In my experience in raising private equity for start-up companies, there exist two types of companies: technology-oriented companies and market-oriented companies. Both types of companies believe that they will be successful in the market. But it has been my experience that the market-oriented companies will ultimately provide their company with a highest, long-term return on investment.
Become a Market Oriented Company
The “technology-oriented” company focuses on its technology as the only means that will provide them success in the market. This type of company, often a typical profile of many start-ups, believes that it is their technology that will provide them with success in the market. They are not concerned with the size or growth of the markets, their competitor offerings, their customers’ needs, or what it takes to be a success in the market. All they know is that they believe that they have “unique” technology that will provide them with the ability to be successful in the market. Technology-oriented companies are blinded by their own thinking. They are “internally focused” companies that do not have the ability to bring their heads up from their technology and survey the landscape that they are intending to address. In many instances, it is these same technology-oriented companies that do not even know who their customer base is and cannot describe their needs in a succinct, well thought through manner. The technology-oriented company focuses their success solely on the success or failure of their technology. These same companies many times have great technology in the laboratory, but never succeed in bringing a great product or service to the market.
The “market-oriented” company takes a much broader focus on the attributes that potentially define their success in the market. The market-oriented company, like the technology-focused company, has “unique” technology that may provide them with the underlying ability to be successful in the market. But, unlike the technology-oriented company, the market-oriented company understands a technology that is successful in the laboratory may not be sufficient to be successful in the market. The market-oriented company generally believes that it is their technology that may provide them with success in the market, but they are genuinely concerned about all other aspects that will define the success of their product or service offering, including the size or growth of the markets, their competitor offerings, their customers’ needs, or what it takes to be a success in the market. Market-oriented companies are not blinded by their own thinking. They have the desire to learn all they can about their market and the attributes that define success in their target markets. Market-oriented companies are “externally focused” companies that do bring their heads up from their technology and survey the landscape that they are intending to address. In many cases, it is these same market-oriented companies that intimately know their customer base. This can be through experience, but most likely is due to the amount of research and due diligence they have done regarding their target markets. The market-oriented company can describe their customers’ needs in a succinct, well thought through manner. Finally, market-oriented companies have a much higher probability of being a success in the market. These companies have great technology in the laboratory and generally succeed in ultimately bringing a complete product or service to the market.
So given you have a choice, engage in the business planning process and make your start-up company an externally, market-focused company. This will increase the probability of success for your company securing venture capital funding and ultimately provide for the highest return on investment for your company’s shareholders.