Arkaro Insights

From Prototype to Production: When scale-up impacts product launch success (AI voices Arkaro content)

• Mark Blackwell • Episode 25

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Welcome to the Arkaro Insights podcast. This episode is based on original content developed by Arkaro. At Arkaro, we're committed to innovation in everything we do—including how we share our insights. We've utilised advanced AI technology to transform our written expertise into this conversational format, making our content more accessible and convenient for our busy B2B audience. What you'll hear is a two-person discussion generated through AI voice technology, designed to deliver our insights in a more engaging way than traditional reading. As we continue to evolve this approach, we genuinely value your feedback. Thank you for listening to Arkaro Insights, where professional expertise meets innovative delivery.

Full article: Scale-Up Mistakes That Harm Product Launches

Why do technically brilliant products still fail in the market? The answer lies not in the science itself, but in what happens when laboratory success collides with manufacturing reality.

This deep dive explores the hidden trap that captures even the most innovative companies: scale-up failures. Drawing from Mark Blackwell's compelling article "From prototype to production: when scale-up impacts product launch success," we uncover how seemingly minor decisions made during early product development can become catastrophic commercial vulnerabilities later on.

Through eye-opening case studies like Amorous Biotechnologies and BioAmber, we reveal the three distinct patterns of scale-up failure that consistently derail product launches. You'll discover how technically perfect biofuel products were forced to pivot to cosmetics when production costs spiraled, and how a promising biosacinic acid led straight to bankruptcy when fermentation yields collapsed at commercial scale. The pattern becomes clear: laboratory performance rarely translates cleanly to industrial production.

The critical insight? Most organizations operate with dangerous disconnects between R&D, operations, and commercial teams. While scientists perfect formulas in controlled environments, they're unknowingly making decisions that will determine manufacturing costs, operational complexity, and commercial infrastructure needs years later. As one executive notes, "You're essentially building the commercial reality of your product right there in the lab, whether you realize it or not."

If you're responsible for innovation, product development, or manufacturing scale-up in your organization, this episode provides essential questions to assess your current approach. Are your operations and commercial leaders involved early enough? How will your production cost structures at scale affect market positioning? What timeline assumptions are driving your investments, and how realistic are they?

Listen now to transform how your organization bridges the critical gap between technical brilliance and commercial success. Your next product launch might depend on it.

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Speaker 1:

Welcome to the Arkaro Insights Deep Dive. We're here to help B2B executives like you deliver well better results using the latest ideas, and change and innovation for your organization. Today, we're really plunging into a topic that, honestly, often blindsides even the most technically brilliant companies. It's about what happens when a new product, maybe a real scientific marvel, hits these major commercial roadblocks, and not because the tech is bad, but because of overlooked scale-up manufacturing challenges. We're unpacking insights from a really powerful article by Mark Blackwell, who is the founder of our car. It's got this great title From prototype to production when scale-up impacts product launch success. Our mission for you, the listener, is really to pull out the most crucial nuggets here how these scale-up decisions sometimes seemingly minor choices made way, way before product launches can become these hidden vulnerabilities, and these aren't just small hiccups, right. They can lead to well crushing post-launch commercial disappointment. We're talking millions, maybe even billions, lost. Okay, let's unpack this.

Speaker 2:

Yeah, what's truly fascinating here and I think, often misunderstood is the core idea Mark Blackwell puts forward. Many new products look incredibly successful right at launch. You know they're celebrating the technical wins but then sometimes, almost inexplicably, they just falter commercially, and the article really highlights this. These aren't failures of the invention itself or even market need usually. Instead, they actually stem from these deeply embedded scale-up challenges, things that got baked into the development phase itself, long before a customer ever saw the product.

Speaker 1:

So what's the core message here? What does the article really want us to get? It seems to be that businesses are pouring just staggering amounts of investment into this whole innovation pipeline Everything from the technical development building, commercial production facilities, hiring, sales teams, entire market development strategies only to face this sort of widespread disappointment later on and Blackwell emphasizes this post-launch phase when you're betting really big on commercialization, that's actually the highest financial risk phase in the whole product journey. It's where those small missteps from way back can become these massive, massive losses today.

Speaker 2:

Exactly and we connect that to the bigger picture, it points to a really critical, almost you could say, systemic oversight. R&d teams. Well, they often make crucial decisions pretty much in isolation. Their focus is the lab proving the concept, hitting those technical benchmarks. But they're doing this without active, early and really ongoing collaboration with operations leaders, the people who understand the gritty realities of manufacturing, or the commercial leaders who know the market demands, the customer needs this cross-functional disconnect. It isn't just like a communication breakdown, the article reveals. It's often a fundamental misalignment, maybe even of incentives and metrics. R&d success gets measured by lab performance, which can be completely detached from the frankly daunting realities of commercial cost targets or operational complexity. It's almost like they're playing entirely different games but technically on the same team.

Speaker 1:

That makes perfect sense. Yeah, it's like the R&D team is building this incredible Formula One car, perfect for the test track, and then suddenly operations gets asked to mass produce it for daily commuters, you know, at a totally different price point with completely different maintenance needs. It just doesn't translate. The article really drills down into this, doesn't it, identifying these three distinct patterns where these early scale up decisions become critical vulnerabilities. Let's dive into that first one.

