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Tech entrepreneurs like to create cool technological solutions. Then, they often only want to provide their solutions to customers or clients that are equally cool — favoring the few buzzy opportunities over many other unexciting ones.
I know this sounds crazy. Who turns down business? But it’s true. Many tech startups have focused on splashy, slick apps of consumer convenience, rather than attending to the less visible infrastructure necessary to keep all this running. According to CB Insights, the number one reason cited by startups in postmortems was “lack of a market need” for their product. Hmm.
So what are they missing? First, let’s consider the disconnect.
Sure, it’s exciting to see yourself helping someone disrupt an entire industry. But most technology solutions get applied to mundane things in everyday businesses — the kind of clients that may “merely” want to reinvigorate a supply chain, find a more efficient way to root out product defects, or improve a routine customer experience. Or maybe they want to pump new life into old lines of business or ignite new growth in a mature business. For technology solutions, no matter how cool, that is where much of the market lies. And the market will only grow larger. More and more companies are realizing that technology can revive old businesses and can create new opportunities in existing businesses.
My colleagues and I studied over 1,300 companies in major industries and found that the most successful of these — roughly 100 — are actively doing this. They’re applying technology-led innovation to both their mature and current businesses, as well as their new ventures. Still, most of the 1,300 fail to identify all the mundane, bland, but potentially profitable ways to apply new technologies. For tech companies that are willing to support this boring stuff, a valuable cycle awaits: They can help established brands today, fueling the innovations that become the brands’ core business tomorrow.
Consider a potential tech client like Uniqlo, the global fast fashion retailer. Management experts have been telling retailers to shed stores, inventory, and where possible, employees in order to compete with e-commerce competitors. But Uniqlo is determined to make the most of a very old business — selling clothes in shopping malls. Instead of abandoning its core retail assets, the company is redesigning them to accommodate the latest in digital technology and digitally savvy customers. At the same time, they are making major technology investments in automated factories that lower inventory costs and allow more relevant products. The company is positioning itself for the future while making existing assets more valuable — and providing exciting challenges to their providers of technology solutions.
If you’re a tech entrepreneur, the lesson from companies like Uniqlo and the hundreds like them in other industries is clear. Make your cool solutions applicable in every phase of a customer’s business, as it continually evolves.
Start by asking yourself how much you really know about product production, or how familiar you are with processes in various service industries. Learn these businesses. Engage. Seek to innovate. You’d be surprised how cool it can be.
June 4, 2019 at 09:03AM