The logical case for integrated requirements

Strategic sourcing in a dual-use context is a delicate balancing act. You aren’t just buying parts; you are buying compliance, resilience, and scalability. An integrated requirements approach supports strategic sourcing in several ways:

• Sovereign reliability: Defense-grade sourcing requires ‘trusted foundries’ and friend-shoring, while commercial sourcing thrives on global cost optimization. Requirements should make it clear when each sourcing approach applies.
• Component commonality: Identifying components that can be shared across commercial and defense variants helps increase purchasing volumes and reduce overall costs. Without precise definitions up front, engineering will naturally ‘over-spec’ the civilian part, killing its market competitiveness.
• Lifecycle traceability: Dual-use contracts often require a ‘digital birth certificate’ for every component. Sourcing must define these data requirements early, or you’ll face a manual auditing nightmare later.
• Regulatory readiness: Sourcing must anticipate changes in ITAR (International Traffic in Arms Regulations) or EAR (Export Administration Regulations) status before the first purchase order is issued. 

Sourcing meets the ‘wall of silence’

Many sourcing challenges in dual-use development do not stem from supplier performance. They arise because procurement and engineering interpret requirements differently.

A commercial component may satisfy functional specifications while lacking the documentation needed for defence qualification. Environmental requirements such as vibration, temperature range or electromagnetic compatibility may appear late in development, forcing costly supplier changes or requalification activities.

Cybersecurity presents another common example. If software assurance and supply-chain security are introduced only during compliance reviews, sourcing options become significantly more limited than they would have been if those requirements had guided supplier selection from the beginning.

The earlier these discussions happen, the more options remain available.

The proof: Scaling autonomous logistics

Consider the evolution of autonomous Last-Mile Delivery (LMD) drones. Initially developed for specialized commercial delivery, these systems have immense dual-use potential for medical resupply in contested environments.

By industrializing the core platform, a leading manufacturer moved from building 10 units a month to 1,000. They achieved this by using modular chassis designs. In the morning, the line produces ‘commercial’ units optimized for weight and cost. In the afternoon, the same line produces ‘hardened’ versions with encrypted comms and ruggedized sensors.

This industrial synergy ensures that the defense sector gets cutting-edge tech at commercial speeds, while the commercial sector benefits from the extreme reliability required by defense standards.

The modular power-grid pilot

Consider a company developing portable microgrids for both disaster relief operations and military deployments.

By utilizing an integrated requirements management tool, the sourcing team identified that 85% of the internal components could be dual-tracked. They defined a core requirement set that met 90% of defense ruggedization standards but remained cost-effective enough for civilian NGOs.

For the remaining 15% (the specialized, encrypted communications modules), they designed a plug-and-play architecture. This allowed them to use a standard, global supply chain for the main chassis while reserving hyper-secure ‘strategic sourcing’ exclusively for the sensitive modules.

The result: a 30% reduction in total COGS (Cost of Goods Sold) compared to building two entirely separate products.

A practical framework for sourcing decisions

An effective dual-use sourcing strategy typically evaluates requirements across three levels.

None of these is a one-off project you finish and move past. They’re operating disciplines that have to mature together because a certification strategy without a matching manufacturing strategy is just paperwork.

Looking ahead sourcing intelligence

Dual-use sourcing is becoming less about finding the lowest-cost supplier and more about building supply chains that remain adaptable as technologies, regulations and geopolitical conditions evolve.

That starts with requirements.

When sourcing, engineering and compliance teams establish a shared understanding of what the product needs to achieve – and why – they create far more flexibility later in development. The result is not only a more resilient supply chain, but also a product that can serve both commercial and defence markets without carrying unnecessary cost or complexity.

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The stakeholder complexity

A common pitfall for early-stage ventures is viewing the ‘user’ as a monolithic entity. In reality, the MedTech landscape is a web of competing interests. A solution might offer clinical excellence for a doctor, but if it fails to address the ‘economic pains’ of a hospital administrator or the efficiency needs of a technician, it will likely stall.

One of the biggest eye-openers we see when mentoring accelerator cohorts is the stakeholder mapping exercise. In MedTech, the ‘customer’ is rarely a single individual. Founders are pushed to move beyond their initial assumptions and clearly identify who holds decision-making power, who will actually use the solution, and who is financially invested in it. This often exposes critical gaps between the perceived value of a solution and how it’s evaluated across the healthcare ecosystem.

Refining a value proposition requires a shift from technical features to the ‘job to be done’. This perspective moves beyond functional utility to explore emotional and social drivers, such as peace of mind, risk reduction, and productivity. By mapping the specific ‘pains and gains’ for every stakeholder, a startup can evolve its narrative from a product pitch into a strategic market fit.

