By Agnes Haak
As a mentor and consultant to small and medium sized businesses, I have encountered many IT professionals and entrepreneurs who are developing new technology and are asking for help on how to turn their technology into a viable business. The first step in developing “viable technology” is by developing products with the market in mind.
Research current products
The first question I ask an entrepreneur is “is there anything like it on the market?”. Too often, programmers, developers or entrepreneurs spend too much time on the idea phase only to find out afterwards that this idea is not new, that it is already on the market, in some way, shape or form.
It is important part of the development phase to do the research and find out what is already out there. Current products that should be considered include products that target different markets, have less or different features or are built differently. An innovative idea does not exist in any form in any market.
How do you find, define and exploit ‘exploitable’ technology?
Why elevator pitches don’t work with investors
Toronto startups unleash slew of productivity boosters
Design for the target market
In the development of technology, it is easy to confuse target market and end users. In simple terms, the target market is the party that is willing to pay for your solution. The end user might like your solution, might use it, but doesn’t necessarily pay for it. In the development phase of the product, it is important to understand the benefits of the product to the target market, so that they are more likely to buy. Target markets could buy for a variety of reasons; cost reduction, increased efficiency or to attract more customers.
Solve a problem
New and innovative technology needs to solve a problem or offer an opportunity. Your market is not willing to pay for a solution that costs money but doesn’t generate additional profit, additional customers, or improved market positioning. The “nice to have” is not good enough. The “need to have” is the only way to go. The right product solves a problem or offers new opportunities for the target market.
Entrepreneurs and developers will need to develop their idea to the proof of concept or prototype stage in order to demonstrate the feasibility. It is critical to show your target market, potential partners, and eventually potential funding partners that you can do what you say you can. If you claim that you will link your technology to social media, develop mobile apps, or integrate a multitude of systems, you will need your prototype to show that you can actually do it.
The critical milestone for any entrepreneur is to test their product on their target market. This is a difficult moment for the entrepreneur. Until now, the assumptions have been from the entrepreneur’s perspective, now it’s time to listen. Market testing will test the entrepreneur’s assumptions; reveal the interest in the market for the product; highlight the features that the market requires; and assess how user friendly the product is. The task of the entrepreneur is to collect as much information as possible in order to assess the product, the features and the feasibility of the product.
The next step in the development of products is to gain momentum, to gather support, and to present the product to others. At this point in time, entrepreneurs and developers have spent so much time at the drawing board, programming or building that they have a hard time explaining their product without getting lost in the design details. An entrepreneur needs to provide clear insight in the product, its target market, the problem it solves, the potential of the business, and why they are the best person to run the show.
In our workshops “Building Your Business” we help developers move out of their development phase and become true entrepreneurs by developing their story to take their business to the next level. The true test to determine if they can turn their product into a business will depend on if their market will buy, if they can make a profit, and, most of all, if they can convince others that their product will make it. Entrepreneurs need to learn to tell their story and convince others. Over, over, and over again.
Dr. Agnes Haak is the principal of Sparkit, a consulting firm for small and medium sized business, based in Toronto as well as a mentor with ventureLAB in Markham.