– A Norwegian to US Comparative
Successful global growth of ICT, medtech, green tech/sustainability and consumer product innovations (as a result of great creative minds, research, academia and public support) can be the future for the Norwegian economy.
However, sustainable growth requires more than a product idea. It demands skillful commercialization to drive customer adoption and revenue generation. Funding ultimately comes from profitability but during the ‘startup period’, investment is needed to build the solution and acquire initial customers. The source of the funding, process for attainment of customer commitments and time to market is often quite different for Norwegian compared to US companies and entrepreneurs.
Norwegian Innovation Path to Market
- An entrepreneur or innovator within a company has a great idea
- Fundraising – investor presentation developed, pitched, discussed
- Product development
- Additional fundraising for finalization of product and customer acquisition
- Beta customers and product refinements
- Fundraising for market entry
- Revenue generation
- Profitability from sales / operations or additional fund raising to support growth
US Innovation Path to Market
In the US, speed and timing are often the greatest determining factors for the success of an innovation. By reducing time to market and accelerating customer and revenue attainment, US innovators have achieved a 25-40% success rate for bringing new solutions into the market – within 1-2 years from conception of the idea.
- Norwegian entrepreneurs put much more time into raising capital and product development (instead of customer / market development). This results in Norwegian company’s average time to market of 3 -8 years versus 1-3 years in the US.
- Less capital is raised in Norway through more small funding rounds.
- US companies accelerate time to market and revenue generation through gaining feedback, validation and customer commitments for the solution during the development process. In today’s rapidly changing environment, this has a significant impact on success rates.
- Investor expectations for revenue growth, profitability and time to exit are much greater in the US.
- Success rates for US innovations (and those funded by institutional investors in US) are significantly higher than Norwegian entrepreneurial success. On average 15-25% of US startups achieve sustainable growth while the rate of Norwegian companies is estimated to be 2-10%.
For the complete article on the Path to Success please visit www.nextstepgrowth.com.