Beer & Blog: Commercialization and Product Launch Strategy, Paul Tolley

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Paul Tolley, founder of Stretford End Solutions, a technology and business development consultancy, and former CEO of ITC MEMS and VP/GM of Syntec Optics, sat down with us to talk commercialization strategy.

Michele: We're both working in the commercialization space from different angles, helping companies go to market successfully. You've just started a consulting practice focused on commercialization. What's the biggest opportunity for companies you work with?

Paul: Few are experienced product companies, so there's a real tendency to underestimate what it'll take to launch a product or bring a new technology to fruition. First: product launch timing. You can't underestimate the amount of time anything is going to take; if anything, it always takes you longer than you expect. Because timing is a subset of everything, you really need to start with early exploration of the target market for your technology solution. Companies often think they have a brilliant commercialization idea and then go into this spiral of perfection. They spend so much time perfecting the technology when they haven’t appropriately identified if their new great thing is solving a problem without creating other problems and at a price the market will bear.


It sounds rudimentary, but you must test early, so you know you are going to have customers on the other side. Understanding what your value proposition is can’t be an afterthought. Pricing is a real blind hole in this process.


People like to say, “Hey, I’m at the 30,000-foot level, or the 50,000-foot level.I’m looking at the big picture.” If asked what the unit cost of their product will be, they may only respond with,“Don’t worry about that yet. Those are the details, and we’re still big picture.” Worry about it. I was actually having that discussion with a customer today. Trying to extrapolate where they thought they were going to be with the unit cost when we get their devices to volume. It was a great example of why this is always a question I ask because the solution they told me was cumbersome and costly. Sometimes the design you’ve chosen and manufacturing process you’ve identified will never get you to the unit cost that the market is demanding right now.


Yes, we’re working on some technologies like lidar where that pricing gap is huge.

Part of that is because people are trying to solve a problem with the conventional path of technology or applying general commodity price models against ultra-precise performance. I'm looking at another device right now, and the presumption is that it needs to be ‘high end’ due to its market space, but in this instance, there are examples of off-the-shelf components that are close in performance and can drive down both prototype and high-volume costs.


In technology development, we often dismiss off-the-shelf components, particularly from non-competing fields.There have been many advances in the automotive industry that could be applicable for aerospace, but the immediate presumption from aerospace is dismissive because in their mind automotive is high commodity and lower down the food chain.


If you're designing a new defense product system that requires a camera, why not start with an off-the-shelf camera that qualifies for autonomous automotive and build from that? It's satisfying to take what is absolutely the best way to solve a problem and then strip it down.


What does a good go-to-market strategy look like?

There's a big difference between perseverance and stubbornness, and stubbornness is not a virtue. Perseverance is knowing when to keep pursuing your idea. And that's also one of those things you don't underestimate.


If you're truly trying to bring a new product to market it’s a long, long, hard road.As a strategy, think about running a marathon versus a sprint.Understand the space you are trying to enter. Who fills that space today? How can you improve upon what’s out there or disrupt the space completely?


Biometrics, facial recognition, finger print scanning—you were very early in that space. It must have been 10-12 years ago that we worked on that together, and now it’s finally a reality.

Yeah, it was probably 2001 that we were trying to get into it. The technology was there, but without full adoption and a set architecture, costs were too high, and like many of these technologies, awareness and regulatory controls needed to catch up. Though we realized some moderate success in the field, we learned some great lessons. The most significant was probably that you cannot underestimate or undervalue the idea of team.


There is no one genius. Steve Jobs did not create a single thing by himself, so don’t underestimate the importance of your team. If you're the technology person taking something to market and don't know how customers will like it, but you assume from your tech-geek perspective you do, then you are doomed.


Get a strong marketing expert. Do some real research and say,“yeah, this is how the problem and solutions are perceived.” The right help will drive you forward.


Financial expertise is another blind spot. Helping a company dig into their numbers, set budgets and scale is a common area I help with. The numbers don’t lie. And all too frequently, tech experts dismiss the “accountant” or the “sales person.”I’ve seen great products die because of poor financial management or sales strategy.


We're seeing more and more companies shift their product development models to outsourced R&D, joint ventures and acquisitions for new technology and innovation. How do you build a team in that context? You've done that a number of times.

