Markets are not static – they evolve, grow, shrink, disappear, and are built. The challenge is to know when this may happen so you can be ready to take advantage of the new sustenance. Here are a few things that you can do to be sure you don’t end up like the squirrels.

• Having a deep understanding of your customers’ situations is the best starting point. After all, they have the problem and the money (usually). For instance, if you are selling 96-well screening thingamajigs and your customers have big backlogs, then there is an opportunity for you (or your competitors…)

• What is everybody else doing? I’m sure the squirrels quickly surmised that all their brethren were fighting them for the 3 acorns that fell on their acre. If your competitors are fiercely throwing all kinds of effort (and VP’s) at even small business opportunities, then something is afoul in your market.

• The good news is that markets do not tend to vaporize; the problems that were being addressed often just shift to new solutions. Similarly the squirrels are now all rushing to get sugar maple seeds stashed away. Capillary sequencing, HPLC, and shrink-wrapped software are in the process of being supplanted by NGS, UHPLC, and SAS. (next-generation sequencing, ultra-high pressure liquid chromatography, and software as a service, in case you were curious). People still need to buy stuff, just not the old stuff.

• The easiest way to get a sense of market reorganization is to look at some external factors. If the squirrels had realized that last year’s super-abundance would be followed by a lean year, they could have been better prepared (though this, of course, is beyond their walnut-sized brains). Trade show attendance, funding agencies’ programs, M&A activity, and capital raising are all good indicators of where the action is… and isn’t.

So when your dependable sources of nutrition are disappearing, be sure you know where to find your next pile of revenue. Like the trusty annual crop of acorns, things will change and you will need to adjust your diet.

For me, a homegrown tomato is the pinnacle of summer – supremely tasty, available any time, and the fruits of my efforts. I bet you wish you thought the same way about your latest products – loved by customers, demanded constantly, and the result of your hard work. Maybe you have this perfect situation or … maybe not.

If we look at tomato growing, we can learn a bit about bringing tasty products to the market.

Earth – Staring with deep, rich earth is clearly the best approach. Adding some fertilizer is also helpful. Basing your new products on a sizeable market with pressing needs is a key foundation. Without this you will have poor yields

Water – Keeping the soil moist definitely hastens the march towards perfect red globes. As you develop your product, it is important to continuously add new information from the marketplace regarding the changes in customers’ situations.

Prune – Occasionally errant shoots need to be hacked back. They would only take energy away from the plant and slow the growth of the fruit (I know – but it’s still a vegetable in my mind.) Activities and efforts that are not directly aimed at the goal should be stopped. Yes it’s great to be able to satisfy “all” the customers, but it’s never possible. Be selective and ruthless about wasted efforts.

Squash the bugs – The most destructive thing I have ever seen is the tomato hornworm. Undeterred they can reduce a 6 foot plant into scrawny stems in a few days. Similarly you need to fight the growing threats – new competitive products, changes in spending habits, aggressive price wars.

Weather - Sometimes bad things happen to good plants. Two years ago, late blight (phytophthora infestans for inquiring minds) wiped out all tomatoes within a hundred miles. The debt “crisis,” industry consolidation, and decreased funding are all hard to battle. All you can do is trim your goals and re-evaluate what you expect to accomplish – not easy, but doable.

So if the weather has been sunny, you watered your plants and kept the pests contained, you are now enjoying the bounty of summer. With focused efforts and a little luck from the environment, you too can be enjoying the fruits of your labor – tasty products that customers can’t get enough of.

ps. that tomato in the corner was indeed very tasty…

As we were taxiing down the runway at Denver airport recently, the pilot gently glided the plane over to the side and stopped. A collective sigh was heard as we all anticipated the usual explanations for the delay. The pilot came on to tell us that a series of storms in the Midwest was preventing us from flying directly to Boston, and we have been re-routed to a northern route over Minnesota. Our agenda had been altered from taking the fastest trip to Boston (happy customers, less fuel) to avoiding the nasty storms that would rattle the passengers and shake the plane.

Similarly many companies at the recent conference I attended came in with agendas set on growth and prosperity, only to find storm clouds upsetting their plans. New products from the competition, unexpected customer reactions to their offerings, or ground-breaking developments have all caused companies to reset their agendas.

