Is your innovation market-ready? We spoke to Innovate UK EDGE innovation and growth specialist, Apoorva Srikkanth, from UCL about market readiness levels to give you a clearer understanding of what it takes to get to market.
Learn how to calculate your market readiness, overcome common challenges and discover the types of support available for innovation-led businesses.
What is Market Readiness Level? (TRL and MRL)
Market readiness is about having the right products or services for your target customer.
Different frameworks are available to assess the readiness of your innovation for commercialisation...
Technology Readiness Level (TRL)
Technology Readiness Level measures the maturity of your technology. Are you in the early ideas and research stages, or has your technology been validated and a prototype been made? Once your technology has been tested and validated with customers, it is ready for commercial production.
Market Readiness Level (MRL)
Market Readiness Level refers to how ready your product or service is to take to market as a commercial offering for a group of customers.
MRL frameworks tend to include the following steps;
- An idea about a perceived need in the market
- Initial research
- Forming an initial offering
- Testing and validation with potential consumers
- Proof of scalability
Technology push companies and spin-outs tend to have a high TRL and a low MRL, while market pull companies can have a high MRL and low TRL and can go straight to the validation stage.
Technology push occurs when R&D efforts drive the development of innovative products, whereas market pull is driven by unmet market or customer needs.
The goal or ‘sweet spot’ is balancing a high TRL with a high MRL. Once you have this, it’s likely you’re ready to commercialise.
Not sure how ready your offering is? Keep reading to find out how to calculate and analyse your market readiness.
Market readiness analysis
When assessing the market readiness of your product or offer, it’s important to ask some key questions...
- Product/Solution Fit - Is the product or service solving a real need? And is it the right time to bring the solution to market?
- Vision/Team Fit - Are you best equipped to be providing a solution for the product? What are your strengths? Maybe it’s your innovative technology or experienced team?
- Product/Market Fit - Is there a willingness from consumers to pay to solve the problem or need? How are your target customers currently solving the problem and will they be willing to switch to your product or service?
- Market/Business Model Fit - Is the market opportunity big enough to make this business model sustainable? Will you be able to achieve a substantial market share?
The more ‘yes’ answers you can make to these questions, the nearer you are to achieving full market readiness.
How to calculate market readiness
To calculate your Market Readiness Level, it’s important to keep track of a selection of key performance indicators, such as;
- Market sizing
- Customer lifetime value
- Leads generated
- Customer usage
One way to assess your current and predicted Readiness Level is to plot your MRL and TRL on a chart with MRL and TRL along the X and Y axis. The closer you get to the top right-hand corner, the closer you are to commercialisation.
Market readiness checklist
If you’re developing new technology and are looking for the right market, make sure you’ve ticked off these readiness components before the final product launch.
#1. Research all opportunities and markets
First, use a wide lens to identify all the markets in which your technology or service could solve a problem. Find out how to identify market opportunities here.
#2. Explore market potential
How attractive is the market for your product or service? Think about market size, how much value can you add and identify any possible barriers to entry.
You could complete a SWOT analysis at this stage to assess potential. Or, use the market opportunity navigator to zoom out and look at the wider markets before narrowing it down to the most attractive ones.
#3. Prioritize market opportunities
Choose a market for further validation and conduct the customer discovery process.
To do this, create three assumptions that need to be true for your offering to be a success, such as;
- The customer will pay for the solution
- The X product solves the X problem
- The customer is willing to switch from the product they currently use
Once you have your assumptions, you need to talk to your target customers for validation.
#4. Engage with the market through consumer validation
Talk to potential customers to test your assumptions about their problems and needs. Talk about the problem, not the solution and let the customer drive the conversation.
You could even ask for newsletter sign-ups at this stage to create potential leads.
#5. Test the product concept with customers
Building a Minimal Viable Product (MPV) or prototype to test with potential customers is a great way of building initial traction.
#6. Is there a product-market fit?
Does your solution serve the target customer segment?
If not, pivot and validate the next best market. If you don’t adapt to consumer needs or change market focus, you are more likely to fail.
Common challenges to achieving market readiness
Achieving market readiness is not without its challenges. Being aware of potential pitfalls and barriers at each stage can help you avoid issues down the line.
Here are some common obstacles to look out for…
A lack of focus
Focus is important, especially when pitching ideas. A common mistake is trying to demonstrate you’re doing lots of things at the same time. Investors want to see that you know your target market well and have a focused approach. We can help refine your pitch through Innovate UK EDGE pitch deck reviews.
