In an engaging dialogue with Sharon Tal Itzkovitch, we explored the crucial process of converting innovation into market success. Sharon is a seasoned expert from the Technion Entrepreneurship Center and the Creator of the Market Opportunity Navigator, which aids ventures in strategic market positioning. Her insights prove invaluable for startups and corporates alike, emphasizing the importance of leveraging core strengths effectively. The conversation revealed key strategies for innovation leaders, aligning with Spyre's mission to enhance innovation leadership and market acumen across various sectors.
Q: What sort of work do you do with organizations?
A: I work mainly with early-stage ventures and do a lot of work training budding entrepreneurs and innovation managers on choosing “where to play”. Through a framework called the Market Opportunity Navigator, they go through a structured decision-making process to better evaluate and prioritize market opportunities for their innovation.
Q: Do you do this with established corporates or with startups?
A: It can be startups, initiatives run by large corporations, technology transfer programs in universities, or anyone dealing with bringing innovation to the market. The common ground is how to best utilize their core abilities or unique technologies and identify the best market for them, meaning the one with the highest potential to create value and least challenges in capturing this value.
Q: In other words, when organizations have an advantage based on some technology or IP and would like to discover market opportunities where they can fully leverage them then you can help in achieving that.
A: Correct. You can usually apply such advantages in various ways to address the different needs of potential customers. This is true both for small and large companies. For example, AI abilities, robotics, or drone technologies can be applied to create various applications for different types of customers. We actually begin the identification process by characterizing the strongest underlying competencies of the organization. We do expect the organization to have some idea of the competencies they’d like to leverage, but we can also introduce them to new technologies that might be relevant. At that stage, we guide them on how to combine these unique abilities and come up with different market opportunities. You can also use other techniques of creative thinking in order to generate these potential opportunities. The next challenge is to help leaders understand which opportunities are most promising for them.
Q: Please describe the process
A: The framework is called the Market Opportunity Navigator and it is composed of three key steps. First, you identify market opportunities for your company. Then, out of these options, assess which ones are most attractive for you and finally, choose your strategic focus smartly. For every step of this process, we have a dedicated worksheet to guide the process in a systematic manner. Applying this framework not only allows you to make a more informed strategic choice, but it is also a communication tool that provides a shared language between various stakeholders. Innovation is a team sport and you need a team to work on this strategy.
Q: Is this process iterative i.e. will these worksheets stay dynamic over the months following this process?
A: Definitely. It can actually serve as a learning companion since every time you progress with your idea and learn, you can update the worksheets, and use them to reflect and communicate these learnings across the team.
Q: What other core competencies do organizations have, other than technology?
A: For example, when we worked with UBS, one of its core competencies was the trust they earned over the years from their customers. It can also be unique know-how that can be applied in different ways or strengths like outstanding service that can be appreciated by new types of customers.
Q: How was this methodology created?
A: My colleague, Prof. Marc Gruber, is one of the leading researchers in technology commercialization and entrepreneurship and is also VP of innovation at his university, EPFL, in Switzerland. The underlying logic of this tool is based on rigorous research that we have conducted and published in academic journals. These studies investigate hundreds of cases to better understand what increases the chances of success when managers and entrepreneurs make the decision on which markets to focus on. In addition, both of us worked with startups and executives so we brought our practical experience into the process.
During our studies, we realized that this issue of increasing chances of success is a real dilemma for entrepreneurs and yet they don’t have clear methods to make such a critical choice, beyond using their intuition, of course. So we realized there was a need for this kind of framework. In addition, we found that companies that identified a set of market opportunities for their innovation actually increased their chances of success. The sheer fact that you have a set of opportunities to select from is, in itself, an asset, so the motto here is “look before you leap”. Another insight was that companies need to decide not only where to focus but also how to focus, i.e. you need to make sure that while you are focusing you also maintain a level of flexibility and not get locked onto a single choice. Companies that are able to maintain this balance increase their chances of success as well.
Q: What would you say are the most common mistakes that early-stage ventures make in choosing where to play?
A: I can divide these mistakes into two groups. The first one is selecting the wrong market opportunity to focus on. Research that followed hundreds of failing companies showed that ‘no market need’ is the top reason for failure. This can happen due to entrepreneurs falling in love with their idea or because the decision was based on an incomplete set of considerations. For instance, think about a customer knocking on your door. Most companies will not turn him down and as a result, might find themselves entering a market that is not necessarily attractive enough.
The second group of mistakes has to do with the balancing issue between focus and flexibility. We hear a lot about ‘laser-sharp focus’ but, in an extreme form, this may come at the expense of flexibility. When we select a very specific niche and focus only on it, pivoting down the road might become very difficult. The other end of the continuum is when managers don’t make tough decisions and try to run in numerous directions simultaneously. They maintain their agility but may lose focus.
Q: Can you give an example of how a capability becomes an opportunity?
A: An example I like is a company called Flyability that develops self-controlling drones that have a protective cage. The idea came into the founder’s mind when he saw the disaster area in Fukushima. When we evaluated the various possible market opportunities it became clear that there were many more of them beyond nuclear power plants. As we went through the process, we identified completely different types of applications like industrial inspection of not only power plants but of oil and gas tanks, and inspection of infrastructures like sewers, dams, and bridges. They could also be used as part of standard police and firefighter issued equipment and so on. We then gradually went through the evaluation of the potential for each of those opportunities and measured it against the challenges in capitalizing on the opportunity. It took several months for the company to evaluate this data and feel confident enough to compare alternatives and figure out which one was most promising. The one that came out most promising- meaning with the highest potential and least challenges – was the inspection of huge boilers and heaters in thermal power plants that need to be periodically inspected in a process that is very dangerous and requires long shutdowns. Their sales went from zero to several million within a few months and they just raised their round C and are very successful with their strategy.
Q: If our readers would like to learn more about your research and methods where should they go?
A: We have different resources available.
First, our book, “Where to play” is a hands-on guide on how to go through the whole process and was published in four languages. In addition, there is an online course available on edX, which is called “Find the right market for your innovation,” and is open to everyone at no cost. Finally, on our website www.wheretoplay.co you can get more information and supporting material and download the Navigator and its worksheets for free.
Consultants, business leaders, and educators who want to master the process are invited to join the Where to Play Deep Dive Training and get certified. The upcoming program will run online on November 13th, 15th, 20th 2023. More details and registration at: https://wheretoplay.co/certificate-program/