I tried to make snow the other day, but much to my surprise, I failed.  I couldn’t believe that my exquisitely designed system of a leaf blower, hose sprayer and duct tape did not produce the wintry landscape that is absent this year.  Instead I got an icy coating on the brown grass and frozen fingers.  This similar situation befalls companies that have a “great” idea, spend a year or more turning it into a product, only to get a tepid reaction from the marketplace.

I had spent several months thinking about my snowmaking system so where did I go wrong, and how can you be more successful with your new products?  Here are a few suggestions.

• Talk to the snowmaking guys.  I had skied by dozens of experts on the hills, but never stopped to ask them some basic questions about turning water into white stuff.  Be well engaged with your target customers – understand how they work, what’s in their way, and whether your product will improve their world.

• Test the snowmaker before you are in need of covering your lawn.  Getting your product in the hands of customers before it is launched is very important.  Like me, you have great ideas…but are they really going to benefit the customers as much as you think?  Better be sure on this.

• Know the environment.  I had assumed that below-freezing air temperature was enough, but what about humidity, wind, etc?  No idea.  Look closely at your market so you are not surprised by unexpected barriers in the way of your success.  Are there regulatory issues, are your prospects funded, is the market large enough, what are the alternatives to your offering?

• Build a better snow maker next time.  I did learn quite a bit from my failure.  Next time I will use a finer spray, colder temps, and drier air.  If your product stumbles out of the gate, all is not lost.  Be on the lookout for this early feedback and be ready to re-tool, re-position, or re-price before your product becomes maligned in the market.  View the launch as the midpoint, not the end-point of product development.

So long before you send your product out into the marketplace, be certain you really understand how well it will fit with your customers.  The alternative is thin icy cover, frozen hands, and wasted duct tape.

If you trace the journey of a log from its stump to a piece of fine furniture, you will see a similar process to developing products from concept to profits. You start with some raw materials and a good idea, add lots of effort and capital, a little luck, and out the other end comes something that customers pay handsomely to acquire.

• On the stump – A log on the stump (aka a tree) is worth about $50 to $100 per MBF.* This is like you and your colleague having an idea over a cold drink. It is a good starting point, but is not really worth much yet. It is a long way between this tree (concept) and a nice coffee table (products). If you look at biotherapeutics, over 80% of the cost to develop them is dealing with formulations, clinical trials, regulatory issues, and production engineering.

• Saw logs at the mill – Here the tree has been cut, skidded, sawn to length, and delivered to the mill on the truck. The value is about $500 per MBF, and this increase in value pays the labor, overhead, costs of trees and profit for the logger. At this point you have your innovations patented and the value of your enterprise has increased, albeit not much. If you look at typical royalty rates for patent licenses they are often in the 3-5% range.

• Rough cut boards – Now the wood is starting to be in a useful form, with a commensurate increase in value to around $2 per BF. Your product has progressed to the proof of concept stage, and your concept now works quite well. It is indeed able to do what you had dreamed about months or years earlier.

• Dry, planed and cut lumber – This wood is ready to be turned into useful things. At Home Depot this will set you back about $6 per BF for a red oak board. Your business is now gaining in value as you have a prototype to demonstrate to customers, and they like what they see.

• Finished furniture – This is where the greatest transformation in value happens. From less than $100 in lumber you can create an $800 table. Your product has passed all its tests and is now in the market. Don’t forget, though, that you will still need to get people excited about your new offering so they open their wallets.

So whether you are crafting a fine coffee table or developing the next MRSA diagnostic, you will build value as you progress down the development path. There are few shortcuts, and it takes time and lots of work. But eventually you will transform your raw logs into valuable products and an invaluable business.

* board foot or BF is a standard measure of wood volume equal to a square foot of wood, 1 inch thick [a foot of board], or 144 cubic inches. MBF is 1000 board feet

We’re not supposed to get a foot of snow in October, but that’s what greeted me the other morning – along with no electricity… The transition from summer to winter (aka fall) is supposed to happen a little smoother – some cool crisp days, maybe a frost or two, then a few flurries in November, and frozen ground mid December. Fall foliage covered in snow is not in the plan.

This disorderly move from one season to the next is similar to the growing pains many companies experience. Instead of seamlessly adding new channels or upgrading processes, they often stumble their way to the next level. Since growth is pretty much at the top of everyone’s list, successful companies will eventuality run into these bumpy transitions. This happens whether they are adding outside capital or building sales organically.

So what can you do to try to avoid getting snow on your foliage? Here are a couple ideas.

• First is to realize that it will happen. Companies growing from a few $M to $10M as well as those going past the $50M watermark will run in to this. It’s human nature to put your head down and grind away, assuming these little challenges are just another small hill to surmount.

• The most obvious sign is that you and your people are getting lost in your pile of information, and becoming less organized in your execution. Spreadsheets are no longer giving you the forecasts you need – its time to put in some infrastructure and processes that are designed for this purpose.

• Management styles need to evolve from the collegial, flat, all-for-one approach to a more formal organization. I’m not saying you need an HR department, but the organization needs more structure to function efficiently.

• Last, but certainly not least, your strategy needs to move from a product or product-line focus to a broader corporate viewpoint. A product view will get you to a couple $M, but more pieces are usually needed to build the company to the next niveau.

Growing your company is a somewhat chaotic, but supremely satisfying achievement. But be aware that snow can fall before you expect it. When the warning signs appear, be sure to change the way you are doing things, before the lights go out.

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.