The Importance of Validating Assumptions When Commercialising Innovations
We often speak with inventors who tell me “I know what the market wants” as they are explaining their innovation, despite having conducted no market research.
Don’t get me wrong, in many cases the inventors are right. However, it is the pure assumption that always scares us the most. When you think about it, where have people’s assumptions come from? Did they ask a “few” clients? Did they run it past their neighbour, auntie, best mate? In some cases, none of these, they just know!
In our line of work, assumptions are one of the most dangerous pitfalls when developing a product or technology, often for an “assumed” market. And that is why, built into our processes, is what we call validation points. These validation points enable us to validate the assumptions and therefore by going through a process of detailing all the assumptions that you are making, we gather a workflow process of having to validate this list of assumptions through the conceptual, market research, product/technical development and go to market preparation phases.
Our validation process enables us to take the assumption, define it and then actually quantify what level of response would be required to validate the assumption. For example; an assumption might be around the price consumers are willing to pay for the innovation. Much debate can occur and it is something that you want to get right, from the moment you launch. Why in the world would you launch a product at a certain price that you have assumed the customers will pay without testing this first? The risks are that your pricing is too high which results in a depressed take-up of your innovation. And what if the price is too low, think of the profits that you are forfeiting in this scenario; raising prices rapidly is a sure way of upsetting those that have valued your product enough to purchase it; you have set an expectation.
Increasing The Probability of Success
Testing these sorts of things are not that challenging. They simply take careful thought and design to articulate the assumption that you are making, quantify what level of response provides you with a validation point, and then being creative in how to get sufficient samples of responses to assist you in validating the assumption.
Given the investment in real dollars and the time and energy an organisation invests into innovating and then commercialising a product or technology, instilling basic principles into the project ethos from day 1 goes a long way towards de-risking a project and increasing the probability of success.
So, next time you hear one of your colleagues make a “mother statement” as though it is pure fact, be sure to challenge this style of thinking and ask the question “is that an assumption that we need to validate?”
If you want to discuss your plans on commercialisation, please get in touch with us