Identifying the opportunity gap

To bridge the gap between a founder’s vision and market reality, an objective validation methodology is required. This often involves utilizing opportunity algorithms to identify underserved needs. The process is deceptively simple but strategically profound: by measuring how important a specific outcome is to a respondent versus how satisfied they are with current solutions, startups can pinpoint the exact ‘attributes’ where the market is failing.

These gaps are where the most compelling value propositions are built. It is rarely about starting over from scratch; rather, it is about:

• Slicing attributes: Breaking down the solution into specific benefits that address validated needs.
• Challenging assumptions: Moving from ‘we think’ to ‘we know’ through structured respondent feedback.
• Story fine-tuning: Rephrasing the core solution to resonate with the person who holds the decision-making power.

Iteration as a competitive edge

The journey from an initial concept to a final pitch is rarely a straight line. It is an iterative cycle of presenting, challenging, and restructuring. The goal of this refinement process is to ensure that by the time a startup stands before an audience, they aren’t just selling an idea, they are solving a validated market pain. When a founder moves past the ‘baby syndrome’ and embraces the reality of the healthcare landscape, they turn their innovation into a sustainable business.

This is exactly the type of transformation we aim to drive when mentoring MedTech startups. Programs like the MedTech Accelerator are designed to support founders through this journey.

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Testing the waters with the MVP approach

Launching with an MVP lets businesses test their digital product with early adopters, gather feedback, and iterate quickly. This lean method lowers the risk of creating a product that doesn’t appeal to consumers and minimizes upfront investment. The challenge lies in transitioning from a free or freemium MVP to a sustainable revenue model.

The paywall paradox: Balancing value and access

Paywalls are crucial for revenue but require careful management. Pricing, feature accessibility, and user experience must be carefully balanced to avoid alienating users and hindering adoption. A well-designed paywall gives consumers a strong incentive to pay and effectively conveys the value of a digital product.

Why make the switch

Free items are rarely long-lasting. In addition to increasing the product’s perceived value and desirability, implementing a paywall generates a consistent cash stream to support further development, maintenance, and expansion. Paywalls enable businesses to segment customers by willingness to pay, allowing them to customize products and pricing strategies for different consumer groups while also generating revenue.

The MVP and paywall strategy is applicable to more than just digital products. In education, free introductory courses or materials can lead to subscriptions to premium content or tutoring. Basic telehealth consultations in the healthcare sector may be free, while fees may apply to specialized services or personalized plans. While paid versions offer more sophisticated functionality and committed support, freemium software draws users in the manufacturing industry.

Challenges and effects on new business creation

There may be difficulties with implementing a paywall: 

• User resistance: Users accustomed to free access may be reluctant to pay for previously free features.
• Churn: Introducing a paywall can lead to customer churn if the value proposition is not clearly communicated.
• Pricing optimization: Determining the optimal pricing strategy that balances revenue generation with user adoption can be complex.

However, when executed thoughtfully, paywalls can transform new business creation. By providing premium features and tailored experiences that build or strengthen loyalty, they create steady and sustainable income streams, maximize profitability, and improve client lifetime value.

Exploring the digital landscape

A smart strategy to address the challenges of managing digital products and to create long-term income models is through the MVP and paywall approach. This strategy can be applied to a variety of industries to increase consumer value and spur the development of new businesses.

Paywalls, MVPs, and digital products all require strategic management. At Verhaert Strategic Innovation, we help businesses design and test MVPs, implementing paywalls that strike a balance between user experience and revenue generation, and matching digital product strategy with business objectives. We assist companies with every stage of the product lifecycle after launch, including customer journey optimization, feature improvement, and long-term value delivery.

By combining a customer-centric approach with data-driven insights and collaborating with experienced partners like Verhaert, businesses can successfully navigate the digital maze, adapt to evolving user needs, and unlock new opportunities for innovation and growth.

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What makes a business model drive innovation?

1. Addressing large markets with real needs

To truly transform industries, innovation starts by identifying big, often fragmented markets with real unmet needs. Large markets offer the scale needed to make a real impact and grow revenues. Successful disruptors like Airbnb and Amazon changed the game by connecting supply and demand globally through digital platforms. By focusing on these big markets and building new ecosystems, they created business models that support lasting growth and meaningful disruption.

2. Built for scalability

Taking innovation beyond small pilots is vital. The most obvious scalable business models are software-based solutions. However, even in the physical world, certain business models allow for rapid scalability. Scalable models replicate local successes on a global scale, using systems like franchises. Companies like McDonald’s succeed by designing clear growth incentives and standardized processes that help them expand quickly without losing quality or flexibility.

