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AAJ INSIGHTS

The Technology is Not Your Startup

AAJ Technologies
June 25, 2018

Editor’s note: This is the first of a new article series focusing on startups.  This first article entitled “The Technology is Not Your Startup” provides a story and case study focusing on why some startups fail from failing to understand what they do, who they are (and aren’t) in their eyes and in the eyes of their (potential) customers.  Future articles in this series will dig deeper into startup issues, concerns, and how to’s from a growth and technology perspective. We hope you enjoy these articles and find them informative.

ARTICLE HIGHLIGHTS:

  • Getting out of “elevator pitch mode”
  • What your true USP (Unique Selling Proposition) is and is not
  • The most common mistake founders make and how to avoid it
  • Refocusing yourself from the common start up misconception (What your customers really want and need)
  • A must-read case study – a parable that every CEO/Founder must read

Own or lead a startup? Ask yourself this one basic question, and just spit out an answer. Don’t think about it, just say the first thing that comes to your head.

What’s the one thing about your company that will make you succeed beyond your competitors?

You probably have the standard, 30-second elevator pitch stored in your head and heavily rehearsed so you can recite it on demand at a moment’s notice. You know…  for that off-chance that you might run into some angel investor at the grocery store while picking up eggs and milk.

But that’s all marketing speak.  Step out of pitch mode for a second and really think.

What’s different about your company? Really different? Not the stuff you say to investors, but the type of thing you would say to your friends when they ask what your startup does?  The thing you explain to your non-technical family members that struggle to work the TV remote?

What do you say? How do you explain it?

If the first thing you mention is the cool new technology that is so innovative you can’t tell them exactly how it works without a lawyer present… Or if you start by saying its using this system you designed that’s a breakthrough in your industry… Or if you start with that amazing new techie tool you discovered… then you doing it wrong. Way wrong.

If the first thing you talk about is the technology, then you are thinking about your startup in completely the wrong way. And if the entrepreneur is thinking of their startup in the wrong way, then chances are the startup is headed in the wrong direction.  Eventually, you and your company will need to come to terms with this misalignment. And the sooner the better.

It’s a common mistake amongst new startup founders, especially new entrepreneurs who come from a heavy tech background. The focus is so much on the technology that the shiny new toy becomes the startup.

Unfortunately, there is one very basic truth:  In most cases your customers simply don’t care about your technology!

Technology is a means to an end. It’s the mechanism by which your company is able to bring value to your customers. To emphasize: technology can be used to bring value to your customers, but the technology itself is not the value.

The misconception that the technology itself is the value that customers will pay can be the most costly mistake a startup founder can make.  It will lead to many incorrect assumptions, and in turn will result in many incorrect decisions, from product roadmap to marketing to sales.

Let’s look at one example of a real-life startup that struggled with this concept.  XYZ, Inc (not its real name) was a young company with an innovative product recommendation engine for socially conscious users interested in environment and animal conservation.  The company created a browser plugin that would detect the product on the current page, and alert the user if the product contained animal-based ingredients, or if the manufacturer was known to do testing on animals or abuse the environment. The plugin would also provide recommendations to alternative products similar to the product shown that were known to be animal and environment friendly.  The company would generate revenue by collecting a commission on the alternative products sold.

The founder of the company was justifiably proud of the recommendation engine.  It was capable of searching through a massively large data set and performing complex algorithms in subseconds to return a result to the user.  He and his engineering team had worked for months refining the logic and the performance to really bring the recommendation engine to life.

When building the go-to-market plan for this product, the founder focused heavily on the complexity and depth of the recommendation engine in just about all aspects of the product marketing.  He made it a point to mention the millions of alternative products in his database, and the millions of calculations it could perform in subseconds. It was everywhere: on the company website, in the plugin description on the browser’s plugin store, even on the popup that showed alternative product recommendations.  Initial beta testing was showing that the users were excited and enthusiastic about its capabilities.

Unfortunately, months of marketing and promotions could not get the number of users above a few measly thousand. In most cases, users would install the plugin then quickly abandon it. The company tried various different marketing strategies to increase adoption, but growth was painfully slow.

The founder felt that the users simply were not understanding the capabilities of the system. He had the engineering team add features that reflected the engine’s power, such as displaying the number of products scanned for each query, and the number of attributes considered. He added a graphical visualization to the plugin’s icon to represent “computing activity” while viewing a product page. None of these helped. Desperate, he added a feature that changed the original product page content to show custom informational messages to discourage the user from buying that product, and that the alternative product was better.

All these efforts proved fruitless. Install rates dropped and abandonment rates increased.  The founder was confused and frustrated. He made the critical mistake of focusing on the technology rather than the customer’s objectives. The more he tried to push the technology, the more the product struggled to take hold.  As amazing and powerful his recommendation engine was, ultimately the product fell out of use and the company eventually shut down.

What could he have done different?  Perhaps instead of displaying counts of calculations, he could have had the plugin display multiple alternative products at a time. Maybe the user could set some preferences as to which products or manufacturers to display first, or not at all.  Or the plugin could display alerts for new alternative products as they become available. There are many, many possibilities.

Back to the simple truth: The users simply didn’t care about the technology.  What they did care about was finding and buying products that didn’t harm animals or the environment.  The early beta testing proved there was an enthusiastic user base out there that would love the product and would use it extensively.  If the founder focused on what those users really wanted, on what value his product was bringing, and not the technology, perhaps that product would still be around, and the startup would have had a very different destiny.

Stay focused.


ABOUT THE AUTHOR:

Andrew Simkovsky The Technology is not your startup. AAJ TechnologiesAndrew Simkovsky, with his 18 years of technology development experience, is the Senior Director of Technology for AAJ Technologies.  He is responsible for managing (and expanding) AAJ’s Startup Practice. Andrew’s full bio can be found here.  

If this article struck a chord with you, contact Andrew and his team for a complimentary discovery meeting using the form below.

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ABOUT AAJ Technologies

AAJ Technologies is a Cloud and Mobility application developer and integrator. AAJ’s clients range from small and mid-size to billion-dollar multinational companies, who rely on AAJ’s vast business, technical and project management expertise. Industry expertise includes healthcare, education, hospitality and government.

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