Often when I’m asked about our company’s process and approach to innovation, I draw on the analogy of the ‘stairway’ because (aside from being a long time Led Zeppelin fan), every step taken forward requires a further step up in investment levels and resulting risk.
So what are the factors or steps in this approach that are critical to success?
There is no easy option here, and this is the most critical factor, as the subject or product being invested in must present a strong and compelling solution to an important problem and/or offer a compelling proposition to the customer causing them to move and buy your product. Traditional market research will not always reveal such opportunity, instead full knowledge in the field must be gained and over time you must become an expert in the specific area and its customers, existing products and IP, in order to formulate a unique proposition that will differentiate itself and stand above current offerings.
Think global from the get go
If you can design and produce a compelling consumer proposition that meets the needs of New Zealanders, there is a good chance that the product will be interesting to groups of similar customers in much larger territories in the US, Europe and Asia. Our Freeload bike rack allowed riders to carry loads on the front and rear of full suspension mountain bikes, much appreciated by the many New Zealanders riding our beautiful mountain trails. But if it was good for riders here, what about the many more riders in Canada and the US? Plan to take your innovation global.
Creation and protection of intellectual property
The resulting designed and developed product must be based in novel and protectable IP. Building strong IP in consumer products requires a deep knowledge and understanding of the customer, what products and IP already exist, the status of its protection and the ability to create unique alternatives that can be protected through patents, design registrations and copyright.
This requires a high level of inventive talent, design, engineering, branding and the implementation of an underpinning strategy for IP protection and commercialisation. Building a strong portfolio of patents around the product IP provides the protection required to have a valuable asset that can then be sold, licensed, be the basis of a joint venture, or be taken further up the staircase by the developers, investing in full IP protection, tooling, manufacture, branding, marketing and commercialisation through a global sales network.
Flexible investment-commercialisation strategy
This is where the stairway approach comes in. Once a suitable opportunity, ideally with a large global customer base, has been identified, invested in, researched and accompanied by a well designed product with protected IP, a flexible approach is adopted that works on the understanding that the IP and/or product will be commercialised at the optimum time and opportunity, preferably with a third party with a strong brand and a global sales network.
Without a previous track record, as was the case for us with the Freeload bike rack, attempts to commercialise with a third party may take three to five years, requiring incremental investment up the stairway towards full IP protection, tooling, production, packaging, branding, marketing and even healthy sales, before an innovative proposition has been de-risked enough for a global brand to be hooked.
However, while completing a deal early may be attractive to the accountants, often it will be through the gradual, investment heavy and multi-task graft of climbing the stairway over time, that allows the innovation to expose its true value to the customers and the global partners capable of optimising sales and return on investment to the design-innovators.
Pat Maguire is founder and director of Freeload