Young tech companies must operate less like products and more like client-driven businesses

Satisfy client needs

Focus on satisfying client demands

Today’s technology sector is a very innovative, fast-changing and competitive area, where dozens of new multi-device services come online daily.

In this setting there are many early-stage companies – particularly in Web, Software and devices – that have become quite good at designing elegant and useful products to serve their initial clients.

However, to thrive early-stage companies need to operate less like product development houses and more like businesses.

Early-stage companies are driven by selling their product

At the beginning of a new venture, the founders invest the bulk of their capital in the development resources needed to produce the first viable product. In parallel, to help drive adoptions and stimulate sales companies invest in basic marketing communication efforts (e.g. Website, sales brochure, online advertising, blogs, presence at selective industry events) and direct sales staff where needed.

However, when a new product starts to take off competitors are usually quick to move in, proposing a comparable, but improved or lower-priced offers. The result is that customer tastes and expectations evolve, eventually leading to slower sales for that product.

In many cases a founder’s reaction may be to invest more in commercial efforts to generate further sales. This can translate into more sales staff, the development of resale partnerships, increased advertising, or an updated Web presence.

However, despite these additional efforts, in most cases customers just don’t buy it – literally. Their tastes and expectations have evolved with the market, and most will look to the latest competitive offers when deciding what to buy.

To become relevant once again in this competitive arena, early-stage tech companies need to reorganize themselves to constantly adapt to changing customer and market demands. But how?

To remain relevant tech companies need to adapt to changing customer and market demands

To adapt, a good place to start is by looking for deeper insights into customers and their demands, and therefore how a company can best help its clients. While this may seems obvious, in practice it’s not a trivial matter.

In practical terms this means:

  • Identifying their clients; Engaging with them on a an individual basis to discuss their context, issues and specific needs; Designing solutions that meet their demands; Making it easy for them to select, buy and use a new offer; Developing a pleasant, dependable and consistent relationship; and keeping a finger on the market’s pulse to identify new emerging opportunities and unforeseen threats.

To capitalize on these customer and market insights most early-stage companies will have to reorganize themselves, putting the customer at the heart of everything they do, rather than their product.

Successful businesses are built to effectively serve customers needs

To continue developing, early-stage companies need to organize themselves by establishing a set of functional teams covering various essential market and customer-focused areas.

Each team should report to a single leader who is responsible for a set of particular activities, working closely with other internal stakeholders while keeping the customer firmly in mind.

In established companies, distinct customer and market-focused functions include: Strategic marketing, Product marketing, Product management and Customer service

For example, a product marketing team will work with other functions in several ways:

  • Strategic marketing – Providing customer insights and market feedback to nourish and guide the company’s strategic directions.
  • Product management – Collecting customer feedback and insights into clients’ emerging needs; Defining and developing purposeful, client-driven content to promote the value that the firm offers clients.
  • Sales – Providing strategic support to help convert prospects to clients.
  • Customer service – Helping assure that client needs and issues are resolved quickly and appropriately.
  • Marketing communication – Preparing client case studies; Offering other relevant client and market-driven content for use in communication campaigns and other initatives.
  • Development – Helping capture client and market demands and helping translate them into product and service requirements.
  • Finance & Legal – Providing customer feedback to assure suitable client contracts and conditions.

Early-stage tech companies need to refocus from creating products to satisfying customers’ changing demands

In early-stage companies the founders usually preform many of these functions since they are the driving force behind the product vision and its execution. However, with each new client the activity grows and the market requirements evolve, pushing the product beyond the original vision.

To capitalize on these inevitable changes and remain relevant, the founders must reorganize their company from one that develops great products to one that is in the businesses of satisfying its customers evolving needs.

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2 Responses to “Young tech companies must operate less like products and more like client-driven businesses”

  1. Today’s Web start-ups: How a customer-marketing approach can jump-start business | Merkado | Technology Marketing Leadership Blog Says:

    […] Many start-ups like these bring new and interesting business idea that they work passionately to crystalize into fresh products or service. However, to make the shift from simply developing a great product that satisfy a fistful of users to kick-starting a new business, early phase companies need to act more like a business. […]

  2. Web Start-ups: How a customer-marketing approach will jump-start business | Merkado | Technology Marketing Leadership Blog Says:

    […] Many start-ups like these bring new and interesting business idea that they work passionately to crystalize into fresh products or service. However, to make the shift from simply developing a great product that satisfy a fistful of users to kick-starting a new business, early phase companies need to act more like businesses. […]

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