Commercial Strategy

Do You Need a Commercial Strategy?

A basic commercial strategy is crucial for a strong start. No question about this. Defining your target market and how to reach it will guide which product features to develop first. It will also help prioritize supply partners to onboard, if your business relies on them.

Unless your venture addresses an industry that's yet to be digitalized (are there any left?) or focuses on a geography without established players, your best chance for commercial success is to take a contrarian approach. Whatever path the incumbents in your market follow, take a different—possibly opposite—one. If the barriers to entry are high, expand your market's boundaries. Consider potential customers who aren't on the incumbents' radar. Think about how your product will improve consumers' lives or enhance other businesses’ operations and revenues.

Commercial strategy isn't the same as commercial planning, especially in a business-to-business context. As you pursue your first pilot customers, opportunities may vanish as quickly as they appear. Discussions with early customers will likely influence—sometimes significantly—your product development roadmap. This will put pressure on your team (and yourself). Make it clear to them that while the strategy may be set, the execution will probably be chaotic.

When we started working on our concept of a consumer-facing Air Travel Marketplace, I'll be honest: I didn't have a specific segment of travelers in mind. I simply knew that online travel agencies were twenty years old and flight search engines were ten years old—neither of which, in my view, were meeting the expectations of both travelers and airlines anymore. We did speak to and present our prototype to our partner airlines. All were excited about it because it provided an opportunity to test the APIs they were building. However, we didn't speak to many travelers before starting to design and build our prototype. That was a mistake, one which could have been costly if we had proceeded with our original vision and got it wrong.

When we pivoted to become a tech partner for consumer-facing brands, I realized our success hinged on looking beyond traditional online travel sellers These established players were locked into their historical tech partners (known as GDS) due to technical, functional, and—as importantly—financial reasons. With no viable business model in this market, we couldn't compete. Instead, I targeted other online players who weren't yet selling flights but could use our technology to enhance their existing customer offerings. My vision was to break open the flight sales market and expand it beyond traditional travel agencies—a strategy our main competitor quickly replicated.

We built an Airline DirectConnect Platform that conceals the complexity of flight products, allowing new players to sell flights and associated services as easily as they would sell a pair of pants and a matching sweater. We had several promising discussions (including with Airbnb), but the reality is that this strategy was probably too bold and certainly too visionary (story of my life). Then COVID hit, and the whole thing became history. Ironically, it was one of the traditional online travel players that ended up buying us.

Key Takeaway #28

A successful commercial strategy often requires taking a contrarian approach, targeting new markets or customers. While the overall strategy should be clear, execution may be chaotic, so remain flexible and open to pivoting based on feedback from select potential customers.