Lack of mar­ket­ing knowhow ham­pers IT start-ups

Finweek English Edition - - ENTREPRENEUR - BY JININE BOTHA

The num­ber one killer of small IT busi­nesses is their naïve p e r s p e c t i v e on how to mar­ket t heir prod­ucts. A small team might have de­vel­oped the next big tech­no­log­i­cal in­no­va­tion, but i f t hey f or get t he pr i nc i pl e s of Mar­ket­ing 101, they will strug­gle to be­come com­mer­cially vi­able.

This is the view of Neil McMurchy, ma n a g i n g v i c e - p r e s i d e n t for ap­pli­ca­tion soft­ware at Gart­ner, one of t he world’s lead­ing i nfor­ma­tion tech­nolog y re­search and ad­vi­sor y com­pa­nies.

An­nu­ally, about 2 000 to 3 000 small com­pa­nies ap­pear on Gart­ner’s radar. The sin­gle fun­da­men­tal is­sue they all have in com­mon is a lack of un­der­stand­ing of strate­gic mar­ket­ing. “It is not just about so­cial me­dia or SEO [search en­gine op­ti­mi­sa­tion], it is about hav­ing a good un­der­stand­ing of who your cus­tomer is and why they would need your prod­uct. And then t un­ing your mes­sage from a buyer’s per­spec­tive.”

This is some­thing that com­pa­nies t h a t p r o d u c e c o n s u mer g o o d s un­der­stand too well. They start with t he cus­tomer and ask t hem­selves: “How can I sat­isf y my mar­ket or de­mo­graphic?”

McMurchy says the ma­jor­ity of IT start-ups do not start out this way. “They usu­ally get very ex­cited about new ideas and then start to de­velop a prod­uct. Some­thing that might be amaz­ing, but that no­body needs or wants to buy.”

It might be rel at i vely easy for “I T- preneurs” to de­velop a good prod­uct, but ac­cord­ing to McMurchy it is re­ally hard to make it com­mer­cially suc­cess­ful. “At the end of the day, only one out of 20 tech start-ups turn into sig­nif­i­cant vi­able busi­nesses.”

Ko­dak is an ex­am­ple of a busi­ness that failed be­cause it didn’t adapt to chang­ing mar­kets.

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