If you are an innovative company entering an emerging market, you should be aware that you are sailing into a vast ocean and will need to engage in purposeful navigation. I decided to interview some of your predecessors and highlight the key lessons learned by those who have already been there before you:
Watch for Critical Market Progression
Emerging markets can be volatile, and the trick is to maintain a steady course by keeping an eye out for the critical beacons of market progression in your industry. Bob Stojanovic (Head of EV Charging Infrastructure North America at ABB) knows this very well.
ABB is a global company that has been selected by Electrify America to provide high-power electric vehicle charging stations across the country. Stojanovic had an important observation on the successful implementation of innovative technologies in the EV marketplace: “you need three things: policy, innovation and customer demand” in order to be successful, he said. Stojanovic noted that similarly to the legs of the three-legged stool, two out of three factors are insufficient to support your market.
Growth in ABB’s industry has been driven by these three factors. As one or more of these three factors has taken a step forward, purposeful energy has flown into the others, resulting in industry progression. Such progressions have created market opportunities for the company.
Stojanovic’s insight on market progression in the EV industry is true for other industries as well. Most innovation opportunities in emerging markets are heavily tied to policy, customer demand (or customer expectations) and technological innovation. Successful market progression requires tending to all three; and the presence of two out of three are not enough to move forward. As an emerging innovative company, you especially need to tune into what policy and customer demand are doing in order to effectively bring your technologies into the marketplace.
Prepare for the Short- and Long-Haul with Your Product Offerings
Entering an emerging market can take time--if policy trends and customer demand are still evolving -- it will take longer. Be prepared for the road ahead, as Scott Taylor, Founder of Green Endeavor, can attest.
Green Endeavor provides eco industrial cleaning chemicals to manufacturers around the country. The company has seen cases where a safer substitution in a plant’s cleaning products just a week prior had prevented a worker from experiencing severe burns to the face and loss of vision during an accident. Despite this tremendous positive impact, getting industry to make large-scale shifts from the status quo in the use of toxic cleaning chemicals has been a very slow-going process. This is due to lack of policy motivators, workers’ hesitancy to speak up, ingrained commercial contracts and intimidation around the topic of chemicals.
Taylor is committed to the industrial cleaning chemicals side of his business but has diversified his product portfolio to generate shorter-term revenues for Green Endeavor through smart LED lighting for manufacturing facilities. Smart LED lighting utilizes software to manage industrial electricity use and results in immediate cost savings for his clients. Smart LED lighting is also a technology with more policy momentum backing it today, making it more accessible to his clients and more profitable in the short-run.
Taylor’s experience is great insight for you. You will also want to structure your product portfolio to support your long-term growth if policy trends and customer expectations are still developing in your industry. Focus on generating short-term revenues in a way that engages your existing customer base or industry, so that your resources remain focused on your ideal customer base.
Extend your Customer Reach with Partnerships
As you forge ahead for the long-haul, you will likely need to find ways to extend your customer reach with a limited sales team. One way to do this is through partnerships. This is what James Ewell, Director of Sustainable Materials at the GreenBlue Institute is doing with Material IQ.
Material IQ (MiQ) is a standardized method for communicating chemical information between manufacturers in the supply chain. MiQ was created to provide manufacturers detailed information about the hazard attributes of the chemicals contained in their products. Material IQ is known for its iconic donut chart, which gives users a quick visual summary of a product’s chemical makeup. GreenBlue has partnered with Scivera’s chemical supply chain management software (Rapid Screen) to utilize MiQ’s approach for summarizing and visualizing results. GreenBlue selected Scivera as a partner for integrating Material IQ because it is the most robust and cost-effective tool on the market and has already been adopted by many leading brands.
With the new collaboration, SciVera users will have access to Material IQ. As a result, Ewell will not only extend the reach of GreenBlue’s chemical information platform to many more users but will be reaching core audiences for whom the information is most relevant. The collaboration with Scivera allows Material IQ to gain visibility in the market in a way that it could not achieve without an additional significant investment of resources.
You may also want to extend your market reach by leveraging partnerships, as they are a great way to deploy limited resources effectively in an emerging market. When approaching a potential partner, look for ways that will create additional value for both sides.
About the author: Joanna Malaczynski is a Principal at DESi (desipotential.com), a consulting firm that helps innovative companies gain market traction.