PADT is a company focused on helping companies bring their physical products to market. As “We Make Innovation Work” for our customers, we learn a lot about what does and does not work in technology startup companies. In addition, we were once a startup ourselves and we now participate in Angel investing. All of this has taught us a lot of valuable lessons.
In this series we will share some of those lessons learned and explore the basic concepts and ideas that will help startups overcome the odds and become successful.
This posting is the first installment for our series. We hope that you find it useful and we look forward to sharing the the other nine articles.
We see it over and over again. Someone has a great idea. They borrow money from their friends and family, they max out their credit card, they get angel funding. They then build their product, putting every ounce of enthusiasm and drive they have into making the product perfect. All along they show it to people and get fantastic feedback like “I would buy that is a second” and “I wish I would have thought of that, it is a great idea.” They are dripping with passion. As soon as they can, they put their product out there…
And the product fails.
And they wonder why. They get frustrated and sometimes angry. What the majority of startups fail to recognize is that no mater how good an idea is, no matter how real and tangible the market need is, products do not sell themselves. This failure mode is different from failure caused by mistakes in execution, pricing, growth, or missing the market. What we are talking about here are perfectly good viable products that do not make it off the ground because the startup that created it felt that just building it was good enough.
“Building it” is just one step of many in getting a startup to success. You must also plan and implement everything that is required to build a business and launch a product. Those things do not come automatically. If you have a great idea with demand, then the implementation will be easier, but it is very rare for the idea or need alone to make a product a success.
There are many different areas that a startup must focus on beyond the product itself. Many a book and even a few text books have been written to talk in detail about how to plan and implement a entrepreneurial business plan. However, in our experience, there three critical parts of the business that every startup must carry out well to be successful.
The first is marketing – because if no one knows you have a product and what it does, you do not have the opportunity to acquire them as customers. You have to do it, and you have to do all of it: branding, messaging, social media, website, advertising, networking, trade shows, press, etc…. You do not have to do it big, and you can scale as you grow, but you must make sure that customers know your product exists and what it does.
We see many of our customers go to market with a name and maybe a basic website. When nothing happens they do not understand why the orders are not rolling in. A consistent and properly scaled marketing strategy with a concise message that conveys the products value is what is missing. Coming up with this is not easy and time and thought needs to be put into it. The good news is that this is one area where outside consultants can really help.
The critical partner to marketing is sales. The ease of direct to customer transactions through the internet gives many startups the false impression that they can simply put their product on the web and they will get orders. Even if no human interaction is involved, there is a sales cycle and you need to plan for it, manage it, and maximize the return on investment from the sales effort.
Sales is something that everyone in a company needs to be involved in to some extent. Success in this area usually comes when a sales process is developed that fits the product, and everyone sticks to it from the receptionist in the lobby to the CEO at the top. It is also a skill that most people do not have, or can not do over the long term. It is important to hire real sales professionals and if needed, managers, to head up the effort.
Complete the Product
There is one more major step that needs to be taken for success, to get people to come and buy a product. You need an actual product, and not just an idea. This seems obvious, and not even worth noting. Many times we have been involved in projects or mentoring where, when you dig deep enough, you find out that the “product” is just an idea, or a half formed prototype, and all of the details have not been worked out. To them they have built something great, so money and customers should be coming. But money and customers need something real and finished before they will engage.
Build It [finish it, market it, sell it], And they WILL Come
If you are thinking of doing a startup, or if you are in a startup now, take some time to look at your strategy and decide if you are counting too much on the power of your product’s appeal to make your successful. You probably are because most people make that mistake. Be honest about what you need to do, plan and execute, and you can defy the odds and be that technology startup that makes it.