Real estate agents don’t just sell houses—they enact a well orchestrated process that counters the fear of a high-risk purchase with an irrefutable display of direct value to the buyer. Assuming this approach, we suggest that technology transfer and intellectual property professionals can learn a lot from real estate agents. Specifically, the steps taken to position a house for sale can be used as a template for a new approach to technology negotiation and marketing.
We have identified three stages, inspired by a real estate approach, but tailored for use in a technology transfer environment:
- Anticipate Value-driving Traits: Recognize the important drivers in the “purchase” decision by understanding the attributes that have the most positive effect on the targeted buyer product mix
- Stage the Opportunity: “Stage” the technology by depicting its effects on products currently in the marketplace, preferably within a competitive landscape
- Show the Value to Potential Buyers: Influence the “buy decision” by leading the buyer to internalize the transformed products. This is accomplished by positioning the asset into the terms of the existing company’s new product development strategy
This proposed approach would assist the technology transfer professional by:
- Identifying potential “buyers” of the technology
- Understanding value in the marketplace
- Placing the asset into the buyer’s context
- Strengthening the negotiation position by decreasing perceived risk and demonstrating the potential impact of the purchase decision
Anticipate Value-driving Traits
The real estate agent knows that any potential buyer will have a set of key traits that they are most interested in. The agent understands that the sale will not ultimately come from offering the accepted market standard, but by identifying the unique, differentiating value that will personalize the decision and move the buyer forward. How the agent anticipates and highlights these characteristics is imperative to serious interest by the potential buyer.
In the context of technology transfer, the first step is to identify the market standards—in this case, the particular product mix that is indicative of the industry the technology is directed towards. For this, we have modified a “Newness Map”, suggested by Robert Cooper (the Godfather of StageGate and NPD), which illustrates the average mix of a high-tech company.
Almost 97% could be classified as near (77%) and long-term innovation (20%), which we have matched with the suggested technology horizons. The important takeaway is that products farther from the origin are more risky for a company to adopt, especially those that are newest to the market, thus have a higher perceived risk barrier to overcome.
Each industry or market map will differ in its approach to product mix, but it is an important starting point to understand the level of willingness of the “buyer” to accept the risk of your technology.
Next, we have identified an increase in market share as the ultimate goal and move to identify the traits that will influence the “buy-decision”.
In this simplified exercise, the two most desired traits of a product create the x,y axis, where as the z axis holds market share (%).
The circle represents the market leader and the triangle the potential buyer.
In use, we suggest a full competitive landscape, which can strengthen your understanding of value-drivers and also come in handy for targeted marketing and negotiations
To complete this assessment:
- Identify the appropriate market (can be done focused or comprehensive)
- Capture the competitive products in that marketplace.
- Assess the two most competitive advantages (market data, customer data). In this case, we have identified “cost” and “state of awareness” as our advantages
- Place the products in their appropriate positions based on market share and relative advantages
Stage the Opportunity
Once the real estate agent understands the value drivers, they must overcome the biggest risk to the buyer—choice. In a market with many alternatives, paying too much and choosing the wrong options can create hesitancy. This poses a dilemma for the buyer prior to the sale. The agent’s goal is to provide a solution to that dilemma, by diminishing perceived risk. The reward to the relationship is a sale and a potential increase in the return value.
Like a real estate agent that is selling a vacant house to a yet unknown buyer, an early stage technology will often not sell itself. It is the technology transfer professional’s job to position and diminish perceived risk wherever possible.
The tech transfer professional can do this by “staging” the technology, or indicating how it will affect the product’s traits, and how it might affect relative market position.
Improving on our earlier diagram, we ask ourselves, “what trait(s) can our technology impact and how?”.
We demonstrate this as both a move towards an ideal trait, and also as an increase (or decrease) in market share.
It helps to also note the effect on the market leader, which can be advantageous in negotiation.
Show the Value to Potential Buyers
Finally, the real estate agent is ready to show the property for sale. In this stage they showcase the value-added in terms that the potential buyer can understand—and feel.
The tech transfer professional does this by inserting the technology-improved product into the company’s existing product mix. In the example below, the “Alertness” technology could allow one company to create a more “alert” version of its current technology, at a minimal cost increase. This could create a completely new product line by allowing the company to fulfill an expressed need of the customer. An example of this would be Dayquil/Nyquil.
The same technology, might slightly improve an already market leading product line from another company, providing for a product enhancement.
Creating a format like this could allow for more value driven negotiations be placing the technologies value directly into the company’s new product development portfolio.
In final negotiations, the tech transfer professional may choose to create standard negotiation modes for particular types of products (below). This idea plays on both risk and returns requesting higher terms for technologies with the highest impact potential. It also moves technologies quickly that do not greatly impact potential products.
This article was written for the Vortechs Group for use in its pursuit of identifying, placing and developing leading technology transfer professionals. The approach suggested in this article comes from Optimizing the Technology Transfer Mechanism, Johnson, Jacob, innovosource, 2011