This is a personal opinion, but the more projects I work into, the more I think that one fudamental skill missing for successful technology-based innovation is “strategic thinking”. This, still in my personal experience, is related to a lack of analytical and structured thinking and, as baseline for this, the fact that most of the times we should study harder.

Why do I say so?

Over a 60% of the R&I projects I have worked into in the last 15 years had not analysed the contextual state-of-the-art with an strategic approach before starting the project (sometimes, even when finishing it!). Even more: probably more than 30% had not a complete and updated understanding of competitors, alternatives, limits and gaps, and critical comparison variables.

Over a 60% of the entrepreneurship projects I have worked into, neither had studied in depth their potential market and customer segments (their real reasons to buy, the existing barriers for them to adopt the new technology, the portion of the market/segment they really serve…).

 

What relation does this have with studying and strategic thinking?

If we agree the 2 issues above (understanding how we differentiate from competitors or the added value we will create + knowing our target customers well enough to make sure we offer something they really need or could want to pay for) are crucial for the potential success of an R&I project, we can also understand that we need information in order to solve them:

1.- Who are our competitors, existing or potential? Who look alike or somehow run next to us but are not really competitors (could even become allies)? Who solves the same need than we do and how? What are the critical variables for entering the markets, grow and offer unique benefits? How do we really compare with competitors in relation to these variables? Where are the gaps and opportunities for differentiation?

2.- Who are our target users / clients? What is their profile? How many of them there are? What they really buy for? How and when?

Imaagen 2 blog

Tool for structuring our studying of target market (Serviceable Available Market, SAM) and market segmentation provided at www.innowizard.eu

In order to get this information, we need to study hard. Additionally, we cannot expect to find the answers we seek for directly in this information. Taking decisions like how to evolve our product, who to hire, what allies to look for, where to invest and who to tell what, will need to apply strategic thinking while studying.

How to think strategically about competitors and users/customers?

I can give you several grander advices:

- Firstly, take your time in thinking what information you really need and what for, and control yourself from surfing too much time outside this scope (although some time “out of the box” is always worth it). The more specific you are, the better. And remember the objective is to help taking a better decision, not just “doing homework”: If you just want to say you have studied the issue without being critic about whether you did it deeper or shallower, you will not be helping yourself;

- Then, think of how you could structure the information so that it serves the purpose you aim at with your studying (the table for comparing with competitors is an example, if you want to identify where do you really differentiate from them or which opportunity you could pursue that they are missing);

- Finally, focus and study; think, analyse and study more; iterate and pivot; dream. This is like medicine vs poison: it is a matter of the right dose. If it is too little, you will die from disease; if it is too much, you will die from “infoxication”. Normally, if you did step 1 properly, you will be able to dedicate the proper amount of time to this (although it is important to set alerts if you are not advancing in meeting the purpose);

- At the very end, is the step of TAKING DECISIONS, in which we will focus our next article (it’s cooking in the oven!).

 

Just one last thing:

- In relation to competitors, think carefully about who they really are. I have seen cases in which the list of potential competitors seemed infinite, so the entrepreneur just didn´t look at them anymore, nor mentioned them to others (who, of course, always wonder about it). However, many times the source of this problem was that they lacked specific and relevant market fit (indeed, the top-1 cause for start-up failure worldwide). If you have a clear vision around what are you offering that is really unique, focus on the people that really consider this is a crucial/compulsory requirement (or vice versa) and “scratch from the table” those that might have similar technology but could not address that customer pain or demand. Alternatively, you can try to group them and study them at category level. But you do need to face competition.

- In relation to target markets, I have seen very often the mistake of considering the TAM (Total Available Market) is our potential ground for growth. It is only a portion of it that we can really serve to! And if we don’t know which portion, we will be wasting golden resources talking to people that will never ever buy or accompany us, and/or will be calculating very wrong financial estimations (which will not be credible to investors, in example).

 

Author: Eva García Muntión

Coming articles:

- Lessons from a Grander 2: Think it carefully, my dear

- Interview to one of our favourite start-ups, showing beautifully the path from research to people and from academia to enterprise.

