Scientists, software developers and other really smart entrepreneurs often are searching for the next great disruptive technology in their industry. The logic follows that if you create something remarkable, new and paradigm shifting, that everyone will come and embrace what you have done and hail you as the latest Steve Jobs and Steve Wozniak. But Apple, Inc. is not the company we know today because of merely disruptive technology. We all know Apple because they were able to transition through the various product life cycle stages. Apple survived, and with more than a little luck – learned to thrive.
Entering the Growth Stage
When a disruptive technology like stem cell treatments appears, it follows the typical product life cycle (see graph below). The early years are filled with research and development, proof of concept, and early adopter clients. As stem cell therapies became more accepted, companies sprung up in larger numbers, with the number of stem cell technology companies doubling in 2011 alone.
In order to succeed in the growth stage, the focus of staff and budget shifts from research and development to increasing the client base and revenue, as well as scaling operations. For many innovators this is the hardest transition. The strengths in research that brought the company to this point are now less important than the ability to sell the products and securing the financial capital to support the company’s growth. Here are some ideas on how to help successfully manage this transition:
Entrepreneurs don’t have to rely solely on internal resources. Sometimes partnering with a company that has a compatible technology – a key supplier or client – can help to expand your product into their client base. Another basis for strategic partnerships can be geographic. If another company is successful in Canada and your company is successful in Europe, then there may be areas for helping each other grow in the others’ markets.
Sidestepping for a New CEO or COO
I have known many scientists and software developers who are most comfortable in their laboratory or when writing code. The founder of the company does not necessarily have to be the leader who shepherds the company through the growth stage. A growth-stage leader needs to be strong in sales and finance. High-tech industries in particular have many entrepreneurial leaders who specialize in growing companies and preparing them for an exit through IPO, acquisition, etc.
Invest in Marketing and Sales
I meet many company leaders who expect the superiority of their products or services to speak for themselves. Underinvestment in marketing and sales programs is rampant in b2b technology companies. The reality is that the best-financed sales/marketing-driven company usually comes out on top and can drive smaller players out of the market. Even if your company doesn’t feel that they have the financial resources to manage marketing and sales expansion, find the financing through loans, investors or reprioritizing the company’s budget.
Consider International Markets as an Accelerator
International markets can represent accelerated opportunities to bring new technologies to market faster. Market acceptance rates in many countries are higher than in the United States. Governments eager to build stem cell technology industry clusters welcome technology and marketing partnerships with home-grown companies. Today’s lower communication and transportation costs, and lower trade barriers; never before has it been simpler for a young, growth-stage technology company to internationalize.
Becky DeStigter works with a variety of B2B technology companies to help them reach their potential. For more information, please contact Becky at The International Entrepreneur.