In 2018, Lux Capital’s Shahin Farshchi and I talked about the emergence of alternative proteins over coffee and other topical issues. Shahin asked me what I believed was a rhetorical question at one point: Our portfolio firms are fantastic as pilots, but scaling up to full-scale commercial rollouts is a difficulty. How do your businesses go past the pilot stage?
I was stumped for a response and found myself deep in thinking long after our conversation was over. As a deep tech VC, I know that my portfolio firms will confront commercialization problems as they go from tiny pilots to large-scale rollouts. This is a significant, pervasive, and industry-specific issue. But, although I don’t claim to have a silver bullet answer, I do know three ways deep tech founders may ensure that their time in pilot hell ends with a deployment.
Define the conversion metric you’ll use. If you only have three clients to choose from, and the one you’re speaking with doesn’t appear to be one of them, keep looking. Most clients, in my experience, have no idea what success looks like when adopting new technology. This can be due to the fact that the technology is new or introduces new procedures, but it’s also due to the fact that each stakeholder defines “success” differently.
Only if all of the key stakeholders who will sign off on the commercial contract agree that your pilot is a success will it be considered a success. On a conceptual level, they’ll be able to explain what a successful pilot looks like, but asking them to characterize it as a metric may result in a chorus of crickets. Engaging these stakeholders in defining success as a measure, as difficult as it may appear, will eliminate post-pilot uncertainty.
An excellent pilot is one in which everyone has a clear picture of what success looks like. Understand what your pilot demonstrates. The widespread consensus is that early-stage firms should concentrate on demonstrating product-market fit. This means that your pilot must finally demonstrate that investing a large sum of money now will result in a large sum of money afterwards.
