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?
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