Market Validation: It’s Role in Contemporary Incubation 2011 APEC Incubation Conference, Xi’an RICHARD WHITE

Internationalisation “We know that turning a tech start-up into a global company is hard, very hard. There has been much rhetoric about internationalisation, but so far few demonstrably successful initiatives.” “China’s investment in International Business Incubators, such as her in Xi’an and Shanghai and other cities, have provided opportunities to New Zealand and other countries that have not been taken full advantage of.”

What is Market Validation? “Market validation is evolving as a formal and highly robust process through which ideas, technologies and products can be tested with potential buyers in the targeted market.”

Talking to Customers?! “Too often, an inventor’s emphasis is on technology validation rather than market validation. Talking to potential customers is left until a product has been invented, prototyped, adapted and perfected, only to find out when the time comes to try and sell it that in many cases it doesn’t meet the needs of the market at all - the classical technology push approach.” “Inviting potential customers into the process can build customer awareness, relationships and sometimes even loyalty well before the product is commercialized and available to the market.”

Benefits to All “Market validation is not only good for researchers, inventors and entrepreneurs. It is good for investors, who as they become more sophisticated and more selective (this is after all an investment class that is highly risky) are demanding to see the documented results of genuinely robust market validation.” “And market validation is certainly good for incubators….”

Born Global! “Most of us operate in incubation environments that encourage or even demand a high growth, export and internationalization focus from the ventures we work with. For small export oriented economies like New Zealand, the concept of “born global” is fundamental.”

New Zealand’s Global Reach Challenge Radius 2,200kms 4 million New Zealanders and quite a few fish Radius 2,200kms 1.4 billion people, 12 countries

Let’s Use our Networks “A number of countries have experimented with investment in their own in-market incubators or soft landing zones. Frankly, these capital intensive investments often end up as white elephants.”

Market Validation as a Catalyst “A market validation hosting program would be a great starting point or catalyst for a multi-lateral co-incubation agreement, the basis upon which deeper co-incubation relationships will follow.”

Contents of an SLA A service level agreement (SLA) for market validation support between incubators party to an APEC co-incubation network could take the following form:   1. Access to space, services and infrastructure 2. An agreed number of hours of advice and mentoring 3. An orientation program on local culture, customs and business practices 4. An introduction to other clients within the incubator 5. Intern support 6. Introductions to potential customers or investors 7. Advice on IP protection issues and strategies 8. Security, confidentiality and disclosure protocols 9. Expatriate introductions

A Sensible Option “Access to these services….provides a low cost and relatively safe opportunity for the start-up to conduct its market validation and to see if it is comfortable with the local business environment and other aspects - before a making a commitment to a full go-to-market strategy.”

Achieve Our Goals “It is important for a market validation process to become standardized and systematized by network partners, so that awareness of what the process is trying to achieve, how it is being implemented, and delivery of support services by the host incubator follow automatically, in all countries.” “As this form of co-operative intervention is seen to demonstrably work, so the APEC goals of technology flow, cross-border investment and market access initiatives will follow and accelerate.”

New Zealand’s Global Reach Challenge Radius 2,200kms 4 million New Zealanders and quite a few fish Radius 2,200kms 1.5 billion people, 17 countries

Thank you RICHARD WHITE