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SR&ED – More Than The Sum of Its Parts

January 9, 2015 By Alex Grgorinic

Inventors are a special breed. Their quest to create something new, driven as much for the self-fulfillment of pulling it off, as for the commercial gain, is much to be admired. There are many great stories but one that that really grabs me is that of Robert Kearns, the inventor of the intermittent windshield wiper. I remember first hearing his story over the car radio during a rainy day, where the DJ purposefully picked up on the tidbit of news that Robert Kearns had died. This, after a career lifetime battling to prove that his invention was patentable.

What is interesting about his plight is the parallels and insights to the SR&ED audit process.

The crux of the story is that Robert Kearns had designed and patented the intermittent windshield wiper. Naturally, he shopped the idea around to the auto manufacturers. But, their engagement was of a very unscrupulous nature, and Ford was the first to simply copy his design. They had already been working on their own design, but just couldn’t get this intermittent thing to work reliably and consistently.

Robert Kearns was a man of principle and was driven with the purpose to set the record straight. He embarked on a legal battle that consumed him for the rest of his career.

It is the legal argument that has a good parallel with the SR&ED audit process. Ford’s defense was on the basis that the intermittent windshield wiper was not something that was patentable (even though patents has been issued by the US Patent Office). Their claim was that the design did not meet the patent standards for originality and novelty. Ford deemed that the solution was obvious, because it did not use any new components in the underlying design.

This process is very much akin to what happens in the SR&ED audit process. The SR&ED technical reviewer is driven to subdivide all activities into their most basic set of activities. And then comes with the assertion: “This is what you guys do every day”; and: “There is no uncertainty or advancement in completing these tasks”.

Robert Kearns’ defense was that it made no sense to look at the components that were used. That part did not matter. What really mattered, was in how those components were combined in order to accomplish something that had not been done before. In the movie dramatization, Flash of Genius, he uses the analogy of taking a single word out of the dictionary. Plucking any set of words out of the dictionary does not make a great work of literature. It is how those words are combined that can yield a literary masterpiece.

It really doesn’t seem that hard to understand. Inherently, it is possible to break down any product, system, process or material, into some set of building blocks. And each of those building blocks may form part of a base set of knowledge. If you are a developer, it is your job to know the building blocks that are there for you to develop. And surely, it is reasonable that as a developer, you know how to combine the building blocks in order to create something greater than the sum of the parts. And to a degree, this is true.

But just because the project can be subdivided into a base set activities, does not mean that there is no risk and uncertainty in combining those activities. And with SR&ED audits, winning this argument has become harder than it should be. Unless you are prepared for the audit strategy used against you, it will be tough go.

Filed Under: SR&ED

Different Stages – Different Tactics

December 17, 2014 By Alex Grgorinic

If you have ever sold your home, you know that one of the key challenges is in picking out a real estate agent to work with. Now, there are no shortages of real estate agents. You could probably pick up the phone and have a bunch of them at your house on the same day. Finding one is not the problem. But determining who or what to believe gets much more challenging, in your decision of who to select.

My first experience in the process was certainly more enlightening than I had expected. As a first timer, I chose to narrow the selection based on a recommendation. I so optimistically listened to the bright and optimistic expectations that were laid out before me. Unfortunately, the reality turned out be something from a completely different storybook. There was absolutely nothing that happened. I barely knew that my home was for sale.

So I moved on to a second recommended agent. And this time, I could not believe what I was hearing. Just a ton of pessimism and negativity. It was as if I was dealing with the evil twin of the first agent. Things had been just too rosy the first time around, and they did not materialize. And now, things were just too despondent, and I expected that they would not materialize.

This is when I threw out this notion that a recommended agent would provide superior results. The scenario felt so much like all those great stock recommendations by a cadre of stock analysts. Not much of what they say ever seems to come true, within the timeframes they predict.

On my third attempt at picking an agent, I decided I was just going to have to make some semi-random picks, roll up my sleeves, and interview the candidates; not just listen to the pitches. Somewhat to my surprise, I was able to dismiss the non-realistic ones fairly quickly. Yet, I spent quite an extensive amount of time with the agent that I finally picked. To cut to the chase, the agent both listed and sold it, all within the listing period.