3. Product-based and standardized offerings

Offering standardized product or service packages makes it easier for customers to adopt and for companies to manage operations. Subscription models, for example, turn pay-as-you-go users into loyal subscribers with predictable revenues. Streaming services like Netflix and Disney+ show how this approach creates a steady income and keeps customers engaged.

4. Generating recurring revenue streams

Financial sustainability hinges on consistent revenue. Business models that combine hardware with consumables, like Nespresso’s coffee pods or HP’s printer cartridges, achieve recurring revenues and greater financial visibility. These ongoing income streams provide the stability innovators need to reinvest in growth and R&D.

5. Protected by intellectual property

Barriers to entry safeguard innovative businesses from commoditization. Patents, trademarks, or proprietary technologies provide a competitive moat, allowing companies the breathing room to refine their models and build brand loyalty. Protection encourages risk-taking and continuous innovation.

6. Creating synergies through product families

Offering interconnected products that enhance each other’s value deepens customer engagement. Apple’s ecosystem of devices and services exemplifies how synergetic offerings foster brand loyalty and increase switching costs—turning customers into long-term advocates.

7. Strong, trustworthy brands

Brands act as shorthand for quality and reliability, reducing customer friction. Leading innovators—from Google to Dyson—leverage their brand equity to expand into new markets and offer new products with confidence. A strong brand becomes a powerful asset in itself.

8. Community focus and network effects

Harnessing the power of existing customers as advocates can accelerate growth exponentially. Platforms like LinkedIn and WhatsApp thrive on positive network effects, where each new user increases the value for all others. Building engaged communities enables direct feedback loops and organic marketing.

9. Asset-light operations

Asset-heavy businesses face challenges with utilization and capital costs. Innovative models like Uber and Booking.com sidestep this by leveraging existing assets—cars, homes, hotel rooms—through digital matchmaking. Asset-light approaches reduce risk and enable rapid scaling.

10. Disruptive with manageable risk

Disruption upends industries by offering fundamentally better solutions. However, disruption carries execution risks, including legal challenges and market resistance. Successful innovators balance bold ambition with careful risk management—Uber’s story highlights both the potential and pitfalls of disruptive business models.

The journey to a breakthrough business model

Great innovation is never static. From problem discovery through scaling, successful business models evolve continuously. They identify large needs, solve execution challenges, build defensible positions, and foster communities. For innovation professionals, mastering these 10 attributes unlocks the pathway to transformative growth. Are you ready to design the business model that will power your next breakthrough?

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Join our keynote session

“Innovation traditionally focuses on product development and intellectual property, yet today’s markets demand a broader approach that includes the 4Ps: product, price, place, and promotion,” says David Pas, Customer Success Manager at Verhaert Strategic Innovation. How do you empower a business to innovate more holistically and successfully? Find inspiration in the keynote session of David Pas on Thursday, November 7th at 8h25 in the morning ‘From ‘innovation for IP’ to ‘innovating the 4Ps’: a phenomenon or a strategic shift?’.

Let’s create new business and grow together

Innovating successfully requires you to understand user needs and set up rapid learning and validation cycles on market and tech dimensions to hit the sweet spot of innovation. With the right methodologies, tools, experts and mentors you have access to unique e-learning, funding and start-up ecosystem assets to help you overcome common innovation challenges:

1. Which strategies enhance solution-market fit for successful product launches and minimize business failure?
   Strategic pilots have achieved remarkable successes in developing and introducing new products, services and new customer experiences.
2. How do you accelerate the adoption of emerging technology and ventures, and ignite market development?
   Thematic business acceleration programs to spur start-ups and technology transfer, with a leading entrepreneurship team active in coaching, scaling and funding.
3. Which disruptive business models and technologies can fuel growth in venturing initiatives?
   Providing full-service corporate venturing ecosystems to succeed in an agile and lean manner, including training, mentoring and start-up connections.

Visit us to increase your capacity to innovate, strategically and improve the outcome of your new business initiatives.

Book a one-on-one at the fair

Visit Verhaert Strategic Innovation and book a personal meeting at your convenience.

Find us at our booth

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Circular business innovations

If you were part of this Innovation Day in 2023, you likely already investigated how outcome-based innovation can be the secret to positioning your business for success. This comes along with necessitating a reevaluation and transformation of traditional models, to prepare yourself for the transition to a net-zero economy profoundly impacts various facets of businesses.

In terms of business models, organizations are compelled to adopt circular and sustainable frameworks that prioritize the focus on sustainable outcomes through resource efficiency, waste reduction, and responsible sourcing. This shift not only aligns with environmental goals but also presents opportunities for innovative revenue streams. Companies that integrate circular principles into their business models can differentiate themselves in the market, appealing to environmentally conscious consumers and investors.

