Commercialising innovation: getting from a good idea to a business

The gap between proof and purchase

A working prototype proves feasibility. It does not prove that a buyer exists with a budget, a problem urgent enough to act on, and the authority to sign. Most innovations stall in that gap, and the response is usually more product rather than more commercial clarity.

The questions that decide it

Before another development cycle, four answers are worth more than any grant:

• Who is the buyer, and what does this displace in their existing budget?
• What is the smallest commercially viable version that someone will pay for now?
• Which route to market — direct, distributor, licence, partnership or joint venture — matches the capital and capability available?
• What has to be true for a partner to be better off working with you than around you?

Choosing the route to market

Direct entry keeps margin and control, and consumes capital and management time. Licensing converts capability into revenue quickly but hands over the customer relationship. Partnership and joint venture split risk, and depend entirely on the incentives being genuinely aligned rather than being described as aligned in a document.

The right answer is usually determined by which scarce resource you are protecting — cash, time or control — and that should be an explicit decision rather than a default.

Bringing in commercial experience early

Innovators tend to add commercial capability after the technology is finished, which is the most expensive point to discover the model is wrong. An experienced operator involved earlier — as advisor or non-executive director — shapes the proposition, the pricing and the partner list while the choices are still cheap.