Opportunity

[Philip Fierlinger]

Some of the great opportunities that still exist or wherever you see a spreadsheet, wherever you see people are emailing, texting, phoning... these are inefficient mechanisms for getting things done. Um and so... a spreadsheet is a particularly telltale sign. If people are running their business on a spreadsheet, now it's similar to Xero actually. With Xero, the major competition, as it turns out, wasn't the big incumbent accounting software companies. Spreadsheets were the biggest competition for Xero, and still are in many ways, it's still... that's why, you know, Xero share price is what it is because that's still there's such a massive opportunity there to win over from spreadsheets and to make these businesses run much more efficiently.

You don't quite appreciate the scale that the rest of the world operates on, and so that can impact your thinking in terms of, you know, the way that you architect a product, the way that you position a product, the way that you approach and market or sell. You know, things happen on different scales that you don't have uh insights into, and so in some
ways I do feel like that's an advantage that I, you know, grew up in the States and I innately understand those... those levels of scale and how the rest of the world operates, and most of the rest of the world, operates in those levels of scale.

[Adrian Packer]

A lot of organisations will have a passion project, they'll have an idea that they want to take to market, or they have a, you know, an idea that they think is going to be a winner. And then another side is they want to um develop a new revenue stream, there's a marketing reason they need some additional income or something. And you'll find that there are two different challenges in both of those scenarios. So, we take the first one, which is the passion project right, um often times we find the hardest part of this is actually getting into... is this really a problem for somebody else? Is this something that's going to be meaningful to the market? Or is it something that I care about on my own, right. In these types of scenarios, the more senior the person is with the idea, the harder it is actually to get that validation to happen, right. We don't find it so easy to find the naysayers in the business, in the team, who are going to say well what is it that's going to take us to validate this idea, how do we really know that this is a winner, not just something that you want. So, one thing that I'd advise all organisations to do is to avoid that group think and to really challenge the people who have those passionate ideas, and ask them those key questions, how do you really know that this is a problem? And how do you know it's a... or it solves a problem? And also, importantly how do you know that it's a problem worth solving, is there a big enough market for this idea to be to be out there.

The second challenge that we see a lot of is we just need a new income stream, we need a new revenue line, go out and find us something, right. And in this case we find um that people's minds and ideas are often constrained around the adjacencies, the things that are close to what they're doing already, and they look for uh an extension... a new type of yogurt for example or, a new type of widget, and they don't really extend themselves to think about what's actually happening in the market and what are the new disruptions that are out there, or what are the transformational things that we should be thinking about.

And so, we take a group of emerging leaders through a process where we're trying to define the customer problem that can be solved. What's the problem that's existing out there, what's the need that's not being met, what's the problem that exists and then we take them through a process of how we can find solutions and build solutions to that problem. We start off with um actually trying to figure out how to solve that customer problem to begin with while keeping some of our mind on the scale side of that solution, but the first part is solving the problem and then the second part is how do I scale it and make it more profitable. This is the challenge of incorporating that new idea into an existing business model, what are the things that we need to do differently, what are the changes that we need to make internally that will make this stick.

[Aroha Armstrong]

Getting excited by your idea and running off is something that I personally see a lot with our customers, and it can be quite difficult to give them the advice to slow down and make sure that they've done the work up front to validate... that their idea is a good one.

[Bridigt Hawkins]

We thought there was a gap in the market, so the regulations were starting to come into force that farmers would have to be able to justify when they applied effluent to land. As it turned out, it probably took the best part of 10 years for the regulations really to come into force, to make that a real gap in the market. But we were there with a great product when it happened.

[Angie Judge]

I was working in the field of telecommunications network analytics, which is a really exciting area of technology but a really boring industry. And one day, I was wandering around at the Smithsonian and I saw one of their security guards who was click accounting what turned out to be 5 million people through the door of that Museum. And I thought what an amazing opportunity for a technology that's being used in another industry to come into this one and help visitor attractions make insightful decisions.

