Challenging the status quo

By Francis Moran

When trying to sell a new and innovative product, and a premium one at that, into a somewhat conservative market, there is often no greater competition than the status quo.

The team at NanoScale Corporation knows this all too well. After years developing its intellectual property into a range of products for the defence, police and hazmat markets, NanoScale has focused its efforts around expanding in the civilian disaster restoration market. Here, restoration professionals work to repair, remediate and decontaminate commercial and residential properties damaged by fire, storms, water, sewer backups and mould. In North America alone, this market is worth hundreds of billions of dollars. It is a steady market sheltered from general economic volatility given that disasters and accidents happen all the time and the cost of restoration is typically covered by an insurer.

While NanoScale has made inroads into this market in recent years, it remains challenged to overcome the status quo and the reluctance of its potential customers to embrace new products and technologies quite unlike what they are accustomed to.

“One of the challenges is that these contractors who have been doing disaster restoration work have been doing it for a long time and a lot of the processes they use have been around for a long time,” said Kyle Knappenberger, NanoScale’s marketing director. “It’s hard to change their minds and a new product has a long adoption cycle.”

In this first post, we will explore how NanoScale has evolved over the years to the stage it is at today, what has been learned along the way and its immediate challenges.

Going off campus

While NanoScale fits into our definition of “startup” by virtue of the fact that it is moving into a substantial new market space, it was in fact founded in 1995 to spinout ground-breaking chemical research by Dr. Kenneth Klabunde, a distinguished professor regarded for his research into nanomaterials, nanoparticles and adsorbents (not to be confused with absorbents) from Kansas State University. He founded NanoScale to continue his work on metal oxide powders which had proven capable of breaking down hazardous chemical agents, such as various types of warfare agents.

For the first few of years, the company operated as a contract research lab for hire, rather than as a true startup intent on bringing technology to market. Klabunde served as an advisor while continuing his research. However, the company came to realize that this wasn’t the most profitable business model. In 2001, Bill Sanford, who today serves as chairman and CEO, came on board and refocused the company around developing its own commercial products. The management team was subsequently built out with a VP of R&D with experience in commercialization, a VP of marketing and sales and an operations expert to help develop international sales channels. NanoScale’s first commercial products were a series of decontamination products for use by soldiers in the field.

Avoiding a military stalemate

But the team soon discovered that a company in its infancy doesn’t just make a product and sell it to the military, said Knappenberger. Rather than focus exclusively on the military market and face the delays typical of long procurement cycles, the company also tailored its IP for products to serve similar needs in the police and hazmat markets.

“The biggest challenge was getting into annual budget cycles of these departments and making sure the timing was right,” he said. “Larger metropolitan markets or teams that serve larger geographic areas have been our primary customers.”

Throughout its history, NanoScale has maintained a strong emphasis on research and development, both for its own proprietary products, and as a contract R&D shop for various partners. In the mid 2000s, NanoScale moved into the indoor air quality and disaster restoration market with OdorKlenz – a range of indoor air quality products for everything from laundry and skunk odours, as well as professional-grade options for combating the more severe challenges faced by disaster restoration contractors.

NanoScale has brought the OdorKlenz product line to market through a combination of its own internal sales team and a national franchise network. As we will explore in more detail in a future post, NanoScale levered its relationships with franchised distributors of disaster restoration products to help overcome its learning curve in the industry. The company now has sales teams across the U.S. and distributors in Canada, Mexico, Japan and Australia.

The new kid on the block

Today, NanoScale’s sales pipeline is a “nice blend” of military, or international decontamination, and commercial, or disaster restoration, sales, said Knappenberger. However, despite the growth of its sales and distribution channel, NanoScale remains the “new kid on the block” for the disaster restoration market.

The reason for this, again, lies largely in the fact that the underlying technology for its OdorKlenz products runs so contrary to what restoration contractors are accustomed to in an industry that typically sees only incremental improvements in products and processes. As Knappenberger puts it, traditional methods often involve adding potentially hazardous chemicals to an indoor environment, which create health risks in addition to those created by the contaminants they are intended to clean up. NanoScale’s products, on the other hand, work to remove harmful contaminants without adding any other potentially hazardous substances to an indoor environment.

For example, ozone generators are still often used to clean pollutants from the air. However, it is now understood that ozone can cause a series of health problems. The large commercial units used in disaster restoration can make homes and businesses unliveable for days. OdorKlenz cartridges, on the other hand, draw toxins and pollutants into the unit, where they are safely destroyed. People can live and work in the environment while the process is underway without any risk to their health.

Getting the word out

To spread the message, the NanoScale has realized that it must ramp up its marketing activities. Over this past year, it has dramatically increased its attendance at key industry tradeshows and its participation in vendor days and certification programs held by distributors. It has also partnered with distributors for customer appreciation events, training courses, and educational seminars.

Knappenberger and his team have also increased their online advertising and social media efforts and developed a new marketing plan for this year that includes e-newsletters, pay-per-click advertising, webinars, a stronger presence on Facebook and LinkedIn, and engaging with influential industry bloggers, such as consumer advocate Debra Lynn Dadd.

Greater participation through online forums also tops the marketing agenda.

“Disaster restoration professionals are very active online, particularly in forums, Linkedin and Facebook,” said marketing coordinator Kristin Clement. “We have had success driving traffic and sales through promoting our products and gaining referrals through these methods.”

NanoScale has also targeted the trade and industry press read by its target market with print and online advertising campaigns. However, the company has yet to engage in any significant public relations activity to also secure editorial coverage in these trade and industry press.

What’s next?

All of this means that the company will be quite busy heading into the new year as it seeks to increase its dialogue with the market, promote new OdorKlenz products and maintain its military and commercial R&D activities.

“Maintaining a hectic travel schedule and growing our sales team will be a priority for the foreseeable future,” Clement said. “We are looking for additional sales presence in territories across the U.S. that will boost sales, distributor support and the adoption rates in those areas.”

For Knappenberger, the challenge remains taking advantage of opportunity when it comes, without losing focus.

“You need to plan, but also be prepared to make adjustments,” he said. “You will always have a new idea or concept for what you have, but you have to be willing to sometimes say no.”

In our next instalment, we will explore in more detail NanoScale’s challenges and goals for the new year.

This is the first article in a continuing monthly series that will chronicle the growth path of NanoScale Corporation, a growing nanotechnology company based in Manhattan, KS that is commercializing various advanced materials and compounds for improving indoor air quality, removing pollutants, and containing and neutralizing hazardous chemicals.

Francis Moran
Francis Moran
Francis Moran is principal of Francis Moran & Associates, a consultancy that provides business-to-business technology ventures with the strategic counsel required to make their innovations successful in a highly competitive marketplace. Francis can be reached at [email protected].

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