“In 15 years of an innovation agenda, honestly, governments have accomplished nothing”, says Dr. Peter Hackett, former CEO of Alberta Ingenuity in a Jan 12, 2011 Edmonton Journal article. He was speaking of efforts to create a culture of innovation in Alberta. Personally, I would have cited a longer period of accomplishing nothing.
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| innovative, but not profitable |
Aware of the criticism, the Alberta Government is shaking up the commercialization sector with the Alberta Innovates strategy. Familiar organizations such as the Alberta Research Council have been folded into new names, and others have had their management changed in the hope that new blood can bring better results.
Certainly something needs to be done, but what if the problem is more basic? As with the entrepreneur in the picture, some ideas just aren’t that good! Technology commercialization is about pushing technologies to market, but strong companies focus on delivering value to their customers, and these two approaches are not the same thing! “Technology Commercialization” actually misses the essence of building a strong company.
Consider the typical Alberta technology start up, as I have several times. After the obligatory patents, funding and organization, the startup spends several years burning money to engineer technology into a widget. The widget is offered to customers, who may show little interest. Then comes a period of blame – “how can the customers be so stupid!”, “don’t they see how cool this is?”, “don’t they care about the Alberta economy?” – followed by layoffs and a furniture sale.
As we know, customers don’t buy technology, they buy solutions to their problems, and customers retain the absolute right to decide for themselves what solutions they like. “Technology Commercialization” fails as a plan because it pre-supposes that we can take “technology”, magically “commercialize” it, and push it to “the market”.
But the ugly truth is, new technology has no market! Innovative new technology products have no market until the product exists, because until the product exists there aren’t any customers! After the product exists there probably still isn’t a market, unless customers rapidly decide that they want it.
This is the essence of the Innovator’s Dilemma famously described by Clayton Christensen. If the product is new there is no market, and if there is no market then how do we justify investing in the product? This explains why any tech startup CEO who talks about “the market” for his new product is at best speaking hypothetically, and more probably lying, but he has to or he will never get funding!
So how can a new technology ever get to market? The short answer is “maybe it can’t”. No technology, however elegant, has a “right” to commercial success. But if it is to succeed, new technology has to be embedded in a product that customers will buy, and this is most likely to happen when the product is developed in direct cooperation with real customers. And, as Clayton Christensen points out, these may turn out to be different customers or different applications than was originally expected.
So what should we do? To improve the dismal return on technology in Alberta, entrepreneurs need to engage with customers before the product is built. This may provide early sales, but more importantly unpopular new products can be changed, retargeted, or abandoned as early as possible. Investors need to demand that “the market” is quickly proven by customer interest. And governments need to encourage market development, and encourage purchases by early-adopter customers.
Or we could keep doing what we have been – focus on technology, and assume marketing is just an excuse to collect airline points. But we know this doesn’t pay! It’s time to grow up – Technology Commercialization is an outcome, not a plan, and right now in Alberta we need a plan that works, and that means find customers first.
