See Market Orientation relationship with Technology
technology matters less than having a good technology at the right place and at the right time. The best example of that is Microsoft with MS-DOS. They did not have the technology, they licensed it and it was not the best technology available, it just happened to be able to sell to IBM at the right moment. Microsoft proves it over and over again. It is marketing, marketing, marketing, marketing. Microsoft rarely has the best product.echnology is the qualifier, not the winner. In fact, having the best
The problem with technology is that while somebody might be able to convince you that the current state of the art technology is this and that you are right there, who knows if there is not somebody you never heard of who is working on the same problem in his garage, and who comes to market and now you are behind. That leads you back to marketing. Nonetheless in a small company a good technology can help you a lot to compete. Since as a startup you cannot do so easily smoke miracles like the big guys which just put out another press release.
Technology is a qualifier, but the best technology rarely wins.
Technology companies frequently undervalue the importance of marketing and assume that the product will carry them. Such companies are doing technology and then say “let the market find us”. In fact, engineer-oriented entrepreneurs often do the product, and then they say, okay, the product is done, now we need a few salespeople to sell it. That is not the way to think of. Market risk is undoubtedly the hardest one to see, the hardest one to test, and drains the most money. You think AT&T spends a lot on R&D, look how much they spend on marketing. Marketing expenses are far larger than development expenses. Technology companies spend usually 20% on Marketing and Sales and 10% on R and D. Therefore you should never underestimate the financial commitment to build a successful marketing and sales force. It takes a lot of money and you should start early. So when you build a financial strategy for a company you have to think of at least two stages or even three: the engineering product stage followed by the sales and marketing stage and the infrastructure stage (administration, support, customer service). They are not subordinate, they are at peers.
Never underestimate the marketing expenses you need and the importance of having a great sales team.
Since market risk is so important companies in Silicon Valley have discovered new ways trying to reduce market risk in the development process. So for instance they have a permanent office at their key customers. Many successful startups have offices at their principal customers who are also their beta site customers. When you have a person there all the time, they make sure that the company keeps up with what the customers’ needs are and which direction they are going. Sometimes, they have it the other way round. The customers have an office in your company and work with your people under the same roof.
Have an office at your principal customers or have their people have an office in your company.
All in all, the interviews have shown that sometimes it can make sense to have a strategy which combines a strong customer orientation which focuses on today’s needs and a long-term technology orientation which looks where technology could go. For the long term technology orientation you should ask yourself where could technology lead the market, set a point far enough out, pick a target three or four years out, do a product for that point in the market and then hope that the market finds you. Thus on the one hand there is a near-term market share strategy, on the other there is a long-term technology strategy.
A short-term technology strategy should always focus on the customers’ needs. Sometimes it can make sense for a technology company to have a long-term technology strategy to see where technology can lead you.