Yovanof marketing strategy_for_new-to-the-world_products_150204_talk_print

©2015G.S.Yovanof,“StrategicManagementofTechnologicalInnovation”
A Strategy for the
Commercialization of
New-to-the-World
Products
Gregory S. Yovanof, PhD
Blue-Dot Partners Inc.
email: yovanof@gmail.com
_
2/4/2015 5:45:42 PM
Prod.Active Meetup, @InnovAthens, Greece, February 4, 2015

Agenda
Sources of Innovation
The Market Need
The Strategy
The Business Model
The Go-to-Market Strategy
 G. Moore’s Chasm Model
2

Strategic Planning
3
STRATEGIC
PLANNING
#1
MARKET
NEED &
SOLUTION
#2
STRATEGY
#3
BUSINESS
MODEL
#4
Go-to-
Market
STRATEGY

5
Recent Innovations
Douwe Egberts Flavored Coffee
Pods for Senseo Coffee Machine
SEGWAY: Human Transporter
http://tech.flash.gr/news/Technology/2005/9/21/11680id/
Bionic Contact Lenses: Univ. of Washington
http://www.nanowerk.com/news/newsid=4125.php

…and, Forthcoming Ones
The Pursuit of Personal Flight
6
www.ohgizmo.com
Photograph by Alain Ernoult
"I steer myself in space with only my body,"
says pilot Yves Rossy, who invented his jet-
powered personal wings.
www.ernoult.com

COMMERCIALIZATION OF A
NEW-TO-THE-WORLD PRODUCT
STEP #1: IDENTIFY THE MARKET NEED
What’s the Pain?
What’s the Gain?
7

8
An Innovation?
What is it?

PATENT DATABASES
– A great source of knowledge
9

10
The Invention
Case: Digital Scent Technology
Invention
Multimedia and scent storage
medium and playback apparatus:
United States Patent 6654664
http://www.freepatentsonline.com/6654664.html
Abstract:The multimedia and scent storage medium
described herein comprises a multimedia storage
region for storing multimedia information; a scent
storage region for storing multiple scents; scent
identification information for identifying which scents
are stored in the scent storage region; and scent
recovery information stored in the multimedia storage
region for sequencing recovery of scents stored in the
scent storage region to coincide with audio and/or
video information stored in the multimedia region … ;
a scent recovery system for recovering scents
stored in the scent storage region of the multimedia
and scent storage medium; and user input and control
means for permitting the user of the integrated system
to input commands for controlling the playback of
multimedia information and recovery of scents stored
in the multimedia and scent-bearing medium.
See also: DigiSCents, Inc. – VP of Scentography, iSmell, etc. –
Ruetz Scent Systems & AC2i, French developers of olfactory applications on the Web.
AromaJet.com – (Dec 21, 2000) Interactive Transmission of Synthesized Smell over IP (IPsmellTM).
US Patent #6654664
Multimedia and scent
storage medium and
playback apparatus:
comprises …
• a scent storage region
for storing multiple scents;
• …and a scent recovery
system for recovering
scents stored in the scent
storage region

11
Motorola’s mobile
smell-o-phone
Communication device having a scent
release feature and method : United States
Patent 7200363
(April 13, 2007) Motorola was recently granted
a patent for a way of making a handset
release scents by heating a special
cartridge. It was inspired by the way plug-in
air fresheners work. The patent notes that it
might not be necessary to modify a phone's
design much. Tests showed that the power
amplifier in some Motorola phones reaches
about 60ºC - hot enough to activate the
fragrance in a disposable gel sachet.
Motorola was recently
granted a patent for a
way of making a
handset release
scents by heating a
special cartridge.
(April 13, 2007)
The Invention
Case: Digital Scent Technology

IDENTIFY THE MARKET NEED
– What is the Pain?
12

13
Invention & Innovation
Case: Digital Scent Technology…
Invention
Multimedia and scent storage medium
and playback apparatus: United States
Patent 6654664
Abstract:The multimedia and scent storage medium
described herein comprises a multimedia storage region for
storing multimedia information; a scent storage region for
storing multiple scents; …
Innovation ???
Smell-o-Phone