[John Mansell]

We see quite a lot of um technologies coming to at least a point where they need to be validated, whether there's a... product there, whether there's a market there for that product or service. Often it comes from the point where an individual inventor or a... or a group of inventors have come up with something, they've identified a need in their own research space, or in their technology area. And they're wondering if that has broader application. And so often they will have a good understanding of the things that are of concern to them, but it's hard for them to assess how that fits into the wider space.

We usually are bringing an intellectual property focus to that, so it might be an investigation of the patent landscape to help them assess whether there's some intellectual property rights they could establish. But what we need to be mindful of, and what these researchers often need to be mindful of, is at what point do they start making those assessments, and we usually find the best time to be doing that is pretty early on in the piece as it stands to reason really, but it's something that often gets overlooked is understanding how you're going to leverage the value that you have in your intellectual property that is embodied in the product or the service that you're providing.

One of the things we often see is a heightened alertness and awareness on the part of investors on what is the intellectual property space for this particular product or service. What have you guys done to protect that, to understand what impediments there might be to you entering the market, who the other players in that market might be, who can you partner with, and say "look together we can provide this facility to you, here's an alternative solution to what you're currently using, this is going to be of advantage to your product line that's existing in the marketplace already". So, the ability to have those conversations with incumbents as well as you know carving out your own space in there is always going to be of interest to investors as they're coming in to look and assess and do due diligence on a particular technology.

It's unfortunately the case that quite often we find people who have... because often you know people are excited by their product or excited by their service, they want to tell people about it, understandably they want to share the good news of that product or what their developments are, and that can really compromise their ability to leverage that properly later on. And so, understanding the repercussions of what your initial discussions may be is an important first step for a lot of people when they're taking their product or their service and first thinking about market readiness.

[Timothy Allan]

UBCO started in 2014, Daryl and Ant... Daryl's from a farming background, Ant was sort of more of an inventor, came up with this idea of the electric farm bike, and both of them had experience in the e-bike sector quite early days, and I saw it. I was the convenor for the grassroots judging committee... and saw the idea and thought "man that's got so much potential", so we started working with each other and then um the company was formed in 2015 in April.

I think they both just felt that there was an inherent opportunity to create something that was akin to the Honda CX90 or CT110 but electric... and so, you know, really they then basically bought together a bunch of technology that they already had and available and built this prototype in the space of 10 weeks. And then the beauty of the Field Days Innovations area is it's one of the highest throughput, you know, locations in the whole of the field days. And you're getting thousands of farming customers going through giving you direct feedback. So, it's very direct, and then I think that showed that there was some real... potential there and then by developing the brand, the product further, and then coming back and actually saying "okay well we now have a product, and we'll take pre-orders", that then starting to judge, you know, whether or not there's interest there. So, I think it's, you know, UBCO already always taken a very direct way of learning, so it's almost like create the product and then validated as quickly as possible directly with the customer.

[Ross Pearce]

Some of the things I see around opportunity validation, where it falls short for me, is people will validate the opportunity around the end user, but they forget that there's actually a process of getting to the end user and that might be through distributors, might not be the the end user who pays for the product. So they've also got to understand the drivers in the value proposition for all those people in the in the delivery... I suppose, journey to get to the end user. Because if they're not interested in buying it or they can't understand why they'd want to distribute it, then you're not actually going to deliver value to the end user in the end anyway.

Another thing that people do is they validate the opportunity, they... solve a need, they can see that there's scale for that need and then they jump straight into product development, that's dangerous because you haven't really understood all the other things that you need to wrap around, that central opportunity to help make it successful. This is a significant reason why why there's such a high failure rate in both startups and product Innovation where it sits at about 4% which is woefully low, and if we can help lift that then you know we're doing our job.

One of the other areas in that opportunity validation space that people often overlook is the fact that if they've identified a problem, there'll probably be customers out there, early adopters, who are solving that problem in their own unique ways, will have a different solution to to addressing the challenge. So, one of the things that's often overlooked is the is the cost of them switching from doing what they're currently doing to using your solution to solve that problem. Because if the switching cost is too high they're not going to do it.