INNOVATION DERAILED: The Chasm Between Solving a Problem and Answering a Need


Where did we go wrong? How many wasted man hours and unemployed have gone into misguided attempts at intellectual property commercialization; these attempts populating the trash heaps of VCs and technology transfer offices? Sure the Google’s of the world are the exception. But the vast majority of new product market launches and new inventions are failures.  Companies built on these innovations fail at a high rate. The data is clear: over 60% fail in the first years. Those that do survive often do so by staying small and cutting the owners earnings. For a variety of reasons these companies just never grow.

Pontificators note a variety of business failure causes ranging from poor operations planning to poor capital management. Consultants will tell you even more reasons. However, this consultant will discuss just one.

After the thousands of new company pitches and after working with hundreds of companies during the formative growth stage, the single overriding reason for lack of growth can be traced to the beginning of the company.  If a company is founded solely on a technology the chances of failure are higher. Think about how technology is created.

Engineers and scientists are problem solvers. They have the knowledge and mental prowess to solve problems better than the rest of us. Applying advanced know-how in physics, quantitative methods, chemistry or computer engineering can yield incredible marvels. However, a scientific marvel does not a business make! Sure it helps. And sure it creates some barriers (although my experience is that it typically evaporates as the business attracts competitors).  The invention is necessary but completely insufficient to creating a sustainable business.

The ultimate wrapper for inventions is the application against a real need. The value comes for the use and from the benefits derived from the use. Too often we at PlazaBridge Group see inventions placed in the market place as inventions and not as value. The creators of the invention become so enamored with the invention and the science that went into it that they forget why target markets buy. This is the Commercialization Chasm.

The Commercialization Chasm contains the garbage heap of great technical inventions; all of them naked of application, benefits and value. Building this Value Wrapper involves a variety of processes and tasks. The central process involves knowing what need(s) are being answered by the innovation. Discovering these needs involves mapping human emotions surrounding the invention.  Though there may be numerous quantifiable benefits of an invention there are very real emotions surrounding the purchase of that invention.

The commercialization process is the discovery of uses and their associated purchasing emotions of new inventions. This often requires far more value delivery than just the invention. For example, say you created the best and most efficient electric motor in the world (already done). And you go to GM to sell it. You are a startup with no track record and no partners. But you have solved a huge problem. What you are confronted with is purchasing fear from procurement; “Not Invented Here” syndrome from the engineers; and a sense of self preservation from management because they know the shareholders will destroy them if they don’t keep the revenue growing in existing businesses. The solution must transform into answering the needs of these purchasing parties.

So many inventions are brought to market as complete solutions that answer buyer’s needs. Its like selling lunch meat when everyone wants a sandwich. The needs of the buyer are often diverse and far more complicated than what the core invention can deliver. Companies that understand this fact, and know how to discover purchasing needs and wrap the invention with value, stand a far greater chance of surviving and thriving.  Of course, this is all irrelevant if you think you have invented the next GOOGLE. But for the rest of us, hard work and business knowledge will carry the day.

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