…the Gain
The ScentDomeTM Digital
Scent Technology intends to
change the interactive
entertainment experience.
 Scent-enable movies, games,
music, animation, or any digital
media.
 Create a more immersive and
captivating environment for your
audience.
 Atmosphere, mood, emotion and
characters can all be enhanced
with scent.
14

Digital Scent Innovation
Medical Field: The day of the
Smell Computer has arrived
Studies have shown a link
between olfactory deficits and
certain brain disorders, such as
Alzheimer’s, Huntington’s, and
Parkinson’s.
It won’t be long before Scent
Technology would allow doctors
to diagnose certain medical
conditions by smell.
(buzzle.com, Feb. 26, 2007)
15Source of Innovation: Academic & Industrial R&D

Does Ovarian Cancer Have a
Smell?
In 1989, a woman went to
the doctor’s office to have
a mole looked at, after
she had noticed that her
collie-Doberman mix
began to sniff the spot
intently — even through
her pants.
The mole turned out to be
an early-stage malignant
melanoma
 The case was reported in a letter
published in The Lancet (1989)
16
• * Debbie Nicholson, “Dogs can detect cancer” May 3, 2013, http://www.examiner.com/article/dogs-can-detect-cancer
• “Medical Detection Dogs trained animals to 'sniff out' breast cancer”, 14 Mar. 2013, http://www.bbc.co.uk/news/uk-england-
Medical Detection Dogs are trained
animals to 'sniff out' breast cancer*
Electronic Nose: built by Dr. George
Preti, at the Univ. of Pennsylvania, is
a tiny box lined with nearly invisible
nanotubes and gold used to ‘sniff’ a
vial of blood to detect ovarian cancer.
A case of
User-driven
Innovation

STEP #2: DEVELOP A STRATEGIC PLAN
What is our Business?
Who is the Customer?
Why will she buy our product or service?
21

What is the Purpose of a
Business?
The purpose of a business is:
 To create (…and serve) a customer!
 Drucker, P. F. (1974), (2001), (2002)
Porter M. E. (1980), (2001)
Moore, G. A. (1991), (1995)
22

Peter Drucker on Strategy
The three most important questions:
What is the Business?
Who are the customers?
What does the customer value?
24
In a world of constant change, Drucker claimed that
“The Right Questions don’t change as often as the
answers do”

M. Porter’s Generic Strategies –
Sources of Competitive Advantage
“The WORST Strategy: is to be “stuck in the middle”, to be neither different
nor lower in cost than one’s competitor” – M. Porter 25
Niche Strategies
Cost
Product/Service
Differentiation
Types of
Competitive
Advantage

M. Porter’s Generic Strategies –
Sources of Competitive Advantage
“The WORST Strategy: is to be “stuck in the middle”, to be neither different
nor lower in cost than one’s competitor” – M. Porter 26
Niche Strategies
Cost
Product/Service
Differentiation
Types of
Competitive
Advantage

STEP #3: DEVELOP A BUSINESS MODEL
Where is the Money?
27

28
What is a Business Model?
It’s the business logic of how a
company makes money in a
sustainable way
HOW?
•Capabilities
•Value Configuration
•Partnerships
WHAT?
•Value Proposition
WHO?
•Target Customers
•Channels
•Customer Relationship
HOW MUCH?
•Cost Model
•Revenue Model
Source: Ostelwader, HEC, Lausanne, 2003

30

35
The success of a breakthrough
technology is dependent on the
application (business model)
Why Business Models Matter

36
One Technology/Eight Business
Models: Three-D Printing - 3DPtm
Background:
• 4 MIT faculty and students
invented 3DPtm, a three
dimensional printing process for
making components by layering
porous materials (1989).
• The Technology Licensing Office
(TLO) of MIT received requests
from 8 interested entrepreneurs to
investigate the use and possible
licensing of the technology
• 4 teams came up with ideas that
resulted in new ventures and were
licensed by MIT
• 4 teams came up with ideas that
were interesting but not pursued.
http://web.mit.edu/tdp/www/whatis3dp.html
MIT Alpha Machine Printed part emerging
from powder
•Ceramic Shells for Direct
Casting of Metal Parts
•Structural Ceramics
•Direct Metal Tools
•Direct Metal Parts
•Ceramic/Electronics
•Composite And Functionally
Gradient Parts
•Medical Application
•Porous Ceramic Filters
•Appearance Models
•Experimental Geometries

