Figure 3, the Marketing/Engineering Investment Ratio™ (M/E Ratio™)
The Marketing/Engineering Investment Ratio™ (M/E Ratio™) was developed for the first annual MIT Enterprise Forum Spring Workshop, "How To Create a Successful New Business." This new metric separates the functions of marketing from promoting and selling, and installs marketing (market research) concurrently with engineering.
"WHEN you make the market research investment is key. There is no point in doing market research after the product is developed. Market research must be done up front!" Seth Taylor, Ph.D., Founder and President, MolecularWare, MIT $50K Entrepreneurship Competition Grand Prize Winner 1999
As you can see from Figure 3 which was created before the data came in, I first taught that the M/E Ratio™ ought to be 1:1. I was wrong! The M/E Ratio™ of successful technology-based companies is more than 2.5:1. Next, here is the data.