If we look at agendas, which hopefully you all have, they usually have 2 or 3 main items and fall into a few simple buckets.

• Growth – innovation, M&A
• Costs – do more with less
• Capital – finding $$ to fuel growth
• Risks – gotcha’s and surprises
• People – the right people to move the agenda

That’s about it. Pick your most critical couple areas of focus and get the company lined up behind them. Sounds simple enough, and if asked you can usually say – we are focused on “getting our costs of goods in line,” or “developing our market for IVD’s”

Agendas really have 2 parts to them – first is picking the right one, and the second is knowing when it needs to change. Picking the right one flows from your overarching strategy, and assuming you have a good plan, your agenda should be clear. However, when some storms appear in your path, you need to asses whether your agenda needs to change. Here are few indicators that your direction needs adjustment

• Timelines are being bent beyond reason
• Many of your assumptions are proving inaccurate
• Your people are losing confidence in their ability to meet the goals
• Your sales or costs are trending in the wrong directions

None of these are fatal flaws unless they are ignored. People and companies are extremely malleable, and with good leadership can be steered onto the right route. So when you detect storm clouds on the horizon, be sure to take stock of your agenda. If you can weather the storm, then proceed ahead; but if you expect some unhealthy buffeting, then reset your agenda. Though this should not be a knee-jerk to the challenges you face, it is important to realize when you need to take the longer, yet smoother route to your destination.

Stepping into the flight chamber, I was astonished at the unexpectedly strange sensations. As I attempted my first indoor skydive, my mind was trying to reconcile the noise, the wind, the pressure on my limbs, and the hand signals from my instructor. A similar cacophony of signals often occurs when you are bringing new products into the marketplace – noise, forces, opinions, and speed are all at play trying to upset your planned trajectory.

Processing all of this at once is critical to entering the market and actually getting the results you want (usually $$$.) Granted you aren’t trying to float in a 100 mph wind, but things do move quicker than you would like.

• Noise – Nothing is more disruptive to a good product launch than too much noise. This can be due to a poorly-focused effort or because lots of other things are occurring around you in the market. Having a good process, a well-vetted strategy, and committed people will help you rise above the fray.

• Odd forces – Like the wind trying to deflect my arms behind my head, there will be responses from the customers and competitors. Being prepared for the possible reactions will definitely help you weather these forces. Run a few scenarios to help you plan for the buffeting.

• Heeding the signals – Trying to comprehend signals and act on them in this environment is tricky. When you first enter the market, signals will come flying back at you. Some people like your product, some hate it, some don’t care. Sales people sell version X but not version Y. Paying attention to this early feedback is critical. Though your plan was perfect, you often need to heed the market signals and make adjustments to be really successful

• Speed – Moving quickly can give you a big advantage over your competitors. Once you see that you need to make some adjustments, doing this quickly and effectively across your organization and market is important. Slowly adapting to the feedback has killed many good products; so keep your foot on the gas. As the Valeant CEO, Michael Pearson, recently said, “Time is the enemy, in my mind. Speed has proven to be a real competitive advantage if you look at our history.”

So when you are getting ready to parachute your products into the marketplace, take a few lessons from the skydivers. There will be new, unexpected forces at work. Paying attention to them will lead to a successful and controlled dive into your new flow of revenue. Not paying attention can lead to a very unpleasant landing.

ps. in case you’re wondering, that is indeed yours truly in his first flight.

The other night, I bolted straight up in the darkness to the sound of people screaming for mercy. After a few seconds, I realized that it was not Charles Manson loose in the neighborhood. It was the wailing howls of a bunch of amorous coyotes.

They reminded me of the unrequited calls that some companies make toward their potential customers. All making the same appeal – choose me, choose me. A few companies do stand out and succeed in building the needed relationships, but others end up fighting a fierce battle for the few remaining opportunities.

So what’s the difference for those that walk off with the prize mate? The first thought is that the winner must have the loudest call or the smoothest tones. While that may help, the voice (aka message) is only a small part of the equation and is usually the final piece.

More importantly the alpha coyotes don’t just have a pleasing serenade, but have demonstrated that they walk the talk. They have fended off other pack members and learned what it takes to win.

