You have the greatest tech in the world, but will you be able to sell it?
While not as exciting as digging into your code and getting it to work, it is critical that you make sure all the hard work, money and headaches you are about to encounter can 1.) solve a real problem (i.e. relieve a pain point for your target users), 2.) can be monetized (i.e. people will happily spend money to relieve that pain) and, 3.) be funded (i.e. investors understand the pain and believe your tech will relieve it). It comes down to the story you are going to tell, to investors and to prospective customers. By outlining the solution your technology provides, and planning on how to overcome the hurdles for wide-spread adoption, you’ll be creating your technology with a high degree of confidence you are building something the market values.
Here are a few things to consider when identifying if you have a solution you can sell:
Is there a deep need? Because you see–and can solve– a problem with your technology, doesn’t mean the market thinks they have a problem. Iterations of existing solutions are far likely to get less traction than a new solution that save costs, time or reduces the need for validation and reconciliation. “We’re like Uber, but better,” is not as strong a value proposition as “We will help ensure that all dollars donated get to the designated end-user and not wind up in the pockets of corrupt officials.” You have to do due diligence to ensure that you are truly solving a problem or addressing someone’s need. That means market research, in-depth conversations with prospective customers in which you are really listening to them, and gathering statistics to ensure there is enough demand– and pain in the market– for your solution. If your market doesn’t exist, or you are trying to convince the market they have a need, proceed carefully. You will need a lot more time, money and marketing to convince them that they both have a problem and want to take a risk in buying your solution.
Are they ready for it? While you can see the full potential for your solution, your target customers may not. When you are developing tech solutions, put yourself in their shoes. What it will take for them to adopt this new tech? Who are the stakeholders? What do they have to lose by adopting your solution? What will they gain? Are they typically reluctant to change? Does your solution integrate with their other systems? What’s the learning curve for new users? What has been the track record of new technology adoption in this space? Understanding all of these perspectives (and many more) will help you to understand what hurdles you may encounter to adoption.
Who or what will you have to displace to get adoption? If you are disrupting a target customer’s current way of doing things you will inevitably find resistance to adoption, no matter how good your technology solution is. In the end, you are dealing with people– people who will always be making decisions and dealing with their own individual biases. If the key stakeholders just championed a project to invest in and update an antiquated system, they are unlikely to scrap it and go with your technology. If your solution is a direct threat to someone’s job or would eliminate headcount, your customers may have reservations. If you have to unseat a competitor or an incumbent technology used for years, you better have a really compelling story to overcome inertia and fear of change. Sometimes “keeping the status quo” inertia is your biggest hurdle to adoption.
What’s your cash runway? Having a clear understanding and timeline to getting to a POC and MVP will not only help keep your development on track, but will also allow you to forecast cash needs between funding rounds and your first client. It’s a long time (and lots of dollars) from development to having the business kick off enough cash to sustain itself. Make sure while you are tracking your development milestones you are also developing your financial models and forecasts to understand how much money you’ll need for each stage so you can plan on fundraising accordingly. The worst thing that can happen is to have a great product in the works and you run out of money to bring it to market.
Is there a network effect? Think about a fax machine in the 90s. One fax machine had no useful value until it had another fax machine to send and receive data from. The value of that fax machine increased as the number of other fax machines in use increased. Just as the fax machine needed a network to be valuable, you also have to understand what other players need to be engaged in order for your tech to be valuable. Especially in developing blockchain solutions, its critical to understand who are the players and what you will need to do to convince them to participate in the network of your solution. If your technology is dependent upon market participation and cooperation, you should outline exactly how you plan on getting buy-in, otherwise your technology will not get the traction you anticipated.
To build a tech solution you can sell, you need to consider the points above, and then some. You will also need to go beyond cursory conversations with customers to uncover the deep need- and the hurdles– you may encounter in getting to adoption. While it can be exciting to launch into development, in the end you are in it to make money. By pausing and objectively assessing the need, you’ll be able to determine if you can monetize your idea, and get paid for all the hard work yet to come.
If you need help strategizing on the market need for your solution, determining your cash runway, financial modeling, or putting together your pitches, please reach out to us for a no-fee consultation. We’d be happy to help.