Defining a unique value proposition
The value of your product or service to the intended market is key to its success. It’s important to make it relevant and unique to what’s currently out there.
Innovate UK EDGE can help you define and communicate your value proposition through our Value Proposition Canvas exercise.
Reaching potential customers
For B2B companies whose target customers are large organisations like major banks, it can be more difficult to reach customers for validation. If you’re struggling to speak with the relevant people, try to network, make new contacts and send the right signals so they come to you.
Letting customers lead the conversation
You need to keep discussions with potential customers as open as possible. Let the customers tell you their problems and what their ideal solution would be rather than leading with your own assumptions.
Defining a target market
In order to test your product or service, you need to first define your target market.
Moving away from an initial idea
Market readiness is achieved when you have tried and tested the market to determine a fit. If it’s not a fit, you should be ready to pivot.
Moving too fast
Be prepared to fail a couple of times before you succeed. Achieving market readiness can take time and it’s important not to miss out any steps along the way.
Tracking relevant metrics
Tracking the right metrics is vital for assessing where you are on your market readiness journey. Find more information on how to measure business growth through KPIs here.
Missing out IP
Many SMEs think it’s too early to think about Intellectual Property (IP), or think that IP is only for more ‘techy’ companies. However, research from the European Patent Office shows that IP adds more value to low-tech companies than it does to high-tech companies.
Funding and finance
Each market readiness preparation stage requires money to complete. We can help by pointing you in the direction of appropriate grants and funding.
For smaller businesses, budget is often the biggest limitation. At the validation stage, the focus should be on what customers are willing to spend on your product or service.
Market readiness examples - FreshCheck case study
Innovate UK EDGE client FreshCheck has been developing colour-changing technology to detect bacteria and verify surface hygiene. The team originally developed a spray for the food and beverage industry, however, after receiving feedback from customers they decided to pivot the technology to make it easier to use.
Innovate UK EDGE helped the company validate its new range of products to help businesses confirm the hygiene of surfaces and open safely post COVID by engaging with potential stakeholders and customers. We assisted FreshCheck with assessing the market readiness of its technology, helping it to identify key barriers, choose a primary market and develop an IP strategy to enter that market. After winning an IP Audit Grant, we helped it check each product to build further IP and protect future products in the pipeline.
This case study highlights the importance of considering IP readiness in parallel to market readiness. Customer validation should be undertaken before filing a patent, in case you need to rework your offering. If you’ve already filed for a patent and need to repurpose for the market, that’s when an IP audit can help.
The importance of partnerships for market readiness
For small to medium sized businesses, finding the right partnership can be instrumental in establishing market readiness.
When considering partnerships, it’s important to determine the purpose of the relationship. Do you need a partner to help run pilot tests of your technology? This can be a great way to gather important metrics.
Or, is it a joint-development partnership with an established player in the industry? This type of partner can be used to reach new customers and validate your market further. A partner that’s already recognised by your target audience will help you to reach and engage with more customers.
Role of intellectual property in assessing market readiness
IP plays an integral role in the SME journey to market readiness. SMEs are often low on budget and unsure of how to prioritise the IP filing. Our team is developing a framework that connects the IP filing to the TRL and MRL of the business and ensures that you are making the best use of your funds.
For companies in the ideation stage (identifying and defining the problem) we recommend relying solely on confidentiality when disclosing ideas to others.
At the product concept stage (creating a viable solution for the identified problem) we recommend relying on confidentiality through trade secrets and starting to conduct patentability and prior art searches to check if your solution can be protected with a patent.
Ideally, you don’t want to start investing in IP until you have made several iterations of your customer discovery process and have validated the market you want to enter.
Development and testing stage
At the development and testing stage, you should file patents if applicable and conduct freedom to operate searches.
Market traction stage
Before you start interacting with customers with a Minimum Viable Product, create a brand strategy including file trademarks, industrial designs and copyrights.
Get market readiness assessment support
Looking for help getting your offer to market? Innovation and growth specialists work with ambitious innovation businesses to provide support through all stages of market readiness, including;
- Market research
- Market expansion strategies
- Building customer personas
- Market sizing
- Customer segmentation
- Competitor analysis
- Business model canvas exercise
- Value proposition canvas
- Connecting with the innovation ecosystem (KTN)
- Conducting surveys, interviews and focus groups
- Understanding international markets (GBIPs and company missions)
- Helping to pivot technology to fit a different market
- IP strategy
We take a bespoke approach, offering practical support and advice that is tailored to your business needs.
Find out how we can help you enter new markets.