Launch a company

I came across this great post on top 10 reasons why high tech companies fail:

Why High Tech companies fail

My favorite part about this post was the comment around conventional barriers to competition not being applicable to high tech companies. ‘Perception’ about your company in the minds of customers and prospects is the biggest competitive barrier.

It makes me wonder, what are the various steps a high -tech start up should take to improve in this arena.

How can a start up address the key perception issue around ‘ Buying from start ups is risky’? Due to this perception most customers fall into the ‘Early Majority/Late Majority’ bucket instead of the ‘ Early adopter’ bucket that is vital for start ups to succeed.

Here are some thoughts around building the right perception:

a) Communicate that your technology is NOT a ‘ Silver bullet’ for all their problems:

Focus on the specific issue that your start up is attempting to solve and clearly communicate and
acknowledge that your solution addresses perhaps a very small subset of the customer’s issues, albeit it very effectively solves that ONE problem. Many start ups get overwhelmed when customers bombard them with questions around does your solution do blah, blah and blah? Under pressure to not lose the customer, many start ups end up claiming that they have built a stairway to the moon, and back.. Its important to come across as genuine and set realistic expectations around what your solution does without going overboard

b) Over communicate with Customers :

With minimal resources and support available, handling the few beta customers in hand can be challenging. Product management will certainly be working overtime to get feedback from these customers to incorporate into future releases. What about the remaining parts of the organization? Have you or your management had conversations with folks who may not have had a direct say in the purchasing process? For e.g Have you talked to the accounting department to see how efficient was your invoicing process? Have you interacted with your customers help desk staff to see how manageable your solution has been?

c) Risk- No way: ‘RISK’ is a 4 letter word that makes most IT managers lose sleep at night. Give
them sleeping pills : -) not a headache..

What i mean by that is most start ups focus a lot on the solution, which is understandable, but customers want more than solutions..they often need the whole nine yards to put them at ease: Support is definitely one of them.. Most start ups cant afford to hire support staff upfront before they sign on customers..classic chicken or egg situation..Consider bringing on a third party provider who can be trained on your solution, and provide 24 X 7 support.. Outsourcing support helps not just with providing the required level of support but also with keeping capital expenses at a minimum..if for some reason your start up does not take off, you can always end the contract with the 3rd party support provider.
If your solution requires some customization or integration, offer to provide not just the initial integration /customization but an extended professional services solution which provides them with needed customizations on an ongoing basis..

In short, sweeten the pot as much as possible

d) ‘I Dont want the whole pie’:

As you may know, its difficult to find those precious gems or ‘Early Adopters’ as we call them..

Most Early majority customers will sit on the fence and watch the ‘Early adopters’ to see if they crash and burn or are truly seeing value.

How can you make them jump across the fence and join the party?

In some situations, you may be able to overcome the perception issue of ‘ this solution sounds great, but i dont want the whole pie, its too much for me ’.. Dont give them the whole pie’ .. What this refers to is ‘ Design your solution so you can provide some pieces of the functionality without giving them the entire solution’. This can be somewhat tempting to ‘ Pragmatists’ who dont want to take big risks and want to ‘wait and watch’.

In addition, the conventional approaches of industry selling/marketing and industry references go a long way.

Comprehensive information on all facets of running a business
Start Up Nation