Routes to market

February 2011 Routes to market

David Jenkins

Cambridge University Entrepreneurs; February 2011

What’s the question?

• How can we best extract value from our idea

and/or invention?

• What do we need to do to earn our first

revenue?

February 2011 Routes to market

• How should we interface with our customers?

– This is the question you get when you google ‘routes

to market’

• I’ll do my best to answer all three and use the

value chain model to link them

How can we best extract value?

• How far out do we go?

– ie which commercialisation route should we chose

• How far down do we go?

– ie how much of the value chain do we want to

capture?capture?

February 2011 Routes to market

How far out do we go?

(after Qi3; www.qi3.co.uk)

• Establish a new companySpinout/start-up

• Transfer to a licensee, with initial payments and ongoing royaltyLicence

• Work together on a joint project. Usually involves supply chain partnershipCollaborative R&D supply chain partnershipCollaborative R&D

• Provide skills to enable knowledge transferConsultancy

• Work within the company for a period of timeSecondment

• Use of facilities available in university by 3rd partyFacilities Access

February 2011 Routes to market

How far down do we go? An

introduction to the value chain

• This is the product end

– Discover: your bit. What’s the big idea? Does it have

value? Can I protect it?

discover develop deliver

value? Can I protect it?

– Develop: can I turn my big idea into a product (or

service) (more IP) for which people might pay?

– Deliver: how can I produce/manufacture this product

and/or resource the delivery of this service?

February 2011 Routes to market

How far down do we go? An

introduction to the value chain

• This is the customer end

– How can I persuade people to choose my product

and/or service and buy it?

sell supply service

and/or service and buy it?

– How do I get my product and/or service to the

customers and collect his or her money?

– What should I do to look after my customers after I’ve

made the sale ?

February 2011 Routes to market

How far down do we go? An

introduction to the value chain

• Marketing is the glue to hold it together:

– Traditional marketing is product, price, promotion and

position and there’s little wrong with that.

discover develop deliver market sell supply service

position and there’s little wrong with that.

• Product (and/or service): what exactly will my customers buy?

• Price: what’s my product and/or service worth?

• Promotion: how do I communicate?

• Position: which sales channels will I be using?

February 2011 Routes to market

Marketing actually spans the

length of the supply chain

discover develop deliver market sell supply service

inbound marketing

strategic marketing

tactical marketing

operational marketing

relationship marketing

February 2011 Routes to market

• It doesn’t matter how far down the supply chain you go you’ve still got to do some marketing

• And doing it well, continuously and consistently, will build a brand … but only if your customers are supportive.

This gives us a useful check list

for what you’ve got to do

• What’s by big idea? How do I protect itdiscover

• How can I turn my idea into something which customers will buy?develop

• How can I produce/manufacture/build my product and/or resource my service?deliver

February 2011 Routes to market

• How can I build my brand? How can I attract customers etcmarket

• How can I persuade potential customers to buy?sell

• How can I get my product and/or service to my customerssupply

• How can I look after my customers once they’ve boughtservice

If you have decided to ‘spin out’

and go all the way to market

• Then you need to decide how you will interface

with your customers:

– Remotely (typical web business);

– Directly (own sales force); or

– By proxy (use of 3rd party intermediaries)– By proxy (use of 3rd party intermediaries)

• And this decision needs to be taken for each of

the final 3 value chain elements

– Sell, supply and service

• Whatever you decide: you’ve still got to manage

February 2011 Routes to market

Your choices will be influenced

by the nature of your business

• Obvious for software, low value items, BtoC

• Challenges you to ‘drive’ customers to you

• High fixed cost, low variable cost

Web: route of choice for many

today

• Best for high value and/or technical itemsDirect sales: • Best for high value and/or technical items

• Lots of control but issues of fixed cost and roll out

Direct sales: challenge of

managing people

• Low fixed costs and rapid roll out possible

• But mega management challengeDistribution: best of both worlds?

February 2011 Routes to market

Choosing your route to market is

really a 2 hour workshop itself

• If you really want to know more come along to

the St John’s Innovation Centre, 8 Mar 11 at

11.00 (there’s a rather good free lunch)

• For more info http://bit.ly/edvc6S

February 2011 Routes to market

Thank you!

David Jenkins; i2i-management.com

helping smaller businesses to do well

February 2011 Routes to market