 

If the previous post I mentioned strategic thinking, today I will talk about “structured thinking”, which means to define a (mental) framework for something unstructured. Structured thinking:

  • Allows us taking better decisions (well-taken ones, not just “guesses”, which will give us more opportunities of taking a decision with greater chances of success);
  • Accelerates learning, by becoming able to build more and deeper relationships;
  • Highlights gaps and opportunities, and leverages discovery;
  • Makes us more productive: We will get more and higher results in less time.

The good news are that there are tools that can easily help us structuring thinking. The challenge comes from creating habits and knowhow in using them. Let’s see some examples and advices.

 

 We can structure thinking at different levels and for different purposes:

A. STRUCTURING THE PROBLEM / QUESTION / INPUT

It will help understanding it, analysing it, and assuring we cover all aspects related to it.

The following is an example on how to do this and the potential it can bring us: 

B. STRUCTURING THE SOLUTION / ANSWER / OUTPUT

It can help us, in example, comparing alternative solutions in order to choose one or a combination of several, and get ready for potential consequences. 

Building scenarios can be very helpful for this purpose! Here are 2 examples:

 

C. STRUCTURING THE PROCESS

So that we make more with less, advancing towards results (some results will come for sure… it will be better if you think first which ones would you like to have). The following example shows how we structure technology watch processed when starting to work into a new R&I project in an area we are not experts at:   

 

Author: Eva García Muntión

Coming articles:

- Looking into tools 1: Business modelling

- Interview to one of our favourite start-ups, showing beautifully the path from research to people and from academia to enterprise.

 

We understand “business modelling” as the definition of a framework by which a company creates and delivers the value its product/service brings to a group of potential customers and, at the same time, extracts some portion of this value in order to create revenues that allow covering costs and gaining power for the future.

We have chosen it as the first set of tools to look into because it relates very closely to the lessons from a Grander we have shared during the past month (about strategic and structured thinking), on the one hand, and due to its importance towards innovation growth, on the other hand.

Establishing a favourable business model can be as important as the new product itself. The right model can make or break your product and sustainability, and even change the game for an entire industry. Along history, the world’s most successful companies have made the biggest leap by revolutionizing their business model, rather than or complementary to their technology.

 

The most famous tool for business modelling is the Business Model Canvas by Alexander Osterwalder:

Business Model Canvas

It draws all the structural components of a business model and, very importantly, their inter-relationships; so that it is well integrated. I have heard critics that instead of this canvas what you need is to ask yourself questions. The way I see it, the canvas is indeed “nothing more” than a complete and structured list of questions, so that it makes it easier to understand the implications of the answers we plan for them (For who are we creating value? Which customer’s needs are we satisfying? Why should they turn to us over our competitors?...).


Most common errors I have seen when using this tool:

  • Not studying the tool in depth before starting to use it (and just attending a short course will not be enough unless you are very confident about the knowledge and experience of the trainer).
  • Considering it more a tool for showing than a tool for reflecting. In general, companies devote too little time to really think about the design of their business; because of this, no clear market need and running out of cash are the top 2 reasons for failure, behind a 70% of start-up deaths).
  • Not aligning the Canvas with a general corporate strategy. Companies either compete by differentiating from competitors, by focusing into specific segments (i.e. luxury items), or by owning the price in worldwide markets (being the ones producting at lowest costs). We need to have a clear strategy in order to prevent non-balanceable tensions amongst the components of the model.
  • Wrong division of Customer Segments. The model must consider different segments only if there is something in the way they buy that makes them different (they differ in their reasons to buy, in their buying dynamics, in their way of paying…). If everything is the same, even if they are groups with different characteristics (i.e. SMEs and large enterprises), they belong to the same segment. In fact, most probably it is some other characteristic the one it is crucial for segmenting (i.e. in the previous example, instead of size, we could think whether they have some IT platform or no, strong or weak cash-flows, a formal business division or not, or whatever).
  • Misstaking product/service features as “Value Propositions”. What does motivate you more: if I say “buy this new washing machine because it spins at 2000 rpm”, or if I explain “buy it because you will take half the time doing laundary”?
  • It shows a little bit obvious when we are given such examples, but when dealing with commercialization of innovative products, many times we try to sell directly the technical advantages we have created, instead of the benefit our customers will get from it. Furthermore, for identifying the real, unique and specific benefit that will really engage them, we need to interact with our target customers properly, searching for this knowledge actively, and processing it strategically, keeping our minds ready to make changes in the business idea we had imagined.

