Aspiring entrepreneurs aiming to make it big would do well to invest considerable time in market research. Deep understanding of consumer needs and pain points enables entrepreneurs to spot vacuum areas. Building a solution in order to address a specific issue or consumer need is the first step in making a successful foray into the enterprise environment. And most of the start-ups which have had success in formulating market relevant solutions have gone on to become unicorns.
R&D is the backbone of new product ideas
R&D (Research & Development) comprise of the investigative activities that aspiring entrepreneurs should undertake to create a new product/offering. Research involves any new thinking that will result in a new product or new features for an existing product. The development portion pertains to the actual application of the new science or thinking to shape a new or better solution.
R&D Offers productivity, product differentiation
Start-ups often gain a competitive advantage by performing in a specific way that the competition cannot easily replicate. Smart R&D efforts generally should result in an improved type of business process. It helps in cutting marginal costs or increasing marginal productivity; both of which make it easier to outpace competition.
Cost benefit analysis of R&D – The advertising and marketing benefits
The cost of initial R&D activities especially while formulating a new solution may seem to be high. But all that money is well spent. Contemporary advertising is built around claims about radically new offerings. And it connects instantly with the consumers as they demand new and improved products from time to time; sometimes simply because they are novel. R&D departments can act as advertising wings in the right market. R&D strategies enable enterprises formulate highly effective marketing strategies that match the innovative products and amplify market participation. New products backed by robust R&D often accrue increased market share by offering customers something they’ve never experienced before.
The R&D Bottom Line
Amplified market participation, budgetary benefits, increased marketing abilities and trend-matching are some reasons start-ups should invest in R&D. Generally, entrepreneurs are advised to allocate considerable resources to R&D; the innovations gained through such R&D often reduce costs facilitating shaping of more efficient and relevant products. And new product/solution ideas brooked by extensive R&D are easy to be patented; this in turn assures the safety of the IPR. The whole process makes it very tough for the new ideas to be copied or stolen.
Advantage thought leaders, early adopters
Visualizing the future and leveraging predictive analysis to formulate unique, first of their kinds solutions gives start-ups a definitive head start. Enterprises taking the thought leadership route often experience instant success; provided, the solution conceptualized is truly innovative with problem solving abilities. Entrepreneurs trying to create new products/solutions need not always bank on original ideas. Getting inspired by a new idea which is already in the market and experienced considerable success is a safe way to take the entrepreneurial route. Early adopter firms usually latch on to a new yet popular solution and build ideas around the same.
Creating a niche for an existing product
Taj group of hotels, the hospitality wing of the famed Tata conglomerate is a perfect case in point. When the emergence of new, smart hotels offering luxury at low cost started eroding its market share, the Taj group came up with the idea of going pet friendly. Most Taj properties were re-imagined to suit the sensibilities of pet owning guests. This enabled the group to create a niche product that catered to a specific consumer segment thus negating competition via a clutter breaking presence. The same applies to almost all the domains where entrepreneurs can improvise existing solutions to offer greater value to consumers.
Combining two or more products to shape a new idea
Swiss Military is a big name in the travel accessories domain. The brand was one of the first few companies to combine the traditional travel trolley bag and a laptop bag to innovate the trolley cum laptop bag which accommodates travel essentials along with a laptop and its accessories. This move captured the imagination of the new age business travelers and paved the way for shaping a whole new consumer segment.
Make an existing product more versatile
A plastic bottle manufacturing company can be a great example to drive this concept. A bottle maker who traditionally caters to the needs of bottled water making companies can always make the product versatile by selling the same bottles to makers of juices and colas. A host of Chinese white label automobile parts manufacturers fit this narrative perfectly. They make several automobile parts which can be used by different makes and models seamlessly. This versatility gives them a much bigger playing ground.
Ease of doing business
New or improvised solutions backed by solid R&D are easy to market and sell, especially in the era of digital natives. Take for instance ecommerce platforms like Alibaba, Amazon, India Mart etc., which help start-ups operate both in B2B and B2C spaces. Well thought out solutions often deliver instant and high returns.