Solution Perception 101: Technology Push vs. Market Pull
One of the crucial questions every founder faces is the degree of their solution in comparison to the problem which they are trying to solve. There are many schools of thought behind this phenomenon. My standpoint is somewhat simplistic: I love to use the analogy of Technology Push vs. Market Pull. The Market Pull approach attempts to provide products the market demands. The Technology Push approach attempts to interest the market in new products based on new solutions.
The topic deserves a bit more detailed explanation because one of the industry’s greatest challenges is to develop products customers want and will purchase. There exists a fine balance between providing just what the customer is known to want and what the producer believes is a far superior solution set.
Technology Push is the scenario in which the producer, seeing an advantage to the consumer that the consumer does not see, creates a product type, and also the demand for that product type. The producer is in the business of fulfilling functions for the consumer, and uses unique methods, technology or approaches to better fulfill the function in ways even the consumer may not initially recognize. The producer carefully learns and understands about customers’ problems. In short, technology push product development is based on the belief that the supplier recognizes a market need even before the market does. By technology push I do not mean proffering products simply because the technology or method is capable of it. I do mean fulfilling functions better than do any other current methods. The producer ultimately educates the customer.
Market Pull is a scenario in which the market demands a product (or service) type, or defines a problem, and producers respond by producing and delivering that product. Market desire is well calculated. The producer is in the business of delivering products intended to fill a market-defined niche. In short, market pull product development is based on a perception of what products or services the customer wants, with the customer having a large say in the direction of product development. The customer defines the solution and educates the producer.
The table above best explains the distinction between technology push and market pull. Nevertheless, I feel that it deserves a more thorough explanation. There are multiple technology push issues. Firstly, there is a danger to start with what can be researched and evaluated easily on the market. Secondly, the threat of addressing the needs of the atypical user. This second reason is interconnected with the first one but it needs a separate explanation. The role of visionary founder is usually somewhat lacking because they can usually attract other visionaries and boost the first traction with “innovators” but they cannot “cross the chasm” and shift to attracting pragmatic and later conservative users who want to get the highest value from the solution. Lastly, there is a huge problem of getting stuck with one solution due to the founder's inability to realize that the solution does not have any prospective customers. Market Pull according to the table above sounds far superior. But there are issues, for instance, there is a risk to look only at needs that are easily identified but with minor potential. Next one, which needs to be taken with a pinch of salt but this is what I have experienced talking to startup founders. They lack at being a “champion” or “true believer”. Differently put, they lack persistence.
It is unlikely you will convince someone to buy something where there wasn’t already an existing demand. Markets move towards desired solutions naturally, like folks lining up for ice cream on a hot summer’s day. You as a founder or investor want to sell stuff on a busy beach. When you target a solid market (with good distribution channels) and give them a product that they are hungry for, you don’t have to do much pushing or pulling. If you do a good job picking your market category then you don’t have to list every single feature, because it is assumed. For example, I know what a CRM is! But, if you did a lousy job of picking your market category, you have got a trouble. Now you are going to have to spend a significant amount of your sales and marketing energy describing what you’ve built. It is way easier to sell in an existing category versus making a new one.
Ignore Steve Jobses, Henry Fords of the world. Invariably, when I start describing these ideas, I would always hear some variation of: “But Steve Jobs built a product we didn’t even know we needed!” First, yes, it is possible for a special type of innovator to create a whole new category. Nevertheless, these innovators either made current solutions less lousy or cheaper. So, friends, it is always about market adherence to the needs of the users. To conclude, Technology Push versus Market Pull phenomenon, I really like a quote used by Jason Cohen in one of his blog posts:
Startup strategy is like Kung Fu. There are many styles that work. But in a bar fight, you’re going to get punched in the face regardless.