When it was all done, I had to reflect on why things had unfolded in such an idiosyncratic manner. It got me thinking when the last agent, who had sold the place, happened to mention that his greatest success was with re-listings, as opposed to original listings. It wasn’t really what I was expecting to hear. The guy was so good, that I really expected that he was able to win original listings and re-listings in equal proportion. But that was not the case.

I slowly came to realize that it as all about the messaging that was delivered at the various stages of the process. Or more specifically, the process that I went through as the home owner selling my home. The mindset that I had at the outset was not the mindset that I had once I had some real experience with the whole process. And hence, I might not have even believed what the most skilled and experienced agent would have tried to impart on me. Most likely, his words would not have connected as strongly with me as my initial listing agent. I just would not have been ready to hear it.

And so how does this all relate to establishing a demand generation system for what you have to offer? Well, the same applies to prospective customers of all types. The mindset that they have in the early stages of problem discovery, are likely going to be different than the mindset that they have once they have more knowledge and experience with the problem that they are dealing with.

From a demand generation perspective, it is important that the messaging that you create, fits within the mindset that the prospect is going to have at different stages. It would be premature to disclose everything to the prospect at the start. They simply would not be ready to hear it. But the messaging must grow, just as the mindset of the prospect shifts. It’s not about creating grand illusions with unreal expectations. Rather it’s about providing the right message at each stage of the process.

Filed Under: Demand Generation

If It Ain’t Broke, Don’t Fix It

December 12, 2014 By Alex Grgorinic

That is the general tendency in our culture today. Why bother giving it the time and attention if it is working? It could be working forever if no-one tampers with it. We will deal with it when it breaks. When it becomes a real problem. No matter what the state of affairs, people are inclined to ask the question “Is that a problem?” before they give it any further consideration or consider expending any effort at all.

Once upon a time, it was possible to capture attention by using the 2 age-old proven benefits for all businesses, which are:

  • This will allow you to make more money
  • This will allow you to save time or money

But these two messages just don’t resonate as well at the outset of the demand generation cycle. On the other hand, any kind of suggestion that there is a problem has the ability to capture some attention or curiosity about what the rest of the story is. Any of these phrases cause prospective customers to give it some attention:

  • You have a problem.
  • There is a problem.
  • This is creating a problem.
  • There are many hidden problems with this.

Businesses operate by managing their risks. And ignoring problems is not a good risk reduction strategy. It just leads to bigger problems. With regard to seeking attention and developing interest for your solutions, you are nowhere if you can’t relate to a problem that needs to be solved. You absolutely have to be associated with a problem. Because when something becomes a problem, it gets all the attention, all at once. And both the desire and the need to act comes to the forefront.

And so what does it all mean for all your demand generation efforts? Quite simply, you must be an expert on problems that your product offering addresses. And you must communicate the whole story effectively by both identifying the problem and proving your understanding of it.

Problem Identification

Your understanding of the problem was be borne through the eyes of the prospective customer:

  • What is the problem?
  • Why is it a real problem?
  • How much do people care about the problem?

Proving the Problem

Businesses can’t be chasing mythical problems. They need proof. For your demand generation efforts it means constructing stories to prove out your conjectures about the problem.

  • How many stories do you have about the problem?
  • How many different ways can you tell the story?
  • How many different places can you tell the story?
  • Who else can echo and validate your story?

If you can effectively focus your communications around identifying and overcoming real problems, desirable things start to happen. Whether the business who had the problem had an awareness of the problem or not, the outcomes for you will be the same.

Prospective customers begin to listen more. Talk more. And you begin to be associated as an entity that is armed and ready to combat the problem. The outcome is that prospective customers will gravitate toward you and initiate a dialogue. You have created demand and you get to play in the game to offer up your solution.

Filed Under: Demand Generation

The Guarantee – Shrouded In Suspicion

December 10, 2014 By Alex Grgorinic

“I guarantee if you follow these steps, you will get these results”.

There you go, you have taken all the risk out of the process. The prospective customers can engage with you with no inhibition whatsoever. It is guaranteed. Of course, we all strive to get to that magical state, where the prospective customer’s inhibition has been removed. But it is not as easy as slapping a “guaranteed” sticker on the whole process.

