Before diving headfirst into your next product launch, increase your chances for success by first making sure the market needs what you’re selling, and what you’re selling does what you’re promising
By Barney Bernstein, Senior Associate
It’s a familiar story in the ag industry: Someone has a product idea they’re convinced will be a great moneymaker. It does well with small test cases, so they eagerly rush it through development and go straight to market.
Whatever the reason—lack of time, running out of funding, or just sheer overzealousness—they forego any sort of real-world ground-truthing and launch the product without hesitation and without looking back.
Rarely does this end well. Possible ramifications include frustrated customers and disillusioned investors, or next thing you know they’re forced to make tough decisions about the future of the business. This situation is unfortunate in and of itself, but it’s an especially sad story when it ends up hurting employees and growers.
It’s far too common, especially for new and smaller companies, to introduce new technologies to the market without investing enough time and resources to fully test it. They’re skipping over the crucial research that would validate whether there actually is a market for what they’re trying to sell. Does it fulfill a need? Do farmers even want it?
Sometimes companies have it backwards—they have a solution in search of a problem.
We worked with a company preparing to launch a new soil analytics technology. They wanted to know what high-tech solutions they’d be competing against in the very low-tech space of soil sampling, and who else might be out there on the cusp of a similar solution. We did an exhaustive review of more than a dozen competitive technologies and formulated a solid picture of who was doing what in the market.
The most important thing we learned was that the problem needing to be solved had nothing to do with lab results, as they thought—it was labor. And many of the competing technologies had robotic soil sampling technologies that eliminated labor costs and also improved accuracy at a price much lower than what our client could offer. That is what solved the problem. It certainly wasn’t the news they wanted to hear, but we saved them from getting too far down a dead-end road.
You have to be sure there’s a market, and you have to be sure the market is ready.
Disruptive technologies may be all the rage right now, but it’s more of a slow burn getting growers to come on board. If you introduce a breakthrough before the market is ready for it, it doesn’t matter if the product satisfies a need—there will be immediate resistance. Does the right niche exist, and will they be willing to purchase your product at your set price point? If yes, then why—what is the value to them? Knowing this will help with pricing and positioning.
And there’s so much more to know before diving in: Do you have a realistic understanding of the competitive landscape? Who else has similar products in the pipeline? On the flip side, is your success reliant on something someone else has? Do you know the risk factors? And are you willing to absorb them? Is the audience large enough to keep you in business?
We recently completed a project with an animal health startup, and together we dug deep into all of the questions above. We found out that yes, there was an addressable market for the product they were developing, and with the insight gleaned through our research and analysis were able to formulate a plan for how to access that market. The company launched their solution at the end of 2019 and it looks to be a success story in-the-making with a great shot at leaving a measurable imprint on the animal health industry.
By rushing, companies are more likely to overpromise what the product can do.
There’s a big difference between lab and commercial-scale testing. You can’t make assumptions about what a product will do based on what you saw in a greenhouse. Claiming the product will have the same efficacy across an entire field is dangerous and irresponsible.
Seed companies know you can’t go straight from the greenhouse to the market when introducing new hybrids. The same is true with crop protection chemicals—maybe the test plots look good, but the treatment isn’t necessarily going to perform the same way over hundreds of acres. Any new ag technology or solution should be approached the same way. There are so many more variables involved, and your research has to account for as many of them as possible.
Why the Haste?
Hasty decisions often result in hasty failures. Being first to market doesn’t guarantee you’ll be the winner. The winner is the one who delivers what the market is actually looking for.
We’ve witnessed countless companies jump in too soon to try and drive revenue before all the pieces and insight are aligned. There are several reasons they skip that crucial first phase.
For starters, market research takes time and money. Companies don’t want to spend their limited resources to test their hypothesis. They’re anxious for cash flow and don’t believe prolonged testing will bring any benefit, so they go ahead to market. Or maybe they go ahead and launch because they don’t want to wait another full growing season to test performance on a larger scale, hoping the product will live up to the claims.
Sometimes companies are overconfident that they’ll be successful. Perhaps it sounds so good they convince themselves it’s worth the risk. Or maybe they’ve garnered favorable results in a lab or plot that gave them a false sense of performance. Some offer outrageous guarantees to make it more enticing. (Though on paper what may appear to eliminate all risk may come with hidden risks not covered by the guarantee. That’s not a gamble we’d wish upon any grower.) Maybe it’s a matter of ego and not wanting to be proven wrong before they’ve had a chance to share it with the world, so they go for it and hope for a little serendipity. Whatever the reason, these are reckless choices to make.
Be Responsible and Do the Research
There are many reasons to slow down and do the homework before forging ahead, not the least of which is fulfilling expectations with investors (both existing and potential).
One big reason is the company’s reputation is on the line. If you make promises that can’t be fulfilled, you’ll quickly lose credibility. No one in the value chain wants to be embarrassed in front of growers. A tarnished reputation can be devastating and hard to rebound from. And it’s not just about you…if someone picks up distribution rights to your product and promotes it, then their reputation is on the line as well.
If your idea tanks, it can set off a ripple effect of problems for others in the industry. Growers’ rate of adoption will be jaundiced by your failure and they’ll be more likely to resist future products down the road. It can throw up barriers for other startups and established companies trying to get their products in front of growers. And, it will put you at a disadvantage later on when you DO have something that works. You’ll have to reinvest time and energy to rebuild trust with growers.
Help is Here
Most large companies follow some form of stage-gate process for product development, a very patient and deliberate approach with checks and balances for addressing all those questions along the way. Ultimately the result is a fully vetted product that’s been through the ringer and is ready for market.
This kind of methodical approach to product development is important for companies of all sizes. Just because they lack the same breadth of resources doesn’t mean smaller companies can afford to bypass such a process. It’s actually even more crucial because a smaller company may not be able to absorb the risks of failure.
Sometimes you need someone from the outside to help sort it all out, so an outside consultant can be a tremendous partner to help you work through the phases from concept through go-to-market. Here’s where they can provide guidance and support:
- Help you determine a realistic time to market so you can plan accordingly and avoid rushing to launch before you’re really ready.
- Conduct a reality check and prevent you from making claims you can’t back up.
- Build a pricing strategy and position the product to maximize value.
This kind of work is one of our greatest capabilities at Entira. Yes, we can show you where you can shave time off and minimize resourcing, but we also know which corners cannot be cut. Our role is to prevent you from underestimating the full scope of what it will take to get to market so you can adequately prepare for the resources and timelines.
It’s ok to start with a hypothesis, but you can’t launch a product on a “best guess.” First you have to prove the hypothesis. Perhaps there is a small degree of good fortune at play, but you can’t build a product based on what you THINK customers want, you have to KNOW.
If you need guidance in testing the waters before diving into your next endeavor, we would be happy to discuss your situation with you. Contact Barney Bernstein at firstname.lastname@example.org or 919.830.6527.
In the midst of this global health crisis, we are hunkered down and staying informed like you; but Entira is still open for business! The best thing we can do for each other and our country is to continue the work of supporting the farmers who feed our nation and the world.