Customer loyalty through sustainability

The impact on customer experience is substantial, as consumers increasingly prioritize sustainability in their purchasing decisions. Businesses must now deliver seamless and transparent experiences that reflect a commitment to eco-friendly practices. This shift in customer expectations requires companies to rethink their supply chains, packaging, and overall product life cycles. User behavior transforms as well, with a growing demand for sustainable and ethical products. Consumers are more likely to engage with brands that demonstrate a clear dedication to environmental responsibility. Consequently, organizations need to anticipate and respond to these evolving user preferences to ensure continued loyalty and market relevance. The evolution of products and services is inevitable in this context, with a heightened emphasis on the outcome ie now including the climate impact of the product. This translates to eco-friendly design, energy efficiency, and the integration of technologies that support sustainability. Companies that innovate in these areas not only contribute to a net-zero future but also gain a competitive edge in a market increasingly driven by environmentally conscious consumers.

Net-zero economy starts today

In the pursuit of a net-zero economy, Verhaert Strategic Innovation’s Circular Canvas emerges as a guiding framework for your outcome-based innovation in the realm of net-zero innovation projects. Together companies, supply chains, and consumers can build a future where innovation and sustainability go hand in hand, creating a lasting impact on industries and the planet. Download our Circular Canvas and embark on the outcome-based innovation journey towards a cleaner, greener, and more innovative tomorrow.

Download the Circular Canvas

Curious about other insights from our Innovation Day? Dive into the insights from a product engineering or digital innovation perspective.

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The shift to sustainability in FMCG can only be realized successfully when you invent new business models, new delivery tools and new products. The best way forward at the moment, is by shifting exploratory thinking and pretotype testing to direct-to-consumer business models, new ecosystems, and the invention of new smart delivery tools. Especially due to the current economic situation, putting pressure on prices. Check out this webinar from Jonathan Reeves, Corporate Vice President New Business, Venturing & Marketing Excellence at Henkel Laundry & Home Care on new business creation to overcome inflation and sustainability needs.

Watch the recording

View the presentation

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Innovating during inflationary times is tough but a thorough scan of your current product portfolio or innovation roadmap will help you navigate more successfully through these uncertain times. As this might not be enough, we recommend innovation and R&D leaders to gear up their teams and focus more on pricing, to install tools and accommodate the new environment, and finally to adjust product features to the new buying behavior. Here are 4 ways to re-strategize innovation and put your company in the driving seat to shape the future.

Develop the art of price setting during your development process

An analysis can plot your current price positioning in the market and evaluate if there’s still room to increase prices without losing market share and volume. Of course this should be an investigation of customers’ willingness to pay relative to comparable products, allowing you to evaluate the consequences of price changes in volume and margin. It will ensure your customer relationships and balance them with an increase in profits. It’s also important that you check the cross-elasticity with your biggest competitor product. Why? A price increase in your product might lead to a large volume switch to a substitutable product from a competitor.

You might also want to re-adjust the planned innovation portfolio as not every planned product might have the same price elasticity and therefore not every product you had in mind will be eligible for a similar price increase. Does every product have the same price elasticity, resulting in a -1% volume change when a +1% of price change is implemented? You can either stop some projects, or reconsider the features compared to intended price levels. Now more than ever, adjusting your innovation portfolio is a profitable strategy to consider.

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Shifting towards circularity in construction

Construction and circularity might not seem like a match made in heaven, but it can and should be. For the industry, this can be the ideal opportunity to get ahead of competition and overcome relatively low productivity growth and limited digitization speed.

Circular construction can take many forms: from repairing, reusing and recycling products, to reducing consumption, sharing and leasing services. To make circular construction profitable though, your organization requires a fundamental transformation. How do you effectively innovate your products, services and business model to meet the rising sustainability demands?

Making circular construction profitable

Energy efficiency and material circularity are the new innovation must-haves in the construction industry. During the ‘Eco-driven innovation’ webinar, you’ll be able to learn how Vandersanden, UAntwerp, ETAP and Verhaert have successfully embraced sustainable solutions in their organization in 3 inspirational sessions:

• 9h30 – Energy-neutral district architecture (UAntwerp)
• 10h05 – Sustainability in building materials (Vandersanden)
• 10h40 – The challenges for a profitable circular business model (ETAP)

Interested in attending the ‘Eco-driven innovation’ webinar? Visit the event page to register or find more information about the sessions.

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Hoe kan je als overheid nieuwe diensten, bedrijfsmodellen en producten ontwikkelen die echte doorbraakinnovaties zijn? Het innovatieproces leren sturen en efficiënter maken is belangrijk in het leerproces. Herbekijk het webinar van Dany Robberecht, Director Strategic Innovation, over de rol van overheden in innovatie en digitale transformatie.

Watch the recording

You can watch the recording of this webinar on the Bouwen aan Morgen website.

View the presentation

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