When it comes to understanding organisational buying behaviour, companies act in similar ways to people. Some like the new whiz bangs products and don’t mind the early versions that can be low in functionality, expensive and often unreliable, through to the ones that wait for a perfect product and a low price.
Making an entrepreneurial Wales
Tomorrow: Walter May says Welsh entrepreneurs abroad can help those at home.
We live in an age of lowering product life cycles, rapidly changing and converging technologies and huge choice. Witness what is happening with the emergence of new devices such as Kindles, iPads, and iPhones.
Every day small entrepreneurial companies are trying to bring even more innovative technologies to the market, often having a ‘neat’ technology searching for an application. Mark Zuckerberg said as much about Facebook: “In the early days we knew we could make money from what we had, we just hadn’t figured out how”.
Having worked for US software companies for many years, I find a stark contrast in their attitude to business compared to Wales. A desire to dominate their market and a relentless focus on achieving short-term (weekly, months, quarterly) goals is a core discipline that drives their success in starting and growing technology businesses. The sales attitude – “what have you done for me lately” – and emphasis on top line revenues forces the constant reappraisal of the companies products and ‘go to market’ strategy, driving excellence and innovation across all disciplines. As Sir Terry Matthews said recently, at a business leaders event in Chepstow, “You can’t have a bottom line, without a top line”. And he added, “If you can’t demonstrate measurable progress within six weeks, what the hell have you been doing”?
For any young Welsh technology business seeking to grow or find an application for its products, adopting the ‘American way’ would be a good place to start. As they say, no one does anything until someone sells something and selling only starts when the customer says ‘No’! Young and not so young entrepreneurs and business leaders are often bemused by their lack of ‘go to market’ success. They fail to understand why their sexy technology is not appreciated by their target customers. Things are only going to get worse as ‘barriers to entry’ become greater, competition more intense and the cost of doing business on an international basis more expensive.
So what can an aspiring Welsh based business do to give themselves the best chance of being the next global success story? A good place to start would be to acquaint or reacquaint themselves with the ‘technology adoption cycle’ and then reappraise their sales and marketing strategy and make the appropriate changes. In addition become a process driven business and seek out ‘lean’ ways to achieve results.
Couple this to the ‘sense of urgency’, sales driven mindset and short term focus that typifies the US business culture would combine to give any business a much better chance of success.
If you are not achieving the sales success that you anticipated or find yourself stuck with stagnant or declining revenues you could benefit from reading Geoffrey Moore’s seminal Crossing the Chasm. It perfectly illustrates the pitfalls and huge challenges that await technology companies in trying to reach the holy grail of the ‘early majority’ customer group. On the journey they must negotiate the deep chasms that have to be crossed in moving from the innovator (those that will help you perfect the product and not use up your precious cash) to the early adopters (that are looking to get an edge on their competitors) and the early majority. Beyond are periods of focusing on ‘economies of scale and cost reductions, leading to the late majority and so-called laggards.
So why is it that some companies go to inordinate lengths to understand their customers buying behaviour and psychology while other businesses seem to ‘wing it’ and hope they get lucky? Technology based firms need to become more analytical in deciding who they want as customers, match their ‘go to market’ process with their buying behaviour and fully appreciate what’s required to ‘cross the chasm’.
So the next time you purchase a technical product, observe your own buying behaviour and see if you are you an innovator (techie), an early adopter (gadget man) or a laggard?