Speaker 2:

Okay, Pattern one technical scale-up compromises. This is basically when the realities of commercial production force you to degrade the product quality or maybe significantly increase the costs yeah, and ultimately that just undermines the product's whole market positioning, even if the lab prototype was absolutely flawless.

Speaker 1:

Right, and the article gives some really striking examples here. They really illustrate how devastating this can be Like. Take Amorous Biotechnologies, for instance. They launched these advanced biofuel products. They even secured established partnerships Looked great on paper, but the moment they tried to move from pilot to industrial scale, well, their production process just became and I'm quoting here too expensive and inefficient to scale up into making large quantities of price competitive biodiesel. So even though their products technically exceeded standards in the lab, commercially they were anything but successful. They were forced to pivot entirely away from biofuels into cosmetics. That's a huge, really expensive course correction.

Speaker 2:

Yeah, it is. And a similar kind of cautionary tale is BioAmber with their biosacinic acid. Again, this compound performed excellently in labs. They even launched it commercially Seemed okay. However, the commercial facility well, it revealed a very different story. Fermentation yields dropped significantly, Purification processes turned out to be way more complex and expensive than they'd anticipated, and their production costs just soared up to $2.23 per kilogram. But the market needed it under $1.50 per kilogram. So, despite this substantial facility investment, that cost difference alone basically led them straight into bankruptcy.

Speaker 1:

Wow, and here's where it really hits home for me. Blackwell attributes this to what he calls operations disconnection. This is where the R&D teams you know. In their pursuit of technical perfection they make choices that work beautifully in controlled lab environments, but they create these insurmountable, often totally unforeseen challenges at commercial scale. You know. Think about how things like reaction kinetics, the speed and consistency of chemical reactions or heat transfer like how efficiently you can add or remove heat from a massive batch compared to a small flask, or even mixing patterns ensuring uniform blending throughout a giant industrial tank how all that shifts dramatically when you scale up. In a small lab these might be pretty easy variables to control, but at commercial scale they become really complex engineering challenges and they can dramatically impact yield, quality and, crucially, cost. He also points out, like food companies finding energy needs and labor costs are way higher at industrial scale than they ever guessed from pilot runs the actual physics of the process change.

Speaker 2:

Exactly, and that leads us nicely into the second pattern, pattern two.

Speaker 1:

A total of.

Speaker 2:

Commercial capability failures. Now this pattern is kind of insidious because it can happen even if your production scales successfully from a technical standpoint. The problem here is that the organization just fails to build the necessary commercial support infrastructure that's required for those industrial volumes.

Speaker 1:

Yeah, it's so easy to pour all the focus, all the resources into the factory itself, isn't it Building the plant? But, as the article really powerfully argues, commercial leaders often aren't brought in early enough or maybe involved deeply enough to build those issues at scale setting up broad distribution partnerships or developing really comprehensive customer education programs. These aren't just nice-to-haves, they're absolutely integral to commercial success.

Speaker 2:

Right, let's bring up another important question what about the sheer complexity of the supply chain? The article highlights that commercial production isn't just about making the widget. It requires managing multiple tiers of suppliers for all your raw materials, implementing really rigorous quality systems across all those diverse inputs and coordinating complex logistics. It's just a world away from the simplified procurement you do for lab operations. If these things aren't thought through and built out early, well, the product might exist, but you just can't get it to market efficiently or reliably.

Speaker 1:

There's a classic, almost frustrating example cited in the article polycarbonate, PC automotive glazing. This product offers fantastic weight reduction for vehicles, Huge benefit, right? But it struggled massively to gain commercial scale. Why to gain commercial scale? Why? Because adopting it required multiple supplier tiers, everyone from the raw material producers to the molders, the coders, the assembly lines. They all had to change their entire processes. And these suppliers well, they simply wouldn't invest in those big changes without a clear, committed promise from the OEMs, the car companies themselves, but the OEMs they wouldn't commit to buy without a stable, proven supply chain already in place. It's a total catch-22. And it just perfectly illustrates how a lack of that commercial foresight can completely stall a genuinely innovative product Absolutely, and we also see how inadequacy in scaling technical support can just destroy customer confidence.

Speaker 2:

Think about specialty chemical companies, for example. They often move from selling commodity products, where support is maybe simpler, simpler, to more specialized solutions, and then they just grossly underestimate the constant, unpredictable problems. The article sort of calls it like playing whack-a-mole that their technical sales teams suddenly face because of, you know, ever-evolving customer issues or application nuances. Or maybe the distribution channels simply can't support the projected commercial volumes, maybe they have limited promotional resources or not enough show space, or their sales force is just stretched too thin. And scaling into new geographies or market segments just amplifies all this right, because existing commercial capabilities often prove totally inadequate for different regulatory landscapes or unique local customer expectations or different support needs. The product might be technically ready, but the market just isn't equipped to actually receive it and use it successfully.

