This is the second chapter of the Basket Case story but it is also a tale in its own right.
Despite confident claims about this company’s products’ efficacy, there was no documented or quantified measure of performance – proof – beyond a litany of anecdotal ‘case studies’. Interestingly, many of these anecdotes emanated from major blue-chip users which gave them an air of credibility. The Technical Director was pressed to provide formal proof but failed to do so.
In order to ramp up marketing we needed to be able to support performance claims unequivocally. With the departure of the Technical Director it fell to me to research the 30 year old claims and provide a tangible, quantified explanation for all the anecdotes.
There is a scale for assessing Technology Readiness Levels which was devised by NASA in the 1980s. It is numbered from 1 to 9 and records the progress of an innovation from germ of an idea through to a fully proven product.
The technology was believed to be TRL9; after all, it was 30 years old and had been widely sold during those years. For its marine applications products were certified by Bureau Veritas. For potential defence sales, products had NATO part numbers. The products met the requirements of the Pressure Equipment Directive, ATEX and a plethora of other standards. Impressive, jargon- and acronym-rich technical blurb.
In actual fact these products barely met the criteria of TRL1.
The course to TRL9 was now the urgent focus of the business. The Design Engineer, Business Development Manager and I, assisted by a freelance scientist, devised a controlled series of test experiments. This required establishing a microbiology laboratory and the building of test rigs. So much for ‘just needs more sales’…
Early results were highly encouraging but it is important to consider scientific research results without prejudice. Repetitions of the test flagged other variables we had to design around and eliminate in our quest for the definitive test and measurement. This happened several times until we had eliminated all variables. It was a roller coaster year culminating in the result we feared: the original product claims were false.
We did however learn what the products actually did. We could also explain the decades of anecdotes and why – under certain conditions – the products appeared to meet the original claims. We even learned how to improve them! It really was a most extraordinary sequence of events but, alas, the true product function was not even close to the magic of those original claims. Demand would therefore be considerably lower than envisaged, calling into question the viability of the enterprise.
Financially, the business was a basket case. Far from being a manufacturing business with global potential, it had turned out to be the nightmare of all tech investors: a research & development black hole.
Aside from the matter of a product that did not meet its opening claims, there was a lot right about the business. Plan, structure, capacity, processes, people – perfect. As a small group we had shared a most unusual and uncommonly challenging mission. The only thing wrong in our business was the product with insufficient demand.
What if we could find a different product to manufacture?
One of my guiding principles in business is the definition and refinement of the formula. The formula holds a considerable amount of value. It is the summary of processes that makes businesses perform better, more predictably and, most importantly, makes them worth more when the shareholders want to sell.
My original intention with this particular business was that it would serve as a template for a group of future start-ups or acquisitions. So, discarding it would not only write off the considerable amount of cash invested, but also lose hard won intellectual capital.
The acid test for the small team’s understanding of the formula would be for them to apply their knowledge of processes to a totally unrelated market sector.
In the words of Monty Python: and now for something completely different.