The irony is that every prospective customer out there is looking for a guarantee, but none of them are willing to believe all the guarantees that are out there. So the state that you are vying for is that it is possible to guarantee your offering. It becomes possible from the perspective of your prospect, if all the underlying conditions can be guaranteed.

Whatever your product offering, the prospect is always looking to ensure that:

  • All the steps are do-able
  • That they have the right level of skills and capabilities
  • That you can pull them through when they get stuck

Putting it another way, all of the underlying conditions must be there to ensure that they will be successful in buying your product offering. And this goes beyond just the basics of functionality.

In the early 1900s, with a multitude of car manufacturers, Henry Ford won the high profile cross-country race of the time with the Model T, by quite a wide margin. A great value booster to his brand, no doubt. But what I found most interesting was that winning the race was enabled by the fact that Ford already had hundreds of authorized service centers along the general route of the race; and the competitive models did not.

Anytime that the Model T broke down, it was back up and running in no time. This became a major selling point in the marketplace at the time, as many better and more expensive cars could be laid up for a week at a time. So people believed that it was quite feasible to keep their Model T running, without concerns of downtime. The fact that Ford also provided thorough service manuals further strengthened the confidence of the prospective customers.

So it is with your demand generation system. Creating demand means creating engagement. For that to happen, the prospect needs to be convinced that your product offering can provide a solution to the problem; and that they can be successful in using it.

Information content has to be broken out in pieces and offered up in manner that allows your prospect to put the pieces together themselves. Each piece of content must strive to create the assurance that that step, or that part of the process, is do-able and has the necessary support. The time that it takes will vary, but with each consumption, the prospect moves closer to a willingness to engage with your brand.

The facts of the marketplace are that prospects are showing up at the start of the direct engagement with your sales force, with a much more informed perspective. And this is a complete reflection on the information content that you have put out there.

Information content that continually re-enforces the multitude of small assurances that are needed at different stages, builds a stronger belief that your company is able to stand by their solution. That your company can provide a credible guarantee. And this delivers a prospect who is willing to both talk and listen.

Filed Under: Demand Generation

How Long Before You Decide to Stay With It?

December 5, 2014 By Alex Grgorinic

I was listening to the morning chatter on the radio about the decision making process on whether to stick with a new TV show. The part that got my attention was the debate on how many episodes it took to decide. It settled out at between 3 and 4 episodes, depending on the nature of the show. After that point, the person was either deeply into it, or not.

Well, 3 or 4 episodes is definitely way more than 1. So why does it take so long? If the story is worth telling, it has to be developed. It takes time to create the setting, introduce the cast of characters, and develop both the storyline, and the inter-relationships between the characters. When the fuller picture is set, then it is much easier for a viewer to decide whether they find it engaging or not.

The processes that you adopt for your marketing and demand generation efforts are much the same. If you have created a plan, or a process, it takes a bit of time to decide on the effectiveness. You need to give it a chance.

But, in the desire not to throw good money after bad, many people have the mindset that they need to get to failure quickly. Or put another way, they need to find out as quickly as possible whether an initiative is working or not. And sometimes, it is perhaps too quickly. In the race to get to a yes/no answer as quickly as possible, there is a danger that efforts are short circuited.

It is something to watch out for. Going in spurts, from one type of strategy to another is in fact more likely to be most effective at nothing at all. It is simply the case that you have not provided enough time to get traction at anything. Just like when you hit the gas pedal, your wheels will spin fast, you will burn both fuel and rubber. But you will not move forward.

You need to expect that figuring things out will take time. So before you start any new endeavor or initiative, the timeframes needs to be set. That is, you need to determine how much time and resources you can apply to the endeavor. As opposed to working with a time and resource constraint that does not match up with what it takes to get traction.

How long should it take? What kind of results are expected? Is it a linear process? Can you justify and commit to this type of endeavor at all? Is there a staged approach? These are all important questions that need answers in order to choose strategies.

Many initiatives fail because people choose the wrong set of strategies for their business. Or they do not stick with the right set of strategies long enough to make them work. You marketing strategies are just like that new TV show, which may turn out to be a fabulous show, better than you ever imagined, once you got by a certain threshold.

Filed Under: Demand Generation

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