Build it… and they won’t come

This is a gloomy title, especially for the very first post on a blog by a tech. enterpreneur; but I’ve come to believe that it holds a key truth.  So, let me share some of my personal thoughts and experiences with you.

To create the proper perspective, let me first confess that I’m not an academic.  Therefore, don’t (mis)take my musings as some scientific analysis.  That is simply not my ambition.  Rather, my entrepreneurial ways have allowed me to team-up with exceptional individuals and innovators, and their experiences, coupled with my own, have helped me see where many new business ventures go astray when trying to market innovative products and services.  After all, history is littered with “amazing innovations” that simply couldn’t find an audience to amaze.

True Confession

I am addicted to innovation.  I’ve been involved in the development and marketing of IT products and services for many years.  In 2004 I co-founded Nomadesk, a tech startup company that created the world’s first Virtual Fileserver Network (VFN) for small-medium business teams (we call them Nomadic Professionals.)  Nomadesk is a file sharing solution that enables mobile business teams to intuitively manage, edit, share and synchronize their documents from everywhere – even when disconnected from the Internet.  It is the first software solution ever built on the cutting-edge Enterprise 2.0 Virtual Fileserver Networking (VFN) architecture, and basically erases the distinction between “web” and “local” files, so that – regardless of where they originated – business files automatically remain:

• Fresh (files are always updated and synchronized);
• At-hand (always available on all team PCs and web-servers);
• Secure (256 bit encrypted and theft-proof);
• Trusted (protected from unauthorized access)

Nomadesk is clearly an innovation that I thought was so powerful, new users would simply flock in once it was launched.  In truth, while Nomadesk is gaining a lot of traction today; it was not the “instant” success we all thought it would be.  In fact, I discovered that, regardless of how disruptively innovative the product, real success is actually the result of a lot of “heavy lifting.”  Following are three important lessons I learned that may help you strengthen your entrepreneurial muscles and better push your amazing idea into the winner’s circle.

Quality is secondary

Many European innovators still have a strong tendency to prioritize product quality over product marketing.  This is quite different from our US counterparts.  Probably this is because in Europe, innovation is still strongly tied to the academic world, where certainty and predictability are the desired “constants”.  In the US, it’s foremost that entrepreneurs run an “innovation business” rather than simply have an innovative idea.  In Europe, I often see new businesses grappling with the notion that – in the end – quality will prevail and in order to achieve success, they need to launch products at a highest quality level, e.g. the richest feature set.

And, in a perfect world of unlimited resources and time, this may be true.  But, in today’s real world of global competition and increasing market demands, an innovator must always ask: “Do I have the resources (i.e., time, money, people, etc.) to get to that end before I start?!”
In the world of business innovation and development, there must be compromise. In the trade-off between product perfection and time-to-market, quality must come second.

Don’t get me wrong, I’m not saying that quality doesn’t matter at all.  For sure, every innovation needs to fulfill a baseline of functionality for which it was conceived, and it must do this in a wholly predictable and dependable way.  No one wants to build (or buy) a crappy product.  But there are miles of ground to cover between down-right crap and the highest feature-rich quality.
Unless you are working in a justifiably quality-regulated industry like healthcare or aviation, quality is not the most important requirement for a successful product launch, especially in early adopter markets.  The software industry is the best example of this notion.  Every user knows – maybe even expects – that the latest software release will have some (non-fatal) bugs.  Yet, it will continue to be used as long as the resulting benefits outweigh the quality risk.

So, if quality is still engraved into your brain as “Job #1”, consider refocusing your efforts at high-quality marketing rather than production.  Take the time to really get to know the proverbial “pain” your innovation cures.  Find out who is suffering, and how many there are, as quickly as possible.  The secret is engaging in rapid prototyping (not a high quality premise) to perform relevant market research on the targeted end-users.  With the omnipresence of the Internet, it has never been easier to do this kind of active market research, especially if you are a software-based product.

At Nomadesk, we continuously build updated versions of our software and “beta-test” them on a live audience.  I never cease to be amazed by how receptive and responsive our early adopter beta-testers are.  With the proper tracking systems installed, the results of beta-trials are sheer marketing gold.

To summarize, lowering your priority on the quality does not imply that you should launch a crappy product.  For your marketing research to be of most use, even beta-test prototypes definitely must cure the basic pain but without overwhelming side effects!  Constructing innovations in close collaboration with your ultimate end-users ensures that if you build it they will stay… and even spread the word before the products is even finished!

Innovating is not banking, don’t hedge your bets

If you are serious about successfully launching an innovative product or service into the market place, never hedge your go-to-market-strategy.  It is very tempting to pursue a conservative business strategy that includes every direct and indirect market channel, or all possible customer profiles (i.e., consumer, “pro-sumer,” small business, enterprise).  This most often occurs because you simply don’t know which strategy is best – after all, business in not exact science and your innovation might not have a comparable benchmark product out there which could set the example.
Or, you might be convinced to go along the multi-channel road by your investors (they are probably bankers; and you should expect them to act accordingly).  Still, when it comes down to launching innovations, it’s not a banker’s business.  Hard-learned experience has taught me that hedging does not mitigate your business risk.  In fact, it often creates more risk by reducing the effectiveness of your decisions.

For instance, if you deal with a multichannel approach, it is clear that each channel imposes specific operational, financial and marketing demands.  In most cases, the innovator is ill-equipped to meet these demands and the channels can become distracters.  What seems to be a good hedge quickly turns into a juggling act, without any particular ball getting enough required attention to make it work.  The net result is all of the balls hitting the floor!

Which are preferred then, direct or indirect channels?  From a pure marketing theory perspective, indirect channels exist to fulfill an existing demand.  Indirect channels are rarely very good in creating demand.  Indeed, you could argue that they are not about sales; they are purely about order intake and fulfillment.  If that is true, it is definitely arguable whether indirect channels are appropriate to launch an innovation in an early adopter marketing, for which demand is still in the making.

Furthermore, realize that indirect channels will never provide you with the indispensable feedback which the innovator requires to ultimately complete the highest quality product marketing and define the product roadmap.  Still, if a multi-channel strategy seems the right way to market your innovation, prioritize and focus on one channel at the time – giving it all your attention for as long as its needed.

With respect to the choice of the target customer profile, hedging is even more dramatic.  Product innovations cannot be all things to all people.  Communicating ambiguous messages into the market place will never be successful.  From a sales process perspective, it’s also unfeasible because of the ways purchase decisions are made, which differ greatly between customer profiles.  There’s a reason why niche strategies are often more successful.

Remain cautiously opportunistic

It is amazing how innovators, especially from the engineering disciplines – such as me – can get really entrenched by their original product vision.  It’s not always easy to keep an open mind, even when confronted with the results of market research that sometimes takes your innovation onto an entirely different road.  Therefore, be reasonably opportunistic and always understand that we build innovations to a useful purpose, which may differ from what we originally envisaged.  With this mind-set, you will be in good company: after inventing the phonograph, Thomas Edison believed its primary application was dictating business letters.  Alexander Graham Bell viewed the telephone as a news and entertainment medium, with subscribers dialing in for access.  And correct me if I’m wrong, but Viagra is no longer a cure for heart diseases right!  I think it’s clear that these innovations went somewhat astray… to far greener pastures.