Speaker 1:

Okay, so we've covered technical compromises, we've covered commercial shortfalls, but there's a third, equally insidious pattern. The article identifies these unforeseen management challenges that top up once you actually hit industrial scale production.

Speaker 2:

Exactly Pattern three operational complexity escalation. This is when an organization's existing management capabilities just prove inadequate for the sheer demands of running industrial operations, and that leads to delivery failures and, predictably, customer dissatisfaction.

Speaker 1:

Yeah, the article notes that research focused organizations, especially, are often completely blindsided by the realities of multi shift operations. I mean labs typically run during standard business hours, right, single team, relatively predictable tasks. But commercial production to be profitable, often needs to be continuous 24-7. That demands fundamentally different skill sets, really comprehensive maintenance programs running around the clock and a robust safety culture that has to permeate diverse workforces across different shifts. Blackwell points out that quality variations between different shifts may be due to training inconsistencies or communication breakdowns or just process control challenges. These frequently create very real problems, problems that can actually eliminate profitability for long periods. It's a whole new ballgame, really, and if you haven't built the management muscles for it beforehand, you're likely in trouble.

Speaker 2:

And the key insight, the thing that really ties all these patterns together is this those scale of decisions you make during initial development, often when the focus is almost purely on technical feasibility well, they become long-term, often entrenched constraints. They effectively determine the commercial success or failure of your product for years after it launches. You're essentially building the commercial reality of your product right there in the lab, whether you realize it or not.

Speaker 1:

So okay, given all these potential pitfalls, what are the actionable insights here? What does the article suggest for your organization? Listening in.

Speaker 2:

Well, it really hammers home the need for a collaborative culture, engaging operations and commercial leaders early in development, and not just as reviewers checking a box, but as active participants shaping decisions. That's absolutely crucial. Blackwell emphasizes that these early cross-functional conversations they help you anticipate and proactively address these constraints before they become those insurmountable barriers later on. It's about front-loading the challenge rather than waiting for it to explode after launch. Right and this raises a really important question for every executive listening Are you approaching scale-up systematically? Are you truly balancing that technical feasibility with commercial reality from day one? Blackwell stresses that taking the systematic approach dramatically increases your chances of sustainable profitability after launch. He even highlights that the transition from lab to manufacturing for some complex processes like microbial bioprocesses that can take anywhere from three to ten years and it involves incredibly high financial risk if it's not managed with an integrated, holistic perspective right from the very beginning. It's not just about getting the science right, it's about getting the business of the science right at scale.

Speaker 1:

Right. So before we wrap up this step dive, the article leaves us with some truly critical, maybe even provocative questions, questions for you to really consider about your own organization's scale-up decision-making. These aren't just rhetorical, they're meant to spark some genuine introspection. First, do your scale-up plans primarily prioritize technical feasibility getting it to work in the lab or are they equally driven by commercial success metrics things like target cost, market acceptance, the required support infrastructure? Is there a balance?

Speaker 1:

Second, are your operations and commercial leaders involved early enough and deeply enough in your development processes to truly anticipate these scale-up challenges, or are they sort of brought in too late in the game, when key decisions are already locked in? Third, how will your production cost structures at commercial scale realistically affect your market positioning and your pricing strategy? Have you actually run the numbers on what it really costs to produce at volume, not just what it costs in the lab pilot? Fourth, what specific commercial capabilities maybe tech support, distribution, training will your new value proposition require that simply don't exist in your current organization today, and what's your concrete plan to build them? And finally, what timeline and volume assumptions are genuinely driving your scale-up investments? And, importantly, how realistic are those assumptions when you view them through the tough lens of operational and commercial realities.

Speaker 3:

Yeah, your honest answers to those questions. They'll really reveal whether your current scale-up approach truly positions your innovations for long-term commercial success, or if it's inadvertently creating those hidden vulnerabilities, the ones that will inevitably manifest as that frustrating, expensive post-launch disappointment. It really is the difference between a fleeting technical victory and achieving lasting market leadership.

Speaker 1:

That's our deep dive into the critical yet often overlooked importance of scale-up decisions for product launch success. We've covered why new products, even technically brilliant ones, can falter after launch. We looked at the three distinct patterns of failure those technical compromises, the commercial capability gaps and operational complexity issues and, critically, how early collaborative engagement across R&D, operations and commercial functions is absolutely key to avoiding these pitfalls. This deep dive was inspired by the profound insights of Mark Blackwell, founder of Arkaro.

Speaker 1:

If you're ready to strengthen your own innovation capabilities and ensure you have more successful product launches within your organization, you can learn more about Arkaro services. They cover strategy, innovation, process, product management, commercial excellence and integrated business management. Just visit them at Arkaro. That's A-R-K-A-R-O dot. R-a-m-e dot at com. You can also follow Arkaro on LinkedIn for valuable updates and ongoing insights, or you can email Mark Blackwell directly at Mark Arkaro. com if you'd like to arrange a free consultation to discuss your specific challenges. That's Mark@ Arkaro. com. Thank you so much for listening to the Arcara Insights Deep Dive and please do share this with colleagues if you found it helpful.

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