One Technology / Eight Business
Models
38
Company Opportunity Market
size
Current Status
Z Corp Fast, inexpensive machine to
make concept models for
industrial design
$100M Private company
Therics Makes pills with superior
microstructure
$9B Private with VC funding
Specific Surface Ceramic filters for power
generation
$800M Private with VC funding
Soligen Make ceramic molds for casting
metal parts
$20B Public
3D Partners Service bureau to make
architectural models from CAD
$10M Abandoned – small
market
3D Orthopedics Create artificial bone for use in
surgery
NA Abandoned – no funding
3D Imaging Create 3D color surgical models NA Lost BP competition
Conferences Create sculptures from photos NA Technology did not work

40
Technology Adoption - Historical Data

42
Consumer Adoption Patterns -
Adopter Categories

45
Rogers (1983) has developed a detailed profile of "ideal types" for each of
the adopter categories on the basis of demographic, socioeconomic, and
personality characteristics. The adopter categories are analogous to the
grouping of consumers in a market segmentation study.
The curve
of adoption
of Innovation
Diffusion of Innovation:
Categories of adopters
(Rogers, 1983)
• People react differently to adoption of innovations
• Later adoption is influenced by innovators and early adopters

47
Product Life Cycle (PLC)
What is the COMPETITIVE Landscape over the different stages of the PLC?

STEP #4: MARKET LAUNCH - CRAFTING A
DEPLOYMENT STRATEGY
Can you capture the value you’ve created?
49

How Do You Market Segway –
The Human Transporter?
The Segway HT: A self-balancing, two-wheeled scooter
 Invented by Dean Kamen, the founder of DEKA Research
Developing the Segway - DEKA Research
 DEKA has a balance of “ideation” and “execution” people. Philosophy of
“kissing frogs”: produce and evaluate a wide range of potential solutions.
 Segway required numerous external partnerships
 VCs invested $90M in Segway (among them, the legendary John
Doerr/KPCB, the VC behind Amazon.com and Netscape, who had
predicted that Segway would be bigger than the Internet)
 Silicon Sensing Systems – helped develop Segway’s gyroscope
 Michelin provided unique “balancing” tires
 Pacific Science created Segway’s electric motor
 SAFT assisted in the development of a “smart-charging” battery
 Government Regulators - to ensure the HT would be legal to operate on
city sidewalks
By 2003, had been adopted primarily for commercial and
industrial applications

51
Segway In Paris
(Sep. 2007)

5353
What is the Chasm?
A Model for the adoption-diffusion of New
Technology (Geoffrey Moore)
 A revised
Geoffrey A. Moore, “Crossing the Chasm”, HarperBusiness; Revised Ed., Aug. 2002

5454
Marketing of Technological
Innovations
Often hard to transition from selling to early
adopters to early majority, resulting in “chasm.”

Crossing the Chasm
Adapted from: Moore (2002), Crossing the Chasm, & Wiefels (2002), The Chasm Companion.
Early
Market Bowling
Alley
Tornado
Main
Street
Total
Assimilation
Innovators Early
Adopters
Early
Majority
Late
Majority
Laggards

5858
The Chasm vs. The Tornado
The chasm is where high-tech
fortunes are lost ...
The tornado is where they are
made."
-- Steve Jobs, Former CEO of
Apple and NeXT COMPUTER
Inc.

5959
Who Crossed the Chasm?
Newton
GO, Pen-Comp
Next
Computer
Beta
vs. VHS
WordStar
vs. WordPerfect IBM PC

6060
Newton
GO, Pen-Comp
Next
Computer
Who FAILED to Cross the
Chasm?

6161
Who FAILED to Cross the
Chasm?
Newton
GO, Pen-Comp
Next
Computer

Beta
vs. VHS
Who ALMOST Crossed the Chasm?
Beta
vs. VHS
VHS's "F*ck Betamax"
ad campaign was a large
factor in winning the
format war.
June 4, 1977:
VHS Comes to America

