Routes to market

David Jenkins
Cambridge University Entrepreneurs; February 2011

February 2011 Routes to market

 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
 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

 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

 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

 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

 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

 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

 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

 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

 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

 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

 Thank you!

David Jenkins; i2i-management.com

helping smaller businesses to do well

February 2011 Routes to market