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The Wide Gap Between Concept and Commercialization

April 2006 Corporate

As an entrepreneur who interacts with other entrepreneurs, we live in a world of concepts – and they are a dime a dozen. A concept is an idea or rationale that assumes a need in the marketplace for some product or service and usually follows a thought track based on “if” and “then.” “IF such a product or service were available at some price THEN people would buy it.”

Taking that concept and developing it into a business requires a major leap. In fact, as I often tell my students, the difference between a concept and a money-making commercial enterprise can be compared to the difference between an amoeba and a human being. The gap is that great.

In fact throughout history, inventors have come up with breakthrough ideas but did not have a clue on how to commercialize them. As a former “Ma Bell” alumnus, I learned that Alexander Graham Bell gets credit for creating the telephone but a far lesser known person, Theodore N. Vail, the first president of AT&T, created the telephone business.

Why is it so difficult?

Ask any successful entrepreneur about the hoops they had to jump through before their concept became a money-making business and you’ll discover that famous 1/99 ratio. One percent inspiration and 99 percent perspiration. While coming up with concepts is an exercise in dreaming, the formation of the business is pure grunt work. It is a process that takes hours of time and painful analysis.

Raw ideas have to be molded and fabricated into business plans, marketing plans, Web sites, pricing and distribution strategies. Products and services have to be named and these names cannot conflict with established brands, trademarks and/or service marks. If the concept will result in a business where will raw materials and component parts come from? How will these materials be fabricated into a product? How will such a product be distributed? How will it be priced, packaged and promoted?

Then, there is the huge issue of financing. How much money is it going to take? Where will the money come from? What rates of interest will you have to pay? What kind of funding will be needed to sustain the business? Is there seasonality and if so where will the funds come from during those times of year when cash is not flowing into the business?

Don’t forget personnel. Are you planning to run the venture by yourself or will you need help? Where are you going to find this help? How much are you going to pay them? Will you have some kind of benefits – i.e. health insurance – plan?

This mind-boggling list goes on and on. It’s like the Iraq War. What seemed so easy and clear at the outset has now become mired in a struggle with no end in sight and the promise of a continual waste of lives and money.

The Success Stories

What seems to sustain the entrepreneurial culture is the abundance of success stories. The Bill Gates’, Steve Jobs’, Googles and Yahoos. Clearly the pot of gold at the end of the rainbow can be a reality, but for every one of these glowing successes there are probably thousands of failures. Worse still are the concepts that didn’t quickly fail but have lingered on for years in low growth/no growth slow death scenarios. The business really isn’t going anywhere but you’re not ready to throw it away.

One Step at a Time

Moving a concept into commercialization is a slow, steady, one-step-at-a-time process. Don’t jump in with both feet. Proceed gingerly. Get as much (free) advise as you can. As a wise man whom I worked for many years ago warned me – “Always look for what’s wrong and not for what’s right.”

Also look for similar situations and learn from the mistakes of others. You don’t have to make all the mistakes yourself. Find business models that apply to your situation.

Use templates when available. The Internet is loaded with business plan and marketing plan outlines. You don’t have to reinvent the wheel.

Find wise people who know you, can understand your concept and can provide you with advice. Don’t limit yourself to those optimistic “glass is half full” people who have never seen a new concept that they didn’t love. Find experienced, sober people who have experienced the pitfalls and can point them out to you. If somebody doesn’t like your concept – find out WHY. Look for people who are skeptical NOT cynical.

Press On

If after your thoroughly examine the concept and decide to jettison it, don’t give up. Keep looking for new ideas.

As an entrepreneur, I continue to delight in developing the concepts. I love the world of ideas. However, I am smart enough to realize the pitfalls BEFORE I invest the time and thankfully, before thousands of dollars have disappeared down a rat hole.



About the author

James T. Berger, Managing Editor of The Wiglaf Journal, through his Northbrook-based firm, James T. Berger/Market Strategies, offers a broad range of marketing communications, research and strategic planning consulting services. In addition, he provides expert services to intellectual property attorneys in the area of trademark infringement litigation. An adjunct professor of marketing at Roosevelt University, he previously has taught at Northwestern University, DePaul University, University of Illinois at Chicago and The Lake Forest Graduate School of Management. He holds degrees from the University of Michigan (BA), Northwestern University (MS) and the University of Chicago (MBA). Berger is an often-published free lance business writer who has developed more than 100 published articles in the last eight years. For more information, visit www.jamesberger.net or telephone him at (847) 328-9633.

James T. Berger
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