• So how can you be the “alpha” business? Spend the time and work with the customers and understand their real needs, where they want to go, and what would help them get there. Secondly craft products and services that truly solve customers’ problems, and big ones at that. Keep a close relationship with them so when the product is ready, it is a clear winner.

• The head of the pack surely had some battles with their competitors in their rise to the top, and likewise all life science markets are very competitive. Even when no other competitor is in sight, customers usually have some sort of remedy to their problem. Moving them off this is often a daunting task. You will need to fight to show them that your offering is faster, smarter, more elegant, and saves them more time/money than the other guy’s.

• After you have the right products for your customers, then you can howl about it. Your call will sound different and be heard above the others. You have the products and the muscle to back it up.

So get your products right, join the pack and howl away. You too will earn the ear of the desired one and beat back the competition. And you probably won’t wake the neighbors either.

After struggling with a certain direction or having market conditions radically change, many companies come face to face with very unpleasant possibilities for growth. Some of these companies wilt away, but many re-invent/reposition their business or entire companies to get to where the action is. Here are some examples of metamorphosis in the life sciences.

• Helicos BioSciences is a pioneer in next generation DNA sequencing and moved from a purveyor of instruments to become a molecular diagnostics company, offering their own tests as well as services.

• Pfenex had initially offered its bacterial-based protein expression system for production of biotherapeutics, but now has repositioned it to express a large variety of proteins for early stage and preclinical work.

• Biocept was focused on providing technology for cell isolation but now is developing assays for personalized medicine in early detection, diagnosis and monitoring of cancer

• Similarly OncoMethylome Sciences moved from out-licensing cancer biomarkers to developing their own diagnostic tests for early cancer detection

• The most famous repositioning of all is probably the failed heart medicine turned lifestyle hero – Viagra. This drug repositioning concept is currently a popular approach in the pharmaceutical industry, even having its own dedicated conferences

And it is not just emerging and growth stage companies that change their tune. Companies such as IBM, PerkinElmer, and GE have all evolved their life science strategies, both through acquisitions as well as internal repositioning.

What are the benefits of changing direction and redefining their strategy? Surely one has to first admit that things are not going well (or could go much better). Since wholesale change is not easy there must be a big payback on this:

• Move up the food chain to higher value/margin products

• Get away from crowded segments with vicious competition

• Access larger segments that will continue to grow in size and breadth

• Reduce internal expenses and leverage current technology in new ways

• Make shareholders more optimistic about the future

What can you do next: acknowledge there must be a better way, find the greener grass, and get ready for a big change. Like the knobby, spiky cecropia that will soon become the biggest moth in North America, changing your business or company direction can be a very healthy metamorphosis leading to a much brighter future.

The success of this blight is quite remarkable and reminds me (in a dark sort of way) of successful businesses and products. The blight’s attributes are truly something to aspire to, although hopefully in a more positive fashion.

• Very clear target – The fungus only kills the American chestnut, not the Chinese, European*, horse or any other. Your products need to be well aimed into the target market segment. The more specifically the customer can be defined, the better your chance for success

• No competition – Nothing short of forest fires and chainsaws affects the chestnut. They are served up for the blight to attack at will. Everyone would like a market like this – customers just waiting for your product with open arms. The proverbial white space.

• Very effective – Pretty much 100% of the trees succumb to this fungus. Similarly you’d like to see all your offerings leave customers completely satisfied and happy.

• Well established – After 100 years of successfully keeping chestnuts from reclaiming their position as a dominant forest tree, the blight continues unabated. This is nirvana for a company – entrenched products that are adopted by all-comers.

However, even something as successful as chestnut blight won’t dominate forever. The American Chestnut Foundation has been breeding resistant varieties that may ultimately leave the blight without willing hosts.

Though this cryphonectria parasitica is indeed devastating, it does give us some lessons for success. And while you strive to achieve the success on the scale of this blight, just keep an eye on the horizon. Market leadership is not forever, though a century is a pretty good run.

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*For inquiring minds: Technically the European chestnut is susceptible to this blight. However, due to infection of the fungus by a hypoviridae virus, the fungus is less virulent and the chestnut trees survive.