Technology or Business? What Innovation is More Important to Succeed as a Startup?
It’s an eternal question within the startup world: is it more important to offer innovative technology, or an innovative business model? Obviously, there are several different ways to go about building a successful company. But ultimately, it is the sales that makes or breaks a startup.
New and flashy technology is great. However, focusing exclusively on the tech can cause startups to overlook key issues. When consumers make decisions, they rarely think, “is this the latest and greatest tech?” Instead, they want to know that they can use a product and that the product will genuinely meet their needs. A super-innovative new technology won’t get very far unless it addresses a clear need in the market. That’s why we need to prioritize sales.
People’s behavior is oftentimes slow to change. This means it’s hard to create a business around new tech that requires people to drastically change their preferences and routines. If, however, a business taps into behaviors people are already doing, it stands a better chance of success.
Another factor to consider is speed to market. It can sometimes be difficult to bring a very new technology to market quickly. Even if the technology eventually becomes widely used, it can prevent the company from enjoying success. The history of startups is rife with companies who developed game-changing technology and then failed to capitalize on it.
Oftentimes, the startups that find the most success are those who can roll out their technology very quickly. If the technology itself has little or no learning curve, the startup can acquire users right away. Ideally, the solution should address a key need that many consumers have.
Basically, startups can leverage the needs and behaviors that customers are already displaying. When a solution is both useful and easy to adapt, it’s a no-brainer for new users to come aboard. We have seen this pattern in a number of successful startups over the past 10 years. Ridesharing services like Uber is just one example. The tech itself is simple — which is exactly why it was so easy for people to adapt. Even more importantly, the solution addressed a real need.
None of this is to say that a highly innovative tech startup can’t succeed if it addresses a key consumer need. This strategy can be particularly effective when it’s geared towards a small, tech-savvy market segment. But ultimately, the success or failure of a startup rests on the same basic equation: does this solution provide something that customers need, and is it easy for people to use?
If a startup can answer yes, it stands a good chance of success.