IBM PC
and, who DID Cross the Chasm?
Apple Macintosh 1984

G. Moore’s Strategy to Cross the
Chasm
Define an initial niche market narrow enough
(the beachhead) that you can:
 Assemble a whole product solution that
represents a compelling reason to buy for
pragmatists
 Dominate it in a year (50%) of sales
 Initial niche must also be an entry point to
adjacent niches
Geoffrey A. Moore, “Crossing the Chasm”, HarperBusiness; Rev Ed., Aug. 2002, Ch#4: Target the Point of Attack
Geoffrey A. Moore, “Inside theTornado”, HarperBusiness; Rev Ed., 1995, Ch#2: Crossing the Chasm and Beyond

6767
When is Chasm framework not
helpful?
When the technology is not especially chasm-prone
When there is no “good” beachhead
 Can you define a niche market for which you can feasibly
assemble a whole product solution that represents a
compelling reason to buy for pragmatists?
 Can you plausibly dominate this niche in a year (>50%)
of sales
 Does this initial niche provide an entry point to adjacent
niches
When you’re Microsoft (or, Apple)!!!!!

The Beachhead Exercise
Can you think of a product concept and a
corresponding beach-head (target niche-
market) for its Go-to-Market strategy?
68

* Selecting the Beach-head is All
About FOCUSING!
* MIT Course 15.390/.366
Fall 2012. “Innovation
Based Entrepreneurship
101: A Handbook on 24
Steps to Help Make
Entrepreneurs More
Successful”
Focus Can be difficult,
especially for entrepreneurs!!!
 Tierney, J., (2008) “Predictably
Irrational”
 Tierney, J. “The Advantages of
Closing a few Doors,” The New
York Times, 26 February 2008
http://www.nytimes.com/2008/02/26/s
cience/26tier.html
69
Perhaps you should
start small and work
your way up. Patience
and Focus is My
Advice.

The APPLE Story
You Can’t Be All Things to All Customers
During the 1990s, Apple suffered
from an expansive product line
that almost led it to bankruptcy.
When Jobs returned as CEO, he
eliminated nonessential product
lines of the company, keeping
only four.
 Some of his eliminations were profitable
lines.
Due in large part to its limited
focus, Apple is now the most
valuable company in the world.
When discussing the amazing
turnaround in a 2008
interview, Jobs said,
“People think focus means
saying “yes” to the thing
you’ve got to focus on. But
that’s not what it means at all.
It means saying ‘no’ to the
hundred other good ideas
that there are. You have to
pick carefully. I’m actually as
proud of the things we
haven’t done as the things
we have done.”
You must remain focused on your journey to greatness. — Les Brown, motivational speaker, author.
“You Can’t Be All Things to All Customers” posted on Jan 14, 2013, by Kevin D. Johnson
– author “The Entrepreneur Mind” http://theentrepreneurmind.com/?p=440

Take Aways
Great technology is NOT a guarantee of success
Need to have the answer to two fundamental
strategic questions
 What is Our Business? Who is the Customer?
Know your customers intimately: what are they
really buying?
 Products which are “for everyone” aren’t for anyone
The success of a breakthrough technology is
dependent on the Business Model
and, “Mind the Chasm”!
 Stay Focused! 76

Food for Thought
How Do You Market “The AirBeam”?
Become Part Of A Giant
Sensing Network With
This Handheld Air-Quality
Monitor
The AirBeam can tell you
precisely how much air
pollution is in your
immediate surroundings,
and send the data to a
publicly available map.
77
Airbeam, a $199 device now on
Kickstarter (Nov. 11, 2014) with a
sensor for particles of less than
2.5 microns (PM 2.5), the device
links to a smartphone app and
gives you an immediate rundown
on dirty air in any location.FastCompany co.Exist (Nov. 11, 2014):
http://www.fastcoexist.com/3037631/change-generation/become-part-of-a-giant-sensing-network-with-this-handheld-air-quality-moni

Thank you!
Gregory S. Yovanof, Ph.D.
Blue-Dot Partners Inc.
e-mail: yovanof@gmail.com
Tel: +30 6973 696 408
Twitter, Skype ID: yovanof
Wrap-up & Dialogue

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