Ignore the market at your peril…
Helping universities to assess markets for spin-out activity is an important strand of our work, so we have been intrigued by some recent debate in Times Higher Education (THE) about barriers to successful commercialisation of research.
In early April, THE reported the results of a National Centre for Universities and Business survey, which showed a marked decline in the percentage of academics commercialising their research. In reply, Professor George Feiger, Pro Vice Chancellor and Executive Dean of Aston Business School, argued that a major factor is “the limited success UK researchers…have had in commercialisation”. In other words, limited exposure to stories of successful commercialisation means that academics invest their time elsewhere. The overriding reason, he explained, is that “successful researchers… tend to be ill-suited to commercialising the intellectual fruits of their labours”, as they are “drawn to novel challenges” rather than the standardisation that commercial production requires.
Prof. Feiger suggested two ways to negotiate those barriers. Firstly, bringing in “translation intermediaries” with the experience, mind-set and skillset to “devise commercialisation paths that are likely to pay off”; and secondly, establishing a network of “connected people”, able to open doors and “help find funding and potential production and marketing channels”.
In our work with academics nurturing potential spin-outs (in fields from software development, to life sciences and robotics), our experience has been that a commercially savvy tech transfer department is invaluable in addressing those needs and in spanning the boundary with the commercial world. More specifically, however, some key factors in success are the processes in place for assessing potential spin-out businesses and the points at which those involved consult ‘the market’.
The tendency to leave market research until quite late in the NPD process is a common failing and can mean that funds are spent developing products and prototypes that don’t fit the market need, or that are out of date by the time the business is launched. While the same tendency sometimes arises in new starts outside of academia, we find it is less common because those involved are often more ‘in touch’ with their intended customer groups.
For an academic researcher, full commercialisation of a research output might be a ‘nice to have’ after the main target – publication – has been achieved. There can be less incentive, therefore, to engage early with the market. The consequence can be that product or service design is well advanced before any serious attempt is made to understand customer needs and wants. By then, it can be too late to easily change course if, for example, product features or benefits need to change, or substantially different customer groups or channels need to be explored.
Keeping in touch with the marketplace during the early stages of product development – and carrying out customer research early – could save many commercialisation opportunities from going to waste.
A comment from one of our university clients illustrates this point well:
“The market research made us realise that we needed to focus on two products instead of one, which meant that we had to prepare for an entirely different business plan. Importantly, it showed that our ultimate objective of breaking into one specific market, would only be achieved over the course of around seven years (which was over double what had been expected). This meant that we needed to focus on developing a version of the product for earlier release into a secondary market, with lower barriers to entry. That product will help to support the company while we develop the second, but main, product line. In retrospect, we should have started doing market research sooner, as the design activities we had already embarked upon needed to be modified in light of the research.” (Academic and Founder of a University spinout)
This kind of comment is not a one off and it is not uncommon for intending spin-outs to rely upon anecdotal evidence as the foundation for their product development and commercialisation strategy. That, coupled with enthusiasm and confidence about their academic research, can generate significant momentum. If commercialisation funding is available without market research being a requirement then this can compound the problem, by propelling the business even further toward launch without an
independent ‘reality check’.
Good quality market research, at the right time, can de-risk some important decisions, steer strategy and increase the likelihood of a successful outcome. It won’t revolutionise UK universities’ rate of commercialisation but, alongside the translation intermediaries and connected people highlighted by Prof Feiger, it can certainly help.
 David Matthews. “Dip in academics commercialising research as ‘third mission sidelined’”. Times Higher Education, 25 February 2016. (Online headline: “Big drop in academics commercialising their research.”) See: //www.timeshighereducation.com/news/big-drop-in-academics-commercialising-their-research
 Prof. George Feiger. “Don’t leave potential moneyspinners in the ‘valley of death’”. Times Higher Education, 31 March 2016. (Online headline: “How to make new discoveries a commercial success.”) See: //www.timeshighereducation.com/comment/how-to-make-new-discoveries-a-commercial-success-george-feiger-aston-business-school#comment-7686