In line with this last issue, Strategizer later released the Value Proposition Canvas, as an attempt to help defining what customers really want from an offer. Also, the LEAN Canvas introduces a very interesting modification in order to include the analysis of the Problem-Solution couple, and related key numbers, as the baseline for defining a Unique Value Proposition.

In spite of the tool you use to really identify the Value Proposition or Unique Selling Point your product/service offers to your specific and relevant target customers, in RTDI we also stress the importance of trying to quantify this value. It will allow you:

  • Assessing the amount of value you offer your customers and, therefore, you level of competitive advantage;
  • Paving the path for setting a price to your innovative product/service/technology.

For this purpose, you will first need to set an specific scenario to be able to measure improvements. We are interested into the change we create, so we need to compare the new situation we make possible with the current status, and show increments.

Quantified Value Proposition by RTDI

Apart from segmenting properly the target customers and defining the most promising Quantified Value Proposition, there is another element of a business model that should catch strong attention: The Revenue Streams. In the end, the potential for creating growth and changing the dynamics of a market held within this business model component is enormous.

We will devote our next post only to this, separating this analysis of tools in 2, not to make this article too long. So will come back to you next week! (By the way: We are already working in the interview to one of our favourite start-ups – Marsibionics - so will also come soon!).

 

Author: Eva García Muntión

For 20 years I have been working in technology consultancy, the last 15 focused in the design, launch, implementation and exploitation of R&I projects. I have helped more than 300 companies and institutions to define, improve and grow their projects, strengthening the needs they aim at covering and the suggested technological solutions, increasing their innovation potential and competitiveness, and supporting the usage of results either for feeding new R&D efficiently, or with commercial and entrepreneurial purposes.

Along this way, I have learnt many things and studied so much, and I will keep on doing both. Today, I want to write about one of the very general conclusions I have gained: Words are vital, and those who work in advanced, high added-value consultancy need a new word that really describes what we offer and differentiates us from other types of consultancy and support stakeholders.

I have thought about this so many times, and I think I finally found the word I was looking for: GRANDING.

Granding comes from grandparent, and also a little from “grande”, which is the vocation of those working into this: Help project grow big.

Why Granding?

Let’s think for a moment about what we are trying to contribute with:

- On one hand, we offer advice based on experience and knowledge complementary to our clients’. Sometimes in the form of questions, other as answers. Normally very kindly and assertive; never imposing, although firmly if needed and without mincing words;

- We also teach people behind the projects around that experience and knowledge, directly as well as indirectly during the hand-in-hand work.

- On the other hand, we think on how to help the projects we are working into day and night, in each thing we do, hear or see. And we get involved in them as if they were ours, becoming an active part on the day-to-day they require.

- We help planning decisions, and keep continuous monitoring of activities and results. We will be ready to test and fail and keep our support, strongly wishing that it will become successful.

- We keep a long-term vision over the projects, so that not only they create a yesterday, a today and a tomorrow, but also a “when I grow up…”.

- We do networking seeking for alliances that can help consolidating and advancing the projects, amongst our current contacts or creating new ones.

For these projects, we are somehow similar to what grandparents do in personal life, at least the way I lived them. This is Granding; and in this blog I am writing about concepts, strategies, goals, methodologies, tools… Granding uses, and any other thing I can think of in relation to the points listed above.

 

Author: Eva García Muntión

Coming articles:

- Lessons from a Grander 1: You need to study harder

- Lessons from a Grander 2: Think it carefully, my dear

 

 

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