It is really tough in that context because sometimes it’s a forced marriage and that rarely works. You have to set the table for collaboration. When you sit down to meet with somebody,try starting with your name, just your first name.


I like to have meetings where it's Paul and Susan and Billy, to avoid the titles, CVs, patents and power dynamics. That eliminates the totem pole mentality. Chain of command can kill creativity on the development side.


Where do you see it being really successfully done now?

We talk a lot about partnerships, but the vendor relationship is tricky. Sometimes they’re not open to a contrary opinion. When the going gets tough, the customer always wants to be right, and sometimes they’re not.


As a large company leveraging a small company, the one lesson you can take is generally small companies know how to be flexible, improvise, adapt and overcome. A lot of large companies lose that ability. That ability to pivot.They can't turn around and get around a problem. It's full steam ahead. And a lot of the smaller companies I've worked with can adapt to shifting conditions.If allowed, they can bring some of that spirit to large company teams.


As for research funding, you’ve worked with SBIRs, STTRs, clusters and incubators. Thoughts?

There's no such thing as free money. You have to understand what you're signing up for because those strings attached are never trivial items. That being said, I do think there is a great opportunity in helping fund specific areas of your research, and it helps provide a roadmap for the technology.


Clusters can be very helpful if they're true clusters where people really try to work collaboratively, share assets where they can and build critical mass. I think sometimes it helps just to understand that somebody else is working on a problem with the same level of complexity that you are. It gives you a different perspective and that helps you move forward. It’s not about getting a bigger slice of the pie—it’s about creating a bigger pie.


What technologies are most promising right now?

The battery space has a lot of opportunity—solving the problems of quicker recharge, more efficient recharge, less loss and smaller, more efficient batteries. There's massive opportunity in the communications side as we just continue to jam that microwave space. Expanding our frequencies is a huge market opportunity.


Another area of growth is certainly in wearables. Connecting people and things. It’s frightening, and I’m not keen on it, but there’s sensor technology right now that would enable my fridge, for instance, to know it was me and know I’m going to grab the ice cream. It isn't really solving a critical problem but eventually could be. It's actually being looked at in the health diagnostic space. Predictive personalization is a second order solution. Think about Pandora: the first order is this great online music library. The second is anticipating needs.


We’re going to have to break away from staring at devices, and stop people from staring at a 4-inch screen and encourage them to re-engage with the world around them. Our reliance is impeding our ability to communicate with people,and this dehumanization kills creativity and cohesiveness in the workplace. Delivering information so we can still feel like we're connected and still be engaged with the people around us—that’s a huge problem to solve.


What do you want to be working on?

I think drone technology and autonomous technology is a great challenge to take on. It would be great to say, “hey, you know, we need to stop distracted drivers.” But you're not going to do it. We keep building cars that are filled with more and more things that distract us.


Technology that can make us safer is definitely a problem to be solved. But it’s always a fine line because safety can lead to fragility which,in turn, kills ingenuity.


I do a lot of work in the defense community, and I think we need to be restructuring our spending such that there’s far more on technology-focused predictive intelligence and threat diffusion. Just looking at defense and border security biometrics, drones and autonomous solutions can be vastly more effective than any current strategy; they could also be far less expensive. How do we identify people that are truly bad and people that are truly good? Biological recognition can go a long way toward improving our security.


In addition, any technology relating to brain imaging is of interest right now. There is no discernible way to understand abnormal protein growth in the brain other than an autopsy. The needle’s not moving fast enough. The image resolution is too poor to make an accurate diagnosis or even give you data points to make an assumption on how patients should be treated.Concussion protocols haven’t really changed in the last 30 years.


Imaging can also go a long way toward creating a baseline for better treatment and drug efficacy. Twenty or 30 years ago, chemotherapy was basically carpet bombing. It's completely different now because we've learned that different people respond different ways, and different ethnicities respond to different chemical structures. There are slight differences in the DNA testing, and identification is both scary and good at the same time.


Any last guidance?

Ask great questions. Don't be afraid to reach out to people who may have been there and done that. For the cost of a cup of coffee, you can get some really good knowledge. One hundred and fifty thousand dollars’ worth of education, and you can gain some better insight over a cup of coffee. And not just insight from successful people—you can learn a lot about what not to do from people who may have failed. Why? Because people fundamentally want to tell their story.


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