A Great Investment Opportunity

Quick Summary: Some companies assume other companies will fill the gaps that they ignore. It seldom happens.

Abstract:

It is easy for companies to focus on what they do best and assume that other companies or perhaps even the customer will take on the responsibility of integrating their product into the customer’s business.  This approach is seldom successful.

Several years ago I attended a high technology trade show.  I was amazed at the variety of products, innovation, and technology that filled the exhibit hall.  I approached a company that was introducing a new product and I asked how they planned to distribute it.  After a long broadcast of generalizations, they said “somebody else” would handle distribution.  I visited another booth and asked them how end user billing would be managed for their product; I received the same response from them: “somebody else.”  At a third booth, I received the same response to the question of system upgrades and RMA logistics: “somebody else.” After spending the entire day visiting company after company and repeatedly hearing about this incredible company “somebody else,” I left the exhibit hall frustrated.  I couldn’t find this awesome “somebody else” company!  I was so depressed. I intended to approach the company to explore the possibility of investing in them since it was obvious that they were such an integral part of virtually every other company’s customer solution.

The above story is only a slight exaggeration from an actual event; the show I attended was called VON, Voice on the Net, an early Internet Protocol focused gathering.  Unfortunately, it happens all too often.  A company, typically a new company or a new entrant into a market, will have a new, sometimes, brilliant idea that could have a major impact on a customer’s business.  Infatuated with their revolutionary idea, they gloss over the realities of considering how their new offering will work in real world environments.  They expect the customer to be so equally enthusiastic about their offering that customers will surely figure it out.  Wrong!

Customers, probably after the first few minutes of listening to the new product description, immediately begin to focus on the implications of adding the product to their company.  Unknowingly, the vendor is attempting to force control onto the customer.  Essentially, they are saying, it is your problem to figure out how to take advantage of our wonderful new offering.  Some companies may, in fact, step up to this challenge.  However, more likely than not, they will politely tell the vendor, thank you and have a nice day as they move on.

At the opposite extreme, perhaps after receiving multiple rejections, the vendor with the new product will realize that they have to “fire” the “somebody else” company and develop an overall solution.  In so doing, many of the required elements may be well beyond their core competence or experience or their financial means.  In any event, developing all of the required capabilities in-house would certainly lengthen the time to market.  Even if they were able to overcome all of the aforementioned obstacles, they would now be in the position to recommend to their clients that they discard all of their related systems and embrace the company’s new, well-thought-out solution.

Somewhere between the two extremes of doing nothing and doing everything is a more practical solution.  It involves carefully thinking through the entire end-to-end solution that a customer can implement to take advantage of the vendor’s new offering.  The article in this collection, “No End Without an End To End,” discusses this issue in detail.  Instead of ignoring or duplicating the capabilities of the “somebody else” company, the best approach is to define each company’s role and work with the customer with the goal of solving their problem with your new, revolutionary product as part of the solution.

 

 

Article Number : 5.030701   

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