This document discusses routes to market for new ideas and inventions. It addresses three main questions: how to best extract value, how far out and down in the value chain to go, and how to interface with customers. The value chain model is introduced to link these questions. Going further down the chain involves taking on more marketing, selling, supplying, and customer service responsibilities. Choosing whether to interface with customers remotely, through direct sales, or via distribution depends on the nature of the business. Determining the optimal route to market requires careful consideration of these factors.

1. Routes to market
David Jenkins
Cambridge University Entrepreneurs; February 2011
February 2011 Routes to market

2. What’s the question?
• How can we best extract value from our idea
and/or invention?
• What do we need to do to earn our first
revenue?
• How should we interface with our customers?
– This is the question you get when you google ‘routes
to market’
• I’ll do my best to answer all three and use the
value chain model to link them
February 2011 Routes to market

3. How can we best extract value?
• How far out do we go?
– ie which commercialisation route should we chose
• How far down do we go?
– ie how much of the value chain do we want to
capture?
February 2011 Routes to market

4. How far out do we go?
(after Qi3; www.qi3.co.uk)
Spinout/start-up • Establish a new company
• Transfer to a licensee, with initial payments and
Licence ongoing royalty
• Work together on a joint project. Usually involves
Collaborative R&D supply chain partnership
Consultancy • Provide skills to enable knowledge transfer
Secondment • Work within the company for a period of time
Facilities Access • Use of facilities available in university by 3rd party
February 2011 Routes to market

5. How far down do we go? An
introduction to the value chain
discover develop deliver
• This is the product end
– Discover: your bit. What’s the big idea? Does it have
value? Can I protect it?
– Develop: can I turn my big idea into a product (or
service) (more IP) for which people might pay?
– Deliver: how can I produce/manufacture this product
and/or resource the delivery of this service?
February 2011 Routes to market

6. How far down do we go? An
introduction to the value chain
sell supply service
• This is the customer end
– How can I persuade people to choose my product
and/or service and buy it?
– How do I get my product and/or service to the
customers and collect his or her money?
– What should I do to look after my customers after I’ve
made the sale ?
February 2011 Routes to market

7. How far down do we go? An
introduction to the value chain
discover develop deliver market sell supply service
• Marketing is the glue to hold it together:
– Traditional marketing is product, price, promotion and
position and there’s little wrong with that.
• Product (and/or service): what exactly will my customers
buy?
• Price: what’s my product and/or service worth?
• Promotion: how do I communicate?
• Position: which sales channels will I be using?
February 2011 Routes to market

8. Marketing actually spans the
length of the supply chain
discover develop deliver market sell supply service
inbound strategic tactical operational relationship
marketing marketing marketing marketing marketing
• It doesn’t matter how far down the supply chain you go you’ve still
got to do some marketing
• And doing it well, continuously and consistently, will build a brand …
but only if your customers are supportive.
February 2011 Routes to market

9. This gives us a useful check list
for what you’ve got to do
discover • What’s by big idea? How do I protect it
develop • How can I turn my idea into something which customers will
buy?
deliver • How can I produce/manufacture/build my product and/or
resource my service?
market • How can I build my brand? How can I attract customers etc
sell • How can I persuade potential customers to buy?
supply • How can I get my product and/or service to my customers
service • How can I look after my customers once they’ve bought
February 2011 Routes to market

10. If you have decided to ‘spin out’
and go all the way to market
• Then you need to decide how you will interface
with your customers:
– Remotely (typical web business);
– Directly (own sales force); or
– By proxy (use of 3rd party intermediaries)
• And this decision needs to be taken for each of
the final 3 value chain elements
– Sell, supply and service
• Whatever you decide: you’ve still got to manage
February 2011 Routes to market

11. Your choices will be influenced
by the nature of your business
Web: route of • Obvious for software, low value items, BtoC
choice for many • Challenges you to ‘drive’ customers to you
today • High fixed cost, low variable cost
Direct sales: • Best for high value and/or technical items
challenge of • Lots of control but issues of fixed cost and roll
managing people out
Distribution: best • Low fixed costs and rapid roll out possible
of both worlds? • But mega management challenge
February 2011 Routes to market

12. Choosing your route to market is
really a 2 hour workshop itself
• If you really want to know more come along to
the St John’s Innovation Centre, 8 Mar 11 at
11.00 (there’s a rather good free lunch)
• For more info http://bit.ly/edvc6S
February 2011 Routes to market

13. Thank you!
David Jenkins; i2i-management.com
helping smaller businesses to do well
February 2011 Routes to market