Several of my tech entrepreneur friends are at a point in their company where they need to decide whether or not to continue. These are brilliant guys in nascent industries that have been hyped by the media in the past 3-4 years, and they all struggle with the same question -- do people really care about my product.
This concern, in their mind, is often phrased as -- how do I change people's innate behavior to use these products?
Now I'm not going to go into another post about the need for customer development and validating demand for a product--I have done so already and will continue to in the future. Rather, I want to muse about a reason why choosing a nascent market is (too) often a losing strategy.
The repeated conclusion I hear from these struggling founders is early adopters are your only customers, and you can only push your product so far before nobody else is willing to pay. Silicon Valley tends to over estimate how quickly tech gets adopted -- new industries with unproven demand takes too long to develop for most venture backed companies to depend on.
For example, 3D printing has been buzzing around in the press for the past ~3 years. However, it seems that the vast majority of dollars go to either the companies that make the printers, or a few successful printer farms. They is a long tail of 3D printed consumer goods companies that might be sustainable and growing, but nothing at a scale to match even a tenth the hype of how 3D printing will revolutionize manufacturing.
News of quadcopters, as another example, has been circulating the interwebs for a year or two now. Ignoring military research, I imagine that the vast majority of dollars flowing in this space are to the few companies that manufacture parts and quadcopter kits, not futuristic delivery services.
Or many payment companies idealize how in the old days, store owners knew who you were as you entered, and automatically placed your order. They paint a picture of the future where your face would pop up in the POS system, or the barista would prepare your drink as you enter the driveway. Personalized coupons based on your shopping habits would be pushed to your phone as you walk around a geo-fenced store. But does anyone truly want this? How often have you heard people complaining that they want a deal on Corn Flakes as they walk down the cereal isle? Yes, your preferences might be more integrated into shopping. Yes, the store owner or cashier might address you by your name. But you'd never get to personally know the people serving you anyway. People are shopping right now -- would adding all these services (and introducing massive privacy concerns) increase the amount of money people are already spending?
I don't have data for any of these claims and am very open to being told I'm wrong. I am simply regurgitating what other founders I've spoken to have been saying. Like everything in SV, there are exceptions all over the place. But as someone starting a tech company with no prior wins -- to what extent do I want to bank my future company on nascent markets?
This concern, in their mind, is often phrased as -- how do I change people's innate behavior to use these products?
Now I'm not going to go into another post about the need for customer development and validating demand for a product--I have done so already and will continue to in the future. Rather, I want to muse about a reason why choosing a nascent market is (too) often a losing strategy.
The repeated conclusion I hear from these struggling founders is early adopters are your only customers, and you can only push your product so far before nobody else is willing to pay. Silicon Valley tends to over estimate how quickly tech gets adopted -- new industries with unproven demand takes too long to develop for most venture backed companies to depend on.
For example, 3D printing has been buzzing around in the press for the past ~3 years. However, it seems that the vast majority of dollars go to either the companies that make the printers, or a few successful printer farms. They is a long tail of 3D printed consumer goods companies that might be sustainable and growing, but nothing at a scale to match even a tenth the hype of how 3D printing will revolutionize manufacturing.
News of quadcopters, as another example, has been circulating the interwebs for a year or two now. Ignoring military research, I imagine that the vast majority of dollars flowing in this space are to the few companies that manufacture parts and quadcopter kits, not futuristic delivery services.
Or many payment companies idealize how in the old days, store owners knew who you were as you entered, and automatically placed your order. They paint a picture of the future where your face would pop up in the POS system, or the barista would prepare your drink as you enter the driveway. Personalized coupons based on your shopping habits would be pushed to your phone as you walk around a geo-fenced store. But does anyone truly want this? How often have you heard people complaining that they want a deal on Corn Flakes as they walk down the cereal isle? Yes, your preferences might be more integrated into shopping. Yes, the store owner or cashier might address you by your name. But you'd never get to personally know the people serving you anyway. People are shopping right now -- would adding all these services (and introducing massive privacy concerns) increase the amount of money people are already spending?
I don't have data for any of these claims and am very open to being told I'm wrong. I am simply regurgitating what other founders I've spoken to have been saying. Like everything in SV, there are exceptions all over the place. But as someone starting a tech company with no prior wins -- to what extent do I want to bank my future company on nascent markets?
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