Deep tech’s “commercial beachhead strategy” to cross the valley of death

Written by Mark M.J. Scott

Northern Pixels Co., Ltd. President

Most deep tech startup founders are aware of the dreaded 'valley of death', but experts recommend proactively launching commercial strategies during the product development stage to increase the odds of success. Too few founders listen.

According to Boston Consulting Group's November 2023 Investor's Guide to Deep Tech, deep tech startups have an approximately 2% success rate in reaching the C round of funding1. Very little precise data exists on the commercialization success rate of deep tech startups, but when applying data from SaaS technology startups (in more mature markets), only 0.4 startups achieve more than $10 million in revenue. %2.

“Bridging the Valley of Death” 2009 article 3 (Barr, Baker Markham, Kingon) provides science and engineering graduate students with product guidance, including industry, use case identification and prioritization, and customer engagement during development. It argues that curricula and pedagogies need to be shaped to familiarize students with best practices. This phase can have a positive impact on the success of startups led by students who become entrepreneurs.

Illustration from the article “Building the Valley of Death”

In my experience, crossing the valley of death is not enough. Deep tech early-stage commercialization strategies must be purposefully designed to create a strengthened position to begin full-stage commercialization. I call this the deep tech commercial beachhead strategy.

Beachhead strategy is a military term that describes the use of special forces and tactics to secure a position on the other side of an obstacle (a valley, river) and strengthen that position to enter the next phase of the operation. . (Similar to beachhead strategy) The term beachhead strategy is more commonly known, but it also applies to crossing rivers and valleys.

To achieve a significantly enhanced commercial beachhead, I strongly advocate prioritizing specific commercial investments that will yield the highest return on investment. When properly planned and executed, this strategy strengthens a startup's position, increases the likelihood of securing additional funding for commercialization, and reduces time to market acceptance and revenue.

The main reason why many people misunderstand and fail commercialization strategies

Most deep tech founders do not fully understand the sophisticated and diverse tactics of a commercialization strategy, leading many to mistakenly believe that all elements of the strategy rise in parallel. This approach wastes valuable time and money and threatens the continued survival and success of your startup.

A carefully coordinated deep tech commercial strategy will be launched in stages. Marketing plays a key forward role in establishing a commercial beachhead to build a strong and consolidated position to begin commercialization. In the early stages, consider marketing as a special forces team with a clear mission to establish a beachhead. When properly conceived and executed, this strategy puts startups in a stronger position for commercialization, accelerating partnerships and revenue, and often creating new categories that are very difficult for competitors to overtake. You can secure a leadership position.

When a startup embarks on serious commercialization, the primary goal of marketing should be to generate a sales pipeline. Every aspect of your marketing investment must be evaluated against the contribution of pipeline-generated sales and closed sales. Our experienced teams generate up to 20x more lifetime revenue (LTV) compared to marketing campaign spend.

An important pillar supporting the deep tech commercial beachhead strategy.

Establishing a beachhead and securing a fortress position on the other side of the Valley of Death has four key pillars, prioritizing each interconnection in a comprehensive strategy that strengthens and accelerates the overall business strategy. is needed.

While some of these may seem obvious at first glance, I have witnessed most deep tech startups deploy effective hybrid strategies that maximize the overall value of their four pillar beachheads. did not.

A very important point here is that modern AI solutions, especially Perplexity, are transforming marketing and the way we achieve visibility in different target markets. It is assumed that you have guidance on how to leverage these modern tools to enhance the strategies below. What may have been a reasonable awareness strategy developed in 2023 may no longer be effective today.

The original diagram in the “Bridging the Valley of Death” article has been modified by the author of this article to enhance the most influential selective strategies to establish a deep tech commercial beachhead.

rights protection

Advocacy is the foundation for the success of any commercial innovation, especially disruptive deep technology innovation. Your organization needs a clear advocacy plan that prioritizes influential key opinion leaders (KOLs) from a variety of sources, including academia, target industries, and ecosystem partners. Of course, each objective and strategy will vary depending on the situation.

You also need a marketing strategy that positions your organization as a fast-growing and impactful disruptive technology. The founder must also become a key thought leader on the topic of how the technology will change the future.

Advocacy comes in many forms. Experienced marketing leaders are adept at identifying and engaging thought leaders, as well as devising which advocacy mediums are most likely to attract and engage their targets and maximize exposure. I am also proficient in this.

Finally, a solid advocacy strategy is the gift that keeps on giving. As your pool of influential advocates grows, your brand improves and the relevant advocacy content you create becomes a powerful asset to support other strategic elements of your strategy (see other pillars ).

