The Deep Tech Customer Interest Ladder

You know, you could be making money right now

One of the benefits of working as an investor and builder across different kinds of deep tech themes is that I get to see the different commercialisation approaches applied in different fields.

For example, it is common in therapeutics to receive milestone payments from an eventual acquirer very early in a molecule’s development. In defence, non-dilutive grants are common, and while they build a particular use case for that funder, they contribute towards the bigger build for the mission of the company. Both of these categories have learned how to monetise early development and piloting.

Sarah Nolet from Tenacious Ventures and I were talking about our food and ag portfolios earlier this year and realised that we don’t monetise these early stages so well in this category. This matters in deep tech because these companies tend to be expensive to build. How we finance that build is a critical element to companies that make it through the multiple ‘valleys of death’ they encounter along the way.

Food and ag companies tend to default to free trials in exchange for the opportunity to prove out a technology in a real environment. But that means the company and their VCs are taking all the risk and customers are not sharing it.

This is a decision to persist with unnecessary risk. The business is:

• more likely to compromise on pilots to save money,

• more likely to run out of money in general,

• less likely to demonstrate evidence to next-round investors,

• less likely to be focused on the sales journey and customer experience aspect of a pilot,

• and does not test commitment from customers.

So we started doing some work in our companies and trying an approach we called the Customer Interest Ladder that we published on the Tenacious Ventures blog here.

And it worked. Money started to flow into companies, just because they asked and they had a value proposition ond purpose of these stages that successfully converted customers.

Introducing the Deep Tech Customer Interest Ladder Tool

Click to copy your own version of the Deep Tech Customer Interest Ladder

We made a tool to help structure this new thinking that we have shared here.

If you are pre-revenue with your company, but have something that a customer can try, I encourage you to try this approach and see what happens. You never know, you might bring some money in.