Imagine you are the Manager of an R&D team and you want to accelerate the time to market for one of your projects. You wonder if there would be companies that have already solved issues your team is still working on. How do you perform such a search and where do you start? How do you scope such a project? In this blog, we give you our approach of how to scope and perform such a search and apply it to a case on 3D printing so you get a better understanding. Ready?
Trap of over-analysing
Before we explain what we think the best process is, let's start with the mistake we see many teams make: being perfectionists. Or in other words, by trying to come up with the perfect scope and criteria before they start searching. Teams that take this approach all share the following seemingly rock solid logic:
"You can only start searching if you know what you are searching for." As logical as it sounds, it's flawed reasoning.
Expect to iterate
Unless you are a market expert, it does not matter how many market analyses you prepare, nor how many meetings you have with your colleagues, prior to learning about the topic you are never going to come up with the perfect search scope. In our experience, it is far better to simply start with the approach described below and to be prepared to iterate a couple of times. By the time 'perfectionist' teams are ready with their scope, you will be starting your second or third iteration of the process described below, with far better insights on what the market really has to offer. This is the process we always take.
Step 1: Define your objective
Start with defining the objective and your definition of success. With a definition of success we mean explicating what a target company should ultimately bring you. This is important to improve collaboration with your team so you have a common goal to work towards.
Example: Let’s say you are interested in companies that develop additive manufacturing technology (that’s a sophisticated word for 3D printing), that can handle copper. This would be interesting because licensing such technology might accelerate your time-to-market for producing 3D printed parts with copper.
Step 2: Determine your area of interest
Don't try to be perfect, just loosely define the area of your search. Try to cover a bit more of the area that could be potentially interesting to you and try to explain it in simple terms. You want people that are not necessarily topic experts to be able to understand it.
Example: Continuing with the same case, ideally you would like to see pure copper being processed, but alloys (which is an industry term for a material that is mixed with other materials) may also be interesting to consider. Furthermore, you would like to remain open to the technologies that might be used and you do not have a preference where companies are based, nor their size.
Step 3a: Find several ways to break down your scope…
Try to find one or more ways to break down your defined area: typical ways industry segments can be broken down are by: technology, type of application, part of the value chain, type of business model, base materials or end markets that are served.
Step 3b: … and try to be MECE
For each way you choose to break down your area, you should try to come up with a ‘MECE’ (pronounced “meesee") breakdown. MECE stands for Mutually exclusive, collectively exhaustive (it was invented by Mckinsey, so you can’t go wrong with it :-)). This means that you should try to come up with a breakdown where the companies you will find can only fit in one piece of the breakdown and where it is unlikely to find a company that does not fit in any of the pieces. This helps you in covering all potential areas with your search.
Example: Ways of breaking down the scope could be by material (pure copper vs. different alloys) and by technology (selective laser melting, electron beam melting, binder jetting and direct energy deposition). There might be other technologies that you’re currently unaware of, but this would be a good starting point.
Step 4. Generate keywords and build search queries:
Create search queries for each part of your breakdown. Ideally, you find keyword combinations that are 'generic within your scope’. With 'generic within your scope' we mean: combinations of words that are typically only used by companies that fall in your scope but are rarely used outside the scope of these companies. Typically, you find these words by reading a couple of websites of relevant companies you already know of.
Example: The goal here is to generate keywords that are specific enough to identify companies in each category. For example, copper may be described in English “copper” or in chemical symbols “Cu”. Similarly, technologies may be abbreviated or have synonyms (e.g. SLM for Selective Laser Melting and according to Wikipedia, Direct Metal Laser Sintering is a marketing term for the same process coined by EOS)
Step 5. Categorise companies
Mark all the companies with a category from your breakdown lists. This helps you in several ways. It gives you insights in which areas you found most companies and in which areas you find little to no companies. Sometimes it makes perfect sense not to find companies in one of the categories and you can leave it at that. Or it might indicate that you weren’t creative enough yet and you need to think differently to find more companies! Sometimes you find companies that despite your effort to be MECE, do not fit in any part of your breakdown. Also that can be interesting as new insights can emerge while searching. Remember: You don’t have to have a perfect scope before you can start.
Congratulations, you have your first list (and it is structured!)
After you have performed searches for each and every breakdown, you will have your first company list that covers all the parts of your scope and you can start assessing the companies you have found.
In the next blogs we will explain to you our way of assessing and rating companies. Only after you have assessed the most interesting companies, you will have the input you need for an iteration of your search.
If you are interested in learning how our software platform Catalist can help you accelerate every step in this process, get in touch via the button below and we look forward to showing you.