Josh helps find growth opportunities for his firm. He needs to speed up the firm’s system for matching an opportunity with desirable customers in new markets.
In the current system, after the firm creates a proprietary technology, a team starts to hunt for customers. The searchers tend to search for early adopters1 in familiar markets, not new markets. As a result the firm missed good growth opportunities.
Josh wants to fine tune the system for quicker discovery of customers in new markets. His idea is to hire, on a project basis, an outside-in2, customer research expert.
The expert’s job is to scout out, in new markets, early adopters of the firm’s technologies. After this quick identification of early adopters, the firm’s team contacts them and begins the job of creating value
Josh talked over this idea with his team. Their suggestion … use it to find new markets for the firm’s proprietary, polymer microtubing technology. This trade-secret, technology is at the heart of three of the firm’s business successes.
Leaders of the firm gave thought to two options for increasing microtubing revenue.
- Set Josh’s idea in motion
- Copy a competitor’s tactics … publicize a catalog of microtubing products they will supply.
- This is a persistent yet, not acted upon option. But, the recent recession resulted in excess capacity for microtubing manufacture. Using this excess to begin catalog sales might increase revenue.
Josh hired me3 for the project. We had worked together on other projects. After a meeting with Josh and his team, we outlined this scouting project.
Project addresses the following issues
- Discover valid growth opportunities in markets affected by the Clean Water Act
- For example: Wastewater treatment, Process water treatment
- Gather and analyze competitive intelligence on XYZ-Corp.
- One type of tube publicized in their catalog could be a threat to Josh’s firm.
Off Limits … No interviews at 10 firms in markets where the team already has productive dialogues on polymer microtubing in place.
Executive Summary: New Market, Growth Opportunities for Polymer Microtubing
All respondents heard this description of the client’s innovative concept.
“ My client has invented a polymer microtubing.They can alter its structure and surface. In tests, the tube can change or capture a molecule as it passes over or through the tube.”
Thirty-nine respondents entered into deep-understanding, interviews with me
Valid growth opportunities for polymer microtubing were discovered for …
- a. Removal of traces of refractory pharmaceuticals from pharmaceutical manufacturing, process water.
“I’ve been on several task forces dealing with the disposal of traces of high potency pharmaceutical in process water. Both the EPA and the FDA regulate the discharge of high potency traces. I am against injection wells for disposal. But, it works.”
Environmental Engineer … Eli Lilly and Co.
- b. Cleaning water recovered from the hydraulic fracturing of gas-containing shale.
“Veolia and GE are working on the problem but, for them it is a niche area compared to cleaning up municipal water systems. In fracking, injection wells are used to dispose of contaminated water.”
Dir., Technology, Texas Water Resources Institute … Texas A&M
Six respondents identified themselves as early adopters. They want the client to contact them as soon as the project is completed. They want a ready-to-go backup if injection well disposal is banned
Competitive Analysis of XYZ-Corp
Like Josh’s firm, XYZ-Corp focuses on specialty niche markets. Its catalog sales finds leads to potential customers in familiar markets. It is slow to recognize attractive leads in new markets.
As a result, XYZ-Corp’s cash flow and product margins are inferior compared to Josh’s firm.
“ George, XYZ-Corp carries a huge selection of tubes in stock. Quality of high-end tubes is inconsistent. Expect to pay top dollar for orders you throw at them. Unwilling to accept jobs that push the envelope.”
Mgr. R&D-Medical Components … Roche Diagnostics
- Other leaders of growth opportunities for the firm adopted Josh’s tweaking of the growth opportunity system.
- R&D developed, to a pilot scale, their technology for cleaning up pharmaceutical and fracking wastewater. Shelved commercial-scale, manufacture until laws are enacted that limit injection well disposal.
- Firm abandoned the option to begin catalog sales. Less effective, in finding desirable customers, than firm’s present system.
Twelve years later
US Supreme Court ruled in April 2020 that injection wells may be the functional equivalent of a direct discharge under the Clean Water Act. The Court instructed the EPA to establish regulations limiting injection well disposal.
- Early Adopters Wikipedia. accessed 06-15-2020
- Outside-in view of customers: Create what the customer values. Don’t focus on product features.
Inside-out view of customers: We know, better than customers, what features they need.
- My key skills for this scouting project.
Recognizing Early Adopters
Drawing Out Latent Needs