Don’t wait for the data, if you want commercial insights, make a start…
I’m working with a couple of large charities at the moment, to help them develop commercial income in relatively new markets. The opportunities fit pretty well with their respective missions, and enquiries they’ve had in the recent past suggest there might be a lucrative market, but the evidence is sparse, the internal expertise to build a new business is relatively low, and the investment required, potentially quite high.
It’s a common situation for charities wanting to grow traded income, and internal stakeholders seldom make it any easier. The Board wants a robust business case before they sign off investment, the staff want to know what they can offer before they talk to customers, and the leadership want confidence that if they put good people on it, their time will pay off. The reason so many charities in that situation get stuck, is that meeting all three needs is like squaring a circle, it’s logically impossible.
Before I came on board, both of my clients had undertaken research to develop some commercial insights. They hoped to understand the market potential and the type of proposition they should be offering. One used their own people, the other employed an external agency – but neither found solid answers. And there’s a simple reason for that: the information doesn’t exist, and that’s a really good sign.
The paradox of market research is that the more data you can get, the less attractive it will be. If you can get all the commercial insights you need from desk-based analysis and telephone interviews, what that tells you is, the need is known, the market is established, the competition in place, and taking a profitable slice of business away from any of them is going to be pretty darned tough. It also raises the question, if a market is already functioning, what are you, as a mission-driven organisation, going to bring to the party that will dramatically change the status quo?
Conversely, where it’s most difficult to get hold of any data; where need, demand and supply are most difficult to quantify; where it’s hardest to define exactly what people will need from you, and nigh on impossible to build a business case; that’s where the greatest opportunities can be found.
The best way to develop high value commercial income with genuine impact, is to find unmet need and to create new markets around it, which means all three of the groups I mentioned need to change their expectations. Boards need to allocate a fund “at risk” to explore an opportunity that may not prove viable. Staff need to get out there without a defined offer, to have unprejudiced conversations with potential customers, who themselves may need help to understand what they want and what difference it would make. And the leadership need to forget about having confidence in the opportunity, and instead, put their faith in the team to find the need and suggest, often quite novel, solutions.
As one of my clients said a month into our project, “We’ve learned far more in the last four weeks than we got from six months of research, and it’s sounding more and more like there’s a market for us here, even if it’s not the one we thought it would be.” Those are the most valuable commercial insights, and you can only develop them once you’ve started.
It’s easier to change direction in your car once it’s moving, and the longer you try to evaluate opportunities from the safety of your office, the more time and money you will end up wasting. So, pick a few ideas, start your engine, take off the handbrake, and get your teams out there.
It’s far better to risk failure with a chance of success than to avoid them both through lack of data.