Most of the potential “technology entrepreneurs” I meet aren’t interested in launching technology companies.
“What?” you ask.
Let me explain: At its essence, most tech entrepreneurs are focused on addressing a specific, unmet market need.
And, believe it or not, they tend to want their underlying technology to be off-the-shelf. For most, new-fangled technology is something they avoid. And I think that’s great. How can I say that as a serial technology entrepreneur?
Because if you take a step back, you realise that the vast majority of what most people think of as “tech startups” aren’t really technology companies at all. And that includes most of those that I’ve been personally involved with as founder, officer or investor, as well as most I’ve studied as a business professor.
Rather, most “tech startups” tend to be businesses that intelligently apply existing, off-the-shelf technology platforms to do a dramatically better job addressing a common issue faced by a targeted customer set.
So if you think of companies in fields ranging from mobile gaming to e-commerce, from cloud-based apps to mobile advertising, from near-field communication (NFC) apps to social networking plug-ins, they’re not really tech businesses in my book.
They’re technology-enabled businesses.
These companies tend not to be inventing and introducing any new technology. No need to. Instead, they’re applying existing, proven frameworks, app development environments and marketplaces—the iPhone and iPad and the iStore; Android and Android Market; app development on Facebook; RFID and NFC technology; Microsoft Office365 and MS HealthVault; mobile geolocation services; ERP apps; Google Apps; and the list keeps growing—and using both vendor SDKs (software development kits) as well as open-source toolkits.
From that baseline, entrepreneurs can solve vertical-market-specific problems remarkably quickly and cheaply without reinventing the wheel with the underlying technology. They can cobble together a prototype solution, get it in front of lead customers, and interactively incorporate real-world feedback.
Fantastic. Because neither smart entrepreneurs nor their customers nor their investors, frankly, are fans of technology risk. Science projects belong in research labs, not deployed in businesses and being foisted on commercial customers. Startups, meanwhile, are usually best off focusing their efforts and their scarce capital on solving a real customer problem—and basing their solution on bullet-proof, market-proven platforms.
Jim Price is a serial entrepreneur and Adjunct Lecturer of Entrepreneurial Studies at the Zell Lurie Institute at The University of Michigan Ross School of Business. ©2012, James D. Price.
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