to realistically focus your efforts and marketing dollars in an effective manner.

One lesson that is hardest to swallow for most inventors or technologists is that your idea is the key driver of value that everything else revolved around. 

The reality is that everything revolves around execution.

Learn this lesson early and save a lot of heartache.  Unfortunately, only a small minority of ideas ever see the light of day.  Did you know that over 95% of all patents never make a dime?  I mention this not to scare you away from pursuing the market but instead to help you get a grasp of the effort ahead.  Be prepared to work hard – very hard.  Learn how to sell yourself so you can remain on top of each negotiation and each opportunity.  Remember, if your innovation is good enough to land funding, a VC will gobble up a significant portion of your equity, so try to develop the market yourself as long as you can and build value around your idea so that you improve your leverage. 

For many creators and innovators, it is tempting to take the stance that you are “simply” a creator and best tinkering behind the scenes and finding someone to write your business plan and market your product or service.  While I strongly believe in good partners and division of labor, I do believe it is a dangerous mistake to hand over all aspects of the business to someone else. 

If you need help with a business plan, get help but be sure you are getting a good coach and writer but do the market research and bulk of the detail yourself.  Several reasons for this:

1. You will learn more about how your innovation impacts others so you can make improvements that might be crucial to success.
2. You will gain a better grasp of the realities of new venture creation.
3. You will learn more about your value and be less likely to be taken advantage of when raising capital or bringing in equity partners.

Be sure that you do your homework and ask for references.  Commercialization experience is hard to come by and you should remain engaged in all aspects of business until you are way down the road to profitability where you can then consider a return to the lab full time while the cogs in the wheel of the venture continue to work for you.

Marketing tactics have changed drastically in the age of the internet.  The good news for those with their heads down in a creative project is that the changes have actually been in your favor.  For many, it is natural to share your ideas with your peers and may have already taken to blogging and social networking or a journal you have been published in is now putting your latest writings online.  For the rest, especially larger firms, you are not required to do these things but you must know that mailing lists, cold calling and other tactics you used ten years ago are not going to work and you must change and evaluate your new offerings or hire a professional marketing firm.

No matter which group you are in, strategies for marketing are relatively the same – the “four P’s” still hold true, just don’t get suckered into old methods of addressing them.

If the idea of selling scares you, then this post – and this blog – is for you. 

When working with as many innovators as I do, you begin to see patterns among the majority and one common thread is a poor ability to market your idea or innovation or even yourself.  Often times, it is worse – a complete and unfounded fear of marketing and selling.  Everyone has the ability to sell and you have sold at some point in your life.  Whether it was to get a job or getting into the right school, if you competed and won, then you sold yourself well. 

Creatives, engineers, designers and many innovators simply were not given any education on the subject as a part of their formal education.  But now that you are a business owner or launching your own product or service, you must learn to take control of how you market yourself and it can be quite simple.  Here are some quick steps to selling and marketing that any innovator can identify with:

Step 1 – Research the pain.  Selling is simply connecting your product or service to someone’s pain.  Unfortunately, the majority of would-be entrepreneurs simply feel that if they see pain, then the market sees pain, which is a very dangerous game to play.  Research isn’t just for the lab folks.  Simply doing some light secondary research at the local university library combined with primary research efforts, like calling experts in the field for a quick interview is painless and a great step towards knowing what your target market is looking for in your innovation.

Step 2 - Write.  Once you have done your research, put it into a business plan or even a one-page reference document.  Gathering the data in one place gives you the ability to see patterns in what you learned and format it in a usable way.  A business plan can be used to pursue funding.  A one-page overview can become your commercialization section for an SBIR/STTR grant or with some touches from a designer it can become a marketing document when you are seeking that first sale or partner.  For those seeking funding, the PowerPoint will be needed at some point.  This is where many mess up.  Strip it down to the bare essentials and leave all the data that isn’t related to the “pain” out.  Show financial projections if applicable and keep it to less than 15 slides. 

Step 3 - Share.  This is the step that most people identify with selling.  True, the average used car or copy machine salesperson starts their pitch here but good salespeople know it is all about the first step above.  Ironically, the easy step for many innovator personalities.  Begin getting used to the idea of sharing your innovation with colleagues.  It is less intimidating and many times, they can be advocates or even potential customers themselves.  Ask everyone you talk to for references or “who else might be interested”.  Spend time at industry gatherings – another friendly place to begin to sell your idea.  You can simply walk the convention and talk to potential users or you can sign up to present your idea in a speech if you are ready for that step.  Remember, these are your friends.  Finally, step out and talk directly to your target audience.  If you’ve discovered the “pain” then this can be an easy effort as well.  Build rapport by talking about the challenges and pain, not your solution.  Be empathetic so you can see it from their view.  When it is natural, share what you are doing and you are likely to get great feedback and possibly even a new client. 

We will talk about individual components of this process in other posts.  For now, just know that you can sell yourself and your innovations and follow a proven process to success.

There is simply no substitute for being out in world meeting people when making deals.  Every city, every region has a place where the deal makers of various industries come together to make things happen.  Today, my wife, Michelle Raines,  told me a story that illustrates this point.  She is a marketing strategist to executives, primarily focused on a couple of industries, one in particular is Urban Real Estate Development.  She works from home but is usually out and about meeting people and clients.  With this freedom, she can leverage herself to be at Jo’s Coffee Shop in Downtown Austin and meet and greet casually with almost every major player in the hot development market in Austin.  She is seen as well, which is equally important.  During the two hours, she met with a major developer casually, integrated into the conversation a couple of C-level executives from her former employer who walked by and who coincidentally raved about her and how much they missed her in front of this new potential client and she met a few other business associates and clients casually, who just happened to be in the area, all of which builds her credibility as a key resource to this community. 

The point I want to make is that when you are doing business development, you have to keep in mind that e-mail and phone calls are only tools that ultimately get you into an opportunity to meet face to face.  I would further advocate that simply ordering a cup of coffee and meeting a few contacts over a morning in a hot spot like I just described is far more valuable than a day spent working the phones. 

As a start-up, your resources are spread thin and sometimes, it seems that making the most contacts you can is where the payoff will be for your firm.  This is rarely the case.  Get out for at least two mornings a week and find a key hot spot in your town for VC’s and Angels, developers, agents, government administrators – whomever you are seeking – and schedule one or two informal meetings with high profile executives and watch your personal stock rise quickly in your area.  Introducing them to others is a very highly regarded position to be in and they will also introduce you to even more important people as they pass by your table.  Making personal connections is key but being seen in the environment often gets overlooked and sometimes, just being seen is half the battle.