35st International Conference of the

TOC Practitioners Alliance - TOCPA

www.tocpractice.com 9-10 November, 2017 – Vilnius, Lithuania

Challenges of Serving
Hi-Tech Industry Customers:
TOC lessons learned at Lidaris
Andrius Melninkaitis, Urtė Kimbaraitė,
Giedrė Šareikaitė, Gintarė Batavičiūtė
 Andrius Melninkaitis, PhD

Brief bio
• CEO & Cofounder of Lidaris
• Physicist @ Vilnius University
Associate Professor;
Senior Research Fellow;
• Background Areas of Expertise:
Laser-Induced Damage;
Design of Experiments;
Laser Physics;
Optics; andrius@lidaris.com

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 Outline of the talk
Context & motivation:
• what we do?
• how it all started?
Challenges of sales in hi-tech (B2B) market:
• “Spam” approach;
• “Follow your customer” approach;
Towards unrefusable offer: understanding the customers true needs by using TOC TP
• Segmentation of target groups;
• Mapping UDEs;
• CRT;
• Real life validation of CRT;
Consequences of TOC & gained knowledge;

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 We are in destruction business

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What we do?
 We test optical elements used in lasers

Matt Heintze/Caltech/ MIT/LIGO Lab

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 Concentrated light is strong enough to
destroy anything: focus is important!

http://www.pinsdaddy.com/

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 LASER DAMAGE TESTING: HOW WE DO IT?

LASER
Laser optic

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 Why people need it?

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Laser systems are self destructive devices

Photo from Max-Planck-Institut (Germany)

 Laser is a chain of optical elements

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 We started research activities as a university lab
15 years ago

• Got a lot of experience in the field;

• Scientific public scientific funding was (and still is) very unstable;
• Lithuanian industry was to small for us to survive at that time;
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 We tried hard find more projects:

However: industry was not

really interested at that time..

We did not understood

“why not“?
seeking joint research projects
All we knew: there were commercially successful companies with industrial companies

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 Launching new company in 2012

switching the other business model of

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International the
st same,
Conference of the TOCbut commercially
Practitioners Alliance - TOCPA
 Challenges of launching our
(or any other hi-tech) business in Lithuania
• Unknown to potential customers;
• Located far from mainstream laser industry;
• No clear message to the market:
• value proposition was very not clear (even to us);
• selling destructive activities does not attract much of attention;
• Almost zero business experience..
Who in the audience would
• High entrance barrier:
be crazy enough to start
• Strong, well established competitors;
such kind of business?
• Customers are very sceptic about newcomers;

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 Opportunities for (or any other hi-tech)
business in Lithuania
• Good ecosystem of Lithuanian laser community;
• 10 years of experience in science;
• Recent establishment of open access centers;
• Start-up boom in 2012: public attention to commercialization and first
public money affordable for startups via national programs;
• Ease of doing business;
• Advantages of small country;
• Good “track record”: gained respect from scientific community in the
field..
• Well established;
• Need for technology transfer practice at universities;

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http://mashable.com/2013/05/09/magic-videos/#rWbMVTFZK8qA
 During first 3 months of operation:
3 serious business visits from worlds famous international companies in Vilnius

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 We started to realize:
we are in life saving business

• Then we understood: results of our

measurement services were
consumed like „pills“ in case of “pain":
- inexpensive cure (low added value);
• Passive sales were enough at the
beginning: word of mouth was
spreading very quickly;

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 Lesson #1

Customers buy (or not) for their own reasons -

not yours (often not known to you): reliability
and time is everything in Hi-Tech industry

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 First attempts to approach customers (sell) in
proactive way: why don’t we sell more “pills”?

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 First idea - try some classics: “send
emails”

Typical message:
WE are nice people,
OUR services beautiful.
ACT NOW – limited
time offer!

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 Doing business with hi-tech people
• Well educated (high self confidence);
• Often believe in single true way of doing things;
• Have high expectations;
• Want to control “everything”;
• Likely have some bad experience with
products/services like yours;
• Very focused, have very little time;
• Decisions are very expensive (avoid risk);
• Sensitive to their trade secrets;
• not always willing to go into the details;
• Often introvert
• sometimes too shy to recognize problem; http://www.thedailymash.co.uk

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 Lesson #2

• Simply “pushing” your services does not

work in b2b:
no respect = no deal: level should be similar before you can even
start doing business together. Proves of excellence are needed
to gain trust, only then business can start.

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 Why we don’t add more value:
why we don't sell projects?

+
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Image: http://www.chapelhillfamilydoctors.com.au/
 “Following the customer”:
doing (blindly) what customer tells

• Listening carefully is “gold”

- you have to do it (!):
• collect as many inputs/complaints as
you can: most likely there is a point;
• Pay attention to every detail;
• Wish list is very big: be careful
before taking actions or making large
investments:
• sometimes customers wishes might be
misleading
• or manipulative (!)
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 Lesson(s) #3

• Strategy is needed - there are some risks if you follow

customers blindly (choosing what not to do is also importnat):
• Even if what customer say is true you are probably already to late
(ethers already do it..)
• Customers mainly ask for minor innovations (as in H. Ford’s horse
example)
• rarely know what they really need (otherwise thy would be doing it themselves);
• By attempting to do everything what is asked you can loose focus
(resources are always limited);
• Some demands are of manipulative manner:
• Sometimes for the sake of getting better discount ☺;

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 Understand customers prospective:
logic behing decision making;

Consider putting yourself

into the customers shoes

http://www.morrisonsocialmedia.co.uk/wp-
content/uploads/2016/04/Child-wearing-adult-shoes.jpg

Nerius
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 Goal for summer 2017:
making a leap towards “unrefusable offer”: first attempt to use TOC systematic approach

Optics Sales Surface Processing

Distributors

Optics manufacturers
2 1
Laser Engineers Thin Film
Integrators

Deposition
System

3
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 Used CRT: TOC TP process:
• Mapping UDEs (for each group);
• Building cause and effect diagrams – CRTs;
• Identifying internal conflict & root cause:
• aggregating UDEs into evaporating cloud:
• Verifying our assumptions with the customer
• checking if the problem indeed exists;
• Now challenging underlying assumptions:
• searching for win-win solution;

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 Mapping of (assumed)
undesirable effects and complaints
UDEs

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 LASER DAMAGE PROBLEMS:
OPTICS MANUFACTURERS PROSPECTIVE
Customers Research Customers want unrealistic Customer don’t buy
require projects are specifications: every parameter coatings without quality
unbreakable expensive and should be at the state-of-art- specification
optics time consuming. level.
Optic is Disputes with There are too many Total quality Sales department
returned as clients whom parameters to control is sells air: things that
damaged to blame? optimize processes expensive can’t be delivered
 LASER DAMAGE PROBLEMS:
DISTRIBUTORS PROSPECTIVE
Redo the purchase Customers don’t buy
Disputes over Optics manufacturers do
is expensive: what optics without LIDT
damaged optics: not provide reliable LIDT
went wrong is numbers
whom to blame? numbers
unclear

Customers want to be consulted on Non-standard LIDT testing

difficult LIDT related questions before conditions is necessary to the
the purchase client
 LASER DAMAGE PROBLEMS:
INTEGRATORS PROSPECTIVE
Delays in
Laser market Early laser system due to the Laser service is costly
release are
pressures to build laser damage causes multiple and time consuming
costly and
high quality products complains and disputes
unwanted
cheap and fast
Purchase Sales people Non-standard Research projects
department are LIDT testing is are expensive and
State-of-the-art buys “bad” incompetent to hard to find. time consuming
optics is usually too optics advise
expensive to use
 Prepared CRTs for each customer segment

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 Identified core conflict:
CUSTOMERS CUSTOMERS
WANT GUARANTEED WANT
TOP LEVEL LOW PRICE FAST
PERFORMANCE DELIVERY
=
=
PRESSURE TO
R&D TESTING COSTS
TO DELIVER ASAP
+
AS IS: WITHOUT
PROLONGED
TESTING OR
LEAD TIME
DEVLOPMENT
Customer does not know:
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Conference testing
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TOC Practitioners Alliance - TOCPA
 Made a validation experiment:
exposed CRTs to Lithuanian laser community

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 Validation of assumed CRTs with customers

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 Validation insights
• Exposure of CRTs generated a lot of „buzz“:
• Inspired disputes among people from different companies that have
customer-supplier relations (blaming each other for existing problems):
the reality touched some feelings (it hurts);
• The were some people watching the game in “silent mode”: not telling
even a single word, but writing down something and coming after;
• Focus shift from our services to customers problems gained some
respect;
• Most of the people agreed that reality is very similar to what we have
discovered by using TOC thought experiments;

• Many new inputs were collected and used for further update of CRTs.

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 What has changed
after we started to use TOC TP?

• Started to realize thinking gaps in our previous selling approaches;

• Shifted our focus to problems that really matter to customer, not only
what they say matters;
• Improved our sales process:
• Identified new win-win situations;
• Trained our sales team: personnel how to communicate it without PhD );
• Finally succeeded in selling “mini project” based activities;
• Now we are in position to lead people towards identifying and solving
their problems;
• Gained immediate respect in the eyes of customers;

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 Our TOC journey is not over yet ☺

“(Paradigms are) sets of assumptions we believe are

valid. We go through ‘paradigm shift’ when we realize
one or more of our assumptions are (no longer) valid”

Eli Goldratt, The Goal, 1986

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 THANK YOU!
Special thanks to coauthors:

Gintarė Urtė Giedrė Nerius

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