Target industry ecosystem

It’s important to identify and engage innovators within your target industry and foster symbiotic relationships during the early stages of product development.

Starting with a major global brand, each advocate can garner more attention by winning with a global brand. The most sought-after innovators are related to specific strategic business (or government policy) goals and are on or have influence on the board.

Finally, each targeted industry has its own Tech Stack players, professional services firms, and integrators. These will all be important players whose connections and awareness need to be established in the early stages. Understand their value proposition and relationship with your target customers and develop an engagement strategy that enhances their success along with yours.

Media (target industry, business, general media, technology)

There's a logical reason why media is third on this list. The most effective media exposure includes support from advocates and industry leaders. Media engagement strategies require multiple situational strategies based on the type of publication and desired outcome. The following is a simplified representation of the major media groups, but should help illustrate the aspects of the engagement strategy you need. Experienced marketing leaders develop plans to leverage success from one media group to another, amplifying the success of their strategy with each success.

General media can quickly and broadly provide a level of brand awareness that can influence all aspects of strategy and drive success in more vertical business and industry media. Furthermore, if your technology is perceived by the public as sinister (as opposed to inflammatory), then popular media is very important. If so, you need to build a compelling narrative to sway ethical or regulatory challenges in your favor.

Business media is always hungry for stories about how disruptive technologies are disrupting the status quo and transforming industries, but if you're looking for Tier 1 business media exposure, maximize your exposure opportunities You need to leverage your supporters to do that.

Industry media is clearly prioritized based on the target industry of the business plan, and journalists have a deeper understanding of the challenges, ecosystem, and competitors, requiring unique and well-developed media engagement is.

Technology media comes in multiple variations (technology category, industry, business, and public) and plays a critical role in your success. It is important to ensure that the plan incorporates technology media and that relevant editors and writers are kept informed of progress. Consider their needs and audience.

Communication Momentum Strategies Proactive and situational streams.

To compensate for long product development timelines, deep tech startups must develop communication momentum strategies to keep their target audience engaged, inspired, and loyal.

There's a logical reason for this: an effective plan for point 4 includes repurposing and sharing content derived from the pillar strategies outlined above, each tailored to your audience persona and their unique tailored to your interests.

Context is key in your communications content strategy. If you have multiple unique audiences, each with different goals and needs, you'll fail if you don't feed one communication stream to multiple audiences.

Cadence is very important. You need to establish an active communication plan with clear objectives, defined frequency, and consistent implementation.

Medium is important. Not all communication has to be one-to-many. Increase the impact of your message by engaging and collaborating with prospects, analysts, professional services firms, and key opinion leaders. Collaborative communication efforts that allow valuable insights to be shared, such as live or web-based panel discussions on relevant trends and topics, can be extremely beneficial.

When will you act? Get an expert opinion now.

As a deep tech founder, it's common to be preoccupied with the technical hurdles of product development in the early stages, but as a founding leader, you can remind investors and your team of all the important things that will increase your chances of success. Responsible for ensuring strategy is implemented. It will be explored and exploited.

In my experience with multiple wins in deep technology, a well-developed and executed bridgehead strategy can yield significant benefits relative to your investment. Strengthen your company's position for subsequent funding rounds, help attract and retain world-class talent, provide early customer feedback to shape and accelerate product development, and evaluate your products. Establish a lucrative pipeline of customers who are willing to buy, advertise, and buy from you.

About the author:

Mark MJ Scott is President of Northern Pixels Inc., a company dedicated to improving and accelerating the success of deep tech startups. Mark has several deep technology successes, including a crypto company acquired by AppDirect, an optical and photonics company acquired by Toyota, and a pioneering enterprise. He has played a leading role in the growth of There, his strategies helped raise revenue to his ARR of $30 million. Mark was recently hired by Canada's Quebec Government Quantum Innovation Zone to develop commercial strategies to help startups succeed with $435 million in funding.

References

Investor's Guide to Deep Tech, November 2023, Jean-Francois Bobier, Anne-Douce Coulin, Constant Morez, Greg Emerson, Kaustubh Wagle, Antoine Gourevitch Technology SaaS Startup Success Rate: SaaStock: https://www.saastock .Bridging the Valley of Death: Lessons Learned from 14 Years of Commercializing Technology Education, 2009 Academy of Management Learning and Education, 2009, Vol. 8, No. 3, 370388 STEVE H. BARR, TED BAKER, STEPHEN K. MARKHAM North Carolina State University Angus I. Kingon Brown University

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