Bridging the commercialisation gap in Malaysia — Part 2

KUALA LUMPUR, March 30 — In my previous article, I mentioned some of the factors affecting commercialisation and its success — both from a supply and demand aspect of the entire “iceberg.”

In today’s article, we will continue to shave down the iceberg into smaller ice-cubes by highlighting suggestions to increase the likelihood of successful commercialisation and also PlaTCOM Ventures’ role in this endeavour. I will be addressing innovators directly in this article.

Research and development activities need to be market-driven. By this I mean:

• meeting a gap in the market,
• being customer-driven, and
• providing value for money.

Firstly, innovators need to study the market and diagnose the pain points of the industry and customers. These would be the gaps in the market with potential for penetration — either by existing players in or newcomers to the market segment.

Market penetration of saturated segments would, of course, be a much tougher a battle to fight, especially if the unique selling point is weak. New market segments also have their own challenges because the first-mover needs to have the resources to convince the market of the need for such a solution.

Either way, as an innovator, you should be familiar with the market you aim to penetrate, its landscape and your unique proposition that would distinguish you from competitors. As you develop ideas leading to your unique proposition, innovators should put on the shoes of potential customers.

In the case of an existing product, an innovation could be in the form of improved functionality, aesthetics, user experience, etc, to the product.

In such instances, the innovator needs to be customer-driven and understand the needs of the customers — both current users of the product and those who could be prospective users.

This exercise is a part of the market research which needs to be conducted prior to commercialisation and continuously throughout the various business stages to remain competitive.

Empathise with these different types of customers and take several steps back from being the innovator. Failure to do this often leads to researchers and innovators who are unrealistically optimistic and inaccurately biased when it comes to the innovation in question.

You need to put on a "sceptical" hat at times because that is how customers tend to view new products. In order to win them over, you need to first start thinking like them. You can ask these questions — first to yourself and then friends, family and other individuals who are from the same sector.

Eventually, you may even consider setting up focus groups with specific target demographics, income brackets, etc. It is important to emphasise to these individuals that they should feel free to give honest feedback. You can do this without giving too much away, especially if you have not filed for IP protection for your innovation.

• If you had to pay for this product, would you buy it?
• If yes, why?
• If no, why?
• If you are an existing user of this product, what is your main reason for purchasing it?
• If you are an existing user of this product, what do you like about it?
• If you are an existing user of this product, what do you not like about it?
• If you are a prospective customer, what would move you from the tipping point to decide to purchase the product?
• If you are not a customer, why would you not purchase the product?

Once you have developed a product that has the potential of penetrating the market with all its attractiveness, the pricing strategy would be the next thing to consider.

Having done the market research leading up to the development of the innovation would help innovators to set their footing right. The reason for this is because the market gaps which you are addressing would determine the target customer group you have in mind.

From there, income brackets need to be studied and further market validation on the pricing needs to be conducted. The nature of the product, in terms of whether it is a nice-to-have or must-have, also comes into play as customers would be willing to spend different amounts of their monthly salary on must-have’s compared to nice-to-have's.

It would be helpful also to place a value on the unique selling point in order to benchmark the innovation against competitor solutions and their prices.

One factor I alluded to in my previous article that affects commercialisation is the business models employed by businesses. It is common that companies take to the commercialisation of new or improved products using traditional business models.

The common trend we see today is the platform business model whereby systems are developed to connect consumers directly to service providers. Examples of services include ride-sharing, doctors and nurses’ locums, elderly patient care, etc.

Perhaps we could say that this trend started about when Uber launched their platform through a mobile application. This was not a new service offering but they disrupted the market by introducing a new method for obtaining and providing the service.

In so doing, they also managed to widen the existing taxi-rider market segment to include those who find Uber ride-sharing more convenient than driving their own cars. People are often mistaken that the failure to commercialise is always due to the product itself, but sometimes it could be the result of a weak business model.

According to Innosight, “business model innovation is about fundamentally rethinking your business around a clear — though not always obvious — customer need, then realigning your resources, processes and profit formula with this new value proposition. It’s not easy and can take decision makers out of their comfort zones. But the results can be dramatic."

Again, this goes back to being customer-driven.

At PlaTCOM Ventures, we bring together both supply and demand factors in this recipe for successful commercialisation. Our High Impact Programme 2 (HIP2) is the national technology commercialisation platform set up with the aim of assisting Malaysian majority-owned SMEs to increase their chances of bringing their innovation to the market and to do so in a sustainable way via the provision of end-to-end facilitation.

This facilitation includes advisory of best practices for technology transfer, linkage of SMEs to the relevant parties for different needs throughout the commercialisation process, IP advisory, business advisory, halal consultancy, legal services, etc.

If you are interested to find out more about HIP2, please write to us at [email protected] (Subject: HIP2).

* Michelle Lim Woodliffe is a Commercialisation Specialist and HIP2 programme manager of PlaTCOM Ventures Sdn Bhd, the national technology commercialisation platform of Malaysia, a wholly-owned subsidiary of Agensi Inovasi Malaysia formed in collaboration with SME Corp Malaysia.