Acceptance of market ‘ambiguity’ can lead to successful commercialisation of early-stage technology by identifying partners and broader potential uses, says a new study co-authored by Professor Jaideep Prabhu of Cambridge Judge Business School.
We hear often that business dislikes uncertainty, because the soundest investment decisions are based on transparent economic policy, a steady political climate, and clear language from policymakers.
Yet when it comes to early-stage technologies, acceptance of market ambiguity – rather than avoidance of such ambiguity – can help lead to successful technology commercialisation, concludes a new study co-authored by Professor Jaideep Prabhu of Cambridge Judge Business School.
Acceptance of market ambiguity results in managers shifting their orientation “upstream” – to potential partners and broad potential uses of the technology – rather than “downstream” toward end users, and this can help uncover indirect paths to viable market spaces and opportunities, says the study published in the Journal of Marketing, published by the American Marketing Association.
“Managers’ downstream focus on end users, while well-intentioned, may result in an illusory sense of direction in situations of market ambiguity,” says the study. “Such a focus may create a false sense of progress and may increase the risk of failure. In contrast, we find that managers’ attention to upstream industry entities – away from end users – can reveal new, indirect paths to market and may improve the chances of success.”
The study is based on a detailed examination of early-stage technologies emerging from a global research university (university labs are typically characterised by market ambiguity), with a particular focus on six new technology projects: a synthetic material, a sensor technology, an optical filter, a surface preparation, a chemical substance and a medical device. The research looked at 1,866 project documents and 12,062 email trails relating to these six tech projects, which provided a rich record of discussions and decisions about the projects in real time. This written record was complemented by detailed interviews with senior technology transfer managers and others involved in the projects.
Of the six projects, the failures displayed the strongest emphasis on target markets, suggesting the project teams avoided market ambiguity; the biggest successes displayed the weakest emphasis on target markets, suggesting acceptance of ambiguity.
“One of the key findings was that acceptance of market ambiguity in early-stage tech projects leads teams to identify broad future outlets and markets for this technology, rather than focusing on end users today,” says co-author Jaideep Prabhu, Professor of Marketing at Cambridge Judge Business School. “This leads to partnerships with other firms developing similar or even competing technologies, and also to the identification of new potential end users for the future.”
The study concludes with three key implications for managers:
Look upstream, not just downstream
Managers are often trained to match tech with markets early on in the project phase, but the study finds that developers of similar or competing technologies (potential partners) “can offer a more realistic assessment of a technology’s prospects and may identify important deficits in a focal technology’s capability”.
Focus on the technology’s evolution, not just its immediate user benefits
Clearly defined performance expectations and tech requirements based on existing market needs can create an “illusory sense of certainty”, so the researchers suggest that managers focus more on a technology’s capabilities and less on current benefits to end users.
Be agnostic, not dogmatic, about market spaces
Identification of market spaces early can lead to an “inflexible stance” about potential market opportunities, and this can result in flawed market analysis.
The study – entitled “Lost in a Universe of Markets: Toward a Theory of Market Scoping for Early-Stage Technologies” – is authored by Sven Molner, Assistant Professor of Marketing, Goldsmiths, University of London; Jaideep Prabhu, Professor of Marketing at Cambridge Judge Business School; and Manjit S. Yadav, Professsor of Marketing at Mays Business School, Texas A&M University.