Deeptech startups

need a
deep marketing

Image generated with Midjourney

Deeptech startups are tackling tomorrow's challenges through disruptive technological

innovation based on scientific research. This is why Deeptech investors are willing to take
greater risks and wait longer.

Moreover, one of the main reasons why startups fail is that their offering does not meet a
market need1. Alignment with market needs is a basic principle that is well disseminated
within incubators.

Does this also apply to Deeptech startups?

Their inventions are so fantastic that they could be relieved of the tasks of market research,
prospecting, promotion, seduction, persuasion, and sales.

On the contrary, in the name of responsibility towards future generations, Deeptech

startups must invest even more in understanding how their potential markets work and
gradually acquire all the skills needed to deliver the promised impact.

This article
• describes the context in which the need for market research arises,
• lists the reasons for postponing this step, some legitimate, others problematic,
• shares lessons learned from practitioners who have navigated in uncertain
environments,
• identifies the success factors to reach the full market adoption, and keep the
founding promise.

1 https://www.cbinsights.com/research/report/startup-failure-reasons-top

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The call of the open sea

Focused on their scientific and technical challenge, Deeptech startups need to work within
a dense R&D ecosystem, close to experts and rare resources. They also need to attract the
support of investors willing to back them during the technological maturation phase.
Among the good fairies surrounding the startup are experienced advisors. They are often
the ones who introduce the startup's managers to potential market players: influencers,
experts, economic decision-makers, public authorities.
Exploratory meetings in the market provide initial feedback that can range from sheer
enthusiasm to a wait-and-see attitude. These signals are not enough to map out a clear
route to market. How do you respond to enquiries from potential customers or partners
whose role and place in the market are still unclear, as are their real strategic intentions?
How can you say “no” while preserving the relationship for later? Given the startup's limited
resources, the choices are often thorny.

Wait a little longer

The urge is strong to postpone the answer to the questions that arise when it comes to
understanding the market.

Some reasons for this are legitimate:

• The short-term priority is to raise funds.

• The results of the first demonstrator are not yet available.
• The small team is overloaded.
• The practical potential of the invention has not yet been fully explored.
• The potential markets look like unchartered territories, and exploring them requires
skills that are not yet available.

Some other reasons are more questionable:

• The startup focuses all its attention on the technological solution. It does not know
enough the context of users, and the alternatives they consider to solve their
problems.
• It overestimates the potential of the invention, and does not consider choosing one
potential use case to the detriment of others.
• It underestimates the adaptation efforts that customers will make to switch to their
solution.
• It underestimates the resources needed to enter several markets, whether in terms
of knowledge of each one, the time required to acquire a new customer, or the costs
of adaptation.
• Sometimes investors are responsible for introducing the startup directly to
customers. Sometimes it is the buzz that fills the order book. In both cases, the
team has the reassuring feeling that "the business comes on its own, there's no
need to do more". Conquering a significant market share in a segment will have to
wait.

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Practitioners of market adoption

Meeting practitioners who have repeatedly gone through the entire cycle from the birth of
the invention to market adoption can be pivotal. They have fallen into the traps or avoided
them. They have fought against their own biases and spontaneous inclinations. They share
the lessons learned from experience of navigating under great uncertainty:

• The success of a technological invention takes place outside the R&D centre,
through a successful market adoption. The planets have aligned between the
existence of a problem among users, the emergence of a new solution to this
problem, the support of market players, and a favourable general environment.

• Running in parallel the technological maturation and the market

exploration means that you learn about the market at an early stage. This will
enable a better decision to be made, particularly on adapting the product
development to market expectations and constraints.

• The choice of the first target market is crucial. Plug Power, the new American
entrant in the fuel cell market, created in 1997, overtook its Canadian competitor
Ballard Power Systems, established 10 years earlier. In contrast to Ballard power
Systems, Plug Power chose to equip electric forklift trucks first, an unglamorous
application, but one in which its solution offered clear user benefits, and rapid
economic viability. The decision to start with this segment, and therefore to forego
all other opportunities, was probably a heartbreaking one. Success in this first
vertical opened the door to the big markets, such as passenger cars, trucks, and
green hydrogen.

• The drawback of disruptive innovation is that it disturbs the players in place.

While the expected gains are considerable, disrupting the market requires a certain
amount of market clout: time, money, and influential partners.

• Alongside technology, business development is a company's second leg. Getting

a "sales machine" up and running requires efforts comparable to those made in
R&D.

Diving into the market

This is usually triggered by a combination of factors:

• Rising financing costs, after an atypical period of low interest rates. Investors are
again focusing on the timeline of economic viability.
• A market environment that has become buoyant in the aftermath of a crisis, a new
regulation, or because of the simultaneous emergence of new technological offers
in a particular field. This draws the attention of media and experts, and market
demand takes off.
• The removal of major technological uncertainties for the Deeptech startup.
Managers kickstart the commercial development of their technology. One person or
a team is dedicated to business development.
• Managers realise that they are more vulnerable if they are behind in their knowledge
of the market and their ability to acquire customers:
o Entrusting the marketing of your products to others means giving up on
building an independent company that defines its targets and chooses its

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 partners. And risking to become a subcontractor over reliant on a few
customers.
o Sometimes, the plan of founders to sell their share of the company's capital
overshadows another entrepreneurial path: that of gradual and methodical
access to the status of a medium-sized company with global reach. This is
the choice of many German and Italian entrepreneurs, who have a culture
of long-term investment and crave of financial and managerial
independence.
o A breakthrough innovation rarely emerges on the market on its own.
Alternative offers mushroom, and there is a global race to reach critical mass
between competitors. Not participating to this race may impair future
competitiveness.

The first steps

The conversation with the practitioner focuses on validating the business plan,
understanding the market, and building the "sales machine". The core stakes are:

• to adopt a new perspective, getting out of our comfort zone

• to acquire a direct, in-depth, systemic understanding of the market,
• to gradually reduce the uncertainties with a sequence of validation milestones:
legitimacy, desirability, acceptability, feasibility, viability2,
• from the outset, consider the adoption of the innovation by the market as a long-haul
project.

Exploring the market is an intense experience that inspires with contrasted feelings:

• amazement and discovery when you immersing oneself in sectors and professions that
have their own jargon and codes, or when exploring new geographies,
• disappointment because of the discrepancy between your initial understanding of what
the market expects and the reality,
• dismay when realizing the entrenched everyday habits and structures, the numerical
importance of users who are followers, or who have little desire to change,
• feeling overwhelmed in front of the complexity of the ecosystem: the players involved,
their individual strategies, the balance of power between them, the opacity of the
decision-making processes within the big customers,
• surprise to see the wide gap between official posturing and rhetoric and reality.

Many adventures along the way

The startup's managers will face some daunting marketing challenges:

• Imperfect knowledge of market realities: market studies, digital sources of

information, meetings with experts, etc. are a first step. There is no substitute for
meeting, listening to and directly observing users, influencers, and decision-makers.
This is what enables to gauge the impact of the innovation on their daily lives, to discern

2 We are referring to the Business Model Design approach of the company Vianeo, which capitalizes on more
than 10,000 ideas converted into innovation business projects, and constitutes a world-class reference.

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 unintended side-effects, and to measure the efforts being made to change habits. This
is the case with additive printing, a revolutionary manufacturing process, whose optimal
use requires sweeping changes not only in the workshops but also within the parts
design teams.

• The tension between taking the time to explore the reality of the market and the
startup’s daily obstacle course: incubator support programmes, boot camps run by
innovation experts, training in design thinking or business model generation all enable
progress to be made within a few days. But in a context of fragmented information,
there are dead ends and shortcuts. The right information is delivered in dribs and drabs,
as daily actions and exchanges unfold. Decisions are only taken once enough
information has been cross-checked, digested, and interpreted. Many painful
reorientations find their origin in the difficulty of coming to grips with both time
horizons. We may regret not having begun by understanding our market.

• The temptation to resort to ready-made business development solutions: In their

haste to win customers quickly, managers may be tempted to use turnkey solutions:
offering qualified and profiled sales leads, canvassing on behalf of the company,
automated marketing, and recruitment campaigns, etc. While they can provide a
valuable contribution to test the market and take the first steps, the Deeptech startup
must remain on the driver’s seat when it comes to build the customer
acquisition process itself, i.e., from communicating to make itself known right
through to signing the contract. There are three reasons for this:

o Clients will not commit without first meeting and establishing a direct
relationship with management. They need to assess the risks and opportunities
of working with such a young company.
o The first implementation of the disruptive solution is likely to require a close
collaboration. The startup will adapt its offering to the partner's needs and
constraints. This adjustment phase cannot be entrusted to a third party.
o A disruptive offering requires significant pre- and post-sales support: assistance
with the business case study, prior user training, integration engineering, real-
life testing, organisational, safety and environmental impact analysis, etc. The
sales machine will be built around these stages.

Rewards that match the challenges

High-quality marketing supports decision-making and the achievement of milestones.

Marketing and business analysis will provide the facts and perspectives that enable
informed discussion on strategic issues: the choice of the first market to target, the choice
of partners for commercial development, the launch offer, the revenue model.

And managers will be able to draw on marketing and business development know-how for
a whole range of operational decisions: the design of offers, sales tools, communication
content and activities, key account development, pricing policy.

With hindsight, managers will recognise that a deep marketing approach has enabled them
to revisit their initial views of the market, to better detect business risks and opportunities,
and to lay the robust foundations of a customised and efficient sales machine, ready for a
scale up.

While Deeptech startups wholeheartedly champion disruptive innovation and

transformation through technology, users expect progress without any conversion efforts.

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Neither techno-solutionism nor traditional mass marketing can overcome this antagonism.
The former denies that it is the customer who ultimately decides. The second views the
customer as a passive, manipulable actor.

The printing press, the weaving loom, electricity, the smartphone, generative artificial
intelligence, autonomous cars, 5G networks... these disruptive innovations have first and
foremost transformed the lives of users. It is best to place them at the heart of the
innovation adoption process.

By embracing a deep marketing mindset, the startup's managers keep their eyes open on
the world as it is, to find the best possible path, channel the energies of favourable players,
be the preferred partner, tip the market towards adoption, and deliver impact.

Geoffroy de Grandmaison

Geoffroy de Grandmaison has devoted his career to marketing in the industrial and technology
sectors, first in market research and marketing consultancy, then as marketing director in
international industrial groups. In 2023, he founded GdeG Consulting to help young or mid-sized
companies to lead their market through innovation.

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