For innovators who launch startups in the fields of biological, chemical, or material sciences, business development can be confusing, challenging, and costly. The solution is to adopt an entrepreneurial spirit, along the lines of the ‘lean startup’ methodology. IP-rich startups can adopt and adapt relevant concepts such as customer development, business models, value proposition canvas, etc. I gave a talk in 2016 which sought to do exactly this – help science entrepreneurs figure out how to build and tune their ‘sales engine’.Entrepreneurial-Spirit-in-Science-Deep-Tech-Venturing
I highlighted the importance of go-to-market chasms and the need for building in optionality. We discussed value chains versus profit pools. I explained the notion of designing to value. We also explored means to find strategic partners and, finally, India-specific factors that founders need to account for.
Unlike a software venture, a deep-tech startup has to cross multiple chasms, since technical feasibility is a primary risk in science and engineering. Thus, an entrepreneurial spirit and a milestone-based approach are essential to navigate the so-called ‘valley of death’ in technology commercialization.
The first step in customer development for scientific ventures is to understand buyer behavior. Clearly, customers expect founders to demonstrate technical credibility and the ability to go beyond lab-scale development. Real-world testing and case studies prove to be quite useful at this stage. Next, entrepreneurs must carefully segment their target market and tease out the business case for their offering. Often, scientists and innovators are enamored by cutting-edge technology but fail to translate it into commercial value. Speaking with customers can help resolve this issue and delineate the value proposition. Finally, founders must build a go-to-market team that can generate leads, develop technical and marketing collateral, develop pricing strategies, and close deals. At this stage, the CEO and a couple of junior hires should build and tune the sales engine. Later on, as the product becomes market-ready, senior hires can be recruited to rapidly scale revenue generation.