Using corporate sponsors to fund market research, and sharing the results.
Like a lot of entrepreneurs, Jeff Bullington, president of Radiant Technologies, in Albuquerque, dreams of diversification. Down the road, he'd like to move his small research and PC-subsystem-manufacturing operation ($500,000 in 1990 sales) into optical computing. But Bullington didn't have the money to explore the business risks of such a move.
That is, not until a large, multinational corporation with similar interests asked Radiant to produce a market-research report on optical electronics. It went so well that Bullington decided to find a "corporate sponsor" for his next report -- on markets for materials science -- by scouring technical papers and trade journals for news of major research-and-development programs.
"It's really a way of cost sharing -- a barter," says Bullington, who notes that professional market-research houses charge more than $100,000 for such work. "You offer the company a lower price and your technical expertise."
Radiant, which employs 10 people, may lose money when it creates the initial report, but the resource it creates more than makes up for that loss. Radiant also negotiates the right to use the findings for its own purposes, without restrictions. That's not a problem, the CEO claims, since the sponsors aren't direct competitors, partly by virtue of their size and partly because their applications are different.
In fact, Bullington has since teamed up with an "underwriter" on a research project that may lead to a joint marketing-and-development agreement. He's also one step closer to his long-term goals, with plans to enter the optical-disk-drive market in about two years.
The research results, he says, "validated where we want to go. When you're making business plans and projections, having a report in hand gives you a lot more credibility. Before, there was no way we could verify my gut instinct. This was a